CEO – RTW 101 SERIES Disability Retirement Services Overview September 27, 2012

1. CEO – RTW 101 SERIESDisability Retirement Services OverviewSeptember 27, 2012 Presented by Richard Schlosser Disability Retirement Services Division Supervisor

2. Terms • Service-connected Disability • Eligible from 1st day of employment • Must be permanently disabled • Must have a direct causational link to the workplace • Nonservice-connected Disability • Must have at least 5 years of service (60 months) • Must be permanently disabled • No direct link to the workplace • Service Retirement • Concurrent with Disability Application • Waive reinstatement rights

3. ComparisonWorkers’ Compensation vs. Retirement Law • Workers’ Comp. system provides different benefits from County Retirement System: • Temporary Disability • Permanent Disability • Rehab or supplemental job displacement benefit • LACERA’s Board of Retirement not bound by Workers’ Comp. system; not party to Workers’ Comp. Decisions • LACERA is separate, legal entity – findings made in Workers’ Comp. cases are not bindingon County Retirement System • LACERA grants only Permanent Incapacity

4. Contents Within Employee’s Disability Retirement Packet • Disability Retirement Brochure • Disability Retirement Eligibility and Application Instructions • Application for Disability Retirement • Physician Statement for Disability Retirement • Claims Against Third Parties Form • Authorization to Obtain and Release Records and Information, signed by applicant

5. Contents Within Employer’s Packet • Disability Retirement brochure • Disability Retirement Eligibility and Application Instructions (Department version) • Application for Disability Retirement

6. EMPLOYEE APPLICATION EMPLOYER APPLICATION

7. Department’s Responsibilities G.C. 31721 • Department may file an application on behalf of the employee • Employee’s Options • Comply with Employer Application • File Employee Application • Do Nothing • LACERA’s Responsibilities • Within 30 days notify employee department has filed an application on their behalf • If applicant complies with Employer Application, they should submit • Authorization to obtain and release records and information (DIS 104) • Claims Against Third Parties (DIS 117) • Missed Medical Appointment form (pg. 8)

8. LACERA’s Responsibilities (cont’d) • Upon receipt employer application is completed and processed • Once the Board of Retirement takes action, the department is notified and an effective date for the Salary Supplement is established • If the application is denied, appeal rights are not affected

9. LACERA’S ROLE • Initial application includes signed information release from employee • Allows LACERA to: • Retrieve all Workers’ Comp records from TPA • Retrieve additional records from outside sources • Kaiser/personal physicians/chiropractors/therapists • Retrieve personnel records • Active, retired or deceased • Ask for additional documentation/information as necessary

10. LACERA’S ROLE (cont’d) • Interview member to get timeline • Job classifications during career • Prior job assignments and overall duties • Current job assignment and duties • Focus on specific job duties within last assignment • Physical requirements • Were there modifications provided to the applicant? • If offered, when? (before or after retirement) • If so, were they temporary or permanent?

11. LACERA’S ROLE (cont’d) • Chronological history of injuries/illnesses • Mechanics of the injury • Where did it happen? • What did they feel? • Were there any witnesses? • Reporting and care after the injury/illness • Follow-up treatment, if any • Current symptoms and reason they cannot return

12. LACERA’S ROLE (cont’d) • Current symptoms/level of activity • Witness statements • Contact supervisor • Confirm “actual” job duties/physical requirements • Obtain information regarding injury/illness • Applicant’s current condition/ability to perform duties • Contact co-worker(s) • Obtain information regarding injury/illness • Query personal awareness of applicant’s condition

13. LACERA’S ROLE (cont’d) • Contact RTW Coordinator • Confirm medical leave status • Confirm past and present work restrictions • Research accommodation, if any • Temporary or permanent

14. LACERA’S ROLE (cont’d) • Medical opinion from LACERA specialist • Mechanism of injury • History of injury/illness and treatment rendered • Confirm or refute permanent incapacity • Advise on any permanent work restrictions • Comment on ability to perform permanent modified position • Confirm or refute job causation

15. LACERA’S ROLE (cont’d) • Contact RTW Coordinator again • Address department’s ability to accommodate LACERA doctor’s permanent work restrictions • If so, what would the duties be? • If not, why not? • *** Response needs to be in writing!!! • Email, letter or fax • Important that person giving response is authorized to make statement

16. Reasonable Accommodation • Workers’ Compensation versus Disability Retirement • Workers’ Comp (Form of Voc. Rehab) • In Worker’s Pre-Injury Job Class (Modified Work) • In New Job Class (Alternative Work) • Disability Retirement • In Applicant’s Pre-Injury job class, therefore Applicant not Permanently Incapacitated • In new job class, but only after found to be Permanently Incapacitated (re-employment plan pursuant to §31725.65) * Both are with employer as of date of injury

17. Employee working within Reasonable Accommodation • Workers’ Compensation • Within worker’s job class (Modified Work) • Employer may provide modification to applicant’s assignment or offer another assignment in job class • Written offer • If worker accepts offer, and accommodation is successful, a disability retirement application is avoided • In new job class (Alternative Work) • Employer provides permanent accommodation in new job class • Written offer to worker • Worker either returns to work or may file a disability application

18. Employee working within Reasonable Accommodation (cont’d) • Disability Retirement • In Applicant’s Pre-Injury job class, Applicant not considered Permanently Incapacitated • Board of Retirement (BOR)has fiduciary duty to independently investigate and determine availability of reasonable accommodation • BOR decision not dependent on whether employer has actually offered accommodation to applicant • BOR is a separate legal entity, empowered to make its own finding of fact

19. Employee working within Reasonable Accommodation (cont’d) • Disability Retirement • If BOR determines reasonable accommodation is available within applicant’s pre-injury job class: • Applicant Is Not Permanently Incapacitated • Disability Retirement Is Denied

20. Questions RTW Cannot Ask • What medical conditions did the employee apply for? • Proposed date of service retirement? • What is the Board recommendation? • What do we think the Board action will be? • How much will employee make if they get the disability retirement?

21. Questions RTW Can Ask • Time frame to process • Status of case • Name of Investigator • Service retirement date, once confirmed by Board

22. Processing Timeframes • Minimum amount of time to process a disability application is 9 to 12 months • Assuming only one claim of disability involved; • Extra time is needed for extensive investigation or delays in obtaining medical evidence; or • Additional medical specialties evaluations are needed

23. SUPPLEMENTAL DISABILITY ALLOWANCE

24. Supplemental Retirement Allowance • How do we retain disabled members in County Service? • County Departments face critical budget cuts, lay offs, and hiring freezes. Salary Supplement is the process of retaining experienced employees in rehabilitation positions. • Government Codes §31725.5, 31725.6 and 31725.65 • Applications are to be treated like any other application; the criteria is that the applicant must be found disabled from the ORIGINAL position.

25. Section 31725.5 • Applies to nonservice-connected disability retirements only • Section 31725.6 and/or 31725.65 • Applies to service-connected disability retirements only

26. Department’s Responsibilities • Department may file an application on behalf of the employee • Confirm the employee has applied for disability retirement benefits with the salary supplement • Department may keep employee in current job classification while performing new job duties during the application process • Department may place an employee on “Y-Rate” with CEO approval pending the Board of Retirement’s approval • The employee’s salary remains unchanged during the disability retirement application process • Submit supporting documentation with the application including the lower item job classification, essential job functions and salary

27. Conditions of Supplemental Allowance • Contingent on: • The offer of a permanent position with a lower salary schedule which accommodates the employee’s permanent work restrictions • The acceptance of this position by the employee • Engaging the Process • The Disability Retirement Services Division works closely with County Departments’ Human Resource managers and Return to Work Coordinators to facilitate a better awareness of the Salary Supplement options.

28. Member’s Future Earnings • The calculation is based upon the member’s actual earnings at the time the benefit is granted. The calculation does not allow for future item raises and cost-of-living increases. • The member can be promoted in the new position career chain. When the member receives a pay raise, it is reviewed against the original item number salary and the salary supplement allowance is lowered accordingly. If the new item number salary exceeds the original position’s salary, the Salary Supplement allowance stops.

29. SCD SUPPLEMENTAL RETIREMENT CALCULATION (GC §31725.65) • Example #1 – Deputy Sheriff I permanently demoted to Dispatcher: • Previous position monthly salary = $6077.36 • NEW position monthly salary = $3996.82 • Difference in salary = $2080.54 • SCD Supplemental Retirement Allowance $2080.54 • SCD Benefit if member retires (50% FAS) $3038.54 • Savings to system $ 958.00

30. NSCD Supplemental Retirement Calculation(GC §31725.5) • Example #2 – Supervisory Staff Nurse permanently demoted to Intermediate Clerk: • Previous position monthly salary = $8013.52 • NEW position monthly salary = $2878.00 • Difference in salary = $5135.52 • NSCD Supplemental Retirement Allowance $2706.12 • NSCD Benefit if member retires (1/3 FAS) $2706.12 • Difference, not paid by supplement $2429.40 • Reason: Supplemental Allowance cannot exceed maximum NSCD benefit allowed

31. Plan E to DTransfers

32. How it Works?Frequently Asked Questions QUESTION: To receive a Disability Retirement as a Prospective Member is there a time requirement? • Yes, completion of two continuous years of active service after his or her most recent transfer date, or • Earned five years of retirement service credit under Retirement Plan D after his or her most recent transfer date. (Sec. 31494.5(e).)

33. How it Works?Frequently Asked Questions QUESTION: When is a prospective transferee eligible for a SCD? • A prospective Plan D transferee must satisfy one of two (2) waiting periods in order to apply for a disability retirement. • Complete two continuous years of active service after his or her most recent transfer date, or • Earn five years of retirement service credit under Retirement Plan D after his or her most recent transfer date. (Sec. 31494.5(e).)

34. How it Works?Frequently Asked Questions QUESTION: When is a prospective transferee eligible for a Nonservice-connected disability retirement? • One is eligible to apply for a nonservice-connected disability under Plan D, regardless of the date of injury, once they have a minimum of five years of County service credit, and have met one of the Plan D service credit options previously listed.

35. How it Works?Frequently Asked Questions QUESTION: Can a paid leave of absence be “active service”? • A paid leave of absence or part-time work schedule is nevertheless considered “active service,” unless “the leave of absence or part-time service is necessitated by a pre-existing disability, injury, or disease.” (Sec. 31494.5(g)(1).) (Emphases added.)

36. Cynthia Lau Legislative Affairs Officer AB 1902

37. Comparison of Plan E and Plan D – New Hire Elects One

38. Prospective Plan Transfer (PPT) DE ED May transfer back and forth – may transfer between plans no more than once every 3 years while in period of “active employment.”

39. What happens if member is disabled while in Plan D? To apply for disability retirement, PPT transferee must have either: • Two yrs. continuous active service after transfer, or • Earned 5 yrs. service credit under Plan D after transfer Requirements prevent Plan E member from transferring to Plan D and immediately filing for disability retirement.

40. Issue – Member may be disabled, but ineligible to apply for LACERA disability retirement due to failure to meet 2 yr./5 yr. requirement.

41. County Long-Term Disability Plan (LTD) • Provides benefits for Plan D and Plan E members who are sick or injured and cannot work. • Benefits expire at age 65, or when no longer disabled.

42. After 2 yrs. on LTD, County requires Plan D (contributory) members to file for retirement in order to continue LTD. • LTD benefit is offset (reduced) by amount of retirement allowance • County does not require Plan E members to file for retirement after 2 yrs. to continue LTD.

43. Under certain circumstances, it may be more advantageous for the affected member to continue LTD benefits under Plan E than under Plan D. Influencing factors include: • Member’s age • Amount of service credit • Status of LTD Health Insurance

44. Currently (Pre-AB 1902) To continue LTD benefits, a disabled Plan D PPT transferee who fails to meet 2 yr./5 yr. requirement may only apply for a service retirement.

45. Effective January 1, 2011 (Post-AB 1902) Disabled Plan D PPT transferee who fails to meet 2 yr./5 yr. requirement has options: • May transfer back to Plan E and continue under the County LTD program • Or may file for a service retirement under Plan D

46. How can you help? Be aware of this new provision and communicate it to employees. Effective 1-1-11.

47. Obstacles LACERA faces • Timeliness of response to Retirement Board once doctor’s opinion is received • Workers’ Comp vs. Disability Retirement • Open labor market vs. independent classification • Restrictions governed by old law • Retirement Board policy changes • Turnover within RTW divisions

48. NOTE: Plan D members electing deferred retirement are ineligible for LTD benefits.

49. Resources • If you have questions, call (626) 564-2419 • Log on to www.lacera.com • Click “Benefits” tab (upper right hand side) • Click “Active Member” tab (left side) • Click “Disability Retirement” (lower left side) • Contact the individual investigator (see attached listing)