Disability Benefits

UNDERSTANDING YOUR PERSI DISABILITY BENEFITS If your career is cut short because of a permanent and total disability, you may be eligible for a monthly disability benefit from your PERSI Base Plan if you meet certain eligibility requirements. This booklet explains those benefits. Base Plan Disability Retirement Disability Requirements Disability for retirement purposes is considered to be a total and permanent physical or mental impairment that prevents you from earning a livelihood. This means you cannot perform any work for compensation. Temporary disability benefits are not available under the retirement law. Permanent incapacity is a prerequisite to approval of a disability retirement application. To be eligible for PERSI disability retirement: • You must be totally and permanently disabled as a result of a physical or mental disease or injury while an active member, AND • Your disability must result in substantially all avenues of employment being reasonably closed, AND • You must apply no later than one year after you cease to be an active member, AND • You must have 5 years of service. (You may be eligible from the first day on the job if you are disabled due to work-related causes.) Based on medical and other evidence, the Retirement Board or its agent will determine whether you are eligible for disability retirement. Disabilities resulting from service in the Armed Forces of the United States meeting the requirements of Idaho Code section 59-1302(23) qualify for disablity retirement. Disability resulting from an intentionally self-inflicted injury are excluded from a disability retirement benefit. Disability Allowance Formula A disability retirement allowance is calculated using the formula on the next page. If you have less than 360 months of service as of the date you are eligible for disability retirement, you will be given credit for the months of service you would have earned from the date of disability to the date you would have reached service retirement age (65 for general members/62 for police/firefighters) had you not become disabled (360 months of credited service maximum). In other words, PERSI will give you up to 30 years of credit or to age 65 for general members (age 62 for police/firefighters), whichever is less. EXAMPLE: If you are a general member with 120 months of service and become disabled at age 50, PERSI will add 180 months (12 months x 15 years to age 65), to give you 300 months of service for your disability retirement. Disability Retirement Formula Your Base Plan disability retirement benefit is based on your highest average monthly salary over a base period of 42 months, your total months of service, and a multiplier. A base period is the period of consecutive months during which you received your highest average monthly salary. This is usually at the end of your career, but may have occurred earlier. The base period is set by Idaho law. In the early 1990s it was shortened from 60 to 42 months to improve benefits. Your benefit will be calculated using the formula in effect at the time of your last contribution to PERSI. Formula Used to Calculate Base Plan Disability Retirement Benefits Your Average Monthly Salary During Base Period _________ Multiplier x _________ = _________ Months of Service x _________ (including disability months) Annual Benefit = _________ ÷ 12 Monthly Benefit = _________ 2 Applying for Disability Retirement To receive a disability benefit you must meet disability eligibility requirements while you are an active PERSI member, you must be leaving your job because of your disability, and you must file your application no later than one year after ceasing to be an active member. The first step in the disability application process is to contact PERSI at 1-800-451-8228 so a disability questionnaire and estimate can be sent to you. Once the form is completed and returned to PERSI, it will be reviewed to determine your eligibility. If you are eligible, PERSI will put you in contact with a third-party administrator (TPA) who will assist you through the application and review process. The TPA will send you several forms to complete including: 1) Employee’s Statement of Disability 2) Training and Educational Experience Questionnaire 3) Daily Activities Questionnaire 4) Attending Physician’s Statement With the information provided by you and your physician, the TPA will determine your eligibility for disability retirement. The entire determination process may take several months. You may contact PERSI or the TPA at any time during the process if you have questions. Until recently, there was no deadline for applying for disability retirement. As a result, inactive members were able to apply at any time if they could demonstrate they became permanently and totally disabled while still an active member. Under a law that went into effect on July 1, 2006, PERSI members applying for disability benefits have a limited period of time to file an application. Inactive members applying for PERSI disability benefits are now required to file their application no later than one year from the date of their last contribution. PERSI is interpreting this to be the day the member ceases to be an active member. Members go from being active to inactive when they are no longer eligible to accrue service and make contributions. Don’t Wait: In some cases, the one year count down for applying for benefits could begin while a member is receiving benefits from worker’s compensation or short-term disability plans. Members who believe they are eligible for PERSI disability retirement should not wait until other benefits end to apply for the PERSI benefits or they may miss the deadline for applying. When possible, members should file their application before terminating employment or shortly thereafter, even if they are still uncertain about their ability to return to work. Applying for disability retirement merely initiates the process, it does not guarantee approval. In all cases, as part of the review process members must meet the applicable disability standard while an active member. TIME LIMITS FOR FILING FOR DISABILITY BENEFITS WENT INTO EFFECT JULY 1, 2006 3 Medical Examinations You will be required to provide medical information and may be required to undergo medical examinations both before and after the disability determination. Refusal to submit to a medical examination, if requested before the beginning of a disability retirement or at any reasonable time thereafter, will be considered proof that you are not disabled. When Disability Allowances Begin A disability allowance is payable on the first of the month following the latest of: • The date salary, sick leave, or temporary disability benefits sponsored by your employer stop, OR • Six months, depending on your employer, OR • The completion of a 5-calendar-month waiting period following your last day of employment. How Long Disability Allowances Continue You may continue receiving a disability allowance until the first of the month following whichever occurs first: • The date of your death, OR • The date your disability ceases, OR • The date you would have been eligible for service retirement if you had remained an active member. If your disability allowance is discontinued because you have reached service retirement age, your benefit will be converted to a service retirement allowance. At that time, you will be provided with options on different ways to draw the allowance and with information on the various options available to you. Returning to Work: Law Modified in 2010 PERSI disability law was modified by HB458 during the 2010 legislative session. If you are receiving disability retirement and attempt to return to work but are unsuccessful, you may resume your disability retirement if certain requirements are met. The requirements include giving PERSI’s executive director advance notice of the return to work (upon the notification, your disability retirement payments shall terminate). Disability payments may resume if you terminate the attempted return to work within 150 days from the date of the notice, make a written request to the Retirement Board, and provide medical records and/or submit to a medical exam at your own expense (if requested by the Retirement Board). If the Retirement Board (and the thirdparty administrator) determines you could not successfully return to work because of the same disability on which your original disability was based, your disability retirement allowance may resume. Death Benefits Payable While on Disability Retirement If you die while on disability retirement or while waiting for disability determination, and had named your spouse as beneficiary, your spouse has the option of a monthly benefit for his or her lifetime or a lump-sum death benefit consisting of two times the amount in your Base Plan account at the time of disability retirement minus any amount paid to you. If your spouse is not your beneficiary, the beneficiary may take a lump-sum payment of two times the amount in your Base Plan account at the time of disability retirement minus any amount paid to you, or may waive rights to the benefit and opt to provide your spouse with a monthly benefit for his or her lifetime. 4 Death Benefit Example: $60,000 In your Base Plan account at time of disability x 2 $120,000 - $65,000 Paid to you while on disability $55,000 Death benefit payable to your beneficiary Choice Plan Withdrawals During Disability The PERSI Choice Plan 401(k) does not provide disability retirement benefits; however, if you end PERSI-covered employment you may withdraw your Choice Plan funds. As long as you have ended PERSI employment, you do not need to wait to be approved for the PERSI Base Plan disability to receive a Choice Plan distribution. The withdrawal options available to you depend on your age and account balance.