Highlights

PAYEES: 1099-R CORRECTIONS DUE MARCH 30TH

SOCIAL SECURITY ADMINISTRATION UPDATE

COLA RECOMMENDATION FOR BOARD OF RETIREMENT

PAYEES: 1099-R CORRECTIONS DUE MARCH 30TH

SBCERS payees were sent a 3-copy version of their 1099-R in the first week of February. Instructions were included on the back of the page, similar to last year's format. Click HERE to view a sample 1099-R.

Members may also view their 1099-R online at MySBCERS. Login or enroll at https://mysbcers.org/.

If necessary, please contact an SBCERS Member Services Representative to make updates to your form. Payees have until March 30, 2025 to review before SBCERS submits to the IRS.

Phone: 1-877-568-2940

Email: benefits@sbcers.org

SOCIAL SECURITY ADMINISTRATION UPDATE

The Social Security Administration (SSA) Releases Update on the Social Security Fairness Act, repealing Social Security WEP/GPO Penalties 

On January 5, 2025, the Social Security Fairness Act was signed into law repealing the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions reduced or eliminated the Social Security benefits of people who receive a pension based on work that was not covered by Social Security because they did not pay Social Security taxes. This Act may increase Social Security benefits for certain Safety retirees, such as Firefighters and Sheriff retirees. 

The effective date for the WEP/GPO repeal for those receiving Social Security benefits is January 2024. It has not yet been announced when Social Security will recalculate and apply the new benefit amounts, however, it was announced that in addition to new monthly benefit amounts, affected retirees will receive lump-sum payments retroactive to January 2024. Social Security will automatically apply the changes and make the lump-sum payments via the same payment method used previously. 

When will a retiree see the benefit increase due to the Social Security Fairness Act? 

SSA has not yet announced the implementation plan for the Act, and there currently is no estimated timeline for when past or future SSA benefits will be adjusted.  

How much of an increase can be expected?  

The amount monthly benefits may change can vary, depending on factors such as the type and amount of Social Security benefit received. Some benefits will increase slightly, while others may be eligible for over $1,000 more each month. It has not yet been announced how the increase calculation will be provided to each person. 

What is the effective date of the Act? 

According to SSA, December 2023 is the last month that WEP and GPO will apply, and that this means that those rules no longer apply to benefits payable for January 2024 and later. As a reminder: Social Security benefits payable for January 2024 would generally have been received in February 2024. 

If you never applied for retirement due to WEP or spouse’s or surviving spouse’s benefits because of GPO:

You may need to file an application with the SSA. The date of your application might affect when your benefits begin and your benefit amount. However, each case is different, and all other Social Security laws and policies, such as benefit reductions for claiming benefits before the full retirement age, the retirement earnings test, and others, still apply. Click here for more information.

Does receipt of a recalculated SSA benefit or retroactive payment in any way impact my SBCERS benefit? 

No, this Act in no way impacts or changes the amount of your SBCERS retirement benefit. 

SBCERS is monitoring SSA for additional updates and announcements, and will post future articles in our newsletter as they become available. In the meantime, you can learn more about the Act at: https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html

COLA RECOMMENDATION FOR BOARD OF RETIREMENT

We estimate that the Los Angeles Area Inflation has averaged 3.30% over calendar year 2024.

County Employees Retirement Law provides that inflation should be rounded to the nearest half percent, but limits COLA increases to 3.0% annually. As a result, a 3.0% COLA is anticipated to be considered by the Santa Barbara County Board of Retirement at its February 26, 2025 meeting. The approved COLA will take effect on May 1, 2025.

When the COLA is more than the plan permits, the excess amount is accumulated, or banked, for most retirees*. The excess amount of COLA can be applied in future years when the approved COLA level is below 3.0%. For 2024, 0.5% will be banked for most retirees*.

*All Safety Plan members, General Plan 5 members, and APCD Plan 1 & 2 members receive a 3% COLA with any remaining amount banked. General Plan 7 & 8 members and APCD Plan 8 members receive a 2% COLA with the remainder banked. General Plan 2 members do not receive a COLA.

Click here to learn more about the retiree COLA.