Can I Collect a CalSTRS Pension and Social Security?
As experienced CalSTRS attorneys, we are frequently asked by our educator clients if collecting CalSTRS affects the Social Security benefits they will collect.
If you are an educator in California, this article will explain some of the rules for collecting your CalSTRS (California Teacher’s Retirement System) pension and Social Security.
Our experienced CalSTRS attorneys have helped thousands of educators in Los Angeles, Long Beach, Anaheim and Southern California get the CalSTRS and Social Security benefits they deserve. You are welcome to call us anytime for a FREE consultation to understand your benefits!
Teacher’s Retirement Benefits and Social Security
During the 1970s & 1980s, amended laws to the Social Security Act were passed in an effort to keep people from “double dipping” by receiving both a Social Security benefit and pension benefits from work where they did not have to pay Social Security taxes.
Two rules were put in place that can prevent an educator with a CalSTRS pension from also claiming a full Social Security benefit:
(1.) The Windfall Elimination Provision (WEP); and,
(2.) The Government Pension Offset (GPO).
Social Security Statement Does NOT Show CalSTRS Reduction
Keep in mind that your Social Security statement does NOT reflect any reduction in your Social Security benefits that result from collecting a CalSTRS pension. This can make calculating your combined CalSTRS and Social Security retirement benefits confusing!
WEP – The Windfall Elimination Provision
The WEP rule recalculates the Social Security benefit of workers – including educators – who are entitled to a Social Security benefit based on their own work history, while having a pension from work where they did not pay Social Security tax.
The normal Social Security calculation formula is not used and instead a new calculation that results in a lower benefit amount is applied.
The WEP maximum Social Security reduction will never be greater than one half of the employees pension amount. And, this is capped at a monthly reduction of $413 (for 2016).
Also, if the employee has more than 20 years of substantial covered earnings (where they paid Social Security tax), the WEP begins to reduce. At 30 years of substantial covered earnings, WEP does not reduce the Social Security benefit at all.
This chart shows how covered earnings reduce the impact of the windfall elimination provision for teachers.
GPO – Government Pension Offset
The GPO – Government Pension Offset – rule applies to people who are entitled to a Social Security benefit as a survivor or spouse and have a pension from work in which they did not pay Social Security tax.
If a person is entitled to a Social Security benefit as a survivor or spouse and they have a pension from work where they did not pay Social Security tax – their Social Security survivor or spousal benefit will be reduced by an amount equal to two-thirds of their pension.
Educators Who Only Qualify for CalSTRS Pension
If a teacher has never paid any Social Security tax, most likely they will never receive any Social Security benefit. California educators who never pay into Social Security typically will not receive any Social Security benefits.
Our Los Angeles Area CalSTRS Attorneys Can Help
Our attorneys are CalSTRS benefit experts. If you are having difficulty calculating your CalSTRS and/or Social Security retirement benefits – or you think you have been wrongly denied your CalSTRS Pension or Social Security Benefits – call us for a FREE Consultation with an experienced CalSTRS attorney.
We have helped hundreds of educators in Los Angeles, Long Beach, Anaheim and Southern California get the CalSTRS and Social Security benefits they deserve. We can help you, too.