Industry News

On November 8, 2019, the Congressional Research Service (CRS) released its report, The Windfall Elimination Provision (WEP) in Social Security: Proposals for a New Proportional Formula.  The report describes the current-law WEP and analyzes the proportional formulas presented under two bills introduced in 2019 for certain individuals that would become eligible for Social Security benefits in 2022 or later.  The two bills introduced were: 1) the Equal Treatment of Public Servants Act (H.R. 3934); and 2) the Public Servants Protection and Fairness Act (H.R. 4540).

According to the report, “The proportional formula allows people with some earnings from noncovered employment to receive the same replacement rate as those workers who spent their entire careers in covered employment, whereas the current-law WEP can only approximately achieve that.  If the proportional formula had applied to current beneficiaries in 2018 … about 1.1 million beneficiaries affected by the current WEP (or 69%) would have received a higher benefit and about 0.5 million (or 31%) would have received a lower benefit.  In addition, 13.5 million beneficiaries with some noncovered earnings who are not affected by the current WEP would have received a lower benefit.  Therefore, if the proportional formula were applied to new beneficiaries, it would generate program savings.”

The report is available here.