The Windfall Elimination Provision: It's Time to Correct the Math
The Social Security Advisory Board is pleased to announce publication of The Windfall Elimination Provision: It’s Time to Correct the Math. The report recommends that Congress replace the Windfall Elimination Provision (WEP) for new retirees starting in 2017, when earnings data for workers not covered by Social Security will become available. These data will make it possible for SSA to calculate these workers’ benefits proportional to their contributions. The Board’s full report can be found here.
Highlights of the report include:
About one quarter of state and local government employees do not contribute to Social Security;
The WEP unevenly adjusts benefits for low earners vs. high earners;
The WEP is often confusing to those affected;
Using newly available earnings data for non-covered employment, SSA has the ability to calculate benefits proportional to contributions.
Replacing the WEP for future retirees would gradually phase out an unpopular and imprecise tool for calculating retirement benefits. The Board urges Congress to implement this fix.
I am a Resident Scholar at the American Enterprise Institute in Washington, where my work focuses on Social Security policy. Previously I held several positions within the Social Security Administration, including Deputy Commissioner for Policy and principal Deputy Commissioner. Prior to that I was a Social Security Analyst at the Cato Institute. In 2005 I worked on Social Security reform at the White House National Economic Council, and in 2001 I was on the staff of the President's Commission to Strengthen Social Security. My Bachelor's degree is from the Queen's University of Belfast, Northern Ireland. I have Master's degrees from Cambridge University and the University of London and a Ph.D. from the London School of Economics and Political Science. I can be contacted at andrew.biggs @ aei.org.