QUESTION PRESENTED
On November 10, 2005, you asked for an opinion as to whether the Number Holder (NH)
was exempt from the Windfall Elimination Provision (WEP) in determining his Primary
Insurance Amount; SSN: ~.
CONCLUSION
Based on our review of the information provided and our research of the applicable
law, we conclude that the NH is not exempt from the WEP.
BACKGROUND
On June 27, 1966, the NH was hired by the Scranton Police Department on reserve status.
On July 29, 1967, the NH was appointed a regular police officer. On September 9, 1991,
the NH retired from the police department based on his length of service, i.e., twenty-five
years. The information you provided indicated that the NH's earnings from the Scranton
Police Department were not covered under the Social Security system.
After retiring from the police department, the NH received earnings from several jobs
covered under the Social Security system. On November 8, 2004, the NH protectively
applied for disability insurance benefits (DIB). The NH alleged disability due to
a back impairment as of July 3, 2003. On or about April 21, 2005, the state agency
found that the NH was disabled and granted his application for DIB. However, because
the NH received a pension, which was based on earnings not covered under the Social
Security system, the amount of the NH's DIB was reduced pursuant to the WEP. On July
13, 2005, the NH requested that the Agency reconsider the amount of his DIB. The NH
alleged that he was first eligible to receive his pension after twelve and one-half
years of service, that is, December 27, 1978, and, therefore, was exempt from the
WEP.
The information you provided indicated that John O~, a retired Scranton police officer,
stated that a "little known" ordinance permitted police officers hired before January
1, 1987 to retire after twelve and one-half years of service, and that these officers
were exempt from the WEP. In addition, Mr. O~ stated that police officers hired after
January 1, 1987 needed to be at least fifty-five (55) years old to retire.
The information you provided also indicated that Conall K~, an Administrative Assistant
with the City of Scranton, Human Resources Department, stated that the Police Pension
Fund of Scranton, Ch. 99, Art. III, addressed police pension matters, and that he
provided the Agency with a copy of the relevant provisions. According to Mr. K~, the
Police Pension Fund of Scranton provides that a police officer needs twenty-five (25)
years of service before he is eligible to retire. Mr. K~ also stated that the Police
Pension Fund of Scranton provides for vested pension rights after twelve and one-half
years of service, and that a police officer is eligible for a reduced non-service
disability pension after that time.
DISCUSSION
As noted in your request for advice, DIB is subject to the WEP when: (1) a claimant
becomes eligible for DIB after 1985, and (2) for the same months after 1985 that the
claimant is entitled to DIB, he is also entitled to a monthly pension for which he
first became eligible after 1985 based on earnings not covered under Social Security.
20 C.F.R. § 404.213(a) (2)-(3).
Here, the NH became eligible for DIB after 1985, and is entitled to a pension based
on earnings not covered under Social Security. Thus, the date that the NH was first
eligible to receive his pension will determine whether he is exempt from the WEP.
Based on the information provided by the City of Scranton, police pension matters
are governed by the Police Pension Fund of Scranton. And, indeed, § 99-35 of the Police
Pension Fund of Scranton provides that "[a]ll pensions shall be subject to the rules
and regulations which make up this Article, which rules and regulations shall govern
the granting of pensions."
The Police Pension Fund of Scranton § 99-41 governs when a police officer is first
eligible to retire and receive a pension. Section 99-41(A) provides that a retired
officer "shall receive a pension at the rate of one-half (??) of the salary currently
paid . . . at the time of his retirement." See § 99-50. In relevant part, § 99-41(B) provides that "[u]pon the completion of twenty-five
(25) years of continuous regular service . . . any policeman or detective may be allowed
to retire upon his own request." Thus, according to the relevant provisions of the
Police Pension Fund of Scranton, the NH was first eligible to voluntarily retire and
receive a pension after twenty-five years of service, not twelve and one-half years,
as alleged.
In addition, § 99-41(C) of the Police Pension Fund of Scranton pertains to disability
pensions. Section 99-41(C) provides that "[n]o member of the Bureau of Police shall
be retired on full pension until he has served twelve and one-half (12 ??) years of
full and continuous service as a member of the Bureau, unless he has been disabled
in the actual performance of his duty as a police officer or detective." Section 99-41(C)
also provides that an officer with less than twelve and one-half years of service
is eligible for a non-service disability pension at a rate of "four percent (4%) of
his latest ranking salary . . . for each year since his appointment as a regular officer."
Incidentally, at twelve and one-half years of service, a non-service disability pension
will equal the amount of a full pension, i.e., one-half of an officer's salary at
the time of retirement. See §§ 99-41(A), 99-50, and 99-55. Thus, while an officer may be eligible for a disability
pension after any length of service, and after completing twelve and one-half years
of service, an officer's disability pension due to a service or non-service disability
will equal a full retirement pension, because eligibility is contingent upon disability,
the Police Pension Fund of Scranton does not provide vested pension rights at twelve
and one-half years, as alleged.
Moreover, with respect to vested pension rights, the Police Pension Fund of Scranton
§ 99-41(B) provides that "[a]fter such period of twenty-five years of continuous service
the pension rights of a member of the Bureau of Police shall not be placed in jeopardy,
nor his pension refused upon dismissal from the service for any cause whatsoever."
In other words, the Police Pension Fund of Scranton provides that an officer's pension
rights vest after twenty-five years of service, not after twelve and one-half years,
as alleged. See § 99-54 (stating that pension benefits are "vested after twenty-five years of continuous
service").
In sum, based on the relevant provisions of the Police Pension Fund of Scranton, which
the City of Scranton provided, the NH was first eligible to receive his police pension
after twenty-five years of service, i.e., in 1991. Thus, because the information provided
showed that the NH was first eligible to receive his pension after 1985, the NH is
not exempt from the WEP. Further, while there are several exceptions to the WEP (20
C.F.R. § 404.213), none apply to the NH. Therefore, we conclude that the NH is not
exempt from the WEP in determining his primary insurance amount.
Donna L. C~
Regional Chief Counsel
By: __________________________
Robert W. F~
Assistant Regional Counsel