Question: If our agency’s employees participate in Social Security, can employees opt out of Social Security coverage or otherwise terminate participation in Social Security?
Answer: Likely no. If a public agency participates in Social Security, this means that the public agency voluntarily joined the State of California’s Section 218 Agreement to provide Social Security coverage to public agency employees. Any public agency that currently participates in Social Security through a Section 218 Agreement can no longer opt out or withdrawn from Social Security. In 1983, Congress amended the Social Security Act to prohibit the termination of any Section 218 agreements on or after April 20, 1983. Congress adopted this amendment after 190,000 state and local employees opted out of Social Security coverage between 1977 and 1982, and another 634 agencies had pending terminations coming in 1983 and 1984. The large number of withdrawals threatened the Social Security system. This pushed Congress to repeal the option for public agencies to terminate Social Security coverage on or after April 20, 1983. Therefore, public agencies can no longer terminate Social Security coverage.