By: Tim Hayes Financial Advisor - posted in: Public School Employees - Last updated Jul 18, 2019

Social Security & Pension from MTRS

Public employees in Massachusetts do not contribute to Social Security; however, many do contribute through other jobs.  Also, some have spouses who take part in the Social Security system. Either way, both get impacted by two federal laws.

  1. The Windfall Elimination can reduce any Social Security earned by an educator by as much as 55%. For example, a retired teacher receiving a pension from MTRS who also qualifies for a monthly Social Security benefit of $1,000 might only receive $450 a month.
  2. The Government Pension Offset provision affects Social Security spouse’s or widow’s or widower’s benefits.  For example, if a married teacher receives a pension from MTRS of $6,000 a month two-thirds of that amount ($4,000) will be credited against any benefit from their spouse’s Social Security.
    • So, if a spouse dies and the retired teacher is eligible for $2,000 survivor benefit from Social Security, they would receive none of it because the $4,000 would eat into all of it.
    • Very few married people who retire with a pension from MTRS will receive anything from their spouse’s Social Security.

Are There any Work Arounds?

There is for the Windfall Elimination. Any public employee in Massachusetts with 30 or more years of “substantial earnings” in a job where they paid into Social Security will receive their full benefit. In fact, after 25 years of such substantial earnings, any reduction in benefits begins to be reduced.

There is no such escape however from the Government Pension Offset.

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July 2019

About Financial Advisor Tim Hayes

Independent Financial Advisor

I am registered with Cambridge Investment Research, Inc., a broker-dealer with over 3,000 Registered Representatives nationwide. Investment Adviser Representative at Cambridge Investment Research Advisors, Inc., a $94B RIA based in Fairfield, IA. I've held an industry securities registration for 26 years and am subject to SEC and FINRA oversight.

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