Colorado Dept of Personnel and Administration (DPA) - Division of Human Resources (DHR)

Division of Human Resources

Information concerning new employer notice requirements.

Beginning January 1, 2005 state and local government employers who offer public pension plans have an obligation to notify newly hired employees of the potential reduction of future Social Security benefits. Under the provisions of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), Social Security benefit calculations are based on a modified formula when a worker is entitled to a pension from a job where the worker did not pay Social Security tax. As a result, these workers receive a lower Social Security benefit than if they were not entitled to the public pension.

The Social Security Protection Act of 2004 requires state and local employers to disclose the possible impact of these two provisions on employees hired into jobs not covered by Social Security on or after January 1, 2005. The notice is necessary because some public employees are not aware that their Social Security benefits are reduced based on income from their public sector pension.

To meet the notice requirement, new employees must sign a document stating they are aware of a possible reduction in their future Social Security benefit entitlement. The Social Security Administration (SSA) recommends that new employees sign a notice form before beginning work. Form SSA-1945, "Statement Concerning Your Employment in a Job Not Covered by Social Security", has been provided for this purpose. The form, along with instructions for its use, can be found at the following address:

Beginning January 1, 2005, please include form SSA-1945 (or its equivalent) in your employee orientation process. A copy of the signed form should also be sent to PERA and the original kept in the personnel file.

For Social Security publications and additional information, including information about exceptions to each provision, visit www.socialsecurity.gov.

These documents may be presented in PDF format, which requires the Adobe® Reader.

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