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South Carolina Retirement System (SCRS)

Disability Retirement

Please note that new SCRS disability eligibility standards will apply to all SCRS disability retirement applications received by PEBA after December 31, 2013. Please familiarize yourself with the new standards and how they will affect you.

 

Disability Retirement in General

Applications Received by PEBA prior to January 1, 2014
For applications received by PEBA prior to January 1, 2014, a member of SCRS may be approved for disability retirement benefits from SCRS if the member is physically or mentally incapable of performing the regular duties of his or her job, the disability is likely to be permanent, and the circumstances are such that the member should be retired.

Applications Received by PEBA after December 31, 2013
For applications received by PEBA after December 31, 2013, a member of SCRS may be approved for disability retirement benefits from SCRS only if the member has first been approved for disability benefits from the federal Social Security Administration, which generally requires an incapacity to perform any gainful occupation.

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Who May Apply

For All Applications
Becoming disabled does not automatically qualify you for a disability retirement annuity; you must file an application and go through the review process. You must be “in service” with a covered employer in order to file an application for disability retirement benefits. You are considered “in service” if you have not yet retired from SCRS and it has not been more than 90 days since you were last on the payroll of a covered employer. If PEBA does not receive your application while you are “in service,” you will not be eligible to receive any disability retirement benefits from SCRS. Retired members who work for a covered employer, including TERI participants, are not eligible to apply for a disability retirement annuity.

In addition to being “in service,” you must also meet certain earned service requirements to apply for disability retirement benefits. If you are a Class Two member, you must have at least five years of earned service credit toward retirement unless your disability is the result of an injury arising out of and in the course of the performance of your job duties. If you are a Class Three member, you must have at least eight years of earned service credit toward retirement unless your disability is the result of an injury arising out of and in the course of the performance of your job duties.

Coordination with Other Benefits
You may arrange with your employer to make your retirement contributions through your employer if your disability requires you to be placed in an employer-approved leave status while receiving workers’ compensation benefits. Doing so will ensure that you continue to earn retirement service credit during your workers’ compensation leave period. Do not wait to apply for a disability annuity until your workers’ compensation claim is finalized. Many workers’ compensation claims are often settled after covered employment has ended. If your disability claim is denied, the continuance of paying retirement contributions and earning retirement service credit may be important to your long-term retirement plans.

For applications submitted to PEBA after December 31, 2013, you must still file your application while you are “in service” with a covered SCRS employer even if you have not yet been approved for Social Security disability benefits. Because of the length of time the Social Security disability application can take, do not wait to apply for SCRS disability retirement benefits until your Social Security disability claim has been approved.

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How to Apply

For All Applications

You should file your application for disability retirement as soon as you become disabled and while you are still “in service” with an employer covered by SCRS. Either go to the Forms section of our website or contact PEBA Retirement Benefits to obtain a disability retirement packet. When you file your disability retirement claim, please complete all of the forms in the disability retirement packet. You do not, however, need to include any medical records from your health care providers. If your disability retirement application is received by PEBA after you have already retired from SCRS or more than 90 days after you terminate from all covered employment under SCRS, you will not be eligible to apply for a disability retirement annuity.

The date your application is actually received by PEBA is the date used to determine whether the application was timely filed and which eligibility standard applies. PEBA must receive your disability application prior to January 1, 2014, for current eligibility standards to apply. If your application is received after December 31, 2013, you will have to be approved for Social Security disability benefits to receive a disability retirement annuity from SCRS.

Acknowledgement of Receipt
If you do not receive notification in the mail confirming PEBA’s receipt of your application within 10 days after submitting it, please contact PEBA. If you are eligible for service retirement when you become disabled, you may apply for a service retirement annuity and begin receiving a monthly annuity while awaiting determination of your disability claim. You will receive only one type of payment, so if your disability claim is approved, you will need to decide whether to continue to receive your service retirement annuity or to begin receiving a disability annuity. When filing for both service and disability retirement benefits, please note that your disability retirement application must be received before your service retirement date.

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Processing the Claim

Applications Received by PEBA prior to January 1, 2014
Your medical records will be obtained from your health care providers by our disability determination provider and evaluated to determine the severity and limiting effects of your physical or mental impairment. The determination to approve or deny your disability retirement claim is made by PEBA. If your claim is denied, you will have an opportunity to appeal the denial. Please allow a minimum of three months after all required documentation has been received from you, your employer, and your health care providers for your disability application to be processed. If you do not receive notification of PEBA’s decision within three months, please contact PEBA.

If PEBA approves your disability retirement claim, your service credit will be projected to when you would have reached age 65 or 28 years of service credit (Class Two member) or 30 years of service credit (Class Three member), whichever is less, to calculate your monthly annuity.

Applications Received by PEBA after December 31, 2013
The evaluation of your disability claim depends on when you send your Social Security Award letter to PEBA. Once PEBA receives your Social Security Award letter, your claim for an SCRS disability annuity can be evaluated. Please note that you will not be eligible for an SCRS disability annuity if the disability onset date established by the Social Security Administration is more than one year after the date of your termination from employment. Please be reminded that, because your SCRS disability retirement application must still be filed while you are “in service,” you should not wait to submit your disability retirement application to PEBA until your Social Security disability claim has been decided.

If PEBA approves your disability retirement claim, your benefit will be calculated based on your actual age and service credit. There is no projection of service credit.

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Effective Date

Applications Received by PEBA prior to January 1, 2014
If your disability retirement claim is approved, the effective date for your annuity will be the 30th day after your application is received by PEBA or the day after your last day on your employer’s payroll, whichever is later.

The disability retirement benefit will be based upon the service retirement benefit that would have been payable had you continued in service to age 65 at your current average final compensation, with an actuarial reduction for the contributions that would have been made during those years of projected service credit. This annual benefit may not be less than 15 percent of your average final compensation.

Applications Received by PEBA after December 31, 2013
Once you have provided a copy of the Social Security Award letter to PEBA, your SCRS disability annuity will be effective the later of the disability onset date established by the Social Security Administration or the day after your termination from employment. Retroactive benefits will be paid to back to the later of these two dates.

The disability retirement benefit will be based upon your years of credited service at retirement, average final compensation at retirement and the current benefit multiplier for service retirement benefits. There will be no projection of additional service or contributions. However, the annual benefit may not be less than 15 percent of your average final compensation.

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Continuing Disability Review

Applications Received by PEBA prior to January 1, 2014
A disability annuity, once approved, may be discontinued if:
•    You regain a certain earning capacity; or
•    Medical evidence indicates that you are no longer disabled; or
•    Your disability annuity was not approved following a continuing disability review.

Periodic medical reexaminations may be required up to age 65. If PEBA determines that your disability annuity should cease because of an improvement in your medical condition, your annuity will stop the month of your scheduled continuing disability review or the month of PEBA’s decision, whichever is later.

Applications Received by PEBA after December 31, 2013
If you have not yet reached age 65, you must provide a document indicating your continued receipt of Social Security disability benefits to PEBA each year. PEBA must receive this annual continued receipt document within 30 days after the anniversary date of your SCRS disability retirement.

Failure to produce documentation of your continued receipt of Social Security disability benefits within 30 days after the anniversary date of your SCRS disability retirement will result in suspension of your SCRS disability annuity. Your SCRS disability annuity will be reinstated retroactively if you provide the necessary documentation of your continued receipt of Social Security disability benefits within one year of the anniversary date of your SCRS disability retirement. Failure to produce documentation within one year of the anniversary date of your SCRS disability retirement will result in the permanent termination of your SCRS disability annuity. 

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Returning to Employment While Receiving a Disability Retirement Annuity

For All Applications
If you are under age 65 and receiving an SCRS disability annuity, you should report earnings from any gainful (public or private) employment to PEBA annually because there is an earnings limitation for all employment which is applied on a calendar-year basis. You may earn the difference between your adjusted average final compensation (AFC) at retirement and your disability annuity without affecting your annuity.

Your AFC may be adjusted each year for inflation for earnings limitation purposes only. This increase generally matches the percentage of the annual increase in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W). These adjustments affect the amount you can earn while receiving a disability annuity; however, they do not affect the amount of your annuity. You will receive a letter each February advising you of how much you can earn and requesting confirmation of your prior year’s earnings. You will have to repay any benefits that you received to which you were not entitled. If you earn more than the difference between your adjusted AFC and your disability annuity, your monthly annuity will be reduced or possibly canceled. If you return to work with an employer covered by one of the retirement systems administered by PEBA and your annual earnable compensation is equal to or greater than your adjusted AFC, your disability annuity ceases and you must become an active member of the system. After age 65, a disability retiree is subject to the same earnings limitation as a service retiree.

Additional Information for Applications Received by PEBA after December 31, 2013
Because a disability retiree who retires from SCRS under an application filed after December 31, 2013, must annually establish continued approval for Social Security disability benefits to continue to receive an SCRS disability retirement annuity, any post-retirement employment that causes a disability retiree to no longer receive Social Security disability benefits will also result in the discontinuance of the retiree’s SCRS disability retirement annuity upon his or her annual review date. For more information about returning to employment while receiving Social Security disability benefits, see Working While Disabled—How We Can Help, available from the Social Security Administration at http://www.ssa.gov/pubs/EN-05-10095.pdf.

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