My wife has a pension from a municipality from which she retired at age 56. It is a 'defined contribution' 401a and a 457. She did not contribute to SS during her employment period there. When she retired she chose the 10 year option for payment of the funds. The funds in the 457 will be exhausted when she is 60, and the 401a funds will be exhausted before she reaches age 63. Because she will not have a pension remaining when she applies for a spousal benefit at age 65, I'm thinking that the Government Pension Offset (GPO) will not apply to her spousal benefits. Similarly, the Windfall Elimination Provision (WEP) would not apply to her SS survivor benefits. Is this wrong?

Hi,

First off just to clarify, the Windfall Elimination Provision (WEP) only affects benefits payable on a person's own Social Security record, whereas the Government Pension Offset (GPO) provision may affect auxiliary and survivor benefits (e.g. spousal, widow's).

Based on your description, I believe Social Security will use their own method of proration to determine the countable monthly amount and applicable period that your wife's defined contribution plan distributions could affect her benefits. The same basic method applies for both WEP and GPO purposes, and is described in sections C.4 and C.5 of the following reference from Social Security's operations manual: https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364.

Our maximization software is programmed to handle WEP and GPO cases involving lump sum or variable distributions from defined contribution plans, so you and your wife may want to consider using it to do your Social Security planning.

Best, Jerry