On January 5, 2025, a law entitled the “Social Security Fairness Act” was enacted. This law may provide a significant financial benefit to certain eligible Massachusetts public employees when they retire.
Background
Massachusetts public employees, including UMass employees, pay into the Massachusetts State Employee Retirement System (MSERS) or the Optional Retirement Plan (ORP). The time that they work for the University counts toward their eligibility for a pension from MSERS or in ORP. Massachusetts public employees do not pay Social Security taxes and their employment with the University does not constitute eligible service for the purpose of determining their eligibility towards Social Security benefits.
However, some public employees have worked, or will work, in the private sector for enough time to become eligible for both social security benefits and a public pension upon retirement. Up until last week, the Social Security Administration would reduce the social security benefit of many of these retirees. The relevant provisions of law that required this reduction were the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). The Social Security Fairness Acts eliminates these provisions that require this reduction.
For more information, we encourage you to read this information from Social Security. To understand how this change may impact you individually, we encourage you to speak with your own accountant or financial planner.