WEP Questionnaire

Quick recap - I’m a UK citizen and resident.  I’ve just turned 65.  I receive a US SS retirement benefit as a result of SS contributions from working abroad.  I started taking my SS benefit at age 62.  I will receive various UK pensions in due course - state pension at 66.  I have 2 company pensions which I’ve deferred for now - will probably start taking those at the same time as my UK state pension, although I’ll review nearer the time.

I’ve just received a letter from the SSA in the USA - Retirement, Survivors and Disability Insurance, Request For Information - maybe precipitated by my turning 65?  Specifically, they want to know details of my UK pensions, in order that they can do their WEP calculations.

Obviously, I want to give correct answers - most are easy, but one in particular is unclear.

1. Have you retired and started receiving a social insurance benefit from another country or a private pension based on earnings not covered by Social Security.
NO (although I suppose there’s a philosophical, maybe technical, debate to be had regarding the definition of “retired”)

2. If NO, when do you expect to receive a pension.
Based on what I said earlier - probably when I’m 66.

Now, this is the problematic one:
3. What is the earliest date you could have received a pension had you stopped working and made application?
One of my company pensions is a deferred annuity (long story, UK company who went bankrupt in the 90s, pension into trust, taken over by Pru).  Technically, although my normal retirement age is 65, I could have taken that pension years ago.  My second company pension was also available at my normal retirement age.  As I mentioned, I’ve deferred both these pensions.

So, any suggestions as to what is the correct answer to that third question?

Quick recap - I’m a UK citizen and resident.  I’ve just turned 65.  I receive a US SS retirement benefit as a result of SS contributions from working abroad.  I started taking my SS benefit at age 62.  I will receive various UK pensions in due course - state pension at 66.  I have 2 company pensions which I’ve deferred for now - will probably start taking those at the same time as my UK state pension, although I’ll review nearer the time.

I’ve just received a letter from the SSA in the USA - Retirement, Survivors and Disability Insurance, Request For Information - maybe precipitated by my turning 65?  Specifically, they want to know details of my UK pensions, in order that they can do their WEP calculations.

Obviously, I want to give correct answers - most are easy, but one in particular is unclear.

1. Have you retired and started receiving a social insurance benefit from another country or a private pension based on earnings not covered by Social Security.
NO (although I suppose there’s a philosophical, maybe technical, debate to be had regarding the definition of “retired”)

2. If NO, when do you expect to receive a pension.
Based on what I said earlier - probably when I’m 66.

Now, this is the problematic one:
3. What is the earliest date you could have received a pension had you stopped working and made application?
One of my company pensions is a deferred annuity (long story, UK company who went bankrupt in the 90s, pension into trust, taken over by Pru).  Technically, although my normal retirement age is 65, I could have taken that pension years ago.  My second company pension was also available at my normal retirement age.  As I mentioned, I’ve deferred both these pensions.

So, any suggestions as to what is the correct answer to that third question?

Perhaps getting the letter at age 65 maybe due to Medicare? Also; some countries have a default retirement age of 65 and I'm sure your letter isn't U.K country specific.

I'd definitely attach a free format letter in with the form and explain your circumstances in greater detail. Often individual circumstances are are not warm and fuzzy; 'Yes' or 'No'.

Q1, If you will never work again and this is factual, then put 'No'. TBH, many who retire, do work again in the future albeit part time. At the time of retirement, many people consider, 'that's it - no more work'! But circumstances can change, or we may simply wish to get back to the grindstone again. With pension freedoms and the default retirement age abolished, you may work again and defer your U.K OAP until 70. 'Retirement' and taking OAP don't have to go together any more, hence detailing this in a letter to be sure. Also, i'd also mention any UK private pension that has nothing to do with work (like an IRA). Has no impact on WEP as its not based on earnings not covered by Social Security. This just gives full facts of all your UK pensions.

Q2, Again you may change your mind from age 66. I'd add to the letter that you are eligible to begin taking your OAP from age 66, until age 70, (don't think you can defer longer, not sure). Adding that you have not decided when you'll apply at this time. (not locking yourself in here).

Q3, 55 is the earliest you could have taken the company pension, although this rule came in in 2010. Again I'd add an explanation to the letter that you could have taken at 55, but have deferred any distribution to a future date, that has yet to be determined.

Thanks.  I'd wondered about attaching an explanation but I'm never sure whether such things are ignored - especially if completed forms are processed electronically.

I still find the third question very strange though.  There's no requirement to stop working when taking pensions - either private pensions or state pension.

I'd write something like:

Please see the attached letter that forms a part of, and should be read in conjunction with this questionnaire. (In CAPS - red pen)

Where there is a 'YES/NO', but no definite 'YES/NO' response, you could then make reference to the attached letter.
Scan all papers prior to mailing, save to your pc, (copy to external drive too) and back up to the cloud for archive. Then you have a permanent paper trail should questioning come down the line in the future.

 

I like the advice to write an explanatory letter when returning the questionnaire.

I like the advice to write an explanatory letter when returning the questionnaire.

Yes indeed.  I'd like to think that the USA's SSA, or at least the FBU in London, know the rules regarding state and company pensions in the UK but it won't do any harm to spell it out.  The UK state pension rules are easy - unlike the USA you can't take it early, but you can take it late.  Company pensions are a different matter.  Although you can take them at age 55, and can still carry on working, you'd hope that they'd realise that for most people doing so wouldn't be very wise.  If I were them (the USA SSA), I'd make it simple and use the UK state pension age - and start WEPping from then.  I suppose there are pros and cons though.

I have an update (didn't think it was worth a new topic).

Well, they didn't like the fact that I didn't return form SSA-308 which gives details of all non-US pensions.  So I now have to fill one in, even though any company pension amounts I give them will be from quotes (regardless of whether I take the pension or not) and I'm more than 6 months from UK state pension age (so the forecast doesn't include the uplift in April - although that is apparently 10.1%).

One of my pensions will give a current quote and is valid for 6 weeks.  Another will actually provide a quote based on a future date, which is good.

I guess the SSA want to know these numbers regardless of whether you take those pensions or not.  And the question: "when did you first become eligible for the pension" is still a worry - because I could have taken my company pensions years ago.

One of the questions on the form I'm not sure of:
Is the pension listed in item 1 a partial benefit paid under a U.S. Social Security (Totalization) agreement?
I assume that only applies to the UK state pension.  My understanding is that, although we have a totalization agreement with the USA, it doesn't apply in this case, because I have enough credits in both countries.  So I should answer No?

There is a penalty for not providing this information - and they want it within 30 days of their letter.  The letter is dated 12th December and it arrived today (14th Feb).  The postmark, however, is 9th Feb so I could use that in my defence I think.

You might find things easier to work through the FBU in London - I have found them to be extremely helpful and responsive - plus they have an understanding of  the UK pensions sector.

I have both a SS pension and a UK state pension as well as a UK private pension - all of which I began drawing upon reaching 66 or 66 & 2 months. I'm Wep'd to the max - which does make me weep (excuse the pun!) - but that's the system.

How many credits do you have in the US SS system? - this will determine the amount of WEP that can be applied.

You might find things easier to work through the FBU in London - I have found them to be extremely helpful and responsive - plus they have an understanding of  the UK pensions sector.

I have both a SS pension and a UK state pension as well as a UK private pension - all of which I began drawing upon reaching 66 or 66 & 2 months. I'm Wep'd to the max - which does make me weep (excuse the pun!) - but that's the system.

I agree with this, my wife and I have both found the FBU to be really good.

When I apply in a couple of years I will have about 28 years of credits in SS which should reduce WEP a lot. I also have 2 UK private pensions so expect to easily hit the max WEP amount. Since WEP starts reducing after 20 credits I am expecting to only be hit by 1/5th of the max. e.g. if the max is $500/mo then I’m hoping to only get a reduction of $100/month

You might find things easier to work through the FBU in London - I have found them to be extremely helpful and responsive - plus they have an understanding of  the UK pensions sector.

I have both a SS pension and a UK state pension as well as a UK private pension - all of which I began drawing upon reaching 66 or 66 & 2 months. I'm Wep'd to the max - which does make me weep (excuse the pun!) - but that's the system.

How many credits do you have in the US SS system? - this will determine the amount of WEP that can be applied.

Not sure about credits but I paid about 14 years worth.  If my understanding is correct, there's a table that defines max WEP based on the ELY which for me was 2019.  I vaguely remember an amount of $463 I think.  Whatever it is, I'll be max WEP'd when I take all my pensions.

I did call the FBU today but failed to get through to anyone.  I have emailed them but from experience it takes them ages to respond even though they quote 10 days.

I agree with this, my wife and I have both found the FBU to be really good.

When I apply in a couple of years I will have about 28 years of credits in SS which should reduce WEP a lot. I also have 2 UK private pensions so expect to easily hit the max WEP amount. Since WEP starts reducing after 20 credits I am expecting to only be hit by 1/5th of the max. e.g. if the max is $500/mo then I’m hoping to only get a reduction of $100/month

I'll try the FBU again tomorrow.  Going through the phone menu was slightly odd - questions about SS benefits are under services for US citizens, which I'm not of course.

The FBU were very good once I managed to get my retirement benefit "interview", but getting to that point took over 6 months as I recall.

Anyone know the answer to the question whether my UK state pension is "a partial benefit under a U.S. Social Security (Totalization) agreement"?  I'm assuming it doesn't apply to company pensions.  Is it something to do with the situation where if you didn't have enough qualifying years in the UK (10?) to get any pension at all, you could use qualifying years from the US to make up it up to 10?

I can give one of 3 answers:
1. Yes, and submit evidence from the agency providing the pension, and ignore the rest of the form which requests dates of employment contributing to the pension
2. No, and complete the rest of the form - dates of employment, periods of voluntary contributions, etc
3. Unknown - but contact the pension agency and complete the rest of the form anyway.

With enough credits in both countries the answer would be no I think.

I spoke to the FBU today, and yes, they are very helpful.

I explained the situation, that I'd been requested to return a form SSA-308, giving details of my UK pensions - but that I couldn't provide any of the information required because I'm not yet in receipt of any of those pensions (although, if I chose, I could be already taking 2 company pensions - that's still a grey area to me).

I was advised to submit a form SSA-795, Statement Of Claimant Or Other Person, stating that I wasn't yet in receipt of any pensions but that I'm fully aware of my obligation to inform the SSA when I start taking them, using form SSA-308, etc.  Which was nice.

Apart from that, I learned that any correspondence that needs to be sent to the SSA in the USA can instead (and is actively encouraged) be sent to the FBU in London.  I wish I'd known that when I returned the original form a few months ago.

So that's a result, I think.  I'll find out in due course whether that worked.

As a penalty for not responding, the SSA could impose the maximum reduction in benefits (which I take to mean max WEP) based on a monthly pension of $9999.99.

I'm sure that you've probably seen this before, but always a useful reference point:

https://www.ssa.gov/pubs/EN-05-10045.pdf