grandfather, father, and son playing chessSocial Security and Medicare

Most PSRS members do not contribute to Social Security on PSRS-covered earnings. However, some members work in positions that require participation in both PSRS and Social Security as determined by the state Social Security Administrator. The PSRS contributions and benefits applicable to such employment are two-thirds of the full value. Age and service requirements for benefit eligibility are the same for all members.

You may qualify for Social Security if you have 40 units (10 years) of Social Security-covered employment, or through your spouse or ex-spouse (living or deceased).

If you qualify for PSRS retirement benefits and also for Social Security, two Federal provisions may impact your Social Security benefits: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These provisions are detailed below.

Information provided here regarding potential Social Security or Medicare benefits is general in nature. Any decisions regarding these benefits should be made only after contacting the Social Security Administration.

  • Social Security Government Pension Offset

    Government Pension Offset (GPO)

    Who is Affected?

    The spouses and widows or widowers of Social Security pensioners who qualify for spousal Social Security benefits.

    How Does it Work?

    Social Security spousal benefits are intended for women and men who are financially dependent on their spouses who have Social Security-covered employment. Retirees receiving a PSRS benefit are not considered by Social Security to be financially dependent on their spouses. Therefore, spousal Social Security benefits are offset (reduced) through this provision. In most cases, the reduction is equal to two-thirds of the PSRS benefit and can cause the complete elimination of the spousal Social Security benefit.

    Exception:

    The GPO does not apply if you were eligible to retire from PSRS before December 1982.

    More Details:

    The following link will provide you with a more detailed document published by the Social Security Administration.  https://www.ssa.gov/pubs/EN-05-10007.pdf

    For additional questions you may also wish to contact Social Security at (800) 772-1213 or visit your local Social Security office to determine if the WEP and GPO laws affect you. You can also visit Social Security at https://www.ssa.gov

  • Social Security Windfall Elimination Provision

    Windfall Elimination Provision (WEP)

    Who is Affected?

    People who earn a pension from work not covered by Social Security (like PSRS) and also work at other jobs where Social Security taxes were paid long enough to qualify for those benefits.

    How Does it Work?

    You do not pay Social Security tax on earnings received from your school district.  So, based on your Social Security-covered employment, you appear to be a lower-paid worker. Your Social Security benefit is calculated giving you a higher percentage of your pre-retirement income, resulting in a “windfall.” The WEP prevents this windfall by reducing your Social Security benefit; however, it cannot reduce it to zero.

    Exception:

    The WEP does not apply if you were eligible to retire from PSRS before 1986 or have 30 years of “substantial” Social Security earnings.

    More details:

    The following link will provide you with a more detailed document published by the Social Security Administration.  https://www.ssa.gov/pubs/EN-05-10045.pdf

  • Medicare

    Medicare

    Contact the Missouri State Health Insurance Assistance Program, at (800) 390-3330 or visit their website  www.missouriship.org for specific information about your entitlement to Medicare benefits.

    If you are a U.S. citizen or a lawfully admitted alien who has lived in the U.S. for at least five years, you can receive Medicare benefits at age 65. The real question for PSRS members is whether or not you will have to pay a premium for Medicare coverage.

    If you were hired by a PSRS-covered employer before April 1986 and have not changed employers since that time, you do not pay into Medicare on your PSRS-covered wages. If you were hired or have changed employers since March 1986, Medicare contributions are withheld from your pay. If you pay into Medicare, your employer matches your contributions. When you are paying into Medicare, you receive "units" based on your earnings. You can receive a maximum of four units in one calendar year.

    There are four components to Medicare:

    • Part A, Hospital Insurance
    • Part B, Medical Insurance
    • Part C, Medicare Advantage Plan
    • Part D, Prescription Drug Coverage

    You may choose to participate in any or all parts.

    Medicare benefits may be payable under special circumstances that are not explained here, such as with the occurrence of a disability.