Hi Larry. When does the money accumulated in my member directed OPERS plan - Ohio Public Employee Retirement System - create a WEP reduction? My sister is electing not to take monthly payments, she elected the lump sum which she'll evevtually roll into an IRA. She just retired. She's 62 and has a small social security benefit. If she elects to start social security but doesn't touch her OPERS, is her benefit reduced? Or is it reduced later when she takes money out or rolls it into an IRA? Thanks for your help.

Hi. The earliest that the Windfall Elimination Provision (WEP) can cause a person's Social Security benefit to be reduced is the first month that they are entitled to BOTH their non-Social Security covered pension AND their Social Security retirement or disability benefit. Entitlement to Social Security benefits starts effective with the month that a person elects to start their benefits. However, the date that a person is considered to become entitled to their non-covered pension can be more complicated.

If your sister will receive a traditional monthly pension from OPERS, then WEP couldn't reduce her Social Security benefit rate at least until the first month that she claims her OPERS pension. But, if the the non-covered pension plan is a defined benefit or defined contribution plan (e.g., 401(k), 403(b), or 457), then the date she is considered to have become 'entitled' is depends on several variables. Most likely, though, if your sister meets the requirements for an OPERS pension and if she is able to choose when and how to start receiving distributions from her account, then she would likely be subject to a potential WEP reduction to her Social Security rate effective with the first month she takes a distribution from the account. That would be true even if she chooses to take the distribution in the form of a rollover to an IRA account.

It sounds like your sister should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of her options so that she can determine her best strategy for maximizing her benefits.

Best, Jerry