WEP 75% Reduction

[bc075259]

I just applied for Social Security (with 20 years substantial earnings) and indicated that I am also receiving QPP. Speaking with the SS agent, he indicated that my $555 USD QPP would reduce my SS benefit by $422 (~76%). I informed about the 50% max reduction that is listed on on the SS WEP webpage but he said this guarantee is only applicable to people with lower benefits.

Since I have not seen this indicated anywhere wondering if anyone else encountered this?

[nelsona]

Do not accept this determination. Ask for a review and a detailed calculation.

WEP is clearly limited to 50%. There may be other factors that are lowering your expected ammount, but they can't be WEP.

Are you 67, or are you younger? That also has an impact.

What office are you dealing with?

[bc075259]

Thanks for the reply. I'm 69 and dealing with a representative in Auburn Washington. He was pretty easy to deal with and ran the numbers multiple times with the same result. I also ran the numbers with the downloadable SSA calculator (anypia) and got exact same result as he did. So if it's incorrect so is their calculator. There was another thread here from 2019, "Case Studies: Social Security, WEP, and CPP", where the OP, appeared to have the same experience. The method of calculation seems a little bizarre to me, since they ask for the QPP amount I get today then apply the 50% rule to the full SS amount at my full retirement age.

[nelsona]

WEP calculations are supposed to be done based on FRA, then they adjust based on age.

[bc075259]

nelsona wrote:
> WEP calculations are supposed to be done based on FRA, then they adjust
> based on age.
yes, that looks like what the calculator does. when I run the numbers using my FRA of 66, the PIA gets reduced by 50% of QPP, the issue is when you run the numbers using age 69, it also reduces the FRA amount (age 66) by 50% (of QPP) then does the delayed retirement increases using the reduced PIA. I guess one argument could be they should use my QPP amount when I was 66, however due to the changing exchange rate, the QPP amount 4 years ago is almost the same as it is today

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[nelsona]

The calculator is just the first step.

But, IN ALL CASES, WEP is limited to 50% of the uncovered pension amount. The SSA admits that their calculation get overridden by this clause:

"*Important: This is for estimate purposes only. The WEP reduction is limited to 1/2 of your pension from non-covered employment.

The amounts in the chart do not reflect the effect of cost-of-living adjustments (COLA), early retirement, delayed retirement, or other factors."

[bc075259]

nelsona wrote:
> The calculator is just the first step.
>
> But, IN ALL CASES, WEP is limited to 50% of the uncovered pension amount.
> The SSA admits that their calculation get overridden by this clause:
>
> "*Important: This is for estimate purposes only. The WEP reduction is
> limited to 1/2 of your pension from non-covered employment.
>
> The amounts in the chart do not reflect the effect of cost-of-living
> adjustments (COLA), early retirement, delayed retirement, or other
> factors."

When I get the official decision, guess I'll try an appeal and let you know what happens. Thanks!