Network Security Model – Defining an Enterprise Security Strategy |

OverviewThese are the 5 primary security groups that should be considered with any enterprise security model. These include security policy, perimeter, network, transaction and monitoring security. These are all part of any effective company security strategy. Any enterprise network has a perimeter that represents all equipment and circuits that connect to external networks both public and private. The internal network is comprised of all the servers, applications, data, and devices used for company operations. The demilitarized zone (DMZ) represents a location between the internal network and the perimeter comprised of firewalls and public servers. It that allows some access for external users to those network servers and denies traffic that would get to internal servers. That doesn’t mean that all external users will be denied access to internal networks. On the contrary, a proper security strategy specifies who can access what and from where. For instance telecommuters will use VPN concentrators at the perimeter to access Windows and Unix servers. As well business partners could use an Extranet VPN connection for access to the company S/390 Mainframe. Define what security is required at all servers to protect company applications and files. Identify transaction protocols required to secure data as it travels across secure and non-secure network segments. Monitoring activities should then be defined that examine packets in real time as a defensive and pro-active strategy for protecting against internal and external attacks. A recent survey revealed that internal attacks from disgruntled employees and consultants are more prevalent than hacker attacks. Virus detection should then be addressed since allowed sessions could be carrying a virus at the application layer with an e-mail or a file transfer.Security Policy DocumentThe security policy document describes various policies for all employees that use the enterprise network. It specifies what an employee is permitted to do and with what resources. The policy includes non-employees as well such as consultants, business partners, clients and terminated employees. In addition security policies are defined for Internet e-mail and virus detection. It defines what cyclical process if any is used for examining and improving security.Perimeter SecurityThis describes a first line of defense that external users must deal with before authenticating to the network. It is security for traffic whose source and destination is an external network. Many components are used to secure the perimeter of a network. The assessment reviews all perimeter devices currently utilized. Typical perimeter devices are firewalls, external routers, TACACS servers, RADIUS servers, dial servers, VPN concentrators and modems.Network Security This is defined as all of the server and legacy host security that is implemented for authenticating and authorizing internal and external employees. When a user has been authenticated through perimeter security, it is the security that must be dealt with before starting any applications. The network exists to carry traffic between workstations and network applications. Network applications are implemented on a shared server that could be running an operating system such as Windows, Unix or Mainframe MVS. It is the responsibility of the operating system to store data, respond to requests for data and maintain security for that data. Once a user is authenticated to a Windows ADS domain with a specific user account, they have privileges that have been granted to that account. Such privileges would be to access specific directories at one or many servers, start applications, and administer some or all of the Windows servers. When the user authenticates to the Windows Active Directory Services distributed it is not any specific server. There is tremendous management and availability advantages to that since all accounts are managed from a centralized perspective and security database copies are maintained at various servers across the network. Unix and Mainframe hosts will usually require logon to a specific system, however the network rights could be distributed to many hosts.· Network operating system domain authentication and authorization· Windows Active Directory Services authentication and authorization· Unix and Mainframe host authentication and authorization· Application authorization per server· File and data authorizationTransaction Security Transaction security works from a dynamic perspective. It attempts to secure each session with five primary activities. They are non-repudiation, integrity, authentication, confidentiality and virus detection. Transaction security ensures that session data is secure before being transported across the enterprise or Internet. This is important when dealing with the Internet since data is vulnerable to those that would use the valuable information without permission. E-Commerce employs some industry standards such as SET and SSL, which describe a set of protocols that provide non-repudiation, integrity, authentication and confidentiality. As well virus detection provides transaction security by examining data files for signs of virus infection before they are transported to an internal user or before they are sent across the Internet. The following describes industry standard transaction security protocols.Non-Repudiation – RSA Digital SignaturesIntegrity – MD5 Route AuthenticationAuthentication – Digital CertificatesConfidentiality – IPSec/IKE/3DESVirus Detection – McAfee/Norton Antivirus SoftwareMonitoring Security Monitoring network traffic for security attacks, vulnerabilities and unusual events is essential for any security strategy. This assessment identifies what strategies and applications are being employed. The following is a list that describes some typical monitoring solutions. Intrusion detection sensors are available for monitoring real time traffic as it arrives at your perimeter. IBM Internet Security Scanner is an excellent vulnerability assessment testing tool that should be considered for your organization. Syslog server messaging is a standard Unix program found at many companies that writes security events to a log file for examination. It is important to have audit trails to record network changes and assist with isolating security issues. Big companies that utilize a lot of analog dial lines for modems sometimes employ dial scanners to determine open lines that could be exploited by security hackers. Facilities security is typical badge access to equipment and servers that host mission critical data. Badge access systems record the date time that each specific employee entered the telecom room and left. Cameras sometimes record what specific activities were conducted as well.Intrusion Prevention Sensors (IPS)Cisco markets intrusion prevention sensors (IPS) to enterprise clients for improving the security posture of the company network. Cisco IPS 4200 series utilize sensors at strategic locations on the inside and outside network protecting switches, routers and servers from hackers. IPS sensors will examine network traffic real time or inline, comparing packets with pre-defined signatures. If the sensor detects suspicious behavior it will send an alarm, drop the packet and take some evasive action to counter the attack. The IPS sensor can be deployed inline IPS, IDS where traffic doesn’t flow through device or a hybrid device. Most sensors inside the data center network will be designated IPS mode with its dynamic security features thwarting attacks as soon as they occur. Note that IOS intrusion prevention software is available today with routers as an option.Vulnerability Assessment Testing (VAST)IBM Internet Security Scanner (ISS) is a vulnerability assessment scanner focused on enterprise customers for assessing network vulnerabilities from an external and internal perspective. The software runs on agents and scans various network devices and servers for known security holes and potential vulnerabilities. The process is comprised of network discovery, data collection, analysis and reports. Data is collected from routers, switches, servers, firewalls, workstations, operating systems and network services. Potential vulnerabilities are verified through non-destructive testing and recommendations made for correcting any security problems. There is a reporting facility available with the scanner that presents the information findings to company staff.Syslog Server MessagingCisco IOS has a Unix program called Syslog that reports on a variety of device activities and error conditions. Most routers and switches generate Syslog messages, which are sent to a designated Unix workstation for review. If your Network Management Console (NMS) is using the Windows platform, there are utilities that allow viewing of log files and sending Syslog files between a Unix and Windows NMS.Copyright 2006 Shaun Hummel All Rights Reserved

Manned Security Guarding – Price Or Service? |

You have probably noticed yourself, that most shops and offices now employ security officers. Generally these security officers will be located somewhere near the front door, either sitting at a reception desk, monitoring CCTV or standing at the front door.Having worked in security for most of my life, it is now second nature for me to look at what security is in place when I visit somewhere. This usually takes the form of just having a look at how the security officers operate.If you are going to employ security service, then you obviously have something specific in mind that you want them to do. I recently visited a well-known high-street supermarket that I have been to many times in my local area. I know that they employ one security officer. On entry there was no security – nothing wrong with that so far. Having a quick look around I couldn’t see security anywhere. I could however see who I thought was a traffic warden thumbing through the newspapers. However, on closer inspection I noticed a tiny badge on her hat that said security. By the time I left the supermarket, she was standing by the front door looking totally disinterested in what was going on. She looked in a world of her own.I understand that this store uses security as more of a deterrent rather than to catch shoplifters, but for this to work your security officer needs to be seen as being alert and proactive. Having a security officer completely disinterested in what they are doing can have the reverse effect, making your premises an easier target.Security in this store would have been arranged by head office, who possibly have never even been to the shop. The store manager won’t get a say and will just have to make do with whoever he gets sent.Security officers are still ambassadors for the store / business they are working in. They may be asked for their recommendations on how security can be improved, and if the security officer doesn’t know, who does?The security company who hold this contract are a recognized company. The problem today, is that it is more important for large companies to secure the contract and protect the bottom line, than supply quality security officers who actually have an interest in what they are doing. Protecting the bottom line usually comes at a cost to the client. Just because someone holds an SIA licence, doesn’t necessarily mean they know anything about security.But sometimes security can be misunderstood. You have proactive security officers but the person arranging security doesn’t really know how to deploy them properly.Take my recent visit to the cinema. It was a large 15 screen cinema with a bar and a few uniformed male security officers. On the front door to the cinema was one officer standing at a table just inside the doorway looking in women’s bags as they entered. The first problem was that there were two separate ways in to the building, so if you wanted to bring something in, you could just take the lift from the car park! There were also no signs posted on the way in informing people they may be subject to a bag search. It was good that security were being proactive, but they did need some direction from a person who understands how security works.I once heard someone say ‘If I can’t get a job, I’ll just go and work in security’. That is the person who will work for minimum wage for a large security company, who will then be posted at a clients premises expected to look after their best interests.Over the years, the way security contracts are procured has changed. Clients are now more likely to be talking about their security requirements with a salesman, rather than with someone who actually understands what they need. A key accounts manager in charge of securing new contracts will start on a salary of £42,000, while the person you really need to look after your business could be working for £5.75 per hour.It’s not just about supplying ‘bodies’There is of course a place for the large security companies, but sometimes it might be better to work with the smaller professional security companies who are usually able to offer the same services as the larger companies, but who keep their emphasis on the work rather than the profit margin.

Hidden Camera Security System |

Nowadays, all the things that we perform converge by technology. It always begins in our home to the office in which technology improves competitively throughout the World. In our economy, we desire to guard our family, possessions and businesses. Home security using Hidden camera security system is better for computer camera security and more affordable these days. Most people claim that monitoring could assist police to identify and find their invaders. Everybody desires to have a hidden camera security system in order to feel safer at home and businesses. Parents are always worried about parting their child with a nanny or babysitter in which they decide to set-up hidden cameras at any places in your home for you to access the live video surveillance feeds from a distant location. There are lots of grounds to consider in using hidden cameras. One of the grounds of security system is appropriate at home, work place and other areas need to secure. But one of the main grounds here is to use this camera to help you verify your suspicions at home and office. The latest hidden security camera can be set in motion to monitor if they detect motion or hear a sound. You can regularly acquired ones that allows scheduled recording times. They can be tiny and positioned at any places without being noticed.A certain DVR hidden security system is becoming a necessary part to keep a proper safeguarding at any location ensuring the safety of the place. It will transact with the total security method at any location through the monitoring system attached in the security camera system. Lot’s of famous organizations and places are in danger with several threatening activities. The security camera on one occasions happened damaged but the positioned of DVR hidden camera security is not identified to everyone. It is required to the certain establishment to position the DVR hidden camera security at any locations next to the security camera to ensure an appropriate safeguarding. Infrared technology is particularly set up with the security camera system with the assistance of the captured images flush even in the dark. The invasion of security camera system makes the business person easy to monitor and to remain an appropriate check on the company of their absence to the several company departments. It is also very useful to set-up the security system at the financial companies department, banks, ATMs, malls and hotels to assure safety and keep checking the appropriate activities. The advance technology can be either an advantage or an annoyance to individuals because of the several person misused the camera security system. It is a must to use it properly for complete security not to make fun to other people’s privacy.There are several people desire to produce sense on the secured locations that are being trapped red handed by authorities by the help of security camera system. The advance technology creates the life’s of individuals simpler and several people always look forward on the latest developments to carry on the work routine in an advance way. But you must be careful in deciding the better security camera system that you can ultimately get relieves of your most security concerns. Have a security tools now like hidden camera security system that operates everything for you. A hidden security camera system might be the resolution you are waiting. Grab one now and don’t wait up that threatening activities will happen to your home and business.

Home Security Camera System |

We all stay in a cruel world, misdeed is a daily life. We have to face burglary, theft, rape, robbery and other harsh incident for a lifetime. Some people hold back on security because they assume it is a waste of their time or they never been a victim to such incidents. You might assume that your home is a safe haven however in order to ascertain it, you need to have a better security measures enough to stop other few professional criminals. Home security cameras systems are an important matter for most persons to their security needs. Our home is our stronghold and we always want to feel safe and secure. There are certain security cameras that will be useful to ensure security systems needs which is an alarm security systems but wireless security camera package is more complete for your security needs. Choose and set-up a security systems immediately to complement for your home security measures in providing you peace of mind. This article grasp in protecting your house to a total new level and it will instruct you several tactics that recommended by most security professionals.Always remember that it takes knowledge and imagination in order to support your home security needs for the family protection and safety. If you are satisfy of what you must have for security measures then decide particularly on what you want to set-up to several home security cameras systems available nowadays. But the contemporary evolution of home security camera is the wireless camera security system. Wireless camera good for your home or small office and this is simple to install and reasonably inexpensive. There are some advantages present by using a wireless security camera such as it offer the capacity to install at any locations and cable is not a factor for wireless security camera in signal range. Hidden security camera is also a good option in monitoring your children activities and your child nannies activities. Because of its underground nature, it has often called nanny or spy cameras. This home security system can be either displayed or hidden.The advantage of displaying your home surveillance security cameras is for intruders to distinguish and discourage to their potential negative actions. It also warning homeowners of burglaries and break-ins. Specific burglar alarms have become a standard and increasingly common to other businesses and homeowners. These security methods vary from do-it-for-yourself equipment and must be set-up by a security system professional.People desire a peaceful life and we have to pay a price enough for our security needs. Home cameras security systems are not really a big investment but a greater security for our family and property. Having an alarm security system nowadays is significant to keep your family protected against crimes. Everywhere you look and hear homes is being break-ins during night and day. You can avoid these home incidents by taking into consideration right away a home security system I have mentioned above. Most of this security method I have mentioned provides security for all dangers and also present a control panel through a one push button that will call upon help immediately.

Cheap Security Camera |

During the earliest days of the business surveillance system, cheap security cameras obtained a continuous white and grainy image on video type. Tapes have to restore frequently because of their inherent storage limitations. High-end options such as night vision, infrared capability and motion detectors will make up the value of security cameras. Cheap security cameras do not have these options. Low-priced security cameras are the best way for homeowners to safeguard their property without buying to major security companies. Beforehand, home cameras security were hard and expensive to come by but with the camera technology recent advances, homeowners is now have admission to low price options and high quality in video surveillance. Low-cost home camera security have become tiny that allows homeowners to position them in a hidden locations and check the security of your family, property and possessions without huge devices. Home cameras securities systems are still accessible in wireless formats, dropping the clutter formed by wires. Wireless security system is also permits security cameras that can still be operated through laptops so that users can check the security of their house on the go. Security home cameras come in a selection of formats that depends on the homeowner needs. Some common types include c-mount cameras, bullet and dome.Each type of home camera security provides different benefits in visual distance, field of view and resolution. Some camera security which is the c-mount is also having a best selection of lenses that can improve field of view or resolution and distance. And other features also include night-vision and black and white color capabilities. There are several choices of cheap security camera that will not go through a hassle to homeowners of totally installing a true security system, it can be very time consuming and hard. In this case, dummy or fake camera is a good choice because mostly just the existence of the security system device only charges off criminals or thieves very effectively. These are one of the low-cost home security systems that look very realistic enough to trick intruders or burglars. One significant point that you need to put in mind that cheap security system does not only mean that it has a bad quality. There are several things to consider when you look for a low-priced camera security. Be sure that your camera security system will supply live feeds over the internet for homeowners to observe it from several locations whether you are at home or on your vacation.Always make sure that several home cameras security can save the information for reviewing it later. There are still certain cheap camera security takes clear pictures compare to other expensive security camera device. In addition, there are some other several options that you might wish to take into account when it comes to your home security system even its low-priced security camera. Low-priced home security cameras offer feasible choices to an expensive camera security which can simply offer you with complete surveillance camera security needs.

All About Securities – Debt, Equity, and Derivative Contracts |

Sometimes it is difficult to know which part of the law applies to your case, especially if you are dealing with what an outsider may view as a complicated financial dispute. If you hold North Carolina securities, where do you go for help? Rest assured, there are attorneys in business and financial law who can advise you in regards securities that you may hold. But until you have retained the services of a local lawyer, let’s get up to speed on the terminology of securities law so you are ready for your first appointment.What are securities?A security is a fungible, negotiable instrument representing financial value. Most securities will be represented either by a certificate, or more commonly, will be in electronic form only (non-certificated). As in the rest of the country, North Carolina securities certificates will be either “bearer” or “registered”. A bearer securities certificate is one that entitles the holder to rights simply by holding the security. A registered certificate is one that only entitles the holder to rights if their name appears on a security register maintained by the issuer or the issuers appointed intermediary.Securities include shares of corporate stock or mutual funds, corporation or government issued bonds, stock options or other options, limited partnership units, and various other formal investment instruments. In North Carolina, securities may be issued by commercial companies, government agencies, local authorities and international and supranational organizations (such as the World Bank). The primary goal of purchasing securities is investment, with an eventual aim of receiving income or capital gain; (capital gain being the difference between a lower buying price and a higher selling price).Securities are broadly categorized into three categories.1. Debt securities:These include debentures, bonds, deposits, notes and commercial paper (in some circumstances). If you hold one of these debt securities, your North Carolina securities attorney will advise that you are usually entitled to the payment of principal and interest on these. There may also be contractual rights a good lawyer will advise you of, including the right to information.Debt securities are usually fixed term securities redeemable at the end of the term, they may be secured or unsecured or protected by collateral. Debt securities may offer some control to investors if the company is a start-up or an established business undergoing ‘restructuring’. In these cases, if interest payments are missed, the creditors may take control of the company and liquidate it to recover some of their investment. People favor buying debt securities because of the usually higher rate of return than bank deposits. However, debt securities issued by a government (bonds) usually have a lower interest rate than securities issued by commercial companies. This applies nationally and to North Carolina securities.2. Equity securities:Common stock is the most popular type of equity security. Investors are called shareholders and they own a share of the equity interest of capital stock of a company, trust or partnership. It is like saying someone who invests in equity securities is buying a tiny part of a company (or a large part, depending on your budget!). As an investor you are not necessarily entitled to any payment, like the regular interest payment of a debt security. If a company goes bankrupt it is possible to lose your entire investment, as shareholders get paid last. If this happens it might be a good time to call your North Carolina securities lawyer for advice.On the plus side, investing in equity securities can gives a shareholder access to profits and capital gains, something debt securities will not. The holder of debt securities receives only interest and repayment of principal no matter how well the issuer performs financially. Equity investment may also offer control of the business of the issuer.3. Derivative contracts:If you have invested in forwards, futures, options and/or swaps you have probably purchased a derivative. A derivative is perhaps obviously, derived from some other asset, index, event, value or condition (known as the underlying asset). Rather than trade or exchange the underlying asset, derivative traders enter into agreements to exchange cash or assets over time based on the underlying asset. A simple example is a futures contract: an agreement to exchange the underlying asset at a future date.An attorney can provide more information about securitiesPlease note that this is not an exhaustive list of legitimate forms of securities. If you purchased what you were lead to believe was a type of security but it is not covered in the information here, don’t panic! However, for you own piece of mind, contact a securities lawyer if you believe that you have been a victim of securities fraud, if have been accused of securities fraud or a related crime, or if you simply have a legal question about buying or selling securities.

Security Expert Asset Protection – International Skills |

Security Experts are advising business owners not to be fooled by the latest crime figures which demonstrate a small increase in crime, because a third of all violent cases have been dismissed as ‘no crime.’Every security expert is aware that theft, burglary & robbery has increased during 2009. The most chilling crime statistic is that UK gun crime increased 89% in the last decade. This is bad news for business asset protection.Security experts advise it’s time for business directors to sit up and take notice because the current recession is attacking businesses in a way that many business directors are unprepared for.Economic hardship is hitting the criminal fraternity in a big way. Historically crime always increases during a credit crunch and this recession is proving no different except for one further unwelcome statistic.The number of reported firearms incidents in England and Wales has increased from 5,209 in 1998/1999 to 9,865 last year. This is a phenomenal increase of 89%. Some UK business regions have witnessed a five – fold increase and in eighteen different UK police regions gun crime has doubled.Add a sharp rise in burglaries, theft, robbery and street muggings also up by 12,000 cases in the UK during a three month period, and it makes sad reading for any business director. No more so than a director or business owner tasked with the provision of security and close protection security for any business asset protection.Asset protection international is one of the growth areas of the security industry and we are seeing a rise in the appointment of an individual threat expert into various companies. Business directors often misunderstand what constitutes assets requiring protection.Many confuse high monetary value assets with assets that don’t appear to have a monetary value. I was once contracted with an American security expert working for a Russian business director who dismissed his senior management team and rank and file employees as no value assets. In reality these were key employees who were the most valuable asset his business possessed.The fact that several of these employees had been targeted for kidnap for ransom by the Russian Mafia should have given the business director a strong indication of how valuable an asset they were. When I pressed the director about how his business would cope if two of his senior management team were kidnapped, he responded that his business would probably never recover. Every security expert working with clients from the former Soviet Bloc countries knows that once these Mafia groups kidnap business victims for ransom then simply paying the Mafia off is not the final solution. These Mafia groups are run by astute business owners who frequently tie in what they call a profit tax payments from all future business earnings.In the west we call it extortion payments, however I’ve heard a security expert compare profit tax in the East to commission payments in the West. The real difference is that you often have no choice about paying it in the Eastern Bloc, and the only alternative is to hire full time close protection officers and security from some of the former KGB officer’s business corporations.I once worked closely with an aviation business in the Southern Ukraine whose managing director flatly refused to pay any profit tax to the Ukrainian Mafia. He and his immediate family, and his extended family were targeted for assassination by this Mafia group. This director’s airline was flying extensive cargo missions for the UN into war zones and his cargo was deemed as valuable assets.I was asked to provide a security and close protection plan for the director and his family. The subsequent threat assessment indicated the Mafia were asking for a whopping 70% of the aviation companies gross turnover.The Mafia identified the business as an excellent vehicle for money laundering and the air transportation of illegal narcotics, arms and other valuable assets.Asset protection international figured very highly on the threat management plan. This particular director made a conscious decision to pay for full time VIP close protection services. This was not an easy decision as the protection team would be required for the rest of his life.About six months into the security contract during a little downtime I was chatting to the director’s wife. She was very angry at the Mafia for taking away her conventional lifestyle and for forcing her and her children and husband into a life full of life threatening risks and gross intrusion.She mentioned she was really despondent about their future business development after speaking to a Russian security expert witness who provided evidence against the Mafia only to see his wife executed as an example to him and others considering opposing the Mafia.I have to say that all security experts understand the risks and unfortunately these risks extend beyond the hiring of close protection and asset protection international specialists.Hiring security from any Eastern Bloc close protection security company is fraught with security problems. Every threat expert is aware that the Mafia have infiltrated these security companies with the same success as they’ve demonstrated in infiltrating the police, military and intelligence agencies.Security Expert Asset Protection International Skills #1Identify your true valuable assets. i.e. goods and products can always be replaced if adequately insured. Whereas key personnel can never be replaced if they are kidnapped and executed.This is a fact recognised by the UK Midlands telephone company whose workers were kidnapped and decapitated in one of the independent states of the former Soviet Union after a botched rescue bid.Security Expert Asset Protection International Skills #2Conduct extensive due diligence on the security close protection security company and personnel you hire. Don’t jump out of the frying pan and into the fire. It is critical to identify the key partners in any security company you retain.Security Expert Asset Protection International Skills #3Ensure all your corporate Insurance policies are up to date and fully compliant. I’m not just talking about your insurance policies covering your assets for theft, fraud, product tampering, vandalism and hi-jacking. I’m also talking about your company directors manslaughter liability insurance policy.i.e. if you are a company director and you send one of your company representatives overseas to represent your business and they are kidnapped and executed and you haven’t proved adequate security and counter kidnapping training then you and your fellow directors will be charged and you could be jailed.Of course you will also be subjected to an expensive civil case.Security Expert Asset Protection International Skills #4Protect your personnel assets as much as you protect your fixed tangible assets. i.e. Ensure you have adequate kidnap for ransom or K&R insurance for every company representative travelling as one of your business representatives. K&R insurance is not as expensive as you might think.Security Expert Asset Protection International Skills #5Hire the services of a professionally recognised security expert. If your assets are based in the UK then utilise a proven British security expert. If the assets are based in North America then utilise an American security expert. If your assets are being transported or travelling internationally then consider retaining an International security expert.

Social Security, Retirement Benefits, and Divorce |

Social Security in the United States refers directly to a lesser known federal Old Age, Survivors and Disability Insurance program or OASDI. The program was originally rolled out in the 1930’s in an attempt to limit what were seen as dangers to the American way of life such as increased life expectancy, poverty, and fatherless children. So the Social Security Act, signed in 1935, created social insurance programs to provide benefits to retirees, the unemployed, and as well as a lump sum benefit to the family at death. Many amendments have been made since the original Social Security Act of 1935. Most importantly; Medicare was added in 1965. The Social Security Act of 1965 also recognized for the first time that divorce was becoming a common cause for the end of marriages and added divorcees to the beneficiary list.The largest component of benefits is retirement income. Throughout a person’s working life the Social Security Administration keeps track of income and taxpayers fund the program via payroll taxes also known as FICA (Federal Insurance Contributions Act) taxes. The amount of the monthly benefit to which the worker is entitled depends upon the earnings record and upon the age at which the retiree chooses to begin receiving benefits. FICA taxes are 7.65% for employees and 15.3% for self employed individuals. The amount of taxes paid is not directly used to calculate an individual’s benefit. The rate is broken down into two parts: Social Security and Medicare. The portion is 6.2% and is paid on a maximum of $106,800 of income for 2009. The income maximum is also known as a wage base. The Medicare portion is 1.45% on all earnings. These rates are set by law and haven’t changed since 1990. The wage base for Social Security is indexed each year for inflation and Medicare has maintained an unlimited base since 1993.Self employed person’s pay double the amount of tax because the employer is responsible for the other half of an employee’s liability. A self employed individual is both employer and employee. There are wages not subject to FICA taxes including some state and local government employees who participate in alternative programs such as CalSTRS and CalPERS. Each state and local government unit with a pension plan decides whether to elect Social Security and Medicare coverage. Civilian federal employees are covered by Medicare but usually not Social Security.The earliest age at which reduced benefits are payable is 62. The age at which full retirement benefits are available is dependent upon the taxpayers age. An increase of regular retirement age was enacted to reduce the amount of benefits payable. For those currently over age 70 the normal age was 65. Anyone born after will fall somewhere on increasing scale which climbs incrementally to age 67 depending upon birth date. Anyone born after 1960 must reach age 67 for normal retirement benefits. Delaying receipt of benefits will increase a taxpayer’s benefit until age 70.Benefits are paid from taxes collected from other tax-payers. This makes it a pay as you go system and will eventually be directly responsible for the downfall of the program. At least as we know it today. In 2009, nearly 51 million Americans will receive $650 billion in Social Security Benefits. Economists project that payroll taxes will no longer be sufficient to fund benefits somewhere in the next 10 to 15 years. Once we can’t cover the expense from cash flow, the program will begin drawing down the trust fund it has accumulated during times of surplus taxes. We can only speculate what happens when the trust fund runs out. This is the cause for concern often discussed in the news and other media. The fix for this problem is the subject of much political posturing including that witnessed in President Bush’s 2005 State of the Union address.The first reported Social Security payment was to Ernest Ackerman, who retired only one day after Social Security began. Five cents were withheld from his pay during that period, and he received a lump-sum payout of seventeen cents from Social Security. This might give you an indication of how Social Security handles business.A current spouse is eligible to receive survivor benefits equal to 100% of the deceased worker’s benefit if they have reached normal retirement age.Divorced spouses are eligible for benefits equal to one half of the worker’s benefit if they were married for 10 years have not remarried and are at least 62 years old. This is called a derivative benefit. A spousal applicant must wait until the worker has reached retirement age, 62, in order to apply for benefits. The worker is not required to have applied for benefits in order for the ex-spouse to apply for spousal benefits. They are not entitled to increases for benefits taken after normal retirement age. If a worker has died and the ex-spouse has reached full retirement age they can receive 100% of the worker’s benefit as survivor benefits.If an applicant is between age 62 and their normal retirement age; the application for benefits will be based on the applicant’s earnings record. If one half of an ex-spouse’s benefit is greater than the applicant’s benefit on their own record; the applicant can choose to take whichever is greater. If you wait until your normal retirement age and file for spousal benefits you can continue to accrue benefits and enhancements for delaying your own retirement up until your age 70.An ex-spouse’s receipt of derivative benefits on the worker’s record does not reduce the worker’s benefits. It is even possible for more than one ex-spouse to collect on the worker’s derivative benefits. This could lead to as much as 500% of the original benefit being claimed by the five ex-spouses.Windfall Elimination Provision and Government Pension Offset ProvisionFor those worker’s who are covered by a pension based on their own earnings not covered by Social Security a different method of computing benefits applies. The alternative method is called the Windfall Elimination Provision (WEP) and was created to close a loophole that enabled worker’s who earned benefits in covered and non-covered employment from being labeled a low-earning worker and receiving a disproportionately large Social Security benefit.The formula is weighted in favor of low earners because such a person is more dependent on Social Security. If the WEP is applicable it reduces a worker’s Social Security benefit by 50% of the worker’s pension benefit up to a maximum of $380.50 in 2010.If you earned a pension based on work where you did not pay Social Security taxes, your Social Security spousal or derivative benefits may be reduced. The Government Pension Offset Provision (GPO) was enacted to treat retired government employees who had not contributed to Social Security similarly to retirees who had. The GPO reduces derivative benefits by two-thirds of other government pensions received. This can reduce Social Security benefits to zero.The truly important ramification of the WEP and GPO on Social Security retirement benefits comes into play during divorce proceedings. Federal Law makes Social Security benefits the separate property of the party that earned them.They are not assignable or divisible in a family law court and not considered an asset of the community in California.Government and other pensions, on the other hand, are considered community property in the state of California to the extent benefits were earned during marriage. Derivative benefits under the Social Security program for ex-spouses would seem, at first glance to remedy the problem. The non-worker spouse get’s half of the worker’s retirement benefit via derivative benefit payments. Getting to the true ramifications of the WEP and GPO during divorce proceedings requires sound financial planning.Consider the following couple.- Jim was a private employee covered by the Social Security system. He retired at age 66 with a monthly Social Security benefit of $2,014.
– Barbara has been employed as a teacher for 30 years covered by the California State Teacher’s Retirement System. She retired this year at age 65 with 30 years of service under CalSTRS and a monthly benefit of $5,520 without having paid a single penny into Social Security.
– Barbara’s CalSTRS benefits are considered community property in California having been earned entirely during marriage.
– Jim and Barbara are divorcing and her CalSTRS pension will be divided equally with each party receiving $2,760.
– Jim will continue to receive his $2,014 per month of Social Security.
– Barbara will be entitled to a derivative Social Security benefit equal to one half of Jim’s benefit, $1,007, or the benefit she has earned on her own record. Barbara has not earned a benefit on her own record so she will choose to receive the derivative benefit on Jim’s record.
– The Government Pension Offset will reduce Barbara’s Social Security benefits by two thirds of her $2,760 pension benefit, or $1,839.82. The GPO leaves Barbara with $0 from the Social Security derivative benefit.
– Barbara will receive a total of $2,760 from her CalSTRS Pension and $0 from Jim’s Social Security derivative benefit.
– Jim’s Social Security benefits will not be affected by the GPO or WEP.
– Jim will receive $2,760 from Barbara’s CalSTRS benefit and $2,014 from his Social Security retirement benefits for a total of $4,776.What looks to the lay person to be an appropriately arranged method for completing an equal division of assets leads to a grossly in-equitable settlement that provides Jim with $4,776 per month and Barbara with $2,760 per month.The California Federation of Teachers sponsored a rally on November 7th to urge Congress to pass SR 484 in the Senate and HR 235 in the House of Representatives to repeal the Government Pension Offset and Windfall Elimination Provision. This has been attempted numerous times before without success. Social Security is a monster of finances, public policy and entitlement. Making changes is not easy or quick.Consulting with a qualified financial planner experienced in the nuances of divorce finances and retaining their services as a neutral expert or advisor will help divorcing individuals work with and around in-equities caused by the system.