Washington Administrative Code › Title 415 - Retirement Systems, Department of › Chapter 415-106 - Public safety employees' retirement system › DISABILITY BENEFITS › Section 415-106-520 - How are the PSERS catastrophic duty disability benefits calculated?

Current through Register Vol. 24-14, July 15, 2024
(1)
Catastrophic duty
				disability:
As a catastrophic duty disability retiree, you may choose
				between:
(a) A taxable, one-time lump-sum
				payment; or
(b) A monthly benefit
				equal to:
(i) Seventy percent of your average
				final compensation (AFC), which is nontaxable, reduced by any disability
				benefits provided under Title 51 RCW and federal Social Security disability
				benefits (SSDI), if necessary to ensure that the total combined benefits do not
				exceed 100 percent of the member's average final compensation (AFC). Any such
				adjustment will be applied prospectively from the time the Title 51 RCW or
				Social Security determination is made, even if the Title 51 RCW or Social
				Security disability (SSDI) benefits are retroactively adjusted.
(ii) The reduced benefit cannot be less than
				the earned service retirement benefit. When the earned service benefit is more
				than the reduced benefit, the difference is taxable (subject to any basis
				recovery).
Calculation of monthly disability
				  benefit:
Example 1:
Terry was approved for catastrophic duty disability.
							 The average final compensation (AFC) was $10,000. Terry was not receiving
							 benefits from L&I or Social Security disability insurance (SSDI). Terry had
							 20 years of service credit at the time of retirement. To determine the
							 catastrophic duty disability benefit amount:
Click here to view
				  image
Since there is no offset and the monthly disability benefit
				  is greater than the earned benefit, Terry's nontaxable monthly benefit
Example 2:
Pat was approved for catastrophic duty disability.
							 The average final compensation (AFC) was $10,000. Pat was receiving benefits
							 from L&I and Social Security disability insurance (SSDI) in the amounts of
							 $5,000 and $2,000. Pat had 2 years of service credit at the time of retirement.
							 To determine the catastrophic duty disability benefit amount:
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				  image
Since the reduced monthly benefit amount is greater than the
				  earned benefit, Pat's nontaxable monthly benefit will be $3,000.
Example 3:
Chris was approved for catastrophic duty disability.
							 The average final compensation (AFC) was $10,000. Chris was receiving benefits
							 from L&I and Social Security disability insurance (SSDI) in the amounts of
							 $5,000 and $2,000. Chris had 20 years of service credit at the time of
							 retirement. To determine the catastrophic duty disability benefit
							 amount:
Click here to view
				  image
Chris is entitled to the greater of the catastrophic duty
				  disability retirement calculation or the earned benefit. Since the earned
				  benefit is greater than the reduced catastrophic duty disability benefit,
				  Chris' monthly benefit will be $4,000 and $1,000 of that benefit will be
				  taxable (subject to any basis recovery).