Retirement Plan D - General Member

SECTION 8 | Disability Retirement

What It Is and Who Is Eligible

Plan D provides disability retirement benefits for active members who are determined by the Board of Retirement (BOR) to be permanently incapacitated for the performance of their regular job duties.

There are two types of disability retirement. The circumstances surrounding the disability determine which type applies.

• Service-connected disability (SCD)—Permanent disability resulting from an illness or injury directly related to your County employment. The BOR must find a direct causational link to the workplace in order to grant a service-connected disability retirement.
• Nonservice-connected disability (NSCD)—Permanent disability resulting from an illness or injury not related to your County employment.

Note: A member who is found by the BOR to be permanently incapacitated for the performance of his or her regular job duties, but is capable of performing the duties of another County position may be eligible for an SCD or NSCD Salary Supplement In such case, should the member opt to accept a lower-paying County position, LACERA will supplement the difference in compensation.

SCD: Eligibility Requirements

A Plan D member who becomes permanently incapacitated for the performance of his or her regular job duties due to an SCD may apply to receive an SCD retirement allowance: There is no age or service requirement.*

*Certain service requirements apply to members who transferred prospectively to Plan D from Plan E.

NSCD: Eligibility Requirements

Any eligible Plan D member who has at least five years (60 months) of County (or County and reciprocal) service credit and becomes permanently incapacitated and unable to perform his or her regular job duties due to an NSCD may apply to receive an NSCD retirement allowance. There is no age requirement.

A member who has withdrawn his or her retirement contributions is not eligible for a disability retirement.

Benefit Amounts

The benefit amount payable depends on the type of disability retirement granted and the amount of the member's final compensation. Disability retirement allowances granted to Plan D members are eligible for annual COLA adjustments.

A member who is eligible to retire may elect a service retirement and receive the applicable retirement benefit while his or her application for a disability retirement is pending.

The SCD benefit is the higher of:

• One-half of the member's final compensation, or
• The member's full service retirement allowance (if eligible)

Tax Note: The Internal Revenue Code grants special tax exclusions for certain SCD retirement benefits. Section 104(a)(1) of the Code provides that an amount equal to 50 percent of the member's final compensation may be excludable from his or her gross income for federal tax purposes. The amount of any COLA adjustment attributable to that amount may also be excludable. Any remaining portion of the allowance is taxable.

Eligible survivors who receive a monthly allowance following the SCD retiree's death are also entitled to this IRS tax benefit. The benefit does not apply to ex-spouses.

Double Accounts: Disability Benefits

A member with a double account resulting from a prospective transfer from Plan E to Plan D who is granted a disability retirement under Plan D is not eligible to receive Plan E service retirement benefits. The benefit the member will receive depends on the type of disability retirement granted:

If the member is granted an SCD retirement he or she would receive the greatest of:

• One-half of his or her final compensation, or
• The full amount of a service retirement allowance, or
• The combined benefit the member would have received had he or she been entitled to a service retirement from both Plan D and Plan E

When You Must Apply

An application for either type of disability retirement must be submitted:

• While you are still employed, or
• Within four months after you have terminated employment, or
• Any time after terminating employment, provided
  • You are physically or mentally unable to perform your regular job duties and that condition has been ongoing from the date of separation
  • A delay in filing your application has not impaired LACERA's ability to investigate your case

If you are terminally ill and wish to provide a continuing allowance to your survivor, you or your authorized representative should contact LACERA immediately at 1-800-786-6464. LACERA will expedite the processing of your disability retirement application.

Effective Date

The effective date of disability retirement is governed by CERL. Generally, a disability retirement allowance becomes effective as of the date the application is filed with LACERA, but not earlier than the day following the last day of regular compensation.

Survivor Benefits

Survivor benefits for disability retirement vary according to the type of disability retirement granted:

SCD benefit for a surviving spouse or domestic partner
If the Unmodified option was elected:

• 100 percent of member's monthly SCD allowance for life
• Marriage or registration of domestic partnership must have occurred prior to member's retirement; one-year requirement does not apply

If one of the numbered Retirement Options was elected:

• Benefit paid to beneficiaries will be based upon the option chosen

NSCD benefit for a surviving spouse or domestic partner
If the Unmodified option was elected:

• 65 percent of member's monthly allowance for life
• Marriage or registration of domestic partnership must have occurred one-year prior to member's retirement

An Employee Disability Retirement Package, containing an application form and brochures detailing disability requirements, policies, and procedures is available on the Brochures & Forms page of lacera.com. You may also request a package by calling LACERA's Disability Retirement Services Division at 1-800-786-6464.

County Long-Term Disability and Survivor Benefit Plan

As an active County employee, you may also be entitled to benefits under the County-administered Long-Term Disability and Survivor Benefit Plan. Contact your Department for more information.

7/21/10