Agenda Item 17
July 27, 2010
Introduction
MEMORANDUM
TO:
FROM:
SUBJECT:
County Council
Robert H. Drummer, Senior Legislative Attorney
~9
Eligibility - Total
Introduction:
Bill 45-10, Personnel - Disability Retirement
and Partial Incapacity
Expedited Bill 45-10, Personnel Disability Retirement Eligibility - Total and Partial
Incapacity, sponsored by Councilmembers Trachtenberg, Andrews and Berliner, is scheduled to
be introduced on July 27, 2010. A public hearing is tentatively scheduled for September 28 at
1:30 p.m.
Bill 45-10 would create a two-tier service-connected disability retirement system for all
County employees identical to the current system for fire and rescue employees. Employees
eligible for a service-connected disability retirement benefit would receive either a partial
incapacity benefit of at least 52
Yz%
of final earnings or a total incapacity benefit of at least 70%
of final earnings. The current system for all employees, except fire and rescue employees,
provides a service-connected disability retirement benefit of at least 66
¥J%
of final earnings for
both partial and total incapacity.
An employee would be eligible for a total incapacity benefit if the employee was unable
to perform any substantial gainful activity because of an impairment that is unlikely to resolve in
the next 12 months and may be permanent. An employee would be eligible for a partial
incapacity benefit if the impairment prevents the employee from performing one or more of the
essential functions of the employee's position, but does not prevent the employee from
performing any other substantial gainful activity.
The Council enacted amendments to the disability retirement system in Bill 37-08 on
May 12, 2009. One of the amendments in the Bill as introduced, but not enacted, was to extend
the two-tier system for service-connected disability benefits to all public safety employees. At
the Council's request last year, the Office of Human Resources provided information on the
County's experience with this two-tier system for fire and rescue employees. As of May 2009,
only 10 of the 67 fire and rescue employees who received a service-connected disability
retirement since the two-tier system began in 2000 were awarded the higher 70% benefit.
Therefore, 85% of the awards were at the lower 52
Yz%
level. The County's actuary, Mercer,
estimated the annual savings to the County's retirement contribution for extending the two-tier
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system to Group F (Police) to be more than $1.5 million based upon an assumption that 60% of
the disability retirements would be at the lower level. A copy of Mercer's January 2009 letter is
at ©17-21. If the Group G (Fire and Rescue) experience is carried over to all employees, the
actuary estimated the savings would be more than $2.6 million.
The Bill would also prohibit the award of a service-connected disability pension to an
employee who "has committed an offense that would justify removal for cause." This provision
was also included in Bill 37-08, as introduced, but not enacted in the final version ofthe Bill.
This packet contains:
Expedited Bil145-10
Legislative Request Report
Mercer January 2009 letter
Circle
#
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Bill No.
....;4~5::....-1.:...:.0::....-
_ _ _ __
Concerning: Personnel - Disability
Retirement - Eligibility - Total and
Partial Incapacity
Revised: July 20,2010 Draft No. _5__
Introduced:
July 27,2010
Expires:
January 27,2012
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _---:_ _ _ _ _ _ __
Sunset Date: -'::'N=o:..:.:ne=--_ _ _ __
Ch. _ , Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Trachtenberg, Andrews, and Berliner
AN
ACT to:
(1)
(2)
(3)
(4)
create a partial incapacity disability retirement benefit for certain employees;
create a total incapacity disability retirement benefit for certain employees;
prohibit an employee who commits certain offenses from receiving a service
connected disability retirement benefit; and
generally amend County law regarding disability retirement.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-43,33-128,33-129, and 33-131
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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1
Sec. 1.
follows:
33-43.
Sections 33-43, 33-128, 33-129, and 33-131 are amended as
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Disability retirement.
*
following meanings:
*
*
(b)
Definitions.
In this Section, the following words and phrases have the
*
*
*
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9
10
11
Partial incapacity
means
~
member's inability to perform one or more
essential functions of the position the member holds because of
impairment that;
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ill
ill
ill
is unlikely to resolve in the next
11
months;
may be permanent; and
does not prevent the member from performing any other
substantial gainful activity.
14
15
*
*
*
16
17
Total Incapacity
means the member's inability to perform substantial
gainful activity because of an impairment that;
18
19
ill
ill
(f)
is unlikely to resolve in the next
11
months; and
may be permanent.
*
20
21
*
*
Service-connected disability retirement.
22
23
24
(1) A member may be retired on a service-connected disability
retirement if:
(A) the member is totally or partially incapacitated [for duty
or partially and permanently incapacitated for duty] as
the natural and proximate result of an accident occurring,
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No.45-10
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or an occupational disease incurred or condition
aggravated.,. while in the actual performance of duty;
(B)
the incapacity is not due to the member's willful
negligence;
(C)
(D)
the incapacity is likely to be permanent; [and]
the member is unable to perform the duties of either:
(i)
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the occupational classification to which the
member was assigned [at the time] when the
disability occurred; or
(ii)
a position of comparable status [within] in the
same department for which the member is
qualified~
and[.]
(E)
the member has not committed an offense that would
justify removal for cause.
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®
For an accidental injury that does not cause mental
impairment, the member must:
(i)
[reports1 report the claimed accidental Injury as
soon as practicable, but no later than one year after
the applicant knew or should have known that the
injury is likely to be disabling; or
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(ii)
[submits]
submit
a
claim
for
Workers'
Compensation benefits for the accidental Injury
that is not dismissed as untimely.
[(F)] {ill
The time periods for reporting in subparagraphs
(i)
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and (ii) do not begin while the member is unable to report
because of incapacitating injuries.
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[(G)]
(ill
For an accidental injury that occurs after July 1,
2009, the member must apply for disability benefits:
(i)
within one year after separation from County
service or before July 1, 2010, whichever is later;
and
(ii)
if the applicant is a member of Group F, within 5
years after the date of the accident causing the
impairment or before July 1, 2014, whichever is
later, unless the member is in a chronic incapacity
duty assignment.
*
(i)
(1)
*
*
Amount ofpension at service-connected disability retirement.
Total incapacity.
The County must pay a member [, other than
a Group G member,] who retires on service-connected
disability retirement with total incapacity an annual pension
calculated under Section 33-42(b)(1), [subject to the following
exceptions] except that:
(A)
the County must substitute final earnmgs for average
final earnings; and
(B)
the pension must be at least [66
2/3
percent] 70% of the
member's final earnings.
(2)
[The County must pay a Group G member who retires on a
service-connected disability retirement an annual pension
calculated under Section 33-42(b)(1), except that the County
must substitute final earnings for average final earnings.
However, if this] If the benefit calculation under Section 33­
42(b)(l) is greater than any other benefit under this subsection,
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the County must pay a Group G member who retires on a
service-connected disability retirement between June 26, 2002,
and June 30, 2007, a pension based on the member's average
final earnings if that member's average final earnings result in a
greater benefit than final earnings.
(3)
[The County must pay a Group G member who retires on a
service-connected disability retirement an annual pension
calculated under Section 33-42(b)(1), but the benefit must be at
least 70 percent of final earnings if the Chief Administrative
Officer finds, based on a recommendation from the Disability
Review Panel, that] The Disability Review Panel must
recommend
f!
finding of total incapacity if the member's
service-connected disability is severe enough to meet the Social
Security Administration's requirements for disability, meaning
that the member is unable to engage in any substantial gainful
activity because of a medically determinable physical or mental
impairment that can be expected to end in death or has lasted,
or can be expected to last, for a continuous period of at least 12
months.
The member does not have to qualifY for Social
Security disability benefits to be eligible for benefits under this
subsection.
(A)
The Panel must base its determination of whether [or not]
an individual is able to engage in any substantial gainful
activity on an assessment from an independent vocational
expert that considers the member's age, education, work
experIence, transferable skills, and residual functional
capacity.
(ij
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(B)
The Panel must detennine the member's residual
functional capacity and provide this infonnation to the
independent vocational expert.
(C)
A Panel detennination that the member's servlce­
connected disability is severe enough to be considered a
disability by the Social Security Administration is not a
recommendation that the member is entitled to, or should
be granted, a disability benefit by the Social Security
Administration.
(D)
If a member has already been granted disability benefits
by the [U.S.] Social Security Administration when the
member applies for a service-connected disability
pension, the County must pay the member a pension of at
least 70% [percent] if the Disability Review Panel finds
that the award of disability benefits from the Social
Security Administration was based primarily on the same
medically detenninable physical or mental impainnent
on which the Disability Review Panel awards the
member a service-connected disability benefit.
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1"7
-'~
(4)
The County must pay a [Group G] member who retires with
partial incapacity on a service-connected disability retirement
an annual pension calculated under Section 33-42(b)(1), but the
benefit must be at least 52Y2
%
[percent] of final earnings if the
Chief Administrative Officer finds, based on a recommendation
from the Disability Review Panel, that:
(A)
the member meets the standards to receIve a servIce­
connected disability benefit under subsection
(1);
and
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(B)
the member is not eligible to receive a benefit for total
incapacity under subsection (i)(3).
(5)
(A)
The County must increase the partial incapacity service­
connected disability pension benefit of a [Group
G]
member calculated under Section 33-42(b )(1), from a
benefit of at least 52
:h
%
[percent] to a benefit of at least
70
%
[percent], if:
(i)
the [U.S.] Social Security Administration awards
disability benefits to the member;
(ii)
the member submits all relevant information about
the award of disability benefits from the Social
Security Administration to the Disability Review
Panel within 60 days after the member receives the
award;
(iii)
the Disability Review Panel finds that the award of
disability benefits from the
Social
Security
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Administration was based primarily on the same
medically
determinable
physical
or
mental
impairment on which the Disability Review Panel
originally
awarded
the
member
a
servlce­
connected disability benefit; and
[(a)] (iv) the member applies for disability benefits with
the Social Security Administration within 90 days
after the [date on which the] Chief Administrative
Officer notified the member that the [amount of
the] service-connected disability pension benefit
would be calculated [under Section 33-42(b)(1),
@
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but at least 52
Yz
percent; or] as
incapacity.
[(b)
~
partial
the Chief Administrative Officer awards a service­
connected disability pension benefit calculated
under Section (b)(1), but at least 52
Yz
percent to
the member between March
1, 2000,
and
December 1, 2003, and the member applies for
disability benefits with the
Social Security
Administration no later than February 29,2004.]
(B)
[For]
If
a member [who] qualifies for an increased
pension benefit under [subsection (5)] subparagraph (A)
[above], the County must increase the member's service­
connected pension retroactively to the date [on which]
when the pension began.
*
(7)
*
*
The County must pay a Group F member who retires on a
service-connected disability retirement on or after June 26,
2002, an annual pension calculated under subsection (i) (1) or
subsection
ill
(1).
However, if [the]
f!
greater benefit results
from the calculation under Section 33-42(b)(1), the County
must pay a Group F member a pension based on the member's
average final earnings if that member's average final earnings
result in a greater benefit than final earnings.
G)
Adjustment or cessation ofdisability pension payments.
(1)
If
a member receiving service-connected disability pensIOn
payments reaches the first day of the month [following] after
the member's normal retirement date, the amount of pension
Ci
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then payable must not be less than the amount that would have
been payable under [the provisions of] Section 33-45(c)[,] if the
member had terminated service
[on]
when the [date] disability
pension [commenced] began and had not elected a return of
member contributions with credited interest.
(2)
(A)
The Chief Administrative Officer may reduce the amount
of the disability pension payments of a member retired
with total incapacity who:
(i)
(ii)
has not reached the normal retirement date; and
is engaged in, or
able to engage in, an
occupation that pays more than the difference
between the disability pension payments and the
current maximum earnings of the occupational
classification
disabled.
(B)
If a member other than a Group F member meets the
criteria in subparagraph (A), the Chief Administrative
Officer may reduce the member's disability pension
payments until the disability pension payments plus the
amount that the employee earned or is able to earn equals
the maximum earnings of the occupational class from
which the member was disabled.
from
which
the
member
was
*
(3)
*
*
~
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If
the earnmgs capacity of a disability retiree with
total
incapacity changes, the Chief Administrative Officer may
change the amount of the disability retirement pension.
[F
or
the purpose of] In this subsection, "disability pension" is the
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amount of penSIOn payable without election of a pension
payment option.
(A) For a disability retiree other than a group F member, the
Chief Administrative Officer must ensure that the amount
of the revised pension does not exceed:
(i)
the original disability retirement pension plus cost­
of-living increases; or
(ii) an amount that, when added to the amount the
member earns or IS able to earn, equals the
maXImum
classification
disabled.
(B) For a Group F member who receIves a non-servIce
connected disability pension, the Chief Administrative
Officer must ensure that the amount of the revised
pension must not exceed:
(i)
the original disability retirement pension plus cost­
of-living increases; or
earnmgs
from
of
which
the
the
occupational
member
was
(ii)
an amount that, when added to the amount that the
member earns or is able to earn, equals 120 percent
of the maximum earnings of the occupational
classification
disabled.
from
which
the
member
was
(4)
A member who receives
~
disability retirement pension for
~
total incapacity must submit to the Chief Administrative Officer
by May 30 of each year
~
£QQY
of that portion of the member's
federal income tax return which shows the member's income.
@
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If a member [receiving] who receIves disability pension
payments [fails or refuses to] does not supply the Chief
Administrative
Officer
[whatever]
any
information
[is
determined necessary] the Chief Administrative Officer needs
to [make a decision on] decide the amount of retirement pay
legally due, the Chief Administrative Officer must suspend the
member's pension payments [must be discontinued] until the
member submits the [requested] needed information.
*
33-128. Definitions.
*
*
In this Division, the following words and phrases have the following
meanmgs:
*
*
*
Partial incapacity
means
f!
member's inability to perform one or more
essential functions of the position the member holds because of
impairment that;
ill
ill
ill
is unlikely to resolve in the next
1f.
months;
may be permanent; and
does not prevent the member from performing any other
substantial gainful activity.
*
*
*
Residual functional capacity
means what the individual can still do,
despite the individual's impairment. The County must give the term
residual functional capacity the same meaning as the term is given by
the Social Security Administration.
Substantial gainful activity
means a level of productive work that
reqUIres significant physical or mental duties, or a combination of
@
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No.45-10
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both, performed for payor profit on a full- time or part-time basis. An
individual is able to perform a substantial level of work if the
individual
is
able to
earn more than the
Social
Security
Administration's current monthly earnings limit for a disabled person.
The County must give the term substantial gainful activity the same
meaning as the term is given by the Social Security Administration.
Total Incapacity
means the member's inability to perform substantial
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gainful activity because of an impairment that;
ill
ill
is unlikely to resolve in the next
.ll
months; and
may be permanent.
33-129. Disability benefits.
*
(1)
*
*
The Disability Review Panel must recommend
f!
finding of total
incapacity if the member's service-connected disability is severe
enough to meet the Social Security Administration's requirements for
disability, meaning that the member is unable to engage in any
substantial gainful activity because of
f!
medically determinable
physical or mental impairment that can be expected to end in death or
has lasted, or can be expected to last, for
f!
continuous period of at
least
11
months. The member does not have to qualify for Social
Security disability benefits to be eligible for benefits under this
subsection.
(1)
The Panel must base its determination of whether an individual
is able to engage in any substantial gainful activity on an
assessment from an independent vocational expert that
considers the member's
~
education, work experIence,
transferable skills, and residual functional capacity.
@
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No.4S-10
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ill
The Panel must determine the member's residual functional
capacity and provide this information to the independent
vocational expert.
ill
A Panel determination that the member's service-connected
disability is severe enough to be considered
Social Security Administration is not
~
~
disability
Qy
the
recommendation that
~
the member is entitled
ill.,.
or should be granted,
benefit
Qy
the Social Security Administration.
!±}
disability
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If
~
member has already been granted disability benefits
Qy
the
Social Security Administration when the member applies for
~
service-connected disability pension, the County must give the
member
~
total incapacity benefit if the Disability Review Panel
finds that the award of disability benefits from the Social
Security Administration was based primarily on the same
medically determinable physical or mental impairment on
which the Disability Review Panel awards the member a
service-connected disability benefit.
(g)
The Disability Review Panel must recommend
incapacity if:
~
finding of partial
ill
ill
(h)
the member meets the standards to receive
disability benefit; and
~
service-connected
the member is not eligible to receIve a benefit for total
incapacity under subsection
f11
The County must increase the partial incapacity service-connected
disability pension benefit of
~
member to
~
total incapacity benefit if:
ill
the Social Security Administration awards disability benefits to
the member;
@
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ill
the member submits all relevant information about the award of
disability benefits from the Social Security Administration to
the Disability Review Panel within 60 days after the member
receives the award;
ill
the Disability Review Panel finds that the award of disability
benefits from the Social Security Administration was based
primarily on the same medically determinable physical or
mental impairment on which the Disability Review Panel
originally awarded the member
benefit; and
~
service-connected disability
ill
the member applies for disability benefits with the Social
Security Administration within 90 days after the Chief
Administrative Officer notified
-
member
- -
service­
the
that the
connected disability pension benefit would be calculated as
~
partial incapacity.
ill
If
~
member qualifies for an increased pension benefit under
subsection
(h1
the County must increase the member's service­
connected pension retroactively to the date when the pension
began.
ill
Role ofthe Disability Review Panel.
(1)
The Disability Review Panel must consider an application for
disability benefits to determine if the applicant is eligible for
disability benefits under subsection (a), (b), (c), (d), [or] (e),.
ti1
(g1
or.au. The Panel may consider any information or material
submitted by the applicant, the certified representative, or the
County. Within 60 days after the application is filed, the Panel
must meet in person,.
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telephone conference, or
121
video
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No.45-10
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conference, to review all evidence submitted to the Panel.
[An
action by the Panel under this Section requires a majority vote of
3] A Panel must include either
2
or
1
members.
At least
2
members must vote in favor of
!!
decision to take any action
under this Section.
*
33-131. Amount of benefits.
*
*
357
358
(a)
Service-connected disability.
The annual amount of service-connected
disability payments payable for total incapacity equals
[66
2/3
percent] 700/0 of the employee's final earnings, less any reductions
provided in section 33-134. The annual amount of service-connected
disability payments payable for partial incapacity equals 52Y2
%
of the
employee's final earnings.
359
360
361
362
363
*
Sec. 2.
*
*
364
365
366
367
Implementation.
Notwithstanding any other provision of law,
including §33-80(a)(7) and §33-107(a)(7), the implementation of any amendment
to County Code Chapter 33 in Section 1 of this Act concerning disability
retirement is not subject to collective bargaining with a certified representative of
employees in any bargaining unit.
Sec. 3.
Effective Date.
The amendments to County Code Chapter 33
368
369
370
371
made in Section 1 of this Act apply to any application for disability retirement filed
on or after the date this Act takes effect.
Approved:
372
373
374
Nancy Floreen, President, County Council
Date
@
F:\LAw\BILLS\1045 Disability - Total Incapacity, Partiallncapacity\BiII 5.Doc
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LEGISLATIVE REQUEST REPORT
Bill 45-10
Personnel - Disability Retirement Eligibility - Total and Partial Incapacity
DESCRIPTION:
The Bill would create a two-tier service-connected disability
retirement system for most employees consisting of a partial
incapacity disability retirement benefit and a total incapacity
disability retirement benefit. The Bill would also prohibit an
employee who commits certain offenses from receiving a service
connected disability retirement benefit, and generally amend County
law regarding disability retirement.
The current system provides the same service-connected disability
retirement benefit for both partial and total incapacity for all
employees except fire and rescue employees. This Bill would create
the same two-tier system that fire employees have for all others. The
Bill would also eliminate the right to a service-connected disability
benefit for an employee who has committed an offense that would
justify removal for cause.
To provide a two-tier service-connected disability retirement system
for all employees and to prevent an employee from avoiding a
termination for cause by applying for a service-connected disability
retirement benefit.
Office of Human Resources, County Attorney
To be requested.
To be requested.
To be requested.
To be researched.
Robert
H.
Drummer, Senior Legislative Attorney
NA
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
NA
f:\law\bills\1045 disability - total incapacity, partial incapacity\lrr.doc
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Aquil
Ahmed,
ASA,
EA,
MAAA
Worldwide Partner
MERCER
i
MA1I:.
MARSH MERCER KROll
GUY CARPENTER OLIVER WYMAN
1255 23rd Street, NW, Suite 500
Washington, DC 20037
202331 5200 Fax 202 2960909
www.mercer.com
January 9,2009
Ms. Belinda Fulco
Office of Human Resources
Montgomery County Government
101 Monroe Street, Seventh Floor
Rockville, MD 20850-2589
Via E lectronic Mail
Subject:
New Legislation Proposal on Disability Provisions for ERS
Dear Belinda:
This letter summarizes cost estimates for proposed disability provisions affecting group A, E,
F, G and H of the Montgomery County Employees' Retirement System (ERS).
The estimates are based on the July 1, 2008 actuarial valuation data. The actuarial
assumptions and methods are the same as those used in our July 1, 2008 actuarial
valuation report unless otherwise noted. Actual costs will depend on the actual data and
experience of the plan. The benefit changes are assumed to apply only to active ERS
members, not to retirees or terminated vested members. We have projected all costs from
the July 1, 2008 valuation date to an assumed effective date of July 1, 2009 using standard
actuarial approximation techniques. By cost, we mean the increase in Normal Cost and an
amortization of any changes in unfunded liability. Cost will change over time as experience
develops.
Any pay increases due to an increase in covered positions that result in 2009 valuation pay
exceeding the 2008 valuation pay by more than 4% will result in the County's FY2010 or
FY2011 costs exceeding those implied by the figures shown below.
Description of Proposed Plan Provision Changes
• The service-connected disability retirement benefit amount for groups A, E, F, G and H
is:
1. For total incapacity: The greater of the accrued benefit or 70% of final earnings.
2. For all other disability, the greater of the accrued benefit or 52.5% of final
earnings. If the member meets the definition of Social Security disability, the
minimum benefit is 70% of final earnings.
A new approval board will be created by the County to review all disability claims.
Consulting. Outsourcing. Investments.
(j)
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MERCER
.
r
....
~
GUY CARPENTER
······1
MARSH
MERCER
KROLL
OUVER WYMAN
Page 2
January 9,2009
Ms. Belinda Fulco
Montgomery County Government
• The non-service-connected disability retirement benefit amount and other plan
provisions are the same as described in our July 1, 2008 valuation.
Actuarial Assumptions
Assumption used are as follows:
The disability rates described in the July 1, 2008 valuation report have decreased by 2%
to reflect the anticipated change in disability rates due to the new disability approval
process.
For groups E and F, 90% of disabilities are still assumed to be service-connected.
However 63% of disabilities are assumed to collect the 52.5% benefit, and 27% are
assumed to take the 70% benefit.
For groups A and H, 45% of disabilities are still assumed to be service-connected.
However 22.5% of disabilities are assumed to collect the 52.5% benefit, and 22.5% are
assumed to take the 70% benefit.
For group G, 93% of disabilities are still assumed to be service-connected. And 62% of
disabilities are assumed to collect the 52.5% benefit, 26% are assumed to take the 70%
benefit and 5% are assumed to take another job (valued by reducing the disability
decrement by 5%).
All other assumptions are the same as those used in the July 1, 2008 valuation.
Per your request, we also estimated the impact on groups E and F based on the
following assumptions:
-
Scenario 1- 60% of disabilities would receive the 52.5% benefit and 30% would
receive the 70% benefit.
Scenario 2- 30% of disabilities would receive the 52.5% benefit and 60% would
receive the 70% benefit.
-
 PDF to HTML - Convert PDF files to HTML files
MERCER
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MARSH MERCER KROll
GUY
CARPENTER
OLIVER WYMAN
Page 3
January 9, 2009
Ms. Belinda Fulco
Montgomery County Government
Estimated Costs of Proposed Changes
_.Annual
~avings
using 40-lear amortization
For represented and non­
represented members
For represented
members only
A
$0
"
Gr()~p""E"""
.""~(~~~~ggQ)
"""""""mm."".
"J(~9~!99Q)_""."""""
~E()~P~
""~(1,?~~~qq9L
. ... . .
__......
..................~~~~~qqgt
"
~r~~p_<?_
.. m.
.
""" """
"~(~~9QQt
" . " . . """"""""""""""""""""""""""""""._ ." " " " " " " " " " " " ..
_.~(?!,g9Qt
......"
~"
...
Gro~pH
" " " ..."_". """"""""""""""""""""""m.""..
_~(!??,gQq)mm.
""""""""""~(1.??,9Q9)""
~11~~()~ps.
"""""""""." .. '._.
."" ".."" " " " "." "
""""."~(?Z!'1,gQQ)..
"~(?,~2~,9.qqL.
Numbers may not add up due to rounding.
Annual Savings using 30-lear amortization
For represented and non­
represented members
For represented
members
~
A
~E()~PE:
""""J(92.8,09QL.. """"""".... ".. """
.
".
"~(~3~~Qq9)
""""."""_. __
.
Group F
~(~,652,09Q)
$(1!5~9,9Qqt
Group§.
""" """""_
~(?1.QQ9)"
.. "_ ... "".""" ...
~'~'
.. ""._..
Ji
60 ,09.QL_...._ . _.....
_<?~,:!p_.~
..."...." ." .. " " " " " " " " " " ..".......... " ".__..__
.~(!~?-'900L
..."._."""""""""....._._"...._....
~~~~?
000)_.._____ .___
. ..."
.
_
1\.11..~.()~p~
...."". .
"""~.".
.....__
.._.~{?2~T~_'-Q99)
.."...._ ..__ .__.___.__ .___
~t~?!
9,0_00-,-)_
Numbers may not add up due to rounding.
Decrease in Actuarial Accrued Liabilitl
For represented and non­
represented members
For represented
members only
A
.§~()~pE
._._._..._.______
~7.3!_~!.QOOL.
_ _."
$(6.543,Oq-'0)'---_~
".§E<:)~_P~mm_
...___m_~(!?'~?~QOO)
."." " " .. . , ___
""""~(!?"Q~?,g9mq)
..m"
Group G
. . . . . . . . . . . . . ." " " " ..
~
""" . . .
""~"(?,1.~.99.Qt
..
"__
J(??~~QgQ)""""""
.. _""."" .."."."."""_"_"""""""
_<?E<:)~P.tl_
... ,_ ..______
.JJ!.~.!
23.,9Q9L___.......__.__ .. ___..__. $(1.!.!??!.00QLm.___._".
All groups
$(22.573,000)
$(20,351,000)
Numbers may not add up due to rounding.
 PDF to HTML - Convert PDF files to HTML files
MERCER
. 1
i....
~
MARSH
MERCER
KROLL
OLIVER WYMAN
GUY CARPENTER
Page 4
January 9,2009
Ms. Belinda Fulco
Montgomery County Government
Scenario 1 - 60% of disabilities receive the 52.5% benefit and 30% of disabilities
receive the 70% benefit
Annual savings based on 40-year or 30-year amortization
For represented and non­
represented members
For represented
members only
amortization
§.~C)~P
..
E:.___ .....
~roup
... . ._ .._
.._._.._ ..................
~t~Q,.2.Q2.L
. _... _____ ..._..... _____.__
$(758,QQ~
__.... __ .
$(1,493,000)
$(1,437,000)
F
_All
gr:?~ps.
... ._ __......_____
~i~~'1..~~QQQ)
....._ _
~
......................____
$(2,380 ,ODD)
amortization
Group E
§r.<?~pf
.......
All groups
Scenario 2 - 30% of disabilities receive the 52.5% benefit and 60% of disabilities
receive the 70% benefit
_Annual savings based on 40-year or 30-year amortization
For represented and non­
represented members
For represented
members only
amortization
amortization
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MERCER
L~
1
MARSH
MERCER
GUY CARPENTER
KROLL
OLIVER WYMAN
Page 5
January
9, 2009
Ms. Belinda Fulco
Montgomery County Government
Scenario 1 and 2- Decrease in Actuarial Accrued liability
For represented and non-
represented members
For represented
members only
Scenario 1
60%
of disabilities receive the
52.5%
benefit and
30%
of disabilities receive
the
70%
benefit
Scenario 2
30%
of disabilities receive the
52.5%
benefit and
60%
of disabilities receive
. . . . . . . . . . . . ", . . . . . . . . . . . . . ,.. . . _____.. . .
.. . . . . . . __ . . .
. . .
the
70%
benefit
..
§roup~
.~....
.
......................~(?~~§O,QQqL
.........................................._.__
..~(?~?35!gQqL
Group!
......................~(~~~??,09Q)
.. ................
...............~(~~~~~.999)
........
~~119r.c:>':!ps
_......._._........._.__...
JJ9.039'QOOL__ ._ .... ______.___..__
._.~7,
80?QQ.Q}_.._ ..... __.........
~
_~_~.
~_
_D.~.__
n"'."."~
•••••m.'_'... __ ._
_••••••••••••••••••••
,.·.··•••••
w
_ _• _ _ •
• •• _ •• _ •••••••••••
~
••
~.~
••••
~~~~
............ _
•• __ • _ _ _ _ • • • • • • • •
Other Considerations
Please let me know if you have any questions or need any further information. I can be
reached at 202 331 5211. I meet the Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained in this letter. I am not aware of any direct
or material indirect financial interest or relationship, including investments or other services
that could create a conflict of interest that would impair the objectivity of our work.
Sincerely,
Ar~ /}f,~
Aquil Ahmed, ASA. EA, MAAA
Worldwide Partner
Copy:
Wes Girling, Montgomery County Government
Doug Rowe, Mercer
The information contained in this document (including any attachments) is not intended by
Mercer to be used, and it cannot be used, for the purpose of avoiding penalties under the
Internal Revenue Code that may be imposed on the taxpayer.
i:\clilmgewasI2009ldisabilily costing\updated new disability provisions impactdoc