The Social Security Fairness Act is now law—and it’s a game-changer for public employees in Texas and 14 other states. President Joe Biden signed the legislation on January 5, 2025, eliminating two controversial provisions: the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).
Retirement expert Dave Freitag returns to explain what the law means now—including real-life examples, refund eligibility, and the potential long-term impact on the Social Security Trust Fund. We first covered the Social Security Fairness Act in our last issue.
A game-changer for public employees
Freitag: This new law is excellent news for public employees in Texas and 14 other states. With President Biden’s final approval of the act, two significant offsets in the Social Security system are now gone forever.
The first is the Government Pension Offset (GPO), reduces the amount that a state worker can receive from spousal and survivor benefits based on their spouse’s Social Security. A substantial state pension would often eliminate those benefits completely.
GPO in action: a real-life example
fyi50+: Can you give an example of how this GPO used to work?
Freitag: Here’s a perfect example: Bob worked in the private sector and earned a monthly Social Security benefit of $3,000. Mary, a teacher in Dallas, earned a $6,000 monthly state pension. Two-thirds of her state pension — $4,000 — would be deducted from the spousal benefit she might have expected from Bob.
Consequently, Mary would have received nothing since Bob’s spousal benefit was capped at $3,000. As a widow, she might have received only $2,000 of Bob’s $3,000 monthly benefit.
What happens now that GPO is repealed?
fyi50+: What is happening to Mary’s income now that the GPO is gone?
Freitag: Here’s the great news: Mary can now receive a full spousal benefit of $3,000 per month and a full survivor benefit of $6,000 from Bob. That’s a significant financial difference for retirees like her.
More good news: WEP has been repealed too
fyi50+: Wow, is there any more good news?
Freitag: Yes! The law also repealed the Windfall Elimination Provision (WEP), which reduced benefits for workers having two careers: one in the private sector and another as a public employee.
How WEP affected dual-career workers
fyi50+: What might be an example of how WEP worked?
Freitag: For example, Mary worked for a private company for 10 years before transitioning to teaching. Her state pension from teaching could have decreased the Social Security benefits she earned from her prior private-sector employment, but the new law removes that decrease.
Retroactive refunds: look at your bank account
fyi50+: Is the law retroactive?
Freitag: Yes, this applies to all of 2024. Any offsets applied to state workers during that time are now being refunded, along with the new monthly income they will receive moving forward.
“The SSA has refunded over $7 billion to more than one million government workers. If you have a state pension, check your bank account—you may already have received a refund.” — Dave Freitag
How to learn more and check your benefits
fyi50+: How can workers find more information about the new law and its potential impact on their circumstances?
Freitag: The best place to visit is the Social Security Administration’s website.
The SSA updates it regularly. So far, the agency has refunded over $7 billion to more than one million government workers. If you have a state-sponsored pension, check your bank account — you may have already received a refund of hundreds or even thousands of dollars.
The downside: strain on the Social Security Trust Fund
fyi50+: Is there any negative news regarding this new law?
Freitag: Unfortunately, yes. This new law will cost over $196 billion over the next 10 years. None of that cost will be funded by new revenue; it’s all drawn from the Social Security Trust Fund. Actuaries now project that the trust fund could run out six months earlier than expected. Lawmakers will need to act soon to ensure the system’s long-term sustainability.
Quick Facts About the Social Security Fairness Act
Signed into law:
January 5, 2025
Key changes:
- GPO repealed — Full spousal and survivor benefits are now available to public employees.
- WEP repealed — Workers with careers in both public and private sectors are no longer penalized.
Retroactive coverage:
Applies to all of 2024, with past offsets refunded.
Total refunds to date:
$7 billion for over 1 million public employees
Who is affected:
Public workers in 15 states, including teachers, firefighters, police officers, and others.
Learn more:
ssa.gov/benefits/retirement/social-security-fairness-act.html
