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Social Security: Better Payment Controls for Benefit Reduction Provisions Could Save Millions

HEHS-98-76 Published: Apr 30, 1998. Publicly Released: Apr 30, 1998.
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Highlights

Pursuant to a congressional request, GAO reviewed: (1) how well the Social Security Administration (SSA) administers the Government Pension Offset and the Windfall Elimination Provision (WEP) benefit payment provisions of the Social Security Act; and (2) the options to improve any administrative deficiencies.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Social Security Administration To improve the administration of the Government Pension Offset and WEP benefit reductions, the Commissioner of Social Security should begin using pension information obtained from OPM to establish a postentitlement matching program for WEP so that it can verify the accurate payment of social security benefits to retired federal government employees.
Closed – Implemented
SSA advises that it has initiated the postentitlement matching program GAO recommended. In the initial match, SSA has identified about 15,000 beneficiaries being paid where WEP applied and is determining if and how much benefits should be reduced. Such matching will be done on a regular basis in the future. Preliminary results suggest that $14 million in benefit savings will be realized per year. Projecting this benefit over the lives of the beneficiaries and considering savings for this year and next, over $250 million in savings will be realized over the next 16 years.
Social Security Administration To improve the administration of the Government Pension Offset and WEP benefit reductions, the Commissioner of Social Security should work with IRS to revise the reporting of pension information on IRS form 1099R, so that SSA would be able to identify people receiving a pension from noncovered employment and to improve its internal controls by establishing a postentitlement matching program.
Closed – Not Implemented
IRS does not believe it has the authority to make the recommended change without new legislative authority. However, IRS will not seek this authority because it believes the adoption of our recommendation would create an excessive taxpayer burden. Using its own data, SSA reviewed 532 instances where the GPO or WEP benefit reductions might have applied. After further investigation, SSA found that benefits should have been reduced in only 24 of these instances. In the absence of IRS action, SSA does not believe it can efficiently identify persons receiving state and local pensions using its own data.

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Topics

Data integritystate relationsGovernment retirement benefitsRetireesInternal controlsOverpaymentsPensionsSocial security benefitsRetirement systemGovernment employees