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How Nationwide Employees Can Benefit from the New Social Security Fairness Act

'With the passage of the Social Security Fairness Act, Nationwide employees may experience an increase in financial resources as provisions like the Windfall Elimination Provision and the Government Pension Offset are eliminated, providing greater access to Social Security benefits—an important update for those navigating retirement planning.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Nationwide employees should take note of the Social Security Fairness Act’s impact, as the elimination of the Windfall Elimination Provision and Government Pension Offset can provide significant financial relief, particularly for those with non-covered pensions, highlighting the importance of adjusting retirement strategies in light of these changes.' – Kevin Landis, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

The key changes introduced by the Social Security Fairness Act, including the elimination of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
The impact on public employees and Nationwide workers, highlighting how these changes affect pension and Social Security benefits.
Potential financial and policy implications, including concerns about Social Security fund sustainability and effects on Medicare premiums.

Major legislative changes recently may alter the outlook for many Americans, including those at Nationwide companies. The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) were repealed with the signing of the Social Security Fairness Act on January 5 by former President Joe Biden. These regulations were originally intended to adjust benefits for people receiving public pensions with Social Security entitlements.

The Windfall Elimination Provision particularly affected Social Security retirement benefits for those who also received pension benefits from jobs not subject to Social Security taxes. Meanwhile, the Government Pension Offset restricted spousal Social Security benefits for people with public pensions from non-Social Security tax-paying jobs.

The elimination of these provisions, reported by the Social Security Administration, will affect about 3.2 million people.

For Nationwide companies and other eligible Americans, it could mean increased payments each month — up to USD 1,190, estimates the Congressional Budget Office.

Former Social Security Administration employee and retirement planning consultant Kurt Czarnowski said the rules were designed to create a balance between Social Security recipients and public sector workers without pensions. While reductions under WEP occurred, at least some benefit was provided to those affected. Some could lose all spousal benefit entitlements under GPO.

The impacts will be greatest for public educators and could similarly affect employees of Nationwide companies. Many educators, for example, may have contributed to Social Security through part-time jobs or summer jobs but saw their benefits cut because their primary income was from teacher pensions. Czarnowski said previous regulations disadvantaged people who helped create both systems.

But some worry that doubling benefits for millions will accelerate Social Security's dwindling pot. Current projections show the Social Security Administration can pay full benefits through 2035, minus any potential financial impact of the Social Security Fairness Act.

Public employees like teachers, firefighters, and police officers are also eligible for increased payments if they receive a pension for work not covered by Social Security. Once eligible, those beneficiaries might get a retroactive lump sum from January 2024 plus increased Social Security income.

Public workers with pensions not covered by Social Security whose spouses contributed to Social Security now can get spousal benefits. This includes possibly getting 100% of a deceased spouse's benefits or 50% at qualifying age, which may be a financial help to some.

As many beneficiaries will receive their lump sum payments by the end of March and increased monthly benefits beginning in April, the SSA said it would expedite the changes in cases that do not require manual processing.

SSA also has measures in place for people who opted out because of the impact of WEP or GPO, or who become eligible for retirement benefits, to ensure they receive accurate payment upon application. It also has information and updates on the Social Security Fairness Act.

Conclusion: while Windfall Elimination Provision and Government Pension Offset repeal provide some financial relief for many, questions remain about the long-term viability of the Social Security fund. Beneficiaries should follow up on those changes and consider them in retirement planning, including employees of Nationwide companies.

In addition, the new Social Security Fairness Act affects Medicare premiums. As Social Security benefits increase under the Act, some retirees may see changes in Medicare Part B premiums — deducted from Social Security payments — that are income-related. Considering this possible financial impact when planning for retirement healthcare is important, according to a March 2024 report by the Centers for Medicare and Medicaid Services.

This legislation, like changing a dam that diverted water from a river, lets resources flow more fairly, allowing Social Security benefits to public employees like teachers and firefighters. This adjustment corrects historical inequalities so people contributing from different job sources receive benefits corresponding to their contributions.

The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) repeals under the Social Security Fairness Act affect many retirees, particularly those with non-covered pensions. Five sources explain these changes.

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Sources:

1. Social Security Administration (SSA). 'Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).' Social Security Administration , 27 Feb. 2025, www.ssa.gov . Accessed 15 Apr. 2025.

2. Thrivent Financial. 'Social Security Fairness Act: How the WEP & GPO Repeal May Affect Your Benefits.' Thrivent , 27 Feb. 2025, www.thrivent.com . Accessed 15 Apr. 2025.

3. Li, Zhe. 'The Social Security Fairness Act of 2023.' Congressional Research Service , Feb. 2025, crsreports.congress.gov. Accessed 15 Apr. 2025.

4. International Association of Fire Fighters (IAFF). 'Q&A: How Will the Social Security Fairness Act Impact Me?' IAFF , 24 Jan. 2025, iaff.org. Accessed 15 Apr. 2025.

5. Horace Mann. 'Social Security Fairness Act FAQ.' Horace Mann , Feb. 2025, horacemann.com. Accessed 15 Apr. 2025.

What are the unique benefits provided by the Nationwide Retirement Plan that differentiate it from other retirement plans? How does Nationwide Mutual Insurance Company ensure the plan meets the regulatory requirements while still addressing the needs of its employees?

Unique Benefits of Nationwide Retirement Plan: Nationwide’s Retirement Plan provides both a Final Average Pay (FAP) Benefit and an Account Balance Benefit, which allows flexibility for employees hired at different times. The plan is qualified under Section 401(a) of the Internal Revenue Code, ensuring compliance with federal tax laws. Nationwide ensures regulatory compliance while addressing employee needs through ongoing contributions, actuarial evaluations, and options like lifetime income for retirees and survivors.

How can employee participation in the Nationwide Retirement Plan impact their overall retirement savings strategy? What role does the defined benefit pension plan play in conjunction with Social Security and personal savings for employees of Nationwide Mutual Insurance Company?

Employee Participation Impact: Participation in the Nationwide Retirement Plan enhances employees' overall retirement savings strategy by integrating Social Security, personal savings, and the defined benefit plan. The FAP benefit, based on final average compensation, works alongside Social Security to offer a stable income, while the Account Balance Benefit adds flexibility in retirement income options.

What options do employees of Nationwide Mutual Insurance Company have when they retire before the age of 55, and how do these options compare to those available for employees who retire after reaching that age? What factors influence the choices employees make regarding timing and type of benefit commencement?

Retirement Options Before and After Age 55: Employees retiring before age 55 can start receiving their benefits immediately, but they face early retirement reductions. Those retiring after age 55 may choose from more benefit options like annuities and receive higher, less-reduced payments. The choice to retire before or after age 55 depends on factors like financial need and health, and affects the timing and size of the benefit commencement(Nationwide Mutual Insur…).

In what ways does the structure of the benefit formulasâ€”Final Average Pay (FAP) Benefit and Account Balance Benefitâ€”affect the retirement income of employees at Nationwide Mutual Insurance Company? What are the implications for employees considering different retirement timings?

Effect of Benefit Formulas on Income: The FAP Benefit is based on Final Average Pay and Social Security coordination, offering a larger benefit for those with higher incomes, while the Account Balance Benefit is based on accumulated contributions and interest. The timing of retirement plays a crucial role in determining income, as early retirement results in reduced benefits, while late retirement allows for continued service accrual and potentially higher payouts.

How does the Nationwide Mutual Insurance Company address spousal benefits under the retirement plan, particularly regarding the Qualified Preretirement Survivor Annuity (QPSA)? What are the actions that employees need to take to ensure their spouses receive these benefits?

Spousal Benefits and QPSA: Nationwide offers a Qualified Preretirement Survivor Annuity (QPSA) to ensure that a spouse receives benefits if the participant dies before retirement. Employees must name their spouse as a beneficiary or obtain notarized consent if they wish to designate someone else. To ensure the spouse receives the QPSA, employees must take the appropriate legal steps outlined in the plan.

What steps must employees of Nationwide Mutual Insurance Company take to successfully file a claim for retirement benefits, and what is the timeframe for processing these claims? How does the company ensure that employees understand their rights under the Employee Retirement Income Security Act (ERISA)?

Steps to File a Claim for Retirement Benefits: To file a claim, employees must notify the Nationwide Retirement Center at Fidelity and submit the required paperwork. Claims are typically processed within 60 days, and Nationwide ensures that employees understand their rights under ERISA through detailed communications and support from Fidelity Investments.

What are the situations that might cause delays or loss of benefits for employees retiring from Nationwide Mutual Insurance Company? How can employees proactively manage these risks to ensure they receive their entitled benefits?

Situations Leading to Delays or Loss of Benefits: Delays can occur if employees fail to submit necessary paperwork, keep their contact information updated, or if they are not vested at the time of severance. Employees should proactively manage these risks by completing forms timely and maintaining communication with the Plan Administrator to avoid disruptions in benefits.

Can employees at Nationwide Mutual Insurance Company alter their distribution choices after commencing their retirement benefits? What regulatory frameworks influence their ability to change benefit elections, and under what circumstances might these changes be permitted?

Changing Distribution Choices After Retirement: Once retirement benefits commence, changes to distribution elections are limited. For example, lump-sum payments and annuity selections are typically irrevocable after commencement, and spousal consent is required for certain changes. Federal regulations, such as IRS rules, further restrict post-retirement changes in benefit elections(Nationwide Mutual Insur…).

How does the Nationwide Mutual Insurance Company plan for automatic post-retirement benefit increases, and what factors determine the percentage increase? How do these increases impact the long-term financial security of retirees?

Post-Retirement Benefit Increases: Nationwide offers automatic post-retirement benefit increases for participants with service before 1996, with annual increases between 0% and 3% based on fund performance. These increases help to protect retirees’ long-term financial security by adjusting their pension income for inflation.

How can employees contact NDPERS for more information regarding their retirement options, and what specific resources are available for personalized assistance? Clear communication channels and support services are essential for helping employees navigate their retirement planning effectively with NDPERS.

Contacting the Nationwide Retirement Center: Employees can reach the Nationwide Retirement Center at Fidelity by calling 1-800-238-4015 for inquiries about their retirement plan. Fidelity provides detailed support, including benefit estimates, plan information, and assistance with filing claims and selecting benefit distribution options(Nationwide Mutual Insur…).