Social Security Section 218 and Your PSRS Membership

• Effective date is July 1, 2010
  
  
• Positions affected will be determined by employers and the State Social Security Administrator.
  
  
• Members working in affected positions will be subject to Social Security taxes and will pay two-thirds the PSRS contribution rate, as required by state statute.
  
  
• For the 2009-2010 school year salary paid on or after July 1, 2010, affected members will pay 6.2% to Social Security and 9% to PSRS. The full PSRS contribution rate is 13.5% for 2009-2010.
  
  
• For the 2010-2011 school year, affected members will pay 6.2% to Social Security and 9.33% to PSRS. The full PSRS contribution rate is 14.0% for 2010-2011.
  
  
• PSRS membership, attainment of retirement eligibility, calculation of final average salary, and earning credit are unaffected by Section 218 Social Security coverage.
  
  
• Members paying into PSRS at two-thirds the contribution rate will have benefits for affected years of service calculated at two-thirds of the normal benefit amount.
  
  
• How to calculate a benefit for a member subject to Social Security due to Section 218:

	Formula	Benefit	% of Final Average Salary (FAS) Received
Exempt from Social Security (normal)	.025 x $4,000 (FAS) x 30 years of credit	$3,000	75.00%
Subject to Social Security (transition) (Member has 27 years of credit and paid into PSRS at ⅔ contribution rate for 3 years.)	.025 x $4,000 (FAS) x 27 years of credit .025 x $4,000 (FAS) x 3 years of credit x ⅔	$2,700 $200 $2,900	72.50%
Subject to Social Security (full career)	.025 x $4,000 (FAS) x 30 years of credit x ⅔	$2,000	50.00%

• Most credit purchase costs will be calculated using the full contribution rate, regardless of whether the member contributed at full or a two-thirds rate for the years being purchased.
  
  
• For PSRS members who work their last five years paying at two-thirds the PSRS contribution rate and are also subject to Social Security, the Government Pension Offset (GPO) may not apply. However, the Windfall Elimination Provision (WEP) may apply. Contact the Social Security Administration at (800) 772-1213 or visit www.ssa.gov for more information.
  
  
• This ruling has no impact on current retirees' PSRS benefits. However, your post-retirement earnings at PSRS-covered employers may be subject to Social Security taxes. Please contact your employer for more information.
  

More Information about Social Security Withholdings Related to Section 218 Agreements...