What are Government Pension Offsets, and who is subject to them?

A:

Government Pension Offsets (GPO) apply to government workers at any level who are not covered by Social Security. Any federal, state or local employee who works for a governmental institution in any capacity and is eligible to receive a separate retirement pension from his or her employer is subject to this offset. The offset will reduce by two-thirds the amount of spousal and/or survivor benefits that the surviving spouse or beneficiary would have been entitled to if he or she were eligible for Social Security.

Example
Rob is a retired educator and receives a pension of $900 per month. His pension was outside the Social Security system. His wife worked for a private corporation throughout her career and had been retired for 10 years before she died. Rob's survivor benefits that he is entitled to from her Social Security will be reduced by $600 per month, two-thirds of the amount of his private pension. Therefore, if he were to otherwise receive $800 of survivor's benefits he would only get $200 per month.
Most of the people that are subject to the GPO will lose all of their survivor's benefits. This can leave many surviving spouses in dire straits financially, and some members of Congress are trying to repeal this provision for this reason.

RELATED FAQS

  1. How do I know what Social Security benefits I am eligible for?

    Learn what tools to use to find out which Social Security benefit programs you are eligible for and the basic requirements ...
  2. What are the main differences between Social Security Benefits & Social Security ...

    Read this article to learn about the differences between SSDI and SSI benefits, including qualifications, program funding, ...
  3. What are the Social Security tax caps?

    Learn how the Social Security tax cap works, what percentage of income is deducted for Social Security taxes and the history ...
  4. What are Social Security Credits for and how can I earn them?

    Understand the basics of the Social Security credit system, how credits are earned and how many credits are required to be ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Economic Justice

    Economic justice is a component of social justice. It's a set ...
  3. Social Justice

    Social Justice is the idea that all members of society deserve ...
  4. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all ...
  6. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
Related Articles
  1. Self-Employed? Top Plans For Retirement ...
    Retirement

    Self-Employed? Top Plans For Retirement ...

  2. The Best Way To Build Your Retirement ...
    Retirement

    The Best Way To Build Your Retirement ...

  3. Want To Know How To Save For Retirement? ...
    Retirement

    Want To Know How To Save For Retirement? ...

  4. Could Being A Landlord Pay For Your ...
    Retirement

    Could Being A Landlord Pay For Your ...

  5. Smart Retirement Strategies Even Without ...
    Retirement

    Smart Retirement Strategies Even Without ...

Trading Center