5.40 B. Amount of IMRF Disability Benefits

2. Reduction of IMRF Disability Benefit For Workers’ Compensation and Social Security Benefits

1. Workers’ Compensation

IMRF will reduce a member’s disability benefit by the amount of any weekly or lump sum payments he or she may receive as workers’ compensation or occupational disease benefits. IMRF disability benefits are not reduced by payments for medical services or attorneys’ fees or by fixed amounts for loss of, or loss of use of, specific bodily members.

The reduction of the IMRF disability benefit will be made in the first IMRF disability check whenever it appears that workers’ compensation or occupational disease benefits are being paid, or will be paid. The monthly reduction is 4-1/3 times the weekly workers’ compensation or occupational disease payments.

IMRF disability benefits will be reduced whether the member’s workers’ compensation claim is pending or the member is receiving a workers’ compensation benefit.

The IMRF monthly benefit is adjusted for a lump sum settlement on the basis of converting the lump sum amount into a monthly workers’ compensation amount, until the total withheld equals the amount of the lump sum payment.

This loss of service credit will affect the member’s eligibility for other IMRF benefits, such as retirement and death benefits. Loss of service credit will also affect eligibility for disability benefits if the member returns to work for an IMRF employer and is again disabled.

Exceptions to workers’ compensation reduction

An exception exists which will allow a member to receive workers’ compensation benefits and a non-reduced IMRF disability benefit. The member must meet the following condition:

The member has IMRF or reciprocal retirement system credit earned during the period from October 1, 1974, through September 30, 1977. If the member has service credit earned anytime during this period in effect on the date of his or her disability, the member will receive an unreduced disability benefit even though he or she is also receiving workers’ compensation benefits.

Signing a workers’ compensation resignation agreement

In some cases, an employer may offer to settle a workers’ compensation claim if the member agrees to resign from his or her position and give up all rights as an employee of that employer.

NOTE: If a member signs such a resignation agreement, he or she also gives up any rights to IMRF disability benefits, unless the agreement specifically states that the member is not giving up his or her right to IMRF disability benefits. Also see Paragraph 5.40 D. 5.

2. Social Security Benefits

If the member becomes disabled when he or she is under the age for Social Security full retirement benefits:

IMRF will not reduce its disability benefits by the amount the member can receive from Social Security for a retirement pension Also known as an annuity. An IMRF pension is paid as long as the member lives. It is increased by 3% of the original amount each year. A member must have at least eight years of service credit and be age 55 to apply for an IMRF pension under the Regular and ECO plans. A member must be age 50 and have at least 20 years of SLEP service credit to apply for a SLEP pension.. Social Security pensions can begin as early as age 62.

If the member is at least age 62 but younger than his or her Social Security full retirement age, and the member becomes disabled or is receiving IMRF disability benefits:

The member is required to apply for Social Security disability benefits and to obtain an official determination from Social Security regarding his or her eligibility for Social Security disability benefits. The member can apply online, by phone, or in person.

• If the member applies online at www.socialsecurity.gov
  After he or she completes the online process, the member should print the confirmation/receipt page titled ”What You Need To Do Now” and send it to IMRF as proof that you applied for Social Security disability benefits.

• If the member applies by phone by calling 1-800-772-1213
  The member will receive a ”Receipt of Claim” from Social Security. He or she should mail IMRF that receipt of claim as proof that the member applied for Social Security disability benefits.

• If the member applies in person by visiting with the nearest Social Security District office
  The member should bring the IMRF Form 5.49, ”Authorization To Secure Social Security Award Or Disallowance Information,”  with him or her. The member completes Sections 1 and 2 and the Social Security representative completes Section 3. The member should mail IMRF the completed Form 5.49 as proof that he or she applied for Social Security disability benefits.

IMRF requires the member to apply with Social Security because IMRF will reduce its disability benefit by the amount that may be paid as a disability benefit by the Social Security Administration, even if the member is receiving Social Security retirement benefits.

Even though Social Security retirement benefits can begin as early as age 62, IMRF will not reduce its disability benefits by the amount the member receives from Social Security for retirement benefits until the member reaches his or her Social Security full retirement benefit age.

If the member is within six months of the age when he or she will become eligible for Social Security full retirement benefits, or is his or her Social Security full retirement age or older, and the member becomes disabled:

IMRF will reduce its disability benefit by the amount the member may be entitled to receive as a Social Security retirement benefits even if the member is not receiving such a benefit.

Social Security does not pay disability benefits if an individual is within six months of his or her full Social Security retirement age. (Social Security begins paying disability benefits six months after the onset of the disability.)

If the member is not receiving Social Security retirement benefits, IMRF requires an estimate of the amount the member is entitled to receive at his or her Social Security full retirement age. IMRF’s disability benefits will be reduced based upon this amount, even if the member does not apply for the benefit. Therefore, the member may wish to apply for his or her Social Security retirement benefits.

See the table below for more detailed information about when a member should apply for each type of Social Security benefit.

The table below provides the ages when a member is eligible for Social Security full retirement benefits.

If the member is being paid a reduced IMRF benefit and a final decision on a Social Security or workers’ compensation claim has not been made, IMRF will restore the benefit to the full unreduced amount (not after the member’s age when he or she is eligible for full Social Security retirement benefits for Social Security claims) provided the member signs Form 5.48, ”Disability Payment Agreement”  (view Exhibit 5I) and:

• Submits Social Security ”Receipt of Claim Form” (or other proof) indicating the member has applied for Social Security,

• Completes and submits IMRF Form 5.49, ”Authorization to Secure Award or Disallowance Information,” and

• If necessary, supplies updated Form 5.42a and medical records.

As long as the member remains disabled and is waiting for a final decision on the Social Security or workers’ compensation claim, IMRF will pay the member unreduced benefits (if the member has signed a Disability Payment Agreement) (Exhibit 5I) until the total of those payments equals 80% of the total amount of member contributions Members who participate in the Regular Plan contribute 4.50% of salary toward a future IMRF pension: 3.75% for the member and 0.75% for a surviving spouse pension. Members who participate in the SLEP plan contribute 7.50% of salary (on and after June 1, 2006) toward a future SLEP pension: 6.75% for the member and 0.75% for a surviving spouse pension. Before June 1, 2006, SLEP members contributed 6.50 percent of salary; 5.75 percent for the member and 0.75 percent for a surviving spouse pension. Members in the ECO plan contribute 7.50 of salary toward a future ECO pension: 6.75% for the member and 0.75% for a surviving spouse pension. he or she has on deposit.

Once that occurs, IMRF will reduce its benefit payments to the minimum payment of $10 or to the difference between the member’s anticipated Social Security disability benefit and 50% of his or her average monthly earnings, subject to the wage cap for Tier 2 members.

The ”Disability Payment Agreement” obligates the member to repay IMRF immediately for any prepayment resulting from an award of Social Security, workers’ compensation, or occupational disease benefits. If the member fails to repay IMRF, the prepayment will be recovered from any future IMRF benefits payable to the member, or to his or her beneficiaries The individual(s) or organization(s) a member chooses to receive his or her IMRF death benefits. or estate.

Before a member signs a Disability Payment Agreement, we strongly recommend that he or she speak with the IMRF Disability Claims Examiner.

3. IMRF Benefit Adjusted to Conform to Workers’ Compensation or Social Security Benefit

Whenever an IMRF disability benefit is reduced, the amount of the monthly check will not be less than $10. If IMRF benefits are reduced and workers’ compensation (including occupational disease) or Social Security benefits are denied, or paid in a smaller amount than the reduction, IMRF will adjust its benefits accordingly.

The member is required to repay to IMRF any prepayments when the member is paid workers’ compensation, occupational disease, or Social Security benefits for which no reduction of IMRF benefits is made.

4. Increase in Total and Permanent Disability Benefits

Total and permanent disability benefits are increased by 3% annually (not compounded) after the disabled member has been on disability for at least 30 months. The 3% increase is payable on the January 1 following the date the member has been disabled 30 months regardless of the member's plan tier. This increase is applied to the original amount before offset for Social Security or workers’ compensation benefits.

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