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A Guide to Early Disability Retirement Under North Carolina LGERS

Posted by Sean Cecil | Apr 29, 2015 | 0 Comments

Most city and county employees in North Carolina are covered by the Local Governmental Employees' Retirement System (LGERS). Under that system, if you become disabled, you are likely to be entitled to receive disability retirement.

In the “normal” situation where your disability arises from some cause unrelated to your job, an employee must have 5 years of “creditable service” before they are eligible for disability retirement. However, because of a provision which the Professional Fire Fighters and Paramedics of North Carolina (PFFPNC) got passed some years ago, firefighters, paramedics and law enforcement officers who become disabled from a line-of-duty injury, need only have one year of creditable service, to be eligible for disability retirement. That one year is not as of the date of the injury, but as of the date of retirement. For example, if a firefighter is hurt in rookie school after only 30 days of employment, but is allowed to work light duty for another 12 months during which they contribute their portion to the retirement system, and are then told that the department cannot keep them in a light duty position, they would meet the requirement for “one year of creditable service” and be eligible for disability retirement because of their “line-of-duty injury” during rookie school.

If you are found eligible for disability retirement under LGERS, you will receive benefits calculated as if you worked to age 65 or 30 years, whichever is less. That means that for someone who can have their benefit calculated on a 30 year retirement, you will receive a maximum benefit of somewhat less than half of your regular income, depending on which of several “options” you select.

The standard for disability under LGERS is “unable to do your normal job”. This is much different than for instance, the standard under Social Security, which is essentially “unable to do any job”. For people with heavy duty jobs like paramedics and firefighters, it does not take a lot to make you “disabled” under LGERS.

In order to qualify for disability retirement, you need to have your doctor complete a form which is known as a Form 7A (Fillable forms available here). The most important question is Question 6. Your doctor must indicate that you are “disabled to perform your usual work duties”. If your doctor is not prepared to say that, then you should not be applying for disability retirement. Your doctor should check the box indicating that you are “permanently” disabled.

Many doctors think that when an employee brings them the Form 7A to fill out, they are asking the doctor to state that the employee meets the standard for Social Security Disability. That standard is essentially, “unable to do any job”. You need to make sure that the doctor understands that you are only asking that they say that you are permanently disabled to do your normal job.

The employee also has to submit an application for disability Retirement, a Form 7. Because the processing of an application for disability retirement and then getting you into the retirement system computer such that monthly checks are issued to you takes more than a month, you need to think about that as you prepare the application. Section C of the Form asks for “your effective date of retirement”. If you are working in a light duty job, or if you have sufficient leave time accrued, I suggest that you list a “retirement date” that is about 2 months away. Also, if you have accrued sick leave you can use, you should use it all prior to your effective retirment date. Thus, if you are submitting your form and the doctors's form on or before March 10th, I would suggest a retirement date of April 30th. If things go “as expected”, your first retirement check should be issued to you at the end of May.

Along with the Form 7, employees should submit a retirement letter to the Chief or their department head, that is contingent on their disability retirement being approved. Thus, in the example of a retirement date of April 30th, the letter to the Chief would say that you are retiring effective April 30th, but you should qualify that by stating that: “My retirement is contingent on my application for disability retirement being approved by that date. To the extent that it has not been approved, I reserve the right to withdraw my retirement.” Obviously, if your retirement has not been approved by April 29th, you should do a memo withdrawing and revoking your April 30th retirement. A few employers have refused to accept such contingent retirement letters, but generally there have been no problems with such letters.

If you are approved for disability retirement, that does not prevent you from getting a new job and earning some additional income. You should not have your disability retirement benefits reduced until your earnings from other work, plus your disability retirement, equals what your were making at the time of your retirement. At that point your retirement benefits are reduced dollar-for-dollar for all earnings that exceed that “cap”. This “cap” on new earnings will go up each year to essentially account for cost-of-living. Thus if you were making $50,000 when your retired, your maximum benefit would probably be about $24,000. You could then earn about $26,000 from new employment before your disability benefit was reduced.

If you become unable to do your normal job due to a work-related injury, you can still draw your full disability retirement benefit, with no reduction for the workers' compensation payments that you receive. Since workers' compensation pays two-thirds of an employee's average weekly wage before they were hurt, and that income is totally tax free, a paramedic or firefighter who is receiving both workers' compensation and disability retirement from LGERS, can sit at home and draw more “take home pay” than they did when they were working.

While most folks would rather not be hurt and disabled, and would certainly rather be able to continue with their career, LGERS covered local government employees can be assured that they are reasonably financially secure.

About the Author

Sean Cecil

Sean is an experienced advocate dedicated to justice for all people. He believes that individual human rights outweigh the freedom to make an easy dollar.

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