GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
SESSION LAW 2007-325
HOUSE BILL 1415
AN ACT to provide that a member of the teachers' and state employees' retirement system shall not be denied short-term disability benefits due to an absence for military service and to amend the law providing long-term disability benefits for members of the teachers' and state employees' retirement system.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 135-105(a) reads as rewritten:
"(a) Any participant who becomes disabled and is no longer able to perform his usual occupation may, after at least 365 calendar days succeeding his date of initial employment as a teacher or employee and at least one year of contributing membership service, receive a benefit commencing on the first day succeeding the waiting period; provided that the participant's employer and attending physician shall certify that such participant is mentally or physically incapacitated for the further performance of duty, that such incapacity was incurred at the time of active employment and has been continuous thereafter; provided further that the requirement for one year of contributing membership service must have been earned within 36 calendar months immediately preceding the date of disability and further, salary continuation used during the period as provided in G.S. 135-104 shall count toward the aforementioned one year requirement. As to the requirement that a participant applying for short term disability benefits have at least one year of contributing membership service within the 36 calendar months immediately preceding the date of disability, a participant who would have qualified for a benefit under this section but for service in the uniformed services shall not be denied a benefit under this section because of that interruption for military service provided all other requirements of this section are met.
Notwithstanding the requirement that the incapacity was incurred at the time of active employment, any participant who becomes disabled while on an employer approved leave of absence and who is eligible for and in receipt of temporary total benefits under The North Carolina Workers' Compensation Act, Article 1 of Chapter 97 of the General Statutes, will be eligible for all benefits provided under this Article."
SECTION 2. G.S. 135-106 reads as rewritten:
"§ 135-106. Long-term disability benefits.
(a) (Effective August
1, 2007) Upon the application of a beneficiary or participant or of his
legal representative or any person deemed by the Board of Trustees to represent
the participant or beneficiary, any beneficiary or participant who has had five
or more years of membership service may receive long-term disability benefits
from the Plan upon approval by the Board of Trustees, commencing on the first
day succeeding the conclusion of the short-term disability period provided for
in G.S. 135-105, provided the beneficiary or participant makes application
for such benefit within 180 days after the short-term disability period ceases,
after salary continuation payments cease, or after monthly payments for
Workers' Compensation cease, whichever is later; Provided, that the beneficiary
or participant withdraws from active service by terminating employment as a
teacher or State employee; Provided, that the Medical Board shall certify that
such beneficiary or participant is unable to perform any occupation or
employment commensurate to the beneficiary's or participant's education,
training, or experience, which is available in the same commuting area for
State employees or within the same local school administrative unit for school
personnel, without an adverse impact on the beneficiary's or participant's
career status, and in which the beneficiary or participant can be expected to
earn not less than sixty-five percent (65%) of that beneficiary's or
participant's predisability earnings, mentally or physically
incapacitated for the further performance of duty, that such incapacity was
incurred at the time of active employment and has been continuous thereafter, and
that such incapacity is likely to be permanent; Provided further that the
Medical Board shall not certify any beneficiary or participant as disabled who
is in receipt of any payments on account of the same incapacity which existed
when the beneficiary first established membership in the Retirement System. The
Board of Trustees may extend this 180-day filing requirement upon receipt of
clear and convincing evidence that application was delayed through no fault of
the disabled beneficiary or participant and was delayed due to the employers'
miscalculation of the end of the 180-day filing period. However, in no instance
shall the filing period be extended beyond an additional 180 days.
The Board of Trustees may require each beneficiary who becomes eligible to receive a long-term disability benefit to have an annual medical review or examination for the first five years and thereafter once every three years after the commencement of benefits under this section. However, the Board of Trustees may require more frequent examinations and upon the advice of the Medical Board shall determine which cases require such examination. Should any beneficiary refuse to submit to any examination required by this subsection or by the Medical Board, his long-term disability benefit shall be suspended until he submits to an examination, and should his refusal last for one year, his benefit may be terminated by the Board of Trustees. If the Medical Board finds that a beneficiary is no longer mentally or physically incapacitated for the further performance of duty, the Medical Board shall so certify this finding to the Board of Trustees, and the Board of Trustees may terminate the beneficiary's long-term disability benefits effective on the last day of the month in which the Medical Board certifies that the beneficiary is no longer disabled.
As to the requirement of five years of membership service, any participant or beneficiary who does not have five years of membership service within the 96 calendar months prior to conclusion of the short-term disability period or cessation of salary continuation payments, whichever is later, shall not be eligible for long-term disability benefits.
Notwithstanding the requirement that the incapacity was incurred at the time of active employment, any participant who becomes disabled while on an employer approved leave of absence and who is eligible for and in receipt of temporary total benefits under The North Carolina Workers' Compensation Act, Article 1 of Chapter 97 of the General Statutes, will be eligible for all benefits provided under this Article.
(b) After the
commencement of benefits under this section, the benefits payable under the
terms of this section during the first 36 months of the long-term disability
period shall be equal to sixty-five percent (65%) of 1/12th of the annual
base rate of compensation last payable to the participant or beneficiary prior
to the beginning of the short-term disability period as may be adjusted for
percentage increases as provided under G.S. 135-108, plus sixty-five
percent (65%) of 1/12th of the annual longevity payment to which the
participant or beneficiary would be eligible, to a maximum of three thousand
nine hundred dollars ($3,900) per month reduced by any primary Social Security
disability benefits and by monthly payments for Workers' Compensation to which
the participant or beneficiary may be entitled. The monthly benefit shall be
further reduced by the amount of any monthly payments from the federal Veterans
Administration Department of Veterans Affairs, any other federal
agency or any payments made under the provisions of G.S. 127A-108, to
which the participant or beneficiary may be entitled on account of the same
disability. Provided, in any event, the benefit payable shall be no less than
ten dollars ($10.00) a month. However, a disabled participant may elect to
receive any salary continuation as provided in G.S. 135-104 in lieu of
long-term disability benefits; provided such election shall not extend the
first 36 consecutive calendar months of the long-term disability period. An
election to receive any salary continuation for any part of any given day shall
be in lieu of any long-term benefit payable for that day, provided further, any
lump-sum payout for vacation leave shall be treated as if the beneficiary or
participant had exhausted the leave and shall be in lieu of any long-term
benefit otherwise payable. Notwithstanding the foregoing, upon the
completion of four years from the conclusion of the waiting period as provided
in G.S. 135-104, the beneficiary's benefit shall be reduced by an amount,
as determined by the Board of Trustees, equal to a primary Social Security
disability benefit to which the beneficiary might be entitled had the
beneficiary been awarded Social Security disability benefits. Provided
that, in any event, a beneficiary's benefit shall be reduced during the
first 36 months of the long-term disability period by an amount, as
determined by the Board of Trustees, equal to a primary Social Security
retirement benefit to which the beneficiary might be entitled.
After 36 months of long-term disability, no further benefits are payable under the terms of this section unless the member has been approved and is in receipt of primary Social Security disability benefits. In that case the benefits payable shall be equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable to the participant or beneficiary prior to the beginning of the short-term disability period as may be adjusted for percentage increases as provided under G.S. 135-108, plus sixty-five percent (65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by the primary Social Security disability benefits and by monthly payments for Workers' Compensation to which the participant or beneficiary may be entitled. The monthly benefit shall be further reduced by the amount of any monthly payments from the federal Department of Veterans Affairs, for payments from any other federal agency, or for any payments made under the provisions of G.S. 127A-108, to which the participant or beneficiary may be entitled on account of the same disability. Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month.
Notwithstanding the foregoing, the long-term disability benefit is payable so long as the beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the earliest date at which the beneficiary is eligible for an unreduced service retirement allowance from the Retirement System, at which time the beneficiary would receive a retirement allowance calculated on the basis of the beneficiary's average final compensation at the time of disability as adjusted to reflect compensation increases subsequent to the time of disability and the creditable service accumulated by the beneficiary, including creditable service while in receipt of benefits under the Plan. In the event the beneficiary has not been approved and is not in receipt of a primary Social Security disability benefit, the long-term disability benefit shall cease after the first 36 months of the long-term disability period. However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the event the Social Security Administration grants a retroactive approval for primary Social Security disability benefits with a benefit effective date within the first 36 months of the long-term disability period. In such event, the long-term disability benefit shall be restored retroactively to the date of cessation.
(c) Notwithstanding the
foregoing, a beneficiary in receipt of long-term disability benefits who has
earnings during the long-term disability period shall have his long-term
disability benefit reduced when the sum of the net long-term disability benefit
and the earnings equals one hundred percent (100%) of monthly compensation
adjusted as provided under G.S. 135-108. The net long-term benefit shall
mean the long-term benefit amount payable as calculated under (b) above, after
the reduction for Social Security benefits and Workers' Compensation
benefits to which the beneficiary might be entitled. entitled,
and after the reduction for any monthly payments from the federal Department of
Veterans Affairs, for payments from any other federal agency, or for any
payments made under the provisions of G.S. 127A-108, to which the
participant or beneficiary may be entitled on account of the same disability.
The net long-term disability benefit shall be reduced dollar-for-dollar for the
amount of earnings in excess of the one hundred percent (100%) monthly limit.
Any beneficiary exceeding the earnings limitations shall notify the Plan by the
fifth of the month succeeding the month in which the earnings were received of
the amount of earnings in excess of the limitations herein provided. Failure to
report excess earnings may result in a suspension or termination of benefits as
determined by the Board of Trustees.
(c1) During the long-term disability period, a beneficiary may return to service for trial rehabilitation for periods of not greater than 36 months of continuous service. Such return will not cause the beneficiary to become a participant and will not require a new waiting period or short-term disability period to commence regardless of whether the beneficiary is unable to continue in service due to the same incapacity or a different incapacity.
A beneficiary who, during a period of trial rehabilitation,
is unable to continue in service may be entitled to a restoration of the long-term
disability benefit provided that the Medical Board certifies that the
beneficiary is disabled in accordance with the laws in effect at the time of
the Board's original approval for long-term disability benefits, either due to
the same or a different incapacity, notwithstanding the requirement the
incapacity has been continuous. In the event that the Medical Board determines
that the long-term disability benefit should be restored, the restored benefit
should be calculated in accordance with G.S. 135-106(b); should include
any post-disability benefit adjustments as provided by G.S. 135-108; and
should not be reduced by an amount equal to a primary Social Security
disability benefit to which the beneficiary might be entitled had the
beneficiary been awarded Social Security benefits until the beneficiary has
been eligible to receive long-term disability benefits for 36 months, including
any period the beneficiary elected to receive any salary continuation in lieu
of the long-term benefit, but not including any period of trial rehabilitation.
and shall continue as long as the beneficiary remains disabled until the
beneficiary has received a total of 36 long-term disability payments.
Continuation of long-term disability benefit payments beyond 36 total payments
shall be dependent upon approval for primary Social Security disability
benefits as required by G.S. 135-106(b).
A beneficiary who returns to service for a period of trial rehabilitation and who has continued in service for greater than 36 continuous months shall again become a participant, and any subsequent incapacity shall be treated as a new incapacity causing a new waiting period to begin. Such a beneficiary may be entitled to additional long-term disability benefits on account of the new incapacity provided the beneficiary meets all other requirements notwithstanding the requirement of five years of membership service within the 96 calendar months prior to becoming disabled or the cessation of continuous salary continuation payments.
(d) Notwithstanding the foregoing, a participant or beneficiary who has applied for and been approved by the Medical Board for long-term disability benefits may make an irrevocable election, within 90 days from the date of notification of such approval, and prior to receipt of any long-term disability benefit payments, to forfeit all pending and accrued rights to the long-term disability benefit including any ancillary benefits and retire on an early service retirement allowance or receive a return of accumulated contributions from the Retirement System."
SECTION 3. G.S. 135-107 reads as rewritten:
"§ 135-107. Optional Retirement Program.
Any participant of the Optional Retirement Program who becomes a beneficiary under the Plan shall be eligible to receive long-term disability benefits so long as the beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the time the beneficiary would first qualify for an unreduced service retirement benefit had the beneficiary elected to be a member of the Teachers' and State Employees' Retirement System, and shall receive no service accruals as otherwise provided members of the Retirement System under the provisions of G.S. 135-4(y). In the event a beneficiary who was a participant in the Optional Retirement Program has not been approved and is not in receipt of a primary Social Security disability benefit, the long-term disability benefit shall cease after the first 36 months of the long-term disability period. However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the event the Social Security Administration grants a retroactive approval for primary Social Security disability benefits with a benefit effective date within the first 36 months of the long-term disability period. In such event, the long-term disability benefit shall be restored retroactively to the date of cessation."
SECTION 4. Sections 2 and 3 of this act become effective August 1, 2007, but apply only to persons who have less than five years of membership service as of July 31, 2007. The remainder of this act becomes effective July 1, 2007.
In the General Assembly read three times and ratified this the 31st day of July, 2007.
s/ Charlie S. Dannelly
Deputy President of the Senate
s/ Joe Hackney
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 11:20 p.m. this 31st day of July, 2007