SECTION 7 Disability Retirement
What It Is and Who Is Eligible
Plans A and B provide 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. More information on Salary Supplement is available in the Disability Retirement brochure on the Brochures & Forms page of lacera.com.
*The Government Code provides certain SCD presumptions for safety members or specified occupations. These include permanent incapacities resulting from heart trouble, cancer, blood borne infectious disease, and illness caused by exposure to biochemical substance; certain service and eligibility requirements may apply.
SCD: Eligibility Requirements
An active Plan A or B 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.
NSCD: Eligibility Requirements
An active Plan A or B 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A member who has withdrawn his or her retirement contributions is not eligible for a disability retirement.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 A or B 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)
UPDATE: JUNE 29, 2009
County SCD Health Care Subsidy: The County contributes a minimum of 50 percent of the member's selected retiree medical/dental plan premium or a minimum of 50 percent of the benchmark plan premium, whichever is less. For members with more than 13 years of service credit, the County pays the percentage to which the member is otherwise entitled under the County's retiree health care subsidy.
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.
UPDATE: OCTOBER 6, 2009
The NSCD benefit is the higher of:
- One-third of member’s final compensation, or*
- The member’s full service retirement allowance (if eligible)
If the NSCD applicant is eligible for a service retirement and the amount of that service retirement allowance is greater than the amount of the disability retirement allowance, the member may prefer to elect a service retirement rather than applying for an NCSD retirement. The benefit amount would be the same and since it would not be subject to the lengthy disability review process, the allowance would begin more quickly.
On NSCDs, the County health care subsidy applies to members with ten or more years of service credit; no exceptions are made on NSCDs with less than ten years of service credit.
*Maximum amount; varies depending on age and length of service.
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.
Advanced Disability Pension Payments
Under certain circumstances, in accordance with the California Labor Code, the County shall make advanced disability pension payments to safety members who are awaiting a determination from the BOR on their application for disability retirement.* In such cases, the member must repay the County for all advanced disability payments he or she receives, whether or not the BOR grants the member’s application:
- If the applicant’s disability retirement is granted, LACERA will deduct the advanced payments from the retroactive disability retirement allowance payable to the member. If the retroactive disability allowance is not sufficient to reimburse the total amount owed to the County, LACERA will deduct the remaining balance from the member’s future disability retirement allowance at a monthly rate no greater than 10 percent.
- If the applicant’s disability application is denied, he or she must reimburse the County directly.
*The applicant must have exhausted all of his or her disability leave; additional eligibility restrictions apply.
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:
The 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
The 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
6/16/09