Clever Tricks Used by Retirement Systems

Under the County Retirement Act, there is a provision that allows for members to make a claim for when their disability retirement benefits should begin that is before the date the member actually applies. This provision, Government Code § 31724, provides in part, that if the member did not know that their disability (injury) would prevent them from ever returning to work permanently at the time they last received regular compensation (that includes annual leave, sick time, vacation time) that their applications should be deemed filed the day after they last received this pay. This means that the disability retirement benefit would begin to be paid retroactively before the date the member applied. Many times this can be a substantial retroactive benefit. The reason for this statutory provision is to alleviate the hardship on the member that was inflicted because of the loss of salary due to the injury which prevented them from work.

Recently a San Diego County Employees Retirement Association representative argued to its Board that a date used by its member when answering a question in its application for disability retirement benefits, prevented that member from seeking this retroactive benefit. The question merely asked for the date when the member first learned he/she was unable to perform his/her usual duties. The representative argued that the answer showed that the member knew he/she was permanently unable to work a year before he applied thus he/she should be denied the retroactive benefit because he/she should have applied back then. However, the question did not ask when did the member know he/she was permanently unable to do his/her job. The question in the application merely asked when did the member first know they were unable to perform the full duties of their job.

The retirement system’s application fails to explain how it will use the member’s answers against him/her to prohibit much needed benefits. In fact, members routinely first learn that they cannot perform full duties of their job when they are initially hurt because that is when their doctors and / or employer remove them from working their full duties. Obviously, that would be one of the first dates one learns they cannot perform their full duties. Their condition may wax and wane over the following months during treatment allowing them to return to modified work for a time and then be removed again. There are often many dates that they find themselves unable to perform their full duties until ultimately their condition becomes permanent. Once their medical condition becomes permanent the employer is legally obligated to determine whether it can permanently accommodate the member. That is a much different scenario then when did one first learn they could not perform their full duties. None of this is explained by the retirement system when asking this seemingly innocent question that what they want is when did the member learn they would be permanently unable to perform their usual duties.

Once the member tries to answer the question to what he believes the ambiguous question means, the retirement system decides to interpret the question and answer to mean something it does not say. This is done no less than by a fiduciary required to act with the utmost of good faith and fair dealing. In fact, in this scenario the fiduciary representative did nothing to clarify that the question was ambiguous and did not bother to clarify to its Board that the question said nothing about permanency. Instead it left its misrepresentation of what was asked remain that the member said he/she knew they were permanently unable to do the job on the date answer even though its question said nothing about being permanent. And a representative again repeated the same argument to the system’s hearing officer. This did not trouble anyone except the member who is being impacted and all the members that will follow if this argument is successful.

These little misrepresentations occur and they seem so innocent but are a far cry from innocent. Members should be appalled that fiduciary systems make these misrepresentations and severely cost members benefits that are needed to survive. Applicant’s need to be aware that the staffs at the retirement systems are trained to do what it can to minimize the amount of claims against it.

Jane H. Oatman, Esq. 
Fighting for the Rights of Disabled Public Employees

Timing is Important

One of the ways the retirement systems “nickel and dime” injured workers, is to make the effective date of the disability retirement as late as possible. Thus, if an injured worker is taken off payroll during a workers’ compensation case and months, or even years, later files for disability retirement, the retirement system will try to ignore those months and years of uncompensated time by making the effective date of the retirement the same as the date it received the disability retirement application.

For county employees, the unfairness of this practice was legislatively corrected by providing for an earlier effective date than the date the application was actually filed. Thus, if an injured worker delays in filing their application beyond the day after the last day of regular compensation, the application is deemed filed on the day after last regular compensation. But, once the injured worker knows that they cannot return to the actual duties they were performing, an effort should be made to get the employer to agree and file for the disability retirement, or the worker will have to file their own application. In any case, once the decision is made that you are disabled, prompt action on a disability retirement application is advisable.

Delay in filing your disability retirement application can be costly. The County Retirement Act provides that the effective date of your disability retirement benefit shall be the date of your application. The effective date may be earlier than the date of your application if you can prove that you delayed filing because of administrative oversight or you were unable to determine that your disability was permanent until a date after you last received regular compensation.

It may be beneficial to you to have your application effective earlier than the date of your application when you have a lengthy period where you received only workers’ compensation benefits or no benefits prior to the date you filed the application. That way you can recover back disability retirement benefits you would have received had you filed at the time you last received compensation from your employer. The earlier date, however, may decrease your monthly benefit so it may be important that an assessment be made whether actually obtaining the earlier date is most advantageous in the long run financially.

It is very important to know when you last will receive regular compensation. For example, you need to know when exactly your sick, vacation, comp time and holiday time will be end so you can time your application. Regular compensation includes contributions to supplement your workers’ compensation benefit from your sick pay, vacation pay and industrial leave compensation if your employer provides such a benefit.

This means that if you are off work and you continue to receive pay in the form of regular compensation from your employer excluding workers’ compensation pay such as temporary or permanent disability payments, and your doctor deems your condition permanent you need to immediately determine whether disability retirement is an option for you and apply. Otherwise you may lose valuable benefits.

Jane Oatman, Esq. 
Fighting for the Rights of Disabled Public Employees