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  • Writer's pictureChris Stein, CFP®

Question on CSRS and WEP

The Civil Service Retirement System (CSRS) is a defined benefit pension plan available to those who worked for the federal government prior to 1987.  Those in CSRS did not pay into Social Security since the CSRS system was designed as a replacement to Social Security.  In 1987 CSRS was replaced by the Federal Employees Retirement System (FERS) that is a system that works alongside Social Security so employees in FERS do pay into Social Security.  As with any government pension that replaces Social Security, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) apply to individuals who participate in those programs.

Question Regarding CSRS and WEP

This week we have a question regarding CSRS and WEP…

“I worked for the federal government for 19 years under the CSRS. I resigned at age 38 and took out my retirement earnings ($25,000) as a lump sum. I was not eligible to retire (55 age/30 yrs of service). Until recently, I thought that since I will not receive a federal pension and was not eligible for retirement,  my SS would not be affected by WEP. I recently spoke unofficially to someone who told me that I could have kept my pension in and received a deferred pension at 62, which might make my SS fall under WEP. Do you know if that is true?  Do you know how difficult it is to get a straight answer from SS? Five calls gave me 3 yes and 2 no. I am currently trying to get an appointment for a face to face but still will not know who to believe.”

Hard to Get a Straight Answer

I certainly agree that it is hard to get a straight answer from Social Security, even on more simple questions than yours.  I am typically a smaller-government-is-better kind of guy, but when it comes to Social Security I believe that the reduction in support staff and to their administrative budget in a time where there are so many Baby Boomers beginning to claim Social Security is causing real harm to the very people who Social Security is supposed to help…but on to your main question…


For WEP applicability I always go straight to the horse’s mouth, which is the Program Operations Manual System (POMS) for the SS system.  The section that covers your situation (RS 00605.364) is found at this link:

Specifically we go to the “Withdrawals” section I have copied here:


a. Withdrawals of the employee’s own contributions and interest made before the employee is eligible to receive a pension are not pensions for WEP purposes if the employee forfeits all rights to the pension. This rule applies even if the employer paid the employee contributions.

b. Withdrawals of the employee’s own contributions and interest made after the employee is eligible to receive a pension are considered a lump-sum pension for WEP purposes.

c. Any separation payment, withdrawal, or refund consisting of both employer and employee contributions is a pension; for WEP purposes whether made before or after the employee is eligible to receive a pension.

Will WEP Apply?

Since you withdrew a lump sum from CSRS when you separated from service we look to this section to determine if WEP will apply.  CSRS receives both employee and employer contributions.  If you withdraw money consisting of both employee and employer contributions you WILL be subject to WEP (see subpart “c” above).  However, if the withdrawal consists only of your employee contributions and interest and was done prior to becoming eligible for a pension and you forfeit all rights to a future pension then the withdrawal is NOT considered a pension for WEP purposes.  I believe this is the case with a CSRS withdrawal done under the circumstances you described.

You should confirm with CSRS that you only received back your own contributions with any interest earned on those contributions when you took your lump sum withdrawal.  If that is the case I believe you will find that Social Security will not be applying WEP reductions to your benefits once you claim them.

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