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SSPE Distinctions, Key Dates & Roles

  1. How is Social Security for public employees the same as Social Security for other employees?
  2. How is Social Security for public employees different from Social Security for other employees?
  3. In simple terms, what are some of the requirements for state and local employees?
  4. Who handles Social Security for public employees?
  5. What is the public employer’s role?

How is Social Security for public employees the same as Social Security for other employees?

Public employees covered for Social Security and their employers pay the same FICA taxes as other employees and their employers.
 
Public employees covered for Social Security receive the same benefits as other employees.

How is Social Security for public employees different from Social Security for other employees?

Social Security coverage of state and local employees involves a complex set of laws and regulations that provide exceptions for unique coverage and tax/withholding requirements that do not apply to private employers.
 
The Section 218 Agreement for the state establishes Social Security coverage for public employees. Classifications of public employees may be specifically covered by or exempt from Social Security coverage under the Section 218 Agreement.

In simple terms, what are some of the requirements for state and local employees?

  • 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.
  • As of April 20, 1983, employers who are under a Section 218 Agreement can no longer opt out of Social Security coverage.
  • In 1986, Medicare coverage was mandated for all newly hired state and local public employees.
  • As of January 1987, FICA and Medicare taxes are submitted directly to the Internal Revenue Service (IRS). Previously, the State Social Security Administrators collected the taxes.
  • In 1991, Social Security and Medicare coverage was mandated for virtually all public employees not covered by either a public retirement system or a Section 218 Agreement.
  • Beginning in 1994, employers may offer coverage to police officers and firefighters, previously excluded classes.

Who handles Social Security for public employees?

Social Security for public employees is a cooperative effort between the public employer, the Pennsylvania Department of Labor & Industry, the Social Security Administration (SSA) and the Internal Revenue Service (IRS).

What is the public employer’s role?

  • Determine which employees are exempt from Social Security and/or Medicare taxes.
  • Withhold, report and pay appropriate Social Security and/or Medicare taxes for each employee.
  • Obtain clarification of laws, regulations, and other appropriate information from the State Social Security Administrator, IRS and SSA.