Hi Larry, Every February I log in to the MySocialSecurity website to make sure thta the SSA has recorded our last year of earnings correctly. All well on that front. However, for the first time I now see a message saying "Fact Sheet: You Have Earnings Not Covered By Social Security". Presumably the SSA thinks I have some earnings for which I did not pay any FICA tax. I can think of several possible reasons for this:
(1) I did work in the UK for 17 months (1999-2000), and I did make contributions towards a UK pension plan while there. However, after 17 months I got a new job back in the USA, and I canceled that UK pension plan, and received the appropriate after-UK-tax balance from that plan. So this should not a valid reason for the new notice from the SSA.
(2) As faculty employed by the state of Colorado I do contribute to an after-tax 457(b) account affiliated with PERA. Some PERA employees are slated to receive a pension; I am not, as a 401(a) plan member. So this too seems not to be a valid reason for the new notice.
(3) In the mid 1990s I had a two-year NRSA research fellowship that was subject to income tax but not to FICA. This *might* be a valid reason for the notice, but the total amount of wages I received from this fellowship was so small that I certainly hope it doesn't result in a large reduction of my social security benefit, since I still have only 26 years of significant earnings according to the SSA WEP document.
So, my question for you is how I might be able to check with the SSA to see whether they have accurate information for all three of these factors.
Thanks Larry!
Hi. You can call and ask Social Security, but I don't know if they'll be able to tell you what non-covered earnings their website is referencing. It sounds like you did have some non-FICA covered earnings, though, so it's not a surprise that that fact is noted on your 'mySocialSecurity' account.
The only way that your non-covered earnings might cause you to receive a lower Social Security benefit is if you receive a pension, or a lump sum payment in lieu of a pension, based on your non-covered earnings. That's due to the Windfall Elimination Provision (WEP).
Withdrawals of funds contributed to a non-covered pension don't count as a lump sum payment in lieu of a pension as long as the withdrawal is made before a person becomes eligible for a pension. Distributions from a 401 or 457 plan can be considered as pensions for WEP purposes, but only if your earnings were exempt from Social Security taxes and if the 401 or 457 plan is the employer's primary retirement plan (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364).
Best, Jerry
