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keeperumiami, Senior Tax Expert & Financial Planner
Category: Social Security
Satisfied Customers: 7197
Experience:  Sr Tax Expert/Financial PlannerCPA/PFS (retired)Over forty years of advising individuals & small businesses
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I receive an annuity payment from my city employer. This

Customer Question

I receive an annuity payment from my city employer. This payment is from an annuity paid by me totally during 28 years of city employment. This mandatory annuity payment was due to the fact that I did not qualify for a pension. I do not understand why I have been told that a social security offset greater than my annuity payment has been implemented. I filed a form for appeal 4 months ago. My social security payment was stopped for 2 months to make repayment of nearly 1500 dollars. My appeal is still pending. Could you explain this situation?
Submitted: 1 year ago.
Category: Social Security
Expert:  keeperumiami replied 1 year ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  keeperumiami replied 1 year ago.

I can explain it, but you aren't going to like it. (Don't shoot the messenger).

The fact that your annuity was MANDATORY makes it a required offset to what your Social Security benefits would otherwise be. I know it's not "fair", but over the years when I was practicing, I had several clients in the same situation. It's just like the teachers when there were contributions to a county or state plan in lieu of Social Security contributions. Often, which is probably applicable to your situation, in addition to the annuity contributions, you may have made contributions to Social Security for the Medicare part of the Social Security Contributions, unless you are going to be covered under your existing or another government plan at age 65.

I'm sorry, but that's the way the law is written.

It also affects individuals in similar situations where they had a second job & the full Social Security contributions were made. They still are in the offset situation if they have mandatory contributions to another pension or annuity plan.

Steve G.

Expert:  keeperumiami replied 1 year ago.

I see that you have had a chance to review my response, and as I predicted, I'm sure you are not pleased with the result. This is a common problem and believe me I agree that it seems unfair. However, with the Social Security Trust fund in the shape that it is in, I don't expect to see any changes that bring more people in under the umbrella, particularly those who are already receiving or will receive some sort of pension from covered public employment. Keep in mind that those of us who are or will receive Social Security benefits, also made mandatory contributions to Social Security and that in most cases is the participants only retirement income. The benefits are far, far less that the majority of public pension benefits many of which provide 80% of the participants highest salary or an average of 3 to 5 years of their highest salaries. To add Social Security benefits to those pensions would put those retires in substantially better shape than their Social Security counterparts, which are lucky to receive 30% to 50% of their inflation adjusted covered working compensation, which is already far less than they were earning due to the wage cap on Social Security earnings subject to Social Security or Self-employment tax.

I know this doesn't ease your pain, but as I said, please don't shoot the messenger. Keeping this in mind, I would appreciate it if you would take a moment to rate my response, as that is the only way I will receive my share of the payment you've already made to the site.

Thanks for using

Steve G.