TN 27 (05-99)
RS 00605.372 Special Situations Applied To WEP
A. Policy - Federal service
Certain types of service or payments affect the application of the WEP. Since Federal annuities result in the largest percentage of cases when WEP applies, several aspects of Federal cases are explained.
1. Federal Employees' Compensation Act (FECA)
If a CS annuitant elects to receive FECA payments (i.e., Federal WC) in lieu of the annuity to which he is entitled, the annuity entitlement continues and WEP is considered based on the eligibility date, pension amount, etc., for the annuity.
EXAMPLE: If an individual who is receiving a CS annuity starts to receive Federal WC instead of the CS annuity, his or her entitlement to the CS annuity continues and WEP is still considered.
2. Military service involved
When an individual has both CS and military service, the military service can be combined with the CS, if necessary, to establish eligibility to the pension. However, in such cases, entitlement to the CS pension may not be established until the military service pension is waived. Such a waiver is not needed to establish the eligibility date of a CS pension that is based on military service for purposes of applying WEP. The theoretical date is used to determine if the worker was eligible before 1986. The pension-paying agency must determine the individual's eligibility date.
3. Thrift Savings Plan (TSP)
Periodic or lump sum payments from the Federal TSP are exempt from WEP because its payments are from an optional savings plan that is separate from the retirement plan. For CSRS employees, the payments yield only the amount the employee paid in (plus interest and investment earnings). For employees covered by FERS, both employer and employee contributions are made but the employee's services are covered by Social Security. Therefore, payments from the TSP based on those months likewise do not cause WEP. (See RS 00605.364A.3.)
4. Treatment of voluntary separation incentive payments under the buyout legislation
Voluntary separation incentive payments are remuneration for service rendered in Federal employment. For persons covered by the CSRS, the incentive payments are excluded from coverage of wages. These payments are not subject to the WEP because they are not included in the pension amount.
B. Policy - independently entitled divorced spouse
An independently entitled divorced spouse (IEDS) is subject to the number holder’s (NH) WEP PIA although the NH is not yet entitled to Social Security benefits. For more information on an IEDS and WEP involvement, see RS 00202.100B.5.
C. Policy - foreign pensions
A foreign pension based on employment not covered by U.S. Social Security is treated as any other pension based on non-covered employment. However, WEP does not apply if the foreign pension is based on factors other than work, e.g., residence, voluntary contributions or financial need. For more information on applicability of WEP on foreign pensions, see GN 00307.290.
2. Totalization agreement
See RS 00605.386.
D. Procedure - non-totalization pensions
1. Exchange rate
Verify the exchange rate for conversion of the foreign currency into U.S. dollars for the first day of the first month of concurrent entitlement (or on the date the claimant alleges receipt of the foreign pension, if later). Verify the exchange rate by using either:
Annotate the date of the exchange rate, the source for the exchange rate, and the exchange rate amount on the Report of Contact in the claims path (if available) or on the EVID screen in Shared Processes.
Since “credit-splitting” and/or “assignment of pension” is known to be allowable, particularly in Canada, a check amount is not adequate proof. The award letter is required to ensure claimant's full pension amount is applicable when determining the WEP guarantee (Cross-reference “credit-splitting” or “pension assignment” in RS 00605.366A.1.).
Complete Form SSA-308 following instructions in GN 00307.292. (See GN 00307.290 for further information about foreign pensions and WEP. See GN 01701.301 - GN 01701.320 for special rules that apply when totalization benefits are involved.)
REMINDER: Develop for other possible pensions as appropriate.