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Jonathan Tierney
Jonathan Tierney, Certified Public Accountant
Category: Social Security
Satisfied Customers: 322
Experience:  Tax Accountant at Praxair, Inc.
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I was in a 403b (defined contribution) retirement plan with

Customer Question

I was in a 403b (defined contribution) retirement plan with TIAA-CREF at the University of Cincinnati. I waited until 70 to collect a reduced Social Security benefit based on other employment outside the university. Social Security has contacted me and want to reduce my benefit by half because they say it is a pension plan if the university contributed to my 403b. TIAA-CREF Informs me that 403b benefits do not reduce social security benefits. I know several other retirees who are in my same situation and are receiving un-reduced social security benefits.
Submitted: 2 years ago.
Category: Social Security
Expert:  Jonathan Tierney replied 2 years ago.

Hi, my name is ***** ***** my goal here is to provide you with the most complete and accurate answer possible.

A 403(b) plan is very much like a 401(k) plan except that they are for non-profit or government organizations. With some defined benefit plans it is possible to take a lump sum distribution and put the proceeds in another qualified plan such as 403(b) or IRA. However, the only way for your benefits to be reduced is if some of your earnings were not covered by Social Security and you did not have to pay any Social Security taxes on them. That is the case with federal government employees, certified teachers in public schools, and railroad workers. These workers do not pay into Social Security but instead make contributions to separate retirement fund. Where I am in Connecticut, certified public school teachers have to pay withholding taxes to the Teacher's Retirement Board but do not have to pay Social Security taxes on that income. The pension that receive from the CT Teacher's Retirement Board can be used to reduce their Social Security benefits

Do you know if you have ever worked in a place where you did not have to pay Social Security taxes? You may want to check your Social Security earnings statement to see if there were any years where there was no or very little income reported to Social Security, but you know your worked. That could be the reason that they would want to reduce your benefit. You can use this link for information directly from the SSA regarding public pensions.

I hope this answers your question. Please let me know if I can clarify anything or answer any additional questions. Thanks, Jonathan