In the wake of the Bipartisan Budget Act of 2015, changes to several Social Security claiming strategies have caused a flurry of questions from plan sponsors and plan advisers. 

The most significant change, according to Tom McGirr, senior vice president of workplace retirement products at Fidelity, was the end of two major Social Security claiming strategies for married couples: “file and suspend” and restricted application for spousal benefits.

Kevin McGarry, director of Nationwide Retirement Institute, says the change in file and suspend has led to a lot of media attention. “More participants are asking questions,” he tells PLANADVISER. “The need for education has increased, and will likely continue to grow along with interest around the topic.”

“Plan sponsors are in the process of digesting these changes and deciding how to best help participants with their Social Security claiming strategies,” McGirr tells PLANADVISER.

The new law causes a voluntary suspension of benefits to stop all benefits payable under the earnings record of the person whose benefit was suspended. For married couples, this means the spouse can no longer collect a spousal benefit during the time in which the wage-earner’s benefit is suspended.

“There’s a window of opportunity, particularly around file and suspend,” explains Roberta Eckert, vice president of Nationwide Retirement Institute. “People need more clarity than ever,” she tells PLANADVISER. “They don’t want to miss that window, so they are scrambling for answers.”

In a related strategy, an individual at age 66 could file a “restricted” application for just spousal benefits, while allowing his or her own future retirement benefit to grow. Social Security will no longer allow an individual to restrict an application to spousal benefits only for people turning age 62 in 2016 or later. The individual will be required to file and claim all eligible benefits. Notably, however, those 62 or older at the end of 2015 will continue to have the option to restrict an application to spousal benefits only.

In short, married couples have fewer claiming strategies, and age is more important than ever, as the rules are being phased in for members in different birth years.

The rules make filing for benefits and optimizing claiming strategies more complex, McGarry says. Anyone born in 1954 or later will no longer be able to file a restricted application, collecting just a spousal benefit while letting their own retirement benefits rise. Things get even more complicated when a married couple has different birth years, notes Eckert. IF one spouse was born in 1954 or earlier, and the other later, two sets of rules must be followed.

“One point we’re underscoring with clients is that Social Security continues to be an important component of retirement income for many Americans,” McGirr says. “How employees and couples use claiming strategies and what age they claim can impact their monthly check. It’s important that employers provide employees with the best guidance so that not only are they aware of how these changes affect them, but also help them identify and use the strategies that are best suited for their situation.”

Eckert suggests advisers turn to providers for help in understanding how the Bipartisan Budget Act works, as well as how to provide information to plan participants. “They’re concerned because they’ve heard a lot of different commentary and they want to understand how the rules play out, but they are gratified to see updated tools and collateral pieces that can help,” she says.

McGarry notes that Institute research showed that more than half of investors believe their adviser would help them with Social Security decisions, with four out of five saying they would seek out a new adviser if the old adviser couldn’t help them, underscoring the need for advisers to become competent in claiming strategies. “Over the course of last week and half, I was surprised there were many plan advisers who were surprised that the Bipartisan Budget Act had any impacts to Social Security or Medicare,” he says.

One reason, Eckert says, is that the budget was passed relatively quickly. “It wasn’t brought to floor months ago and kicked around,” she says. “It came to fruition quickly and was debated quickly over Halloween weekend.” The speed of the budget’s passing caught a lot of people short and left them struggling to understand the changes, Eckert says.