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BENEFITS


WINDFALL ELIMINATION PROVISION

If you receive a retirement allowance from LACERA and are also eligible for Social Security benefits, you may be subject to Social Security’s Windfall Elimination Provision (WEP) enacted by Congress in 1983. The WEP reduces the Social Security benefit for workers who receive a government pension from employment that is not covered by Social Security. If you have 30 or more years of substantial earnings under Social Security, you are fully exempt from the WEP.

The County of Los Angeles withdrew from participation in Social Security beginning in 1983. If you have service with the County of Los Angeles on or after 1983 and receive a LACERA pension, any Social Security benefit you receive may be subject to the WEP. However, the WEP’s reduction of your Social Security benefit may be no more than one-half of the amount of your first month’s retirement allowance.

THE WEP FORMULA

The “normal” Social Security benefit formula separates your average monthly earnings into three segments, and multiplies each by a different percentage. The WEP modifies the percentage by which the first segment is multiplied, resulting in a lower Social Security benefit if you are entitled to a pension.

The WEP formula includes a sliding scale based on the length of your Social Security-covered employment:

  • If you have fewer than 21 years of coverage, the 40 percent factor applies.
  • If you have 21 to 29 years of coverage (“substantial earnings”) under Social Security, you are eligible for a partial WEP exemption.
  • Under a partial exemption, the 90 percent factor is reduced to between 45 and 85 percent depending on your earnings in each year you worked in Social Security-covered employment.

See the Social Security Administration’s chart of substantial earnings to determine your multiplier under the WEP.

EXAMPLE: LACERA Member Who Turns 62 in 2019 and Worked in
Social Security-Covered Employment for Less Than 20 Years
  Multiplier Under Normal Social Security Benefit Formula Multiplier Under
WEP
First $926 in covered monthly earnings 90% 40%
Next segment of earnings, up to $5,583 32% 32%
Any additional earnings 15% 15%

For More Info

Visit the Social Security website for more about how the WEP might affect your federal benefit, or contact the Social Security Administration at 800-772-1213.

6/24/19