Bush Inks Social Security Reform Bill

March 4, 2004 (PLANSPONSOR.com) - President Bush has signed into law a Social Security reform bill impacting public sector employees.

HR 743 implements a new employment provision by which a non-covered worker must work five years under Social Security to avoid the Government Pension Offset (GPO) provision.   This closes the previous provision allowing a non-covered worker to work one day under Social Security and to avoid the GPO.   The new provision takes effect July 1, 2004, according to a report by the National Conference on Public Employee Retirement Systems.

For those employers not covered by Social Security, the new law requires them toprovide written notice about the GPO and Windfall Elimination Provision (WEP) to new employees.   These employees must then sign a statement acknowledging that by working under non-covered employment they could be subject to the Social Security pension offsets.  This provision becomes effective January 1, 2005. 

As a housekeeping move, the new regulation adds Kentucky and Louisiana to the list of states that can offer divided retirement systems to its employees.   The number of states that can offer divided retirement systems to their employees is now up to 23.