WEP related question

Dear Larry,
I am Canadian citizen and US permanent resident to reach full retirement age in October 2020. I have about 4 years of work in Canada (with Canadian Social Insurance withholding from my paycheck) and 20 years (since September 2001) of substantial earnings from California (US social security withholding from my paycheck). During my Canadian career period I earned 3 types of pensions: CPP - I have been receiving benefits for one year now; LIRA (deferred pension transferred by my employer into a mutual fund upon employment separation in 2001 - mix of personal and employer contributions; and RRSP - deferred pension based on my personal contributions only. LIRA and RRSP pensions not yet withdrawn. I understand that my social security pension will be reduced by WEP based on my Canadian pensions. The amounts are small enough to qualify for the WEP guarantee provision of 50%.
My questions are:
1. Which of the 3 Canadian pensions count for the WEP reduction to be reported to the SSA (it seems to me that RRSP should not be)?
2. What amount of the Canadian pensions should be reported, e.g., for LIRA - the amount transferred by my employer in 2001 (although it includs my contributions?), the total amount with the accrued interest at the moment of withdrawal or the amount after the 25% Canadian non-resident tax at time of withdrawal (lump sum) following echange into US dollars? In addition, the accrued interest has been taxed yearly by the State of California, although pensions are considered deferred for US federal tax purposes.
3. My current SSA statement shows earnings for 19 years only, although I have already accumulated substantial earnings for 2020 (20-tieth year). Should I wait till 2021 (till substantial earnings for 2020 appear on my SS statement) before I claim my Social Security pension or the WEP reduction will be the same if I apply for social security benefits during 2020 (if only 19 years are considered)?

Thank you.

Hi,

To count as a non-Social Security covered pension for Windfall Elimination Provision (WEP) purposes, the pension must be based on your own work and earnings that weren't subject to Social Security taxes. I can't tell you for sure, but it sounds to me like only your CPP and LIRA pensions will count for WEP purposes (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364#a).

Social Security counts the gross monthly amount of a person's non-covered pension for WEP calculations. If a person's non-covered pension is paid out in other than monthly installments, Social Security converts the amount into a monthly rate. I would think from your description that Social Security will prorate the total amount of your LIRA fund into a monthly amount using the method described in the following section of their operations manual: https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364#c.

Having 20 years of substantial Social Security covered earnings wouldn't help you with regard to the effect of WEP on your benefit rate. You'd need to have a minimum of 21 years of substantial earnings to lessen the applicable percentage reduction, and even that wouldn't matter if the WEP guarantee ends up being more advantageous for you than the regular WEP formula (https://www.ssa.gov/pubs/EN-05-10045.pdf). In any case, though, you can potentially be credited with substantial earnings years that occur after you start drawing Social Security benefits, and your benefit rate can potentially be recalculated accordingly.

Our software (https://maximizemysocialsecurity.com/purchase) is programmed to handle WEP computations, so you may want to strongly consider using the software to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits.

Best, Jerry