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. What is a 401(k) rollover?

    Find out what a 401(k) rollover is, when you might want to roll over a 401(k) and whether a direct or indirect rollover is ...
  2. Are qualified pension plans taxable?

    The taxable portion of your pension or annuity payments is usually subject to federal income tax withholding, according to ...
  3. How do you withdraw money from your 401(k)?

    Deciding to take a withdraw from your 401k is not a decision that should be made lightly. However, for those who needs funds, ...
  4. Is it possible to obtain a loan from a qualified retirement plan?

    Read how loans are available for qualified retirement plans; most loans allow for $50,000 or 50% of the current vested value, ...
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 ...
comments powered by Disqus
Related Articles
  1. Top Financial Frights: Emergencies & ...
    Investing Basics

    Top Financial Frights: Emergencies & ...

  2. Steps To Retiring With A Reverse Mortgage
    Retirement

    Steps To Retiring With A Reverse Mortgage

  3. When Your Job Offers An Awful Retirement ...
    Retirement

    When Your Job Offers An Awful Retirement ...

  4. Top 5 Strategies To Pay For Elder Care
    Retirement

    Top 5 Strategies To Pay For Elder Care

  5. 5 Top Alternatives To A Reverse Mortgage
    Retirement

    5 Top Alternatives To A Reverse Mortgage

Trading Center