The Social Security Fairness Act Explained
by Sequoia Financial Group
by Sequoia Financial Group
Background
On January 5, 2025, President Biden signed the Social Security Fairness Act, repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The bill passed with a large bipartisan majority in both the House and Senate. The repeal is retroactive to January 1, 2024.
By repealing WEP and GPO, the Social Security Fairness Act eliminates the reduction of Social Security benefits for someone entitled to public pensions from work not covered by Social Security. These noncovered pensions are often earned by teachers, police officers, firefighters, other state and local employees in some states, and Federal employees hired before 1984 (Social Security covers those hired after 1983).
WEP was enacted in 1983 and impacted a worker’s Social Security benefits based on their earnings record if they received a noncovered pension and did not have 30 years of earnings history with Social Security. GPO was enacted in 1977 and affected those who would otherwise have been eligible for Social Security based on their spouses’ or deceased spouses’ earnings if not for their noncovered pensions.
What’s Next?
The Social Security Administration (SSA) evaluates how to implement the Act. Individuals previously ineligible for Social Security and therefore never applied for Social Security should apply immediately. This includes those eligible for spousal benefits if not for GPO. Social Security benefits are generally only payable retroactively for six months. You may file online at ssa.gov/apply or schedule an appointment with SSA.
If you previously filed for Social Security and your benefits are partially or completely offset, no action is needed now other than verifying your mailing address and direct deposit information. Most people can do this online via their “My Social Security account” at www.ssa.gov/myaccount. SSA will provide ongoing updates regarding implementation on their website, and Sequoia will continue to monitor the situation.
We encourage you to contact your Sequoia advisor if you would like to discuss the Act’s impact on your financial plan.
This material is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Diversification cannot assure profit or guarantee against loss. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Sequoia Financial Advisors, LLC makes no representations or warranties with respect to the accuracy, reliability, or utility of information obtained from third-parties. Certain assumptions may have been made by these sources in compiling such information, and changes to assumptions may have material impact on the information presented in these materials. Sequoia Financial Advisors, LLC does not provide tax or legal advice.
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