The following is a question submitted by a Federal Times readers about retirement and other issues facing the federal workforce. It is answered by Reg Jones, a charter member of the senior executive service and a Federal Times columnist since 1995.
Question: I retired under the CSRS system in 2011. When I turned 65, my Social security payment was capped at $146. The 40+ quarters that I paid into were not Civil service related. My civil service and my SS quarter work requirement are separate entities. I’m aware that there is a windfall clause, but that to me doesn’t really explain why my Social security is capped, with no increases when COLA is increased. I’m curious as to what you think on this.
Reg’s Response: Because you are receiving a pension from CSRS - a retirement system where you didn’t pay Social Security taxes - a modified formula was used to figure the amount of your Social Security benefit. That reduction is known as the Windfall Elimination Provision. The amount of the reduction depends on your years of Social Security-covered service. Because you had fewer than 20 years of covered service, the first factor used in determining your Social Security benefit was reduced to 40 percent. Once the initial benefit was determined, your Social Security benefit would be increased each year by any annual cost-of-living adjustments (COLAs).
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Reg Jones is the resident expert on retirement and the federal government at Federal Times. From 1979 until 1995, he served as an assistant director of the U.S. Office of Personnel Management handling recruiting and examining, white and blue collar pay, retirement, insurance and other issues. Opinions expressed are his own.