Regarding the WEP, A previous FAQ answer referred to the IRS POMS "RS 00605.364 Determining Pension Applicability, Eligibility Date, and Monthly Amount". At the bottom of this document is the sentence: "However, if the pension ceases and the NH is no longer entitled to the pension, recompute the PIA without considering the pension effective with the first month for which the claimant is no longer entitled to the pension". I take this to mean that the pension payments have run out for a person who has been receiving monthly payments of a municipality defined contribution 401a (where SS was not contributed)? But this conclusion seems contrary to the intent of the lump sum from a defined contribution section of this same document? Would a person have to prove they took monthly payments and not a lump sum?

Hi,

I think that the key is whether or not the period over which to receive disbursements is left entirely up to the person themselves. If it is, then WEP would apply throughout the period of proration even after the person stopped receiving disbursements. On the other hand if the period over which disbursements can be paid is standardized in the plan, then I think WEP would be limited to the period that disbursements are actually paid.

I should point out, however, that I am not judge and jury on this issue. There are many gray areas in regulations like WEP and GPO, and Social Security must often make these types of determinations by precedent or on a case by case basis.

Best, Jerry