The Passage of the Social Security Fairness Act (H.R. 82)

On January 5, 2025, (then) President Biden signed into law the Social Security Fairness Act (H.R. 82), marking a significant change in the benefits landscape for teachers, police, firefighters and other public service workers. This landmark legislation repeals both the Windfall Elimination Provision (WEP), and the Government Pension Offset (GPO), two provisions that had long reduced Social Security benefits for individuals who also received a pension from non-Social Security covered employment.

The WEP reduced social security benefits for workers who had also contributed to any type of public employee retirement plans. The most common of these plans in Ohio are the Ohio Public Employees Retirement System (OPERS) and the State Teachers Retirement System (STRS). The GPO reduced social security payments to surviving spouses covered under public employee pensions.

Key Changes:

• Retroactive Payments: The repeal is retroactive to December 2023, ensuring that eligible recipients will receive backdated payments. This immediate financial boost is expected to benefit millions of public service workers, including state employees who were previously affected by the WEP and GPO.
• Increased Retirement Income: With the elimination of WEP and GPO, public employees and their spouses can now receive their full Social Security benefits in addition to their state pensions. This change translates to a significant increase in retirement income, offering greater financial stability and security.

Estate and Financial Planning Implications:

• Enhanced Retirement Planning: The increase in retirement income allows public employees to more effectively plan for their future. With higher expected Social Security benefits, individuals can allocate additional resources towards healthcare costs, long-term care, and other essential expenses, allowing for a more comfortable retirement.
• Estate Planning Adjustments: The changes in benefits may necessitate updates to estate planning documents. State employees should review their wills, trusts, and beneficiary designations to ensure their estate plans align with their new financial situation. Consulting with an estate planning attorney can help individuals navigate these changes and ensure their assets are distributed according to their wishes.
• Charitable Giving and Legacy Planning: With increased financial security, some state employees might choose to incorporate charitable giving into their estate plans. Establishing charitable trusts or making bequests to favorite causes can create a lasting legacy and provide tax benefits.

For assistance with these issues or any questions regarding H.R. 82, please contact Dylan Krendl or Paul Croy at RCO Law, 419-249-7900.

This article was written by Dylan Krendl.