Social Security Fairness Act FAQ

What does the Social Security Fairness Act (SSFA) do?

The SSFA repeals provisions of law that reduce or eliminate Social Security benefits for individuals who receive other pension or disability benefits from a system that does not require participation in Social Security, such as California State Teachers Retirement System (CalSTRS). The rules that reduce Social Security benefits are called the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Once signed into law, these changes are effective for benefits payable after December 2023.

In short, this act eliminates the WEP and GPO penalties. By eliminating these penalties, it gives the promised benefits from all systems a worker has paid into and doesn’t penalize anyone for being in multiple systems during different periods in their working life.

What are WEP and GPO?

WEP is a formula applied by the Social Security Administration that can reduce the size of a worker’s Social Security retirement or disability benefit. It applies to people with a combination of Social Security-covered employment and non-covered employment (e.g. a teacher or faculty member in California who had other jobs that paid into Social Security).

It impacts public employee retirees who participate in a public pension system such as CalSTRS who do not pay into Social Security but paid Social Security taxes while at other jobs.  

An example of this would be a person who worked at a private company before getting into teaching or a school nurse who works extra shifts at a hospital.

The WEP reduction does not apply to workers with fewer than 10 years (40 quarters) of employment covered by Social Security. So, for example, if you taught for decades and worked five summers outside the school system, WEP would not impact you.

The WEP reduction does not apply to workers with more than 30 years of substantial earnings from employment covered by Social Security. So, for example, if you worked in the private sector for 30 years and then worked as a substitute teacher, WEP would not apply to you.

The GPO reduces the spousal or widow(er) benefit by two-thirds of the monthly non-covered pension and can partially, or fully, offset an individual's spousal/widow(er) benefit, depending on the amount of the non-covered pension.

For instance, an individual with a $900 spousal benefit from Social Security, who also has a $1,000 non-covered pension like CalSTRS, would see their Social Security benefit reduced by $667, or two-thirds the non-covered pension amount. That leaves them with a $233 remaining spousal benefit. With the GPO measure repealed, the same individual would be entitled to the entire $900 spousal benefit amount without an offset reduction.

Who does this affect?

For CFT members, this affects those who are retired (or one day will retire), in the CalSTRS system and have paid into Social Security for another job and/or have a spouse who pays or has paid into Social Security. Teachers do not participate in Social Security when they are members of the CalSTRS Defined Benefit plan.

Neither of these penalties, nor the elimination of these penalties, applies to benefits derived from CalPERS since those workers (mostly classified professionals) simultaneously contributed to Social Security.

Does this change my contributions to my pension fund or Social Security?  

This does not change anyone's current participation in Social Security, nor does the act change anyone’s contribution to their pension fund or Social Security. Participation in whatever retirement system a person is in will continue with no additional cost to the employee or employer. This only affects the benefits received in retirement from Social Security into which a person has already contributed.

Does this apply to those already receiving retirement, disability, or survivor benefits?

Yes, this applies to current recipients. We believe this will be retroactive to December 2023. The law states the following:

The amendments made by this Act shall apply with respect to monthly insurance benefits payable under title II of the Social Security Act for months after December 2023. Notwithstanding section 215(f) of the Social Security Act, the Commissioner of Social Security shall adjust primary insurance amounts to the extent necessary to take into account the amendments made by section 3.

Once the bill is signed and the Social Security administration can apply the rules, the reduction in payments will be eliminated and all new payments should be based on the normal calculation for Social Security benefits.  

When does the change in law take effect?

President Biden still needs to sign the law and then the Social Security Administration will need to make rules and create a process to implement this for millions of current and future beneficiaries.

Other questions?

We will continue to update you in the new year as more answers can be verified. We also know that individual retirement circumstances may be complex. More detailed answers may be obtained by using the CalSTRS and My Social Security websites or calling CalSTRS or the Social Security Administration. It is recommended to get advice from retirement specialists before making any decisions on retirement.