Q. Is the CSRS pension annuity calculation calculated and paid without any Social Security penalty (windfall elimination) “prior” to the CSRS retiree applying for Social Security benefits (age 62 years and older). In other words, is it the Social Security component or the CSRS annuity component that is penalized with a reduction factor in the total calculation when they are both finally combined?
A. The windfall elimination provision applies solely to the Social Security benefit. The WEP reduces the Social Security benefit of anyone receiving an annuity from a retirement system where he didn’t pay Social Security taxes, in whole or part. It has no effect on a CSRS annuity. However, if you were covered by CSRS Offset, when you became eligible for a Social Security benefit at age 62, your CSRS annuity would offset by the amount of Social Security benefit you earned while covered by CSRS Offset. That reduction occurs whether or not you actually apply for a Social Security benefit.