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Repeal of WEP and GPO Provides Major Relief for Public Sector Workers

Big changes are on the horizon for public sector retirees! On January 5, 2025, President Biden signed the Social Security Fairness Act into law. This significant legislation repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — two provisions that have long reduced Social Security benefits for millions of public sector workers and their families.

What Does This Mean for Retirees?

The repeal of the GPO and WEP is a monumental change for individuals receiving government pensions who are also entitled to Social Security benefits. Here’s how it breaks down:

Government Pension Offset (GPO)

Prior to the repeal, retirees receiving government pensions had their spousal or survivor Social Security benefits reduced by two-thirds of their pension amount (source: Social Security Administration). In some cases, these reductions completely eliminated their benefits. Now, spousal and survivor Social Security benefits will no longer be reduced or eliminated for retirees who also receive a government pension.

Windfall Elimination Provision (WEP):

The WEP reduced Social Security benefits for public sector workers who switched to private-sector jobs and qualified for Social Security. This reduction could amount to as much as $587 per month (source: Social Security Administration). The repeal means affected individuals will now receive their full Social Security benefits without WEP-related reductions.

Who Will Benefit?

According to a November 2024 report by the Congressional Research Service, approximately 2.5 million beneficiaries have been impacted by WEP, GPO, or both. These changes represent a massive improvement in retirement income for those individuals. Many of the states with the highest number of affected retirees—like California, Texas, and Illinois ­— are also states where Cary Street Partners operates, making this news especially relevant to our clients.

When Does the Repeal Take Effect?

The law is effective for months after December 2023, meaning: Public sector retirees affected by these reductions in 2024 should see adjustments to their benefits. Refunds or retroactive payments may be issued, but the Social Security Administration (SSA) has not yet announced how these will be processed. Stay tuned for updates from the SSA (source: Social Security Administration Newsroom).

What Should You Do Next?

If you are a public sector retiree — or have clients who are — this is the perfect time to revisit your financial plan. Start by staying informed: reach out to your financial advisor to understand how these changes will affect your retirement income. Next, schedule a portfolio review to ensure your investments align with your updated financial situation. Finally, take this opportunity to reassess your Social Security benefits and evaluate how they contribute to your overall retirement goals.

At Cary Street Partners, we pride ourselves on delivering A Higher Standard of service. Our experienced financial advisors are dedicated to helping clients navigate changes like these and optimize their financial futures. If you have questions about how the repeal of WEP and GPO affects your Social Security benefits, or if you want to revisit your financial plan, our team is here to help. Contact us today to schedule a consultation with one of our knowledgeable advisors. Together, we can ensure you make the most of this new legislation and take steps toward a stronger financial future.

Contact Cary Street Partners, or reach out directly to your local office. We’re here to support you every step of the way.

 


Jeb H. Cogger, CFP®, ChFC®
Head of Wealth Planning, Managing Director

Jeb contributes to the Wealth Wisdom Series by leveraging his leadership in financial planning at Cary Street Partners. He develops advanced planning strategies, training programs, and client-focused solutions to support advisors and enhance the financial planning experience. With a focus on delivering tailored insights, Jeb ensures readers benefit from practical and impactful wealth planning expertise.

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