What Public Sector Employees and Retirees Need to Know About the Social Security Fairness Act

Those who have dedicated their lives to service, whether as educators, protectors, or first responders, have received long-awaited news this year. Their invaluable contributions to society may be reflected in their retirement benefits.

On January 5, 2025, the Social Security Fairness Act was signed into law. For millions of Americans, particularly public sector retirees, this legislation marks a significant shift in how Social Security benefits are calculated. At its core, the Act eliminates two provisions that have long reduced benefits for individuals who earned pensions from employment not covered by Social Security: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

Although this update restores benefits going forward, it may also result in retroactive payments for those who were previously affected. Below, we’ve outlined what is changing, how it impacts you, and what steps you may want to consider as part of your financial planning.

What Has the Social Security Fairness Act Changed?

WEP and GPO were originally designed to prevent “double-dipping” from public pensions and Social Security. In practice, these provisions often penalized public employees who worked in non-covered positions by slashing their benefits.

The Windfall Elimination Provision

WEP reduced Social Security retirement benefits for individuals who also received a pension from non-covered employment (i.e., jobs where they did not pay into Social Security). This often impacted teachers, firefighters, police officers, and other state or local government workers.

The Government Pension Offset

GPO reduced or eliminated Social Security spousal or survivor benefits for individuals receiving a non-covered pension. In many cases, eligible spouses never filed for benefits because their expected amount was reduced to zero.

What the New Law Does

The Social Security Fairness Act fully repeals both the WEP and GPO, effective retroactively to benefits payable after December 2023. This means:

• Social Security benefits will no longer be reduced due to non-covered pensions.
• Individuals who had benefits reduced under these provisions may receive increased monthly payments.
• Retroactive payments may be issued to make up for underpaid benefits dating back to late 2023. 

What Should You Do Now?

For many, the benefits increase will be automatic. There’s a key exception, however, for individuals who never filed for benefits because they were previously told they wouldn’t qualify. These individuals, often spouses or survivors of public employees, may now be entitled to significant Social Security income, but must file to receive it.

Others who filed under WEP may benefit from reviewing whether a spousal benefit is now more favorable than their own. In some cases, switching could lead to a higher income for life.

The Social Security Administration (SSA) is working on implementing the Act, so it’s important to know there may be delays in issuing retroactive payments and adjusting benefits.

TrueNorth is Here to Help You Make the Most of It

As this policy takes effect, it may shift the way you view your broader retirement strategy. We’re helping our clients navigate this change as part of your holistic, purpose-driven plan.

Whether you need assistance reassessing your Social Security filing strategy, navigating retroactive benefit claims, or aligning increased income with your long-term goals, you can call us at 417-434-9400. Now is a good time to ensure your financial decisions support what truly matters to you.

TrueNorth does not provide tax, legal or accounting advice.