PERS DB Occupational Disability
- Introduction
- Qualifying for PERS DB Occupational Disability
- Applying for PERS DB Occupational Disability
- Disability Benefits
- Taxes and Occupational Disability Benefits
- Medical Coverage for Occupational Disability Members
- Termination of Disability Retirement Benefits
- Proof of Eligibility Requirements
- Death Benefits
- Timeline of a Disability Benefit
- Becoming Reemployed
Introduction
Important Document:
If you are injured and become totally and permanently disabled because of a physical or mental condition caused by an injury or hazard that happens while performing the usual and normal duties of your job, you may be eligible for an occupational disability benefit. Disability benefits are intended to provide a means of economic survival if you must terminate your PERS Defined Benefit (DB) employment because of a permanent disability. Disability benefits provide you a monthly benefit payment and major medical insurance and are not intended to supplement your income should you recover from your disability and return to work.
Qualifying for PERS DB Occupational Disability
There are no minimum service requirements for occupational disability benefits. You are eligible for benefits from the first day on the job if you are hurt or injured. All DB members are eligible for occupational disability regardless of Tier level. In addition, your disabling condition must be permanent and prevent you from performing the usual duties of your job, or any other comparable job your employer makes available for which you are qualified by training and experience. You are not eligible to apply if you already qualify for a normal retirement.
Determining Qualification for Disability Benefits
You must provide physician statements and complete medical records along with an employer’s statement of disability to the Division. A consulting physician will make a recommendation to the PERS Administrator after reviewing your complete file. The Administrator will then make a final determination and you will be notified. If you are denied disability benefits, you may appeal to the Department of Administration’s Office of Administrative Hearings.
Applying for PERS DB Occupational Disability
Contact the Division and request a disability packet. Your application must be received by the Division or postmarked within 90 days after termination of employment. If you have missed the 90-day deadline, contact the Division for assistance. In general, it takes approximately six to eight weeks to process your application. It can take longer if you do not provide adequate medical documentation or other required information to support your application. It is your responsibility to provide complete information to the Division so a determination can be made.
Employment and Applying for Disability Benefits
You do not need to terminate employment before applying for a disability benefit. However, if you are approved for benefits, you must terminate employment within 30 days of the Administrator’s decision.
Caution: You may choose to receive a refund of your accumulated member contributions in a lump sum, rather than apply for a disability retirement benefit. However, if you refund your contributions instead of applying for a disability retirement, you are no longer eligible for that benefit or any future PERS retirement benefit or associated system-paid medical insurance benefits, unless you return to PERS DB work in future and requalify for benefits.
Disability Benefits
Once your disability application is approved, you will begin receiving monthly benefits. Benefits accrue from the first day of the month following termination of employment and are paid at the end of the month. If your appointment to disability is delayed to allow time for the PERS Administrator to obtain and review records, retroactive payments will be made.
Monthly Benefit Amount
Under current law, the monthly benefit is equal to 40% of your gross salary at the time of termination.
Note: If you were hired and first enrolled in the PERS before July 1, 1976, the benefit amount will depend on when you were first enrolled in the PERS and whether you are classified as “peace officers/fire fighters” or “all other” members. If you are a peace officer or fire fighter who was first hired before July 1, 1976, please contact the Division for further information.
PERS DB Occupational Disability Health Benefit
This benefit allows for our Police and Firefighters who entered after June 30, 1986, and before June 30, 2006. Members can retire normally with 20 years of service, but they must have 25 years of service to receive system-paid medical coverage at the time of retirement. If you get injured performing the duties, and you have more than 20 years of service but less than 25 years you can apply for Occupational Disability Health Benefit. If your approved this allows you to retire normally, and you would receive system-paid medical.
Taxes and Occupational Disability Benefits
Generally, PERS occupational disability benefits are not considered taxable if your benefit is calculated as 40% of your gross monthly salary earned while you were working.
Note: Some members, who were initially hired under the PERS system prior to July 1, 1976, may choose a benefit based on service and salaries. Benefits calculated in this manner are considered taxable and are required by the IRS to be coded as an early distribution of retirement funds. As such, these benefits may be subject to a 10% early distribution penalty. If you feel you meet the federal definition of disability, you can file IRS Form #5329 for an exemption to the early distribution penalty. You may elect to have no federal tax withheld from your benefit by completing a W4-P withholding form available from the Division. However, you are still responsible for any taxes due to the federal government. The Division does not give tax advice and you may wish to consult a tax professional for more information.
Medical Coverage for Occupational Disability Members
You, your spouse, and your dependent children are eligible for major medical coverage at no premium to you as long as you are receiving disability benefits. Dependent children up to age 19 are covered and may be included up to age 23 if enrolled full-time in an accredited college or university. The medical coverage will continue once your disability benefits convert to a normal retirement. There are also optional insurance coverages for dental-vision-audio (DVA) and long-term care (LTC) insurance which you may elect and pay premiums for. You must elect optional coverages when you are appointed to disability benefits or you will not have the opportunity to elect them at any future time, including when your disability benefit converts to a normal retirement.
Vocational Rehabilitation Requirements
If you were first hired in the PERS after June 30, 1986, you will be required to enroll in a rehabilitation program with the Division of Vocational Rehabilitation (DVR) within 30 days of being appointed to a disability retirement benefit.
Termination of Disability Retirement Benefits
If you are required to report to the Division of Vocational Rehabilitation (DVR) and fail to do so, your disability benefits can be terminated. The Division requires proof of your enrollment in a DVR program. If you fail to enroll, fail to interview for a job, or fail to accept a position offered, or if you are certified by DVR as failing to cooperate in a rehabilitation program, your disability retirement benefit may be terminated. Your disability benefit may also be terminated if you return to work or recover from your disability.
Proof of Eligibility Requirements
All occupational disability members must show proof of continuing eligibility by undergoing a medical examination when required by the PERS Administrator (not more than once each year). In addition, you may be asked to provide other documentation or physician statements as proof of continued eligibility.
Death Benefits
If you die while you are receiving occupational disability benefits and you are married, your spouse is entitled to continuing benefits, called a “survivor’s pension.” If there is no surviving spouse, the survivor’s pension shall be paid in equal parts to the dependent children of the employee.
If you are not married and have no dependent children, a beneficiary benefit (the balance of the employee contribution account) will be paid to your named beneficiaries on file with the Division. You may update your beneficiaries by completing new beneficiary forms available on the Division website. For further information on death benefits, please contact the Division.
Timeline of a Disability Benefit
Members continue to accrue PERS service while receiving occupational disability benefits. When you become eligible for normal retirement, disability benefits will cease and you will be appointed to normal retirement. Your monthly retirement benefit will be based on your total PERS service and average monthly compensation.
For Tier I “all others” members, age 55 or 30 years of paid-up membership service determines normal retirement eligibility; Tier II and III “all others” members, age 60 or 30 years of paid-up membership service. Tier I police and fire fighters, age 55 or 20 years of paid-up membership service; Tier II and III police and fire fighters, age 60 or 20 years of paid-up membership service.
Becoming Reemployed
Disability benefits are not intended to supplement your income should you recover from your disability and return to work. Proof of such recovery may include medical evidence or proof of capability to work in a comparable position for an employer, including self-employment. A “comparable position” may include a position that requires similar strengths and abilities to the position you held at the time of termination OR a PERS position that provides compensation of 75% or more of the salary used to calculate your occupational disability benefit, adjusted for inflation.
PERS DB Non-occupational Disability
- Introduction
- Qualifying for PERS DB Non-occupational Disability Benefits
- Applying for PERS DB Non-occupational Disability Benefits
- Disability Benefits
- Taxes and Non-occupational Disability Benefits
- Medical Coverage for Non-occupational Disability Members
- Termination of Disability Retirement Benefits
- Proof of Eligibility Requirements
- Death Benefits
- Timeline of a Disability Benefit
- Becoming Reemployed
Introduction
Important Document:
If you have a debilitating illness or injury that prevents you from performing your job duties, you may be eligible for a non-occupational disability retirement benefit. Non-occupational disability benefits are paid to vested PERS Defined Benefit (DB) members who become totally and permanently disabled because of a physical or mental condition that is unrelated to their employment. Disability benefits provide a means of partial income replacement if you must terminate your PERS employment because of a permanent disability. Disability benefits provide you a monthly benefit payment and major medical insurance and are not intended to supplement your income should you recover from your disability and return to work.
Qualifying for PERS DB Non-occupational Disability Benefits
To qualify, you must be vested. This means you must have at least five years of paid-up PERS DB membership service. You must also be totally and presumably permanently disabled and unable to perform the usual duties of your job, or the duties of another job an employer makes available for which you are qualified by training and experience.
Determining Qualification for Disability Benefits
You must provide physician statements and complete medical records along with an employer’s statement of disability to the Division. A consulting physician reviews your file and makes a recommendation to the PERS Administrator who makes the final decision. You will be notified of the final outcome. If you are denied disability benefits, you may appeal to the Department of Administration's Office of Administrative Hearings.
Applying for PERS DB Non-occupational Disability Benefits
Contact the Division and request a disability packet. Your application must be received by the Division or postmarked within 90 days after termination of employment. If you have missed the 90-day deadline, contact the Division for assistance. Usually, it takes approximately six to eight weeks to process your application. It can take longer if you do not provide all of the required information to support your application. It is your responsibility to provide complete information to the Division so a determination can be made.
Employment and Applying for Disability Benefits
You do not need to terminate employment before applying for a disability benefit. However, if you are approved for benefits, you must terminate employment within 30 days of the Administrator’s decision.
Caution: You may choose to receive a refund of your total member contributions in a lump sum, rather than apply for a disability retirement benefit. However, if you refund your contributions instead of applying for a disability retirement, you are no longer eligible for that benefit or any future PERS retirement benefit or associated system-paid medical insurance benefits, unless you return to PERS DB work in future and requalify for benefits
Disability Benefits
Once your disability application is approved, you will begin receiving monthly benefits. Benefits accrue from the first day of the month following termination of employment and are paid at the end of the month. If your appointment to disability is delayed to allow time for the PERS Administrator to obtain and review records, retroactive payments will be made.
Monthly Benefit Amount
Your benefit will be calculated based on your average monthly compensation and PERS service at the time you terminated employment because of disability. The benefit is calculated the same as a normal retirement benefit. If you have an unpaid indebtedness for any of your PERS service at the time you are appointed to non-occupational disability, that service will not be included in your disability benefit calculation unless you pay the indebtedness in full. If you do not pay the indebtedness at the time you are appointed, but elect to pay it later, your non-occupational disability benefit will be recalculated to include the additional paid-up service. Your benefit will be increased on the first of the month following the date your indebtedness is paid. The benefit increase will not be paid retroactively.
Taxes and Non-occupational Disability Benefits
Your monthly disability benefits are taxable by the federal government upon receipt. If you move to another state, your benefit may also be subject to that state’s income tax. In addition, since the standard for eligibility for PERS non-occupational disability benefits is different than the federal definition of disability (according to Internal Revenue Code Section 72(m)(7)), we are required to code your benefit as an early distribution of retirement funds. As such, you may be subject to a 10% early distribution penalty for amounts received from the PERS. If you feel that you meet the federal definition of disability, you can file IRS form #5329 for an exception to the early distribution penalty. You may elect to have no federal tax withheld from your benefit by completing a W4-P withholding form available from the IRS; however, you are still responsible for any taxes due to the federal government. The Division does not give tax advice and you may wish to consult a tax professional for more information.
Medical Coverage for Non-occupational Disability Members
You, your spouse, and your dependent children are eligible for major medical coverage at no premium to you while you are receiving disability benefits. Dependent children up to age 19 are covered and may be included up to age 23 if enrolled full-time in an accredited college or university. The medical coverage will continue once your disability benefits convert to a normal retirement. There are also optional insurance coverages for dental-vision-audio (DVA) and long-term care (LTC) insurance which you may elect and pay premiums for. You must elect optional coverages when you are appointed to disability benefits or you will not have the opportunity to elect them at any future time, including when your disability benefit converts to a normal retirement.
Vocational Rehabilitation Requirements
If you were first hired in the PERS after June 30, 1986, you will be required to enroll in a rehabilitation program with the Division of Vocational Rehabilitation (DVR) within 30 days of being appointed to a disability retirement benefit.
Termination of Disability Retirement Benefits
If you are required to report to the Division of Vocational Rehabilitation (DVR) and you fail to do so, your disability benefits can be terminated. The Division requires proof of your enrollment in a DVR program. If you fail to enroll, fail to interview for a job, or fail to accept a position offered, or if you are certified by DVR as failing to cooperate in a rehabilitation program, your disability retirement benefit may be terminated. Your disability benefit may also be terminated if you return to work. See further information in this brochure on returning to work.
Proof of Eligibility Requirements
Members first hired under the PERS after June 30, 1976, must provide proof of disability under the Social Security Act on an annual basis. If you are not eligible for Social Security, each year you must provide medical proof that Social Security disability payments would have been payable had you been eligible to apply. Members first hired before July 1, 1976, are not required to show proof of eligibility under the Social Security Act, however, you must undergo a medical examination when required by the Administrator (not more than once a year). You may also be asked to provide other documentation such as tax returns or physician statements as proof of continued eligibility.
Death Benefits
If you die while you are receiving non-occupational disability benefits and you are married, your spouse will have options for continuing benefits. If you are not married, your account balance will be paid to your named beneficiaries on file with the Division. You may update your beneficiaries by completing new beneficiary forms available on the Division website. For further information on death benefits, please contact the Division.
Timeline of a Disability Benefit
Members do not accrue PERS service while receiving non-occupational disability benefits. When you become eligible for normal retirement, disability benefits will cease and you will be appointed to normal retirement. Your monthly retirement benefit will be based on your total PERS service and average monthly compensation you earned while employed. For Tier I members, age 55 determines normal retirement eligibility; for Tier II and III members, it is age 60.
Becoming Reemployed
Disability benefits are not intended to supplement your income if you recover from your disability and return to work. Proof of such recovery may include medical evidence or proof of capability to work in a comparable position for an employer, including self-employment. If you become reemployed, you may no longer be eligible to continue receiving disability benefits. If you return to work at any time while receiving non-occupational disability benefits, you must notify the Disability Unit in the Division. If you become employed in a part-time position, your continuing eligibility for non-occupational disability benefits will be reviewed. If you become employed in a full-time position, you are considered “recovered from disability,” and you are no longer eligible to receive non-occupational disability benefits from PERS.
Introduction
Important Document:
No one wishes to become disabled, but if you do become permanently disabled, you may be eligible to receive monthly benefits from the Teachers’ Retirement System (TRS) Defined Benefit (DB) Plan. Disability benefits are intended to provide a means of partial income replacement if you must terminate your TRS employment because of a permanent disability. Disability benefits provide you a monthly benefit payment and major medical insurance and are not intended to supplement your income should you recover from your disability and return to teaching.
Qualifying for TRS DB Disability Benefits
You must have a minimum of five paid-up years of TRS membership service to be eligible to apply for TRS disability benefits. You must also have a presumably permanent physical or mental condition which prevents you from performing the usual duties of your job or the duties of another position the employer makes available and for which training or education qualifies you. You must terminate your TRS position because of your disability.
Determining Qualification for Disability Benefits
You must provide physician statements and complete medical records along with an employer’s statement of disability to the Division. A consulting physician reviews your file and makes a recommendation to the TRS Administrator who makes a final recommendation. You will be notified of the final outcome. If you are denied disability benefits, you may appeal to the Department of Administration's Office of Administrative Hearings.
Applying for TRS DB Disability Benefits
You should contact the Division and request a disability packet. Your application must be received by the Division or postmarked within six months after your disability begins, or 90 days after termination of TRS employment. If you miss either deadline, contact the Division for assistance. In general, it takes approximately six to eight weeks to process your application. It can take longer if you do not provide adequate medical documentation or other required information to support your application. It is your responsibility to provide complete information to the Division so a determination can be made.
Employment and Applying for Disability Benefits
You do not need to terminate employment before applying for a disability benefit. However, if you are approved for benefits, you must terminate TRS employment within 30 days of the Administrator’s decision.
Caution: You may choose to receive a refund of your accumulated member contributions in a lump sum, rather than apply for a disability benefit. However, if you refund your contributions instead of applying for a disability retirement, you are no longer eligible for that benefit or any future TRS retirement benefit or associated system-paid medical insurance benefits, unless you return to TRS DB work in future and requalify for benefits.
Disability Benefits
Once your disability application is approved, you will begin receiving monthly benefits. Benefits accrue from the first day of the month following termination of employment and are paid at the end of the month. If your appointment to disability is delayed to allow time for the TRS Administrator to obtain and review records, retroactive payments will be made.
Monthly Benefit Amount
Your benefit is equal to 50% of your annual base contract salary immediately before becoming disabled (divided by 12 months). An additional 10% (divided by 12 months) of your base contract salary is payable for each of your dependent children, if any, up to a maximum of four children (40% of salary). Dependent children are defined as a child who is under age 19, or under 23 if registered as a full-time student and attending an accredited school, college, or university.
Taxes and TRS Disability Benefits
Your monthly disability benefits are taxable by the federal government upon receipt. If you move to another state, your benefit may also be subject to that state’s income tax. In addition, since the standard for eligibility for TRS disability benefits is different from the federal definition of disability (according to Internal Revenue Code Section 72(m)(7)), your benefit is required by the IRS to be coded as an early distribution of retirement funds. As such, you may be subject to a 10% early distribution penalty for amounts received from the TRS. If you feel that you meet the federal definition of disability, you can file IRS form #5329 for an exception to the early distribution penalty. You may elect to have no federal tax withheld from your benefit by completing a W4-P withholding form available from the IRS ; however, you are still responsible for any taxes due to the federal government. The Division does not give tax advice and you may wish to consult a tax professional for more information.
Medical Coverage for TRS Disability Members
You, your spouse, and your dependent children are eligible for major medical coverage at no cost to you as long as you are receiving disability benefits. Dependent children up to age 19 are covered and may be included up to age 23 if enrolled full-time in an accredited college or university. The medical coverage will continue once your disability benefits convert to a normal retirement. There are also optional insurance coverages for dental-vision-audio (DVA) and long-term care (LTC) insurance which you may elect and pay premiums for. You must elect optional coverages when you are appointed to disability benefits or you will not have the opportunity to elect them at any future time, including when your disability benefit converts to a normal retirement.
Disability Retirement Benefits and Termination
Disability benefits, including the benefits for dependent children, will cease when you:
- recover from disability;
- fail to comply with eligibility requirements;
- die; or
- become eligible for normal retirement.
Benefits may also be terminated if you return to work in a teaching position. See section "Becoming Reemployed."
Proof of Eligibility Requirements
You will be required to provide information for proof of continuing eligibility by submitting a completed physician’s statement of continuing eligibility that is signed by the physician who is treating your medical condition(s). In addition, you will be asked to provide a copy of your previous year’s federal income taxes to verify you are not employed. You may also be required by the TRS Administrator to undergo a medical examination. Proof may be required once a year during the first five years of disability and once every three years thereafter.
Death Benefits
If you die while you are receiving TRS disability benefits and you are married, your spouse will have options for continuing benefits. If you are not married, your account balance will be paid to your named beneficiaries on file with the Division. You may wish to update your beneficiaries by completing new beneficiary forms available on the Division website. For further information on death benefits, please contact the Division.
Timeline of a Disability Benefit
As a TRS member, you will continue to accrue service while receiving disability benefits until you become eligible for a normal retirement benefit. At that time, disability benefits will cease and you will be appointed to normal retirement. Your monthly retirement benefit will be calculated on your total TRS service and average monthly compensation you earned while employed. For Tier I members, age 55 or 20 years of accrued service determines normal retirement eligibility; and for Tier II members, it is age 60 or 20 years of service.
Becoming Reemployed
Disability benefits are intended to provide a means of economic survival if you must terminate your TRS employment because of a total and presumably permanent disability. Disability benefits provide you a monthly benefit payment and major medical insurance. This program for disabled members of the TRS is not intended to supplement your income should you recover from disability and are capable of performing the duties required of a teacher. Teachers receiving disability benefits are restricted from returning to the classroom as a teacher, or from accepting a position that requires a teaching certificate. If you return to the workforce, you should contact the Division immediately. Your disability benefits may be terminated if you are no longer considered presumably permanently disabled.
Introduction
Your DCR retirement plan will provide you with financial security if you become totally and presumably permanently disabled because of a physical or mental condition caused by an injury or hazard undergone while you are performing your job. Occupational disability benefits provide a portion of your salary at the time you terminate employment because of the disability up to the date you become eligible for normal retirement benefits.
While you are receiving disability benefits, your employer will continue to contribute to your retirement account as though you were still working. Your employer will contribute both employee and employer contributions based on your gross monthly salary at the time you terminated employment because of the disability. You will continue to earn service credit while you receive disability benefits. When you reach normal retirement eligibility, your disability benefits stop and you will have access to your retirement account balance. You will also be eligible at that time to elect retiree medical, long term care (LTC), and dental/vision/audio (DVA) benefits. If you are Medicare eligible at that time you will receive a premium subsidy based on your accrued years of service.
Normal retirement eligibility is reached:
- At Medicare eligible age with at least 10 years of service credit, or
- Any age with 25 years of service for peace officers and firefighters, or
- Any age with 30 years of service for other public employees and teachers.
Eligibility Requirements
To qualify for an occupational disability benefit, you must meet the following requirements:
- You have a total and presumably permanent disability because of a physical or mental condition caused by a bodily injury sustained, or a hazard undergone, while in the performance and within the scope of your duties and not the result of your willful negligence;
- This physical or mental condition presumably permanently prevents you from satisfactorily performing your usual duties for an employer or the duties of another comparable position or job that an employer makes available for which you are qualified by training or education;
- You terminated PERS/TRS employment because of the occupational disability; and
- You filed a timely application for the disability benefit with the plan administrator. The application is timely if it is filed within 90 days after the termination of your employment.
The plan administrator will review your medical reports and other evidence to determine if you qualify. If you are determined ineligible, you may appeal the denial to the Office of Administrative Hearings.
Monthly Occupational Disability Benefit
Your monthly occupational disability benefit will be:
- 40% of your gross monthly compensation immediately before you terminated employment due to the disability. This benefit is not taxable. Participants who are receiving disability benefits are not eligible for medical benefits until the participant meets the eligibility requirements for normal retirement.
While You are Receiving Occupational Disability Benefits
- You are 100% vested in the employer contributions upon appointment to disability, regardless of your actual service.
- You continue to earn service credit toward medical eligibility and the Health Reimbursement Arrangement (HRA).
- Your employer will continue to make the required employer and employee contributions on your behalf, including HRA contributions and contributions to your retirement account. Contributions to your retirement account will be based on your gross monthly compensation at the time of termination of employment due to disability.
- During these ongoing contributions, your employer does not deduct, or take out, money from your disability payment. Your disability payment is separate from these contributions.
- You continue to direct the investment of contributions while you receive disability benefits; however, contributions cannot be removed from the account until you reach normal retirement eligibility. You may be required by the plan administrator to undergo a medical examination once a year to show proof of continuing eligibility for the disability benefit.
Vocational Rehabilitation Requirements
If you are appointed to an occupational disability benefit, you must:
- Apply to the Division of Vocational Rehabilitation within 30 days of the date disability benefits begin; and
- Enroll in a rehabilitation program if you meet the eligibility requirements of the Division of Vocational Rehabilitation.
When Occupational Disability Benefits Stop
Before Normal Retirement
You will become ineligible and disability benefits will stop at the end of the first month that you:
- Fail to report to the Division of Vocational Rehabilitation;
- Are certified by the Division of Vocational Rehabilitation as failing to cooperate in a vocational rehabilitation program;
- Fail to interview for a job;
- Fail to accept a position offered;
- Recover or die from the disability.
At Normal Retirement
Occupational disability benefits cease according to your age and length of service. Your occupational disability benefits stop under these conditions: When a participant is eligible for normal retirement at Medicare-eligible age with at least 10 years of service;
OR
PERS
- At any age with 30 years of service, or
- At any age if you are a peace officer or firefighter with 25 years of service.
TRS
- At any age with 30 years of service.
