Social Security & Medicare
California's Official State Social Security Administrator
Who We Are
CalPERS is the official Social Security Administrator for the State of California's Section 218 Agreement, referred to as the Master Agreement. We're your liaison between the Social Security Administration and the Internal Revenue Service to address Section 218 coverage-related issues and questions. Not only do we provide services to CalPERS covered agencies, we offer coverage assistance to all California public agencies.
The State Social Security Administrator (SSSA) provides:
- Guidance in resolving issues related to Section 218 Agreement coverage
- Assistance in determining mandatory Social Security and Medicare coverage or Section 218 Agreement coverage
- Processing modifications to the Master Agreement to cover new agencies and/or correct erroneous reporting
- Social Security & Medicare employer education webinars
- Informational meetings to discuss Social Security and/or Medicare contracting options
- Copies of an agency's Section 218 Agreement and related records
- Notifications of organization structure changes to Federal Social Security Administration
- Guidance with resolving employment tax compliance issues
Annual Information Request (AIR)
As the SSSA, communication with all public agencies is vital to ensure tax compliance with Social Security and Medicare withholdings. All of California's public agencies and schools, including those that do not have Section 218 Agreements, will receive and are required to complete an AIR.
The SSSA is federally mandated to report any agencies with Section 218 Agreements that become inactive, merged, dissolved, or have changed names to the Social Security Administration. These types of changes can be reported by way of the AIR questionnaire.
AIR forms can now be completed online in myCalPERS. Once available in your myCalPERS profile, a designated Social Security Administrator contact will be notified. We ask that you complete the AIR within 30 days of notification.
If you have questions or are having difficulties with the online AIR form contact us by phone at (916) 795-0810 or e-mail.
Interested in learning more about Section 218 coverage, or need assistance understanding the complex Federal Insurance Contribution Act (FICA) tax laws? The SSSA team provides a variety of events and resources to assist you.
In classes designed for employers, learn more about the Social Security and Medicare program. Payroll officers and human resources professionals are encouraged to register.
- Social Security & Medicare program overview
- Federal Insurance Contributions Act (FICA) tax compliance
- Windfall Elimination Provision (WEP)
- Government Pension Offset (GPO)
- How to contract for Section 218 Agreements
*Information is collected in accordance with our Privacy Notice.
Updates regarding legislation, training, and policies can be found in the newsletter. Subscribe to the State Social Security Administrator Program Newsletter.
CalPERS Benefit Education Events (Members)
Are you a member looking to learn more about how Social Security benefits are affected by the CalPERS pension? Register to attend CalPERS Benefit Educational Events (CBEEs) to plan for your retirement future in a city near you.
Federal, State, and Local Government (FSLG) Self-Assessment
FSLG Compliance Self-Assessment (PDF) was created by the IRS, in coordination with SSA and the NCSSSA, to allow employers to review major areas of federal tax law and identify areas where compliance issues may exist. This anonymous voluntary self-assessment can help determine the level of compliance with federal tax requirements as it relates to federal income, Social Security and Medicare taxes and, public retirement system obligationsNote: The self-assessment tool is intended as a general guide to the most common tax issues that public employers may encounter, and to direct those entities to additional information as necessary. It is not intended to provide legal advice. It does not cover every question that may be encountered. The tool is provided for general information only and should not be relied upon as legal advice or a determination by the IRS with respect to a particular tax situation. The sources cited should be reviewed for complete information.
Section 218 Coverage
Public Employers have the option to contract for Social Security and/or Medicare through a Section 218 Agreement. Contracting for Social Security and/or Medicare must be initiated by the employer. In California, contracting for coverage is done in conjunction with an already established public retirement system. Employers who do not have an established retirement system are required to withhold Social Security and Medicare based on mandatory FICA requirements outlined by the IRS in the Federal-State Reference Guide – IRS Publication 963 (PDF).
How to Contract for Benefits
The Section 218 Agreement contract process is a six-step process, facilitated by the SSSA. This process can take 18-24 months to complete.
- Step 1
- Resolution Information Packet
- Step 2
- Procedure Plan
- Step 3
- Step 4
- Application & Agreement Documents
- Step 5
- SSA Review
- Step 6
- SSA Decision
Note: Employees, labor groups, unions, and other representatives may not initiate contracts for Section 218 coverage. Section 218 Agreements must be initiated by the employer.
Is your agency not coordinated with Social Security and therefore not withholding FICA taxes? There are steps that must be taken to ensure your employees are informed.
In 2004 new legislation required state and local government employers to provide Social Security's form SSA-1945 (PDF) to new employees hired on or after January 1, 2005 in jobs not covered under Social Security. The form explains the potential effects of the two provisions in the Social Security law for workers who also receive a pension based on their work in a job not covered by Social Security:
- Windfall Elimination Provision (WEP) - impacts the amount of an employee's Social Security retirement or disability benefit.
- Government Pension Offset (GPO) - impacts Social Security benefits received as a spouse or an ex-spouse.
For this form, we recommend Employers ensure the following steps are taken:
- Provide the form to the employee prior to start of employment
- Obtain the employee's signature on the form
- Maintain original forms in employee files
- Submit a copy of the signed form to the agency's pension agency
For more information, visit the Social Security Administration State and Local Government Employers page.
The Windfall Elimination Provision (WEP)
In 1983, Congress passed the WEP to prevent employees who received non-covered (no Social Security taxes paid) pensions from the "windfall" of receiving the higher Social Security benefit calculation typically used for longtime, low-wage earners.
The WEP may reduce Social Security benefits for those who receive any portion of their pension not covered by Social Security, and who also qualify for benefits based on other Social Security-covered earnings.
Below is detailed information that may apply to CalPERS members:
- Not all CalPERS members are impacted by the WEP. Members should check their warrant or pay stub or review their earnings statement through their my Social Security Account to see if Social Security taxes have been withheld.
- Any reduction would be to a Social Security benefit, not a CalPERS pension.
- If a refund of CalPERS retirement contributions is taken in a lump sum, Social Security will still calculate the reduction as if a monthly government pension payment was received.
- The WEP may not apply if there are 30 or more years of substantial earnings in employment where Social Security taxes were paid.
- If between 20-30 years of substantial earnings were covered by Social Security, the WEP may still apply, but at a lesser impact.
For more information about WEP and a list of exceptions, review the Windfall Elimination Provision (PDF) and use the WEP Calculator. Encourage employees to obtain a copy of their earnings record and utilize these tools to see how their Social Security benefit may be affected.
Government Pension Offset (GPO)
The GPO applies when a government pension based on employment not covered by Social Security is received and there is eligibility for a spouse or surviving spouse's Social Security benefit.
The GPO provisions do not apply if employment has always been covered by Social Security.
Social Security & Your CalPERS Pension
Are you a CalPERS member? Find more information on how your Social Security benefits may be impacted by your CalPERS pension.
Social Security & Your CalSTRS Pension
Are you a CalSTRS member? Find more information on how your Social Security benefits may be impacted by your CalSTRS pension.
my Social Security Account
Sign up for a my Social Security account to access statements, review estimates of future Social Security retirement benefits, and more.
Who to Contact
If there's a possibility Social Security benefits were reduced incorrectly by the WEP or GPO, first reach out to the Social Security field office. To escalate for further assistance contact the following:
- San Francisco Social Security Administration Public Affairs team
- Call (800) 772-1213 or for TTY users, (800) 325-0778.
- California Official State Social Security Administrator (SSSA) office by e-mail
- Or call (916) 795-0810.
- School members may also contact the California School Employees Association (CSEA)
- Call (800) 632-2128.
Medicare (Hospital Insurance) coverage was extended to all those employees covered by a Section 218 Agreement on July 1, 1966. As of April 1, 1986, Medicare coverage became mandatory for state and local government employees hired (or rehired) after March 31, 1986. However, services performed after this date are exempt from mandatory Medicare coverage (known as the Continued Employment Exception) if the employee is a member of a public retirement system and meets all the following requirements:
- The Public Employer did not have a valid Section 218 Agreement prior to July 1, 1966.
- The employee was performing regular and substantial services for remuneration for the state or political subdivision employer before April 1, 1986.
- The employee was a bona fide employee of the employer on March 31, 1986.
- The employment relationship with the employer was not entered in to for purposes of avoiding the Medicare tax.
- The employment relationship with the employer has been continuous since March 31, 1986.
For employees hired prior to April 1, 1986, who are currently not paying into Medicare, a Section 218 Agreement to provide Medicare Hospital Insurance (HI) only coverage can be elected. If the employer wishes to initiate this type of Section 218 Agreement the employees once excluded from contributing, may begin to contribute.
Contact us for more information on how to initiate the process.
For more information, refer to Section 13205 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), section 3121(u) of the Internal Revenue Code (Application of Hospital Insurance Tax to Federal, State, and Local Employment), or the official government Medicare website.
State Social Security Administrator Program
- (916) 795-0810
CalPERS - State Social Security Administrator Program
P.O. Box 720720
Sacramento CA, 94229-0720
- Federal Social Security Administration
- IRS Federal, Local, & State Government Toolkit
- Social Security Administration State and Local Coverage Handbook
- Social Security & Medicare Agreement Student Guide (PDF)
- Social Security & Medicare Webinars
Frequently Asked Questions
- Can employees who lost their Social Security benefits pay the contributions for coverage on their own?
There are no provisions that would allow employees to voluntarily make the contributions on their own.
- How do I correct overpaid/underpaid contributions?
Contact the IRS. Start with the office/department you send your taxes and contributions to.