Overview of Commonwealth's Provision for Social Security for Public Employees (SSPE)
When initially enacted in 1935, the Social Security Act (Act) did not include public employees as eligible for Social Security because of the constitutional question regarding the power of the federal government to tax state and local governments.
Since 1950, state and local employers have been able to offer Social Security coverage to their employees under an agreement between the commonwealth of Pennsylvania and the Social Security Administration (SSA), known as a Section 218 Agreement.
Section 218 of the Act permits a state to participate in Social Security coverage for its employees or employees of political subdivisions within the state. Many government employers did not have their own retirement systems. In 1950, the United States Congress amended the Act to allow states to voluntarily enter into agreements with SSA, on behalf of the Department of Health and Human Services.
Each state designated an official to administer the agreement on behalf of the state. This official is referred to as the State Social Security Administrator. In 1952, the Pennsylvania Department of Labor & Industry was designated by the Governor to administer the Amendments to the Act which permitted public employers to voluntarily provide their employees with Social Security coverage.
Notices and Updates
Attention! If you hire new employees not covered by Social Security: Section 419(c) of Public Law 108-203, the Social Security Protection Act of 2004, requires state and local government employers to disclose the effect of the Windfall Elimination Provision and the Government Pension Offset to employees hired on or after January 1, 2005, in jobs not covered by Social Security. The law requires newly hired public employees to sign a statement that they are aware of a possible reduction in their future Social Security benefit entitlement.
For more detailed information about this law, and to view a copy of the statement concerning employment in a job not covered by Social Security (Form SSA-1945), refer to the following site: http://www.socialsecurity.gov/form1945/
- Referendum Procedure for Obtaining Social Security Coverage
SSPE Frequently Asked Questions (FAQs)
SSPE FAQs have been organized by the list of topics below. Please click on any link to display the questions and answers provided for the topics listed.