Q. I worked for an independent federal agency from 1977 to 1989 that had its own retirement system —neither CSRS nor FERS. I had a break in service for one year, then returned to work for the federal government (Transportation Department), where I was erroneously placed in FERS by HR. In 2006, following a FERCCA ruling that took more than 2½ years, I chose to be placed in the CSRS Offset program rather than FERS. I paid Social Security as a federal employee (plus through part-time jobs dating back to 1970) until I retired in 2010 with 32 years of service. I was told I would receive a reduction to my pension and/or SS at age 62 due to the offset. I have also read that there will be no reduction since I have more than 30 quarters of SS. Should I file for SS at age 62, since I will receive a possible reduction, or will I receive no reduction in SS benefits? I know this sounds like a complicated scenario, but I am sure that someone will know the answer.
A. As a CSRS Offset retiree, when you reach 62, your annuity will automatically be reduced by the amount of Social Security benefit you earned while a CSRS Offset employee. The amount you’ll receive will be the same; it will just come from two places, OPM and the Social Security Administration. However, if you’ll be receiving some of your annuity from a retirement system where you didn’t pay Social Security taxes, you’ll be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of any such person who doesn’t have at least 30 years (not quarters) of substantial earnings under Social Security.
