Social Security and TRS

The Challenge

This is a subject on which there is a lot of confusion. First, let’s establish the main facts:

1. Social Security does not affect TRS.

2. TRS will affect your ability to collect Social Security.

Why It’s Important

The Windfall Elimination Provision and the Government Pension Offset are unfair laws. Unfortunately, both are here to stay because the government is doing everything it can to keep Social Security viable. Thirty-six states require their school districts to contribute to Social Security. Texas is among the 14 that do not. Those 14 states don’t have the votes to change the law.

The Windfall Elimination Provision (WEP) affects your ability to collect Social Security that you earned since you have a State Funded Pension. The WEP reduces your Social Security by as much as 60%. The size of the reduction depends on your earning history and the number of years you paid into Social Security. This is different from the 40 quarters needed to qualify for Social Security.

The Government Pension Offset (GPO) is even less fair. The GPO will prevent you from collecting on your spouse’s Dependent Spouse Benefit because you have TRS. This is REALLY unfair! There is one way around the GPO. If you retire from a school district where you pay into TRS and Social Security from the SAME check for a 5-year period, you are exempted from the GPO.

Recommendation

We are happy to run the calculations for you so that you know where you stand in regards to the Windfall Elimination Provision. If you want to find a district where you can work to get around the Government Pension Offset, there are a few dozen Texas school districts that pay into both, and we are happy to share them with you if you are interested in learning more.

Source: www.ssa.gov