The Government Pension Offset (GPO) Calculation Example

The Government Pension Offsets reduces or eliminates spousal (including restricted benefits) and survivor’s benefits. The quick calculation is taking 2/3 the pension and subtracting that off of what would be owed in either spousal or survivor’s benefits. Keep in mind, the software increases the pension amount at the same rate the COLA is set. 2/3 today will be different than 2/3 of the same number years in the future with an increasing COLA.

Things to remember: The pension amount grows with COLA. Increase pension by the COLA being used until spousal/survivor starts. ALSO, for survivor, look at the last Social Security amount paid to the deceased spouse and add one more COLA % to it.

Example:

Husband’s PIA- $6190 Wife’s PIA- $0 Wife;s Pension- $3000

$6190 was the last SS amount before husband’s death. You need to increase that by 2.5% for the next year (when wife would take survivor)= $6344

Now, the $3000 pension ALSO increases with COLA (2.5%) the whole time, so $3000 is now $5293 (23 years of COLA increase-23 years is the total years between now and when survivor benefits are first analyzed).

2/3 the $5293= $3528

$6344-$3528= $2816 m/ (wife’s first year survivor benefit amount)