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Offset Programs

The Social Security Administration (SSA) applies an offset to ORP benefits under two programs:

  1. Windfall Elimination Provision, and
  2. Government Pension Offset.

Exceptions to the offsets: The SSA allows exceptions to their two offset programs. Check the SSA website External Link for details about these exceptions.

Windfall Elimination Provision

The Windfall Elimination Provision (WEP) is applied when an ORP Participant applies for SSA benefits under their own earnings record.

Rule for the ORP: The SSA will use an ORP Participant's (total) ORP account balance on the date he or she terminates employment with the Commonwealth to develop a proxy "state pension” to offset.

This proxy for a state pension is then used to adjust your SSA Monthly Income (AIME). Finally, the SSA’s income replacement ratios are reduced when applied to your AIME.

Government Pension Offset

The Government Pension Offset (GPO) is applied to an ORP Participant applying for SSA benefits under their spouse’s earnings record.

Rule for the ORP: The SSA will use an ORP Participant's (total) ORP account balance on the date he or she terminates employment with the Commonwealth to develop a proxy "state pension” to offset.

The SSA offsets their normal (spousal) benefit to you by two thirds of your proxy state pension.

 

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