disability benefits | Pension360

Actuaries Call on Obama to Address Aging Issues, Retirement Security in State of the Union

The American Academy of Actuaries is urging President Obama and the U.S. Congress to tackle retirement security issues through public policy over the next two years.

That includes addressing the solvency of Social Security, improving the governance and disclosure requirements of public pension plans, and ensuring adequate retirement income for seniors who are living longer.

From the AAA:

The American Academy of Actuaries is calling on the president and the 114th Congress to commit to a focus in the next two years on addressing the needs of an aging America. A concerted national strategy on policies to support systems such as retirement security and lifetime income, health care and long-term care for the elderly, and public programs such as Social Security and Medicare, is long overdue.

[…]

As President Obama prepares to address Congress and the American people this evening, the Academy (which celebrates its own 50th anniversary this year) would point out that the state of our union is inextricably linked to the demographic transition of proportionately greater numbers of Americans entering retirement, coupled with increased longevity, or life expectancies, that will compound the fiscal challenges to both private systems and public programs in the years to come.

The AAA goes on to provide specific points that comprise a public policy “wish list”:

* Take immediate steps to address solvency concerns of key public programs like Social Security and Medicare to ensure that they are sustainable in light of changing demographics. The Academy also urges action to allow the disability trust fund to continue to pay full scheduled disability benefits during and beyond 2016.

* Evaluate and address the risk of retirement-income systems not providing expected income into old age, especially in light of increasing longevity. The Academy’s Retirement for the AGES initiative provides a framework for evaluating both private and public retirement systems, as well as public policy proposals.

* Encourage the use of lifetime-income solutions for people living longer in retirement. The Academy’s Lifetime Income initiative supports more widespread use of lifetime-income options.

* Improve the governance and disclosures regarding the measurements of the value of public-sector (state/municipal) employee pension plans. The Academy’s Public Pension Plans Actuarial E-Guide provides information on the nature of the risks and the complex issues surrounding these plans.

* Explore solutions to provide for affordable long-term care financing, and address caregiver needs and concerns through public and/or private programs.

* Address the impact of delayed retirement, either voluntary or through future retirement age changes, on benefit programs, as well as the needs it may create with increased demand for early retirement hardship considerations and disability income programs.

Read the full release here.

Nevada Newspaper: State Pension Needs Disability Reform

The editorial board of the Las Vegas Review-Journal called on lawmakers Tuesday to deal with the “outrageous abuses” it says are plaguing the state’s disability pension system.

From the Review-Journal:

We know the Public Employees Retirement System of Nevada provides retirement benefits to people who aren’t retired. But did you know the taxpayer-funded pension plan also provides disability benefits to former government workers who aren’t disabled?

[…]

The Review-Journal exposed the PERS disability giveaways last year in an investigation of the termination of Las Vegas police officer Jesus Arevalo. On Oct. 15, 2013, Mr. Arevalo became the first Metropolitan Police Department officer to be fired over an improper use of deadly force. In 2011, he killed Stanley Gibson, an unarmed, mentally ill Gulf War veteran who became lost while driving around an apartment complex parking lot. That tragedy, which followed a Review-Journal investigative series on police use of deadly force, led to major changes in department training, policies and oversight — and a $1.5 million settlement for Mr. Gibson’s widow.

Mr. Arevalo was on paid suspension for almost two years while termination proceedings played out. But weeks before his firing was finalized, Mr. Arevalo submitted disability retirement paperwork — for stress related to his firing and the shooting that prompted his firing. The “retirement” was approved by his immediate supervisor, a personal physician, the PERS board and the pension agency’s doctor.

Mr. Arevalo, who was 36 at the time of his firing, will collect about $2,500 per month for the rest of his life, plus cost of living increases. Over 35 years, he could collect more than $1 million.

Anyone who receives federal disability benefits or long-term disability benefits through a private insurer isn’t supposed to work. But Mr. Arevalo’s disability claim applies only to police work. He can collect his PERS disability benefits and work in another field.

Read the entire editorial here.

Photo by TaxRebate.org.uk

New York City Council Weighs Disability Pension Boost For Police

A New York City councilwoman is sponsoring a resolution that would ask the state to increase the disability pensions of certain city police officers.

The resolution has the support of two-thirds of the City Council, but doesn’t yet have the support of the mayor’s office or the Council speaker.

From Capital New York:

Under the current law, uniformed workers are placed into a tier system based on when they are hired. Workers with less time on the job only receive 50 percent of their pensions. Workers hired before 2009—the last time the law was changed —get 75 percent of their pension in disability benefits.

Crowley’s proposal would create parity among the different pension tiers for all employees of the uniformed services.

“Every emergency responder is taking the same risk, and every responder deserves the same disability benefits if they get hurt,” Crowley said.

Since it’s a law that can only be enacted at the state level, the Council must pass what is known as a “home rule message,” indicating to Albany that it supports the legislation and would urge the governor to sign it into law.

Last year, the Council failed to act on the resolution and never passed the home rule message, so the state Legislature was not able to move a corresponding bill. Similar legislation was passed in 2009, but then-governor David Paterson vetoed it.

The Council hearing has not been scheduled yet. The bill will also have to be reintroduced in Albany’s new legislative session before it can be sent to the floor for a vote.

[…]

De Blasio has said he would oppose because of concerns over its cost. But the mayor doesn’t have the power to veto this sort of Council resolution.

Council Speaker Melissa Mark-Viverito has said she is reviewing the request. Her spokesman said today that still hasn’t taken a position on it.

Similar pieces of legislation have been proposed on an annual basis since 2009. In 2009, the legislation was passed but subsequently vetoed by Gov. David Paterson.

New York Police Unions Lobby For Higher Disability Pensions

Public safety unions in New York have renewed lobbying for a bill that would increase pensions for less experienced police officers that are injured on the job.

More details on the bill and how it would change current law, from Capital New York:

To determine the size of their pensions, police officers, like most municipal employees, are grouped into a tier system based upon their date of hire. The Albany bill, which has been introduced in both houses of the State Legislature, would afford all police officers the same disability benefit of three-quarters of their salary.

Currently those hired after July, 2009 receive less than their colleagues with more seniority.

The bill received added attention after NYPD officer Rosa Rodriguez suffered severe lung damage after responding to a Brooklyn fire in April. Her partner, Denis Guerra, died from injuries he sustained at the high-rise arson fire in Coney Island.

A memo attached to the Albany bill notes that Rodriguez’s disability benefits would currently total $22,000 annually, compared to roughly $39,000 if she had been hired earlier.

Mayor Bill de Blasio does not support the bill, although his support isn’t needed to pass the measure. De Blasio says the bill would cost the city $35 million in the first year alone, but union officials dispute that number.

Judgement Due in Court Battle Waged By Workers Excluded From Pension System Because of Medical Issues

A five-year long court fight continues to play out in Jacksonville, and chances are good this lawsuit will continue to stretch on even after an initial judgement is filed.

City employees filed the class-action lawsuit after Jacksonville barred many workers with medical issues from entering the pension system. The workers say the city violated the Americans with Disabilities Act. From the Florida Times-Union:

The suit involves about 1,400 employees, and at one point their lawyers said the case might affect up to $500 million of pension payments, spread over 30 years. But there are too many details unanswered still for either side to talk about a price tag yet.

The employees bringing the suit argue the city violated ADA rules by requiring new workers to be screened for health problems such as diabetes and heart disease before they could enroll in the city’s pension system. People with medical issues could be blocked from enrolling in the pension and would instead pay into Social Security, or they could sign a waiver that disqualified them from getting any death or disability benefits based on their particular issue.

“The sole purpose of the examination was to address the terms under which an employee would be admitted to the pension plans, if admitted at all,” reads the judgment drafted by the plaintiffs.

The city changed its rules in 2010 to allow employees to buy pension coverage they couldn’t get earlier, but the suit is about what expenses the city should cover.

The city has argued that it has no liability in the case; if the judge rules on the side of the city, the case will wind down quickly.

But if the ruling falls on the side of employees, more court battles loom. Among them: how much does the city owe? Once that number is determined, the court will need to decide how to divvy up the damages amongst the employees.