Big Changes to Social Security Benefits and Public Pensions

By: Dustin A. Husarik, CFP®
Executive Vice President – Financial Advisor
Magnan Family Wealth Management

Exciting news for retirees and future retirees! A new piece of legislation has been passed that allows individuals to collect both a public pension and Social Security benefits simultaneously, marking a major shift in retirement planning opportunities. For years, those who worked in certain public sector jobs – like teachers, firefighters, and police officers – were subject to rules that limited their ability to collect both types of income. This new law eliminates those restrictions, providing a much-needed boost to retirement income for millions of Americans.

What Changed?
Previously, the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) significantly reduced Social Security benefits for individuals who also received a public pension. These provisions were intended to prevent “double-dipping” into retirement benefits, but they often created financial hardships for retirees who paid into both systems during their careers.

The new legislation repeals or significantly reduces the impact of WEP and GPO, allowing qualifying individuals to receive the full benefits they’ve earned. This change will particularly benefit those who split their careers between public service and private-sector jobs and Survivors of public employees who will no longer see their benefits drastically reduced, helping widows maintain financial stability.

Who Qualifies?

This change primarily affects:

1. Public Sector Workers: Teachers, Police Officers, Firefighters, and other public employees who contributed to state or local pension plans instead of Social Security can now collect both if qualified.
2. Dual-Career Workers: Individuals who worked in both the public and private sectors and paid into Social Security at some point in their careers.
3. Survivors: Spouses and dependents of public sector workers who previously faced reduced Social Security survivor benefits.
4. Spousal Benefit Collectors: If your spouse qualifies for Social Security, you can now receive spousal benefits in addition to your public pension without the offset reducing your payout.

How to Take Advantage
If you think you qualify, here’s what you should do:

• Contact Social Security: Confirm your eligibility and inquire about updated benefit calculations
• Contact Brian or Dustin: If you are uncertain if this rule applies to you, please contact Brian or myself and we can provide guidance on your specific situation and next steps.

You Can Now Collect a Public Pension and Full Social Security Benefits | Kiplinger

Here’s who could qualify for expanded Social Security benefits – NBC4 Washington

Public-sector workers benefit from new Social Security legislation