Social Security Benefits: What the Fairness Act Means for Retirees

By Callie Morgan, CFP®

The Social Security Fairness Act was signed into law on January 5, 2025, and is expected to benefit approximately 2.5 million public sector retirees. This legislation repeals two provisions, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which had previously reduced Social Security benefits for individuals, spouses, and widows who receive a public pension from work not covered by social security.

Background on WEP and GPO

The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) were enacted in 1983 and 1977, respectively. These regulations were intended to equalize the social security benefit formulas for workers whether their earnings were covered by Social Security or not thus preventing individuals with pensions from non-social security covered employment from receiving a higher benefit.

• Windfall Elimination Provision (WEP): Reduces Social Security benefits for people who receive a pension from non-social security covered employment, such as state or local government jobs.
• Government Pension Offset (GPO): Reduces Social Security spousal or survivor benefits for retirees with public pensions.

These provisions affected several public servants, including teachers, firefighters, and police officers leading to significant reductions in expected retirement income.

Impact of the Social Security Fairness Act

The repeal of WEP and GPO is expected to restore social security benefits to approximately 2.5 million retirees for these public servants. The law is retroactive to December 2023, meaning eligible recipients will receive back payments for the past year. For those individuals who are already receiving benefits, this change will be automatically adjusted. However, for those individuals who have reached retirement age and have not or did not apply for Social Security benefits due to the reduction, it is advisable to contact Social Security Administration to apply or apply online.

As the Social Security Administration begins implementing these changes, it’s imperative to review your information, update contact details, and view your benefits statement online at ssa.gov. Want to visit with our team in person to make sure you have your retirement plans in order? You can talk to a Southside Bank Wealth Management Advisor today at southside.com/wealth/wealth-management-and-trust.

The information provided in this article is for general informational purposes only and should not be construed as financial advice. Before making any financial decisions, it is strongly recommended that you consult with a certified financial planner™, attorney, accountant, or another trusted financial professional to assess your individual circumstances.

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