OPERS seeks reform of windfall provision

We’re asking Congress to pursue a solution that will help our members

By Michael Pramik, Ohio Public Employees Retirement System

May 3, 2022 – For many years, the Ohio Public Employees Retirement System has supported efforts in Congress to update Social Security’s rules on the Windfall Elimination Provision and the Government Pension Offset.

Both provisions can have a negative effect on our members because, in many cases, they reduce the Social Security benefit for those who have worked in both the private and public sectors.

OPERS expressed support for two pieces of federal legislation that would reform the Windfall Elimination Provision, or WEP, and provide a measure of relief for our members and retirees who have been impacted by the offset.

The bills were most-recently reintroduced late last year, and because of the impending retirement of one of the sponsors, this may be the best opportunity to reach a compromise for a bill to move forward in the near future.

The two similar bills, the Public Servants Protection and Fairness Act of 2021 and the Equal Treatment of Public Servants Act of 2021, are sponsored by Chairman Richard Neal, D-Mass., and Ranking Member of the House Ways and Means Committee, Kevin Brady, R-Texas, who has announced that he will not run for re-election when his term expires this year.

Chairman Neal’s bill changes the way Social Security benefits are calculated so that non-covered earnings are taken into account, but it also specifies that no worker will be worse off as a result of that change – if a worker would be better off retiring under the current law, they would receive that treatment. Neal’s bill also provides for monthly $150 relief payments to retirees who already have been impacted by the offset.

Here is a summary of Neal’s bill.

Similarly, Brady’s bill would replace the WEP with an adjusted formula that backers say would more accurately define a worker’s time spent in the public sector vs. the private sector. It also would provide a $100 monthly rebate as well as $50 for surviving spouses.

Neal and Brady have for years introduced legislation designed to alter the WEP formula, and in the past they’ve co-sponsored WEP legislation. That’s not the case with their two current bills. One of the main differences is how they handle grandfathering. Brady’s bill would hold harmless current workers above age 16, while grandfathering in Neal’s bill, as stated above, would include all current workers.

Nevertheless, we support both bills because we believe they offer a workable solution to a problem that harms more of our members every day.

We have heard from many of our retired members that WEP relief is one of their most pressing issues, because it often results in a reduced Social Security benefit for those who also have worked in the private sector. OPERS’ Government Relations staff has been active on this issue for decades. As we continue to engage with members of Congress, we are encouraged by the current efforts to modify the WEP formula and bring much-needed relief to our retirees and the millions of public employees around the country who are impacted.

To be clear, OPERS’ support for these two bills does not necessarily mean we are opposed to full repeal of the provision. As we press for a solution to the WEP, whether reform or repeal, we must consider its chances for success as well as any unintended consequences that might result.

Two current bills that would eliminate WEP are the Social Security Fairness Act of 2021 (S. 1302), sponsored by Sen. Sherrod Brown, D-Ohio, and House Resolution 82 (also titled Social Security Fairness Act), sponsored by Rep. Rodney Davis, R-Ill. However, those proposals come with a $150 billion price tag, which makes passage difficult.

The cost and perceived inequity of WEP repeal have prevented that option from gaining any real traction in the decades since the offset was enacted, and have led some to suggest that the better solution would be to mandate Social Security coverage for all public workers. OPERS has opposed mandatory Social Security coverage for many years because of the assured fiscal impact to our system and resulting significant benefit reductions.

We encourage you to read Rep. Brady’s and Rep. Neal’s bills and then contact your member of Congress — both representatives and senators — to share your stories regarding how you have been, or will be, impacted by the WEP. Ask them to work diligently on a bipartisan solution that not only addresses the inequities associated with the provision, but that also can be enacted into law.

Michael Pramik

Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.

Michael Pramik

Communication Strategist

38 thoughts on “OPERS seeks reform of windfall provision

  • May 3, 2022 at 1:05 pm
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    The windfall provision cheats me out of over fifteen hundred dollars a month. I had over ten years in the private sector work before thirty years in public sector.

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    • May 3, 2022 at 5:10 pm
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      As I understand it, you need 35 years of SS earning to receive a full benefit. As it now stands, the WEP reduces anything less than 30 years of SS earnings.

      Reply
  • May 3, 2022 at 1:59 pm
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    Just not less benefits for retirees. Thank You!

    Reply
  • May 3, 2022 at 2:21 pm
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    I worked my 40 quarters under SSC and went on to work for the State of Ohio , when I retired from the state and signed up for Social Security benefits I was informed since I retired from the State I would be receiving a reduced amount on my social security benefit. that amount was approximately $600.00 less a month. This money is money that myself and my employer paid into social security not the Governments . This money would certainly come in handy now that the cost of living has risen to an all time high and our benefits are being cut such as our HRA.

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    • May 3, 2022 at 8:35 pm
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      I too was in the same position when I retired from the state of Ohio. I had my 40
      Points in the public sector. What I want to know is who gets that benefit that should be in my pocket!!

      Reply
      • June 17, 2022 at 8:35 pm
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        I have worked over ten years paying into social security, and if something were to happen to my husband then I would also lose the full benefits from his retirement. Scares me he is the breadwinner in our family. We are only one of a few states that still have this. Really Ohio you need to fix this. It’s sad that Ohio is that behind.

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    • May 4, 2022 at 12:07 am
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      I retired with a 45% reduction in SS because I fell under the Windfall act. If something happens to my husband I will again fall under Windfall and receive reduced income again! Please help us!! It’s been decades now and long overdue for future retirees also.

      Reply
      • May 4, 2022 at 8:58 pm
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        I worked for the private sector for 25 years and the state for 28 years and suffer from the windfall. It is not fair to take money from us penalizing payment of ss at a lesser rate than what a person paid into.

        Reply
  • May 3, 2022 at 4:20 pm
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    I don’t understand how the WEP can even be legal. To reduce paid up SS benefits because of another source of income just doesn’t seem right. It should not matter if the source of the other income is in the form of a different type of pension from a government employer, SS has been into and funded by the employee and the employer. How is this different from income from a private pension?

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    • May 4, 2022 at 8:33 am
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      Barbara,

      Social Security’s justification of the WEP goes back to the way it calculates the retirement benefit. Each year that an individual works in non-Social Security-covered employment appears as a zero in the Social Security benefit formula.

      Adding zeroes to the formula’s average calculation tends to lower the average, making it seem like the individual had lower total earnings than he or she actually did, and creating a higher replacement rate than was warranted. Congress enacted WEP to address this perceived inequity.

      Reply
      • May 5, 2022 at 11:05 am
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        However, not all states use the SS WEP formula.
        Cheryl

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      • May 5, 2022 at 2:43 pm
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        Would you kindly inform me how you calculated the cost ($150 billion) as shared in the following quote? Please share a reference source. Thank you very much!

        “Two current bills that would eliminate WEP are the Social Security Fairness Act of 2021 (S. 1302), sponsored by Sen. Sherrod Brown, D-Ohio, and House Resolution 82 (also titled Social Security Fairness Act), sponsored by Rep. Rodney Davis, R-Ill. However, those proposals come with a $150 billion price tag, which makes passage difficult.”

        Reply
        • May 10, 2022 at 8:16 am
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          Pam,

          The cost cited was based on information our Government Relations staff received from Congressional staff.

          Reply
      • May 12, 2022 at 12:08 pm
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        I’m retired PERS employee, my ex-husband that I was married to for more than 10 years. SS said that I wasn’t eligible for his SS benefits of $1,400 a month, because it had to be $1,600 or more a month so therefore I’m not eligible for his SS benefits. And this is because I’m PERS employee.

        Reply
    • May 4, 2022 at 5:35 pm
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      We need WEP repealed as well as GOP. Most employees knew nothing about this until they go to retire. I worked 28 years for the state and 24 years before & after my state job where I did pay into Social Security. I’m losing $6000 a year in my SS. The GOP affects over 80% of women, if their spouse passes before them they will receive none of his SS benefits, causing MANY to live below the poverty line…all because we are public employees with a pension. We are being penalized and discriminated against compared to private company employees who have a pension plus SS and lose nothing!! It’s time to make a wrong RIGHT!! It’s not a state issue, not a Republican or Democratic issue but it is a federal INJUSTICE!! This affects over 153,000 senior citizens in Ohio!! It’s time for people to receive what they have earned as well as their employees paid into on their behalf!! HR 82 & S 1302 need cosponsored and repealed…these are companion bills.

      Reply
      • May 5, 2022 at 6:50 pm
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        ….my situation…. ITS ABSOLUTELY NOT FAIR, we are CHEATED OUT OF WHAT WE WORKED HARD FOR …. this needs to STOP

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      • June 9, 2022 at 10:14 am
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        Could not agree more! We all deserve to get the money back from SS that we paid into when we retire REGARDLESS if we have pension or not. We have worked and contributed same dollar amounts just like everyone else….and deserve to get what is owed to us just like everyone else, and NOT be penalized because we also have a pension. Pathetic!!

        Reply
      • June 10, 2022 at 2:54 pm
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        Working husbands and wife stays home to take care of children get 50% of husbands SSI when he draws. What is fair here!! We work many years to have a nice retirement but are reduced 67% without any notification and those un working wife’s get the SSI for taking care of children & not working.

        Reply
    • May 10, 2022 at 5:09 pm
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      I totally agree with you. I have ave the same problem. Why can General Motors people get a pension from them and their full Social Security benefit? That makes no sense to me!

      Reply
  • May 4, 2022 at 12:31 am
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    They took over $60k from my Social security that I have to repay. So no Social security for over 5 years. And I was grandfathered with OPERS for the reimbursement account, and they cut that in half. First Social security said I didn’t tell them I was receiving OPERS which I have proof. Then this windfall. So social security is always right. I didn’t have any recourse. Sorry very frustrated. Thanks

    Reply
  • May 4, 2022 at 7:38 am
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    If we can’t get the benefit of what we paid into to SS then why even ever work in the private sector? I’ve worked public and private and have earned 40q but cant get the SS with the private sector but have to pay in the full amount if i see private work after I retire from the public…its not right..

    Another frustrating thing is, I’m a public safety employee but considered only a state employee for retirement purposes…

    Reply
    • May 4, 2022 at 10:53 pm
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      In the last two years Ohio has had the highest rate of migration out of the state
      Ohio has lost millions in Tax Revenue
      From withholding tax to income tax
      That numbers compounds into many millions more in cash flow into our economy.
      So why would you withhold any rammed income from a resedient of Ohio
      You would also prevent all our kids from leaving Ohio to make other states prosper
      Pay the social security accursed and pay the Pers retirement and the growth will take care of of the encumbered debt
      We are one of 6 states that penalize our workforce Why’! How much can a retire
      Endure. After all if you are paying future employees minimum wage you’ll lose
      Opers one day. No reform amend the Windfall.

      Reply
  • May 5, 2022 at 7:41 am
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    I also don’t understand why I would not receive any of my husband’s social security ( if something happens to him before me) just because I have my own OPERS retirement. Doesn’t seem to me that one has anything to do with the other.

    Reply
  • May 5, 2022 at 2:34 pm
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    Mr: Pramik: Richard Neal’s bill HR #2337 specifically excludes 2 important groups: those subject to the WEP because they receive foreign pensions (these are retirees who have divided their careers between the US & another country, paying into the SS programs of both) & those affected by the Government Pension Offset. Neal makes his bill fiscally viable by leaving them out of his “revised formula”. This isn’t good enough. You can’t solve the WEP for some & not for others.

    Both the Brady & Neal bills simply revise the formula, giving a token tweak which looks good to politicians but doesn’t solve much for those affected. The Neal & Brady revised formulas allow a $100 & $150 compensation respectively each month to WEP affectees. It’s not good enough. People are losing hundreds of dollars every month to WEP. Thousands to GPO. Throwing a $150 consolation prize to someone who’s losing 40% of their SS benefits is not a solution.

    This is why knowledgeable WEP/GPO affectees dismiss both the Neal & Brady bills. We favor a full WEP/GPO repeal which can be achieved with either HR 82 (S. 1302) or HR 5723. Rep. Julia Letlow’s new bill HR 4788 would also be an acceptable solution.

    In the case of HR 82, Social Security bills do not have a “Pay go” requirement in Congress. They can still reach the floor. The overwhelming opinion of WEP/GPO affectees is that this bill has already been paid for with our SS contributions. It’s up to Congress how to figure out the budget.

    Last year Congress passed into law a major bailout of private pensions (The Butch Lewis Emergency Pension Plan Relief Act of 2021) at an estimate cost $86 billion to US taxpayers. Some estimates go as high as $600 billion for this bill. These are PRIVATE PENSION funds. If Congress can fund private pensions at taxpayer cost, they can figure out how to fund a repeal of WEP/GPO.

    Respectfully, the cost which you’ve quoted for the WEP/GPO repeal, Mr. Pramik, is not in line with most estimates out there. You don’t mention the source or how many years that figure covers. The Social Security Fairness website (ssfairness.org), for example, expresses the cost as the following:

    “The $8-10 billion annual cost to repeal the GPO/WEP is minimal when compared to the total amount paid in Social Security retirement benefits annually. The annual estimated cost to repeal GPO/WEP amounts to less than 2% of the overall Social Security benefits paid to recipients each year. (Estimated Trust Fund Information at http://www.ssa.gov.)

    If funding is a concern, then HR. 5723 provides a WEP/GPO repeal which is fully funded. Rep. John Larson proposes “scrapping the cap” on the $400,000 earnings limit on SS contributions which would effectively pay for both the repeal & other much-needed updates in the SSA program.

    Neither the Neal or Brady bills are equitable solutions to the WEP/GPO crisis. A full repeal of these unfair penalties is required. HR 82 and HR 5723 both offer this solution. Our support should be for those 2 bills.

    Reply
    • May 10, 2022 at 8:15 am
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      Karen,

      We appreciate your perspective, but we must weigh the interests of our entire membership. It is within that context that OPERS formulates positions on certain issues such as WEP and GPO. As we stated, we do not dismiss the argument for full repeal; however, full repeal seems unlikely, whereas movement of Neal’s and Brady’s bills seem more realistically viable.

      Reply
    • May 18, 2022 at 3:40 pm
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      Ms. Nelson,
      Thank you for posting such an informative and accurate message. Very much appreciated.
      Cheryl H

      Reply
  • May 5, 2022 at 3:00 pm
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    I have been very negatively effected. I paid into Social Security starting when I was 15 years old until I was 36 years old. If I had stopped working at 36 or had gone to prison I would get $1200 a month gross according to my annual Social Security statements. 15 of those years involved full time work in cancer research and private school teaching. Then in 1993 I got a job teaching in the public schools. My Social Security has been cut drastically. I receive $357 a month from SS and this month it will be reduced to $187 because I will begin paying Medicare. WHAT CONGRESS DOES NOT UNDERSTAND is that I DO NOT collect a FULL public school teacher pension. I would have to have taught until I was 67 to get a full pension because of the Market Crisis of 2008. Because of bankers getting rich off of bad mortgage loans all of a sudden I had to teach 35 years in the public schools in Oder to retire! Then our tax money is used to bail the bankers out! I also had two extremely ill parents at the time.  My mom was on a feeding tube, had a colon bag and had her right leg amputated. So we bail out the bankers who were making bad loans…. Yet the government takes MOST of my Social Security! This is SO wrong! So many families are suffering! Worked in research for two years, taught Biology for 34 years, 25 public. Live on $2200 a month because SS reduced by the WEP. #repealWEP

    Reply
  • May 5, 2022 at 9:15 pm
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    I served 15 years in the Marines, where I paid my required quarters at, required ! And now that I retired from the State of Ohio you tell me that you are not required to pay me back what I was required to pay in. To me, that is thieving at the highest level. Do politicians get both ? If they do, then we should as well. I worked for both therefore I should get both.

    Reply
  • May 6, 2022 at 2:34 pm
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    Opers has already penalized anyone under 65. We had to find our own insurance and we pay 450.00 more a month . Which does not cover insulin. So we add another 200.00. We were promised with Opers at retirement, we be taken care of.. So now it’s Social Security taking a hit. Very sad

    Reply
  • May 8, 2022 at 10:10 pm
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    I worked 13 years paying into Social Security with 52 quarters a little above the minimum of 40 quarters required. Then I began my work with the State of Ohio for 30 1/2 years before I retired. The WEP formula took about 2/3 of what I would have received from Social Security. I would have gotten with WEP approximately 1200.00 per month. I actually only received $479.00 per month as a result of WEP. It is frustrating as I paid in and they said well some states didn’t pay taxes into Social Security but I worked for the state government at that time and it is a non-profit?????

    Reply
  • May 9, 2022 at 9:43 pm
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    Wep/Gpo affects over 165,000 Ohioans. The support from Our representatives to correct these provisions is lukewarm at best. We all need to contact our representatives and get their support. HR82 which will totally repeal the Wep/Gpo provisions and has the most support in Congress. We are 17 cosponsors away from getting it it to the floor for a vote.
    Wep/Gpo were part of the Social Security reform in 1984. President Reagan realized that the Social Security fund was in need of more funds to be sustainable. The provisions were aimed mainly at Federal Workers.
    I had 40 quarters of income prior to 1984 and earned full social security benefits only to lose them because of Wep.
    The formula they use to calculate substantial earnings is flawed, some years I missed the substantial earnings amount by two hundred dollars, some years I paid thousands over the substantial earnings amount for that year. I didn’t get any credit for the the thousands of dollars I overpaid over the substantial earnings amount, none.
    The Federal government owes the social security fund 2.5 trillion dollars, much like the labor unions that squandered away their pension funds that required an 80 billion dollar government (taxpayer) bailout. If the federal government would repay the social security fund, there would be money for everyone to receive their full pension. It gets tiresome watching our Government give away billions and billions of dollars to other countries and illegals and leave the senior citizens behind.
    I started paying into social security at age 13 and paid into it most of my life. I went to work for a local government and retired there after 30 years.The entire time I worked for the government , I worked two other jobs and paid into social security only to find out when I enrolled for benefits that I would get only half of my benefits because of the windfall elimination provision of social security, it gets worse.
    My wife is medically retired and I’m her full time caretaker. She paid well over $300,000.00 into social security but I’m not eligible for any of her benefits because of the Government Pension offset.
    sadly as a group, we don’t have big Pacs or lobbyist fighting for us.
    HR 82 will increase the social security systems total expenditures by 2 percent, while paying us the full benefits We earned. They didn’t deduct partial fica taxes from our pay, We shouldn’t be getting partial benefits.
    Wep/Gpo affects mostly middle-class workers, with the current economy and runaway inflation We need our full benefits.

    Jeff

    Reply
  • May 10, 2022 at 9:17 am
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    My situation is similar to many of you. I don’t want to seem like a whiner, but that is MY money! I feel for all of you, and I pray that OPERS can help to make changes for all of us in this boat. I have worked for 50 years, most of it in the public sector. Now, because I work for the state I can’t receive what is rightfully mine. It was shocking to find out that my SS would be so drastically reduced, and to have no recourse is frustrating and unfair. Just my two cents…

    Reply
  • May 10, 2022 at 11:07 am
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    I have worked 17 + years in the private sector (social security & paid into) & 30 years in OPERS. The WEP has a very negative impact on my retirement. Very unfair when you’ve worked all those years.
    Hopefully they will reach a solution.

    Reply
  • May 23, 2022 at 8:42 am
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    When this bill was passed they (Congress) labeled it “windfall” as if retirees were going to rake in a vast amount of money. What a misnomer! Retirees from State employment and private sector employment have earned both. They should receive both or as many as they’ve earned. Congress should act on the Social Security Fairness Act 2021 ASAP. Congress has no business deciding who should receive and not receive retirement benefits.

    Reply
  • June 3, 2022 at 12:19 am
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    Taxed SS earnings from 1985 until 1998 and taxed medicare earnings until 2002. 1994 began working for Ohio public sector and a second job in private sector. In 2002, I was disability separated and receive compensation from OPERS, which is reported as “an early distribution from a pension fund with an exception”.
    OPERS does not report the compensation as DISABILITY. My income is reported on a 1099-R, and fully taxable to the IRS and state. I am not permitted to work without permission from OPERS due to approval of disability pension payments. I am not eligible for an age or service retirement, and must report annually to OPERS that I receive no earnings and do not volunteer.
    I moved in 2009 from Ohio and got married, too. After moving to another state, I filed taxes with my husband and that state taxed my disability pension, despite the fact that I still owned my home in Ohio and could claim married, filing separate as a non-resident and owed no state taxes. Instead, I have to file state tax on income derived from employment in Ohio and pay state taxes on disability benefits even though Ohio does not withhold state taxes.
    An Ohio resident receives a credit for the total amount of disability compensation paid to an Ohio resident. The state my husband and I live in now taxes retirement income and does not offer long term disability pensions. They do not even acknowledge my condition as “disabling or compensable” under their PERS system. OPERS can mandate a review of my disability and it can be terminated without notice.
    Should OPERS terminate my disability pension payment, I will have NO income at all. I can not receive SSDI or SS, unemployment and have not worked for 20 years. I meet the IRS’s definition of “total and permanent disability” and have a letter from my doctor stating I am permanently disabled.
    Because of the way OPERS reports my income, it is included in our adjusted gross income and is fully taxable to the IRS. My husband would receive a refund of his state taxes. Instead, his state tax payments are insufficient to pay the tax liability caused by OPERS disability pension distribution.
    Why can’t I claim my disability pension to Ohio (the state it was earned in) for state tax return as a non-resident and claim my disability credit since I owe no state tax or a refund to Ohio and am under minimum retirement age? I’m being taxed by states for retirement income, not exempt under disability income as defined by the IRS.
    OPERS is denying me the disability exemption unless I live in Ohio, and suffering tax liabilities on retirement income in other states, which my husband is an innocent spouse as far as my state tax liability is owed.
    Until I reach minimum retirement age, and while under disability conditions, WHY don’t I file state tax returns to Ohio?

    Reply
    • June 7, 2022 at 11:10 am
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      Susan, OPERS recommends speaking with a tax advisor directly in regards to any questions on filing your taxes, as OPERS cannot provide tax advice.
      Thank you,
      OPERS

      Reply
  • June 24, 2022 at 1:21 pm
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    PLEASE contact your congressman as soon as possible to support HR 82 to repeal WEP & GPO !!
    Currently there are 281 sponsors
    290 sponsors are needed to advance it to the floor for a vote.

    Reply
  • June 24, 2022 at 1:21 pm
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    PLEASE contact your congressman as soon as possible to support HR 82 to repeal WEP & GPO !!
    Currently there are 281 sponsors
    290 sponsors are needed to advance it to the floor for a vote.

    Reply

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