Q. I am 58 years old, and I have a service date of 1975. I am under the Civil Service Retirement System. I recently retired from the military after 33 years of reserve service (no active duty service over 90 consecutive days). My reserve pay was subject to Social Security withholding. What impact will my military reserve retirement pay have on my CSRS annuity? Will my CSRS or military retirement be subject to a reduction, or do I have to redeposit money? How do I determine whether I have to redeposit any money? Do I still get to Social Security at age 62, or is that lost due to CSRS?
A. Your reserve retired pay won’t be affected. However, if you have been given credit for those periods of active-duty service in your CSRS annuity computation and haven’t made a deposit to the retirement system, your annuity would be reduced at age 62 when you become eligible for a Social Security benefit. That time would be subtracted from your total service and your annuity recomputed.
Because you will be receiving an annuity from a retirement system where you didn’t pay Social Security taxes, your Social Security benefit would be subject to the windfall elimination provision. The WEP reduces that benefit if you have fewer than 30 years of substantial earnings under Social Security.
2 Comments
CSRS Individuals covered under CSRS pay CSRS employee deductions…..they are excluded from OASDI taxes of Social Security. They may contribute up to the Internal Revenue Service elective deferral limit each year to the Thrift Savings Plan (TSP), but CSRS employees who contribute do not receive any government contribution. There are so many references in OPM, Congressional Papers, and Treasury Manuals that prohibited those working under this system from paying into Social Security, how can the Congress and Social Security turn around and penalize survivors whose spouses paid into Social Security and are not able to apply for those benefits by use it against the survivor who paid into Social Security and had to forego their full retirement benefits due to the death of that former spouse and a reduction in force that occurred simultaneously and out-of-state. The so called voluntary early retirement given because of years of federal service and the stress of a death and the full undertaking of responsibility for two school age children.
The Social Security system was designed to provide a modest level of security for those who didn’t work or who had earned little during their working life. In other words, spousal benefits weren’t designed to put extra income into the pockets of working couples who were both entitled to benefits. In a two-worker family where both pay Social Security taxes, if one of them is eligible for an earned Social Security and a spousal benefit, he or she only gets the higher of the two, not both. At one time, anyone covered by CSRS who was married to someone covered by Social Security was entitled to receive both a full CSRS annuity and a full Social Security spousal benefit. Then in 1982, Congress decided that an employee who was in a retirement system where he wasn’t paying Social Security taxes was enjoying an unfair advantage. So it changed the law. While bills have been introduced in the Congress to revise or eliminate the GPO, to date they have gone nowhere.