Agenda Item 4B
October 31, 2017
Introduction
ME MO RA ND UM
October 27, 2017
TO:
FROM:
County Council
'
Robert H. Drummer, Senior Legislative Attorney
:
'
l . \,
v1
ent Savings Pla n-
Introduction:
Expedited Bill 33-17, Employees' Retirem
SUBJECT:
ments
Disability Benefits Pla n-T erm inat ion of Benefits - Amend
- Disability Benefits Plan -
Expedited Bill 33-17, Employees' Retirement Savings Plan
Council President Berliner
ion of Benefits -Am end men ts, sponsored by Lead Sponsor
Terminat
duced on October 31, 2017. A
request of the County Executive, is scheduled to be intro
at the
at 1:30 p.m.
public hearing is tentatively scheduled for November 28
Bill 33-17 would increase the age long term disability ben
Background
efits end from 65 to 70.
Savings Plan, the Guaranteed
County employees who are participants in the Retirement
eligible for benefits under the Disability
Retirement Income Plan, or the Elected Officials Plan are
1
disability benefits for both service-
Benefits Plan (the Plan). The Plan provides long term
nected benefit is 52.5% of salary
ed and non-service connected disabilities. A service con
connect
A non-service connected benefit is 2%
for partial disability and 70% of salary for total disability.
benefit of 30% and a maximum benefit
of salary per year of County employment with a minimum
Plan and each employee
salary. The County contributes 75% of the cost of the
of 60% of
and the Summary of the Plan
tes 25% of the cost. See the basic outline of the Plan at ©9
contribu
Description at ©10-18.
when a participant reaches the
The Plan requires the CAO to terminate disability benefits
from age 65 to age 70. 0M B
Bill 33-17 wou ld extend eligibility for disability benefits
age of 65.
age 70 wou ld be $420,000. The
ates that the Cou nty' s annual cost to extend benefits to
estim
2 per month per employee. See the
ual total cost to all employees would be $140,000 or $2.2
ann
e disability benefits was negotiated
Fiscal Impact Statement at ©5. This increase in employe
the Executive and MCGEO is at ©19-
between the Executive and MCGEO. The MOU between
MCGEO, the Bill would increase the
20.
In
addition to the eligible employees represented by
including elected officials.
disability benefit for eligible non-represented employees,
loyee's Retirement System are eligible for a
participating
in
the defined benefit plans under the Emp
Employees
ted by Bill 33-17.
different disability retirement pension that would not be affec
1
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Thi s pac ket contains:
Exp edit ed Bill 33-17
Leg isla tive Req ues t Rep ort
Me mo from Cou nty Exe cuti ve
Fisc al and Eco nom ic Imp act stat eme nt
Pla n Out line
Sum mar y of Plan Des crip tion
MO U wit h MC GE O
Cir cle#
1
3
4
5
9
10
19
Disability Benefits Plan\lntro Memo.Docx
F:\LAW\BILLS\1733 Employees' Retirement Savings Plan-
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33-1 7
Expedited Bill No.
Retirement
Concerning: Employees'
Savings Plan - Disability Benefits
Plan - Termination of Benefits -
Amendments
Revised: October
18, 2017
Draft No.
_1
October
31, 2017
Introduced:
May 1,
2019
Expires:
[date]
Enacted:
[date signed]
Executive:
[date takes effect]
Effective:
Sunset Date: -'-'- No =n= e'-- ---- ---
[year)
Ch. Jta. ._, Laws of Mont. Co.
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
nty Executive
Lead Sponsor: Council President at the request of the Cou
AN EXP EDI TED ACT
to:
fits; and
amend the age for termination oflo ng term disability bene
(1)
Plan.
generally amend the laws governing the Disability Benefits
(2)
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-133
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 unqffected by bill.
the following Act:
County Council for Montgomery County, Maryland approves
The
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8<PEDITED BILL
NO. 33-17
1
2
3
4
Sec.
1.
Section 33-133 is amended as follows:
33-133. Termination of Benefits.
(a)
Non-public safety employee.
The administrator must terminate initial or
continued disability benefits to a non-public safety employee if the
employee:
(1)
(2)
recovers from the disability, as determined by the administrator;
does not provide the administrator with information that the
administrator requires; or
(3)
attains age 70 [65], or a later age if required under federal law.
5
6
7
8
9
10
(b)
11
12
Public safety employee.
The administrator must terminate initial or
continued disability benefits to a public safety employee if the employee:
(1)
(2)
recovers from the disability, as determined by the administrator;
does not provide the administrator with information that the
administrator requires; or
(3)
attains age 70 [65], or a later age if required under federal law, if
the benefit is for a non-service connected disability.
13
14
15
16
17
18
Sec. 2.
Expedited Effective Date.
19
20
21
22
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on January 1, 2017. The
amendments in Section 1 apply to all participants receiving benefits or entitled to
receive benefits on or after January 1, 2017.
Approved:
23
Roger Berliner, President, County Council
Date
benefits plan\bill 1.docx
0
f:\law\bills\1733 employees' retirement savings plan-disability
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LEGISLATIVE REQUEST REPORT
Expedited Bill 33-17
ination of Benefits
-
Employees' Retirement Savings Plan
-
Disability Benefits Plan
-
Term
Amendments
The legislation would change the benefits provided under the Long
Term Disability Program (LTD2) by extending the age at which
benefits end from 65 to age 70. The change brings the LTD2
program's income replacement in line with the changes made to the
availability for full unreduced Social Security benefits. Full Social
Security benefits are not available to employees born after 1943 until
they reach the age of 66 or later (reduced benefits are still available at
age 62).
Stopping the benefits at age 65 forces participants receiving LTD2
benefits, who are not receiving Social Security disability benefits, to
apply for the reduced Social Security benefits when the LTD2 benefit
ends at 65. Taking a reduction from the full benefit from Social
Security places an undue hardship on the LTD2 participants. The bulk
of those participants receiving LTD2 benefits became disabled
performing their day-to-day County duties and were awarded service
connected disability benefits. Providing this increased benefit for the
approximately 6,000 employees covered by the program results in a
very minimal increase in the monthly premium paid by the County and
employees and results in a better alignment with benefits provided by
the Social Security Administration.
To provide income replacement to County and participating
employees who become disabled.
Montgomery County Employee Retirement Plans & the Office of
Human Resources
Office of Management and Budget
Department of Finance
DESCRIPTION:
PROBLEM:
GOA LSA ND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
NIA
To be researched.
Montgomery County Employee Retirement Plans
Office of Human Resources
NIA
NIA
ts Plan\LRR.Docx
F:\LAW\BILLS\1733 Employees' Retirement Savings Plan-Disability Benefi
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.. · i
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-~-!
OFFICE OF THE COUNTY EXECUTIVE
ROCKVlLLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
October 16, 2017
TO:
Roger Berliner, President
Montgomery County Council
Isiah
Leggett,
County E x e c u t i v ~
Legislation to Amend Chapter 33, Personnel and Human Resources
i
I.
i
FROM:
SUBJECT:
I am attaching for Council 's consideration a bill that would amend the
County's law related to the payment of long-term disability benefits to participating
employees. The legislation would change the benefits provided under the Long Term
Disability Program (LTD2) by extending the age at which benefits end from 65 to age 70.
The change brings the LTD2 program 's income replacement in line with the changes
made to the availability for full, unreduced Social Security benefits. Full Social Security
benefits are not available to employees born after 1943 until they reach the age of 66 or
later (reduced benefits are still available at age 62). On average, affected County
employees were born after 1943.
Stopping the benefits at age 65 forces participants receiving LTD2
benefits, who are not receiving Social Security disability benefits, to apply for the
reduced Social Security benefits when the LTD2 benefit ends at 65. Taking a reduction
from the full benefit from Social Security places an undue hardship on the LTD2
participants. The bulk of those participants receiving LTD2 benefits became disabled
performing their day-to-day County duties and were awarded service connected disability
benefits. Providing this increased benefit for the approximately 6,000 employees
covered by the program results in a minimal increase in the monthly premium paid by the
County and employees, and results in better alignment with benefits provided
by
the
Social Security Administration.
Thank you for your consideration of this matter.
Attachments
Linda Herman, Executive Director, MCERP
c:
Shawn Stokes, Director, Office of Human Resources
montgome rycountym d.gov/311
,;~31 1)
240-773-3556 TTY
'ENift'IHIIIMl:••·iti-
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Fiscal
lmpact
Statement
Expedited Bill XX-17
-Disability
Benefits Plan
1l
1.
Legislative
Summary
The biil would amend the
age for
termination of long term disability benefits from
age
65
to age 70,
and generally amend the laws governing the County's
Long
Term Disability
Benefits Plan (LTD2).
2. An estimate
of
changes in County revenues and expenditures regardless of whether
the revenues
or
expenditures are assumed in the recommended or approved budget.
Includes
source of informatio n,
assumptions, and methodologies used.
This bill would change the benefits provided by LTD2 by extending the age at which
benefits end from 65 to
70.
An
actuarial analysis performed by the Fund's actuary, Aon,'
estimates the annual cost of the County's portion of these benefits to increase from
$873,000 to $1,293,000; an increase of $420,000, The employee portion of the benefit
would increase from $291,000 to $431,000, an increase of $140,000. This charge is
administered through payroll, and would result in a monthly increase of $2.22 per
employee. The analysis assumes the current cost share arrangement between the County
and employees of7S%/25%.
3.
Revenue
and
expenditur e
estimates covering at least the next 6 fiscal years.
Assuming an increase of$420,000 annually, this bill would have an estimated impact of
$2,520,000 in increased expenditures over the next6 fiscal years. There is no anticipated
·
impact on revenues.
4. An actuarial analysis
through
the entire amortization period for each
bill
that would
affect retiree
pension or
group insurance costs.
See above.
S. Later actions that may affect future revenue and expenditures
if
the
bill
authorizes
·
future spending.
Not applicable.
6.
An
estimate
of
the
staff
time needed to implement
the
bill.
There are no additional costs for staff to implement the legislation.
7. An explanatio n of
how
the addition of new staff responsibil ities
would affect
other
duties.
Not applicable.
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riation is needed.
8. An estimate of costs when an additional approp
Not applicable.
revenue and cost estimates.
9. A description of
any
variable that could affect
Not applicable.
ertain or difficult to project.
10,
Ranges of
revenue or expenditures that are unc
Not applicable.
t is the
case,
11. If
a
bill
is likely to have no
fiscal impact,
why
tha
Not applicable.
12. Other fiscal impacts or comments.
Not applicable.
h this analysis:
13. The following contributed to and concurred wit
Corey Orlosky, Office of Management and
Budget -
nty Employee- Retirement Plans
Linda Hennan, Executive Director, Montgomery Cou
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· 1
····.··-·..:-· -·
·---·-·.
__ _
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Economic Impact Statement
Expedited Bill xx-17, Disability Benefits Plan
Background:
;
I
This legislation would amend Montgomery County Code Section 33-133, Termination of
Benefits, to increase the age from
65
to
70
for termination of long
tenn
disability
·
benefits.
1.
The sources of information, assumptlons, and methodologies ·used,
i;
j'
Source
of
information
is
the Montgomery County Long-Term Disability Benefits
Plan (LTD2).
An
actuarial valuation is performed every two years for the program to
set the contribution rate for
the
County, participating agencies
and
employees. Based
on the actuarial analysis performed by the fund's actuary for Expedited
Bill ##-17,
an
estimate of the increase in the annual cost of the County's portion would be $420,000
from $873,000
to
$1,293,000. The employee portion of the benefit would increase
from
$291,000 to $431,000,
an
increase of$140,000, resulting
in
a monthly increase
of
$2.22
per
employee. The analysis conducted by the actuary assumes the current
cost share agreement between the County and employees of 75%/25%.
2. A description
of
any
variable that could affect the
economic i~pac t
estimates.
The variables that could affect the economic impact estimates are the number of
recipients who reside in the County receiving long-tenn disability benefits, the total
amount of benefits or income received by those recipients, and the deduction from the
salary of County employees.
3. The
Bill's
positive or negative effect,
if
any on
employment, spending, savings,
investment,
incomes,
arid property values
in
the County.
County receiving long-term disability benefits, it is uncertain whether Expedited Bill
##-17 would have a significant effect on the Collllty' s economy and total personal
income. The increase
in
benefits would
have
a positive impact on
an
individual
recipient's personal income.· However, since the estimated annual cost of the
County's portion
of
these benefits
would
increase by
only
$420,000, the economic
impact on the County's overall economy
and
income would be minimal. Finally,
since
Expedited
Bill ##-17
would change the employee benefit portion
and
result
in
an
increase
or $2.22
per
month or
$26.64 per year, it
would
also have
a
minimal
impact on the economy.
4. Ha Bill is likely to have no economic impact, why
is
that the case?
Becau se of the lack of data
on
the number of recipients
currently
residing in
the
Please
see paragraph #3
Page
1
of2
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..
--:-:
Economic Impac t Statem ent .
Expedi~ed Bill xx-17, Disabil ity Benefits Plan
5. The following
contrib uted
to
or
concurred with this analysis:
David
Platt, and
Rob Hagedoorn,
Finance;
Linda Herman and Robert Goff, MCERP.
Alexandre Espin •
ecto r
Date
Department of Finance
Page2 of2
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Montgo mery County
Long
Term Disability Benefits Plan (LTD2)
Background:
When the Retirement Savings Plan (RSP) was created in October 1994 for all non-un iformed
public safety and non-public safety employees, the LTD2 plan was also created.
o An actuarial analysis is performed every two years to set the contrib ution rate for the
County, participating agencies and employees.
As part of collective bargaining with MCGEO, the County is required to make employ er
contrib utions (8% of the LTD2 participant's salary) until the participant turns 62
The County pays the employ er contrib ution for insurance benefits for LTD2 participants
LTD2 participant's RSP or Guaranteed Retirement Income Plan (GRIP) account is frozen until age
62, if employer contrib utions are required
Covered employees:
All County employees hired after October 1994, who are non-uniformed public safety or non-
public safety, who participate in the RSP and GRIP
Total covered employees - approximately 6,000 (including participating agencies)
Benefits:
Service Connected
o 52.5% or 70% of salary until age 65
Non-Service Connected
o 2% per year of County employ ment with a minimu m of 30% and a maximum of 60%
until age 65
Contributions:
FY 17/18
o 75% - County - $13.82 per month, per participant, annual total - $873,000
o 25% - Employees - $4.61 per month, per participant, annual total - $291,000
Recom mende d Change:
Continuing service connected disability until age 70
o
Benefits
Monthl y disability payments would continue until age 70
• Health insurance benefits would continue, if eligible
Estimated Cost increases
• County from $873,000 to $1.293 million - $420,00 annually
• Employees from $291,000 to $431,000 ($4.61 per month to $6.83) - $140,000
annually
o
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MO NT GO ME RY CO UN TY
Disability Benefits Pl an
Su mm ary Plan Description
October 2016
.......__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____.(!)
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lcontentsl
Introduction ..................................................................
................................................................................. 3
......................................................................... 3
............
Eligibility ..................................................................
Definition of Disability ................................................
................................................................................. 3
........................................................................... 3
...................................................... 4
4
......
Initial Disability ............................................................
..............................
Temporary Disability ................................................
Continuing Disability ................................................
....................................................................................
........................
Application Process ......................................................
Disability Review Panel ................................................
......................................................... 4
................................................................................ 5
.......................................................... 5
........................
Benefits ........................................................................
Service-Connected ......................................................
......................................................................... 5
........................................................... 6
............
Non-Service-Connected................................................
............
Public Safety Employee Cos t of Livi ng Adjustment
......................................................................... 7
.................................................................. 7
8
..................
Reduction in Benefits ................................................
Payment Period ............................................................
..................................................................................
..................
Employer Contributions to the Retirement Plan............
Re-evaluations of Continuation of Payments ............
.............................................................. 8
8
....................................................................................
............
Re-Employment Progrrun ..........................................
........................................................................ 8
.......................................................... 9
.9
........................
Appeals ........................................................................
Errors ........................................................................
....................................................................................
........................
Resources ..................................................................
............................................................. 9
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Introduction
The purpose of this Summary Description is to provide you with an informal guide to the
key provisions of the Disability Benefits Plan (Long Term Disability (LTD) Plan), as
provided for in the Montgomery County Code, Chapter 33, Article VIII, Division 2
("County Code"). Every effort has been made to accurately summarize the LTD Plan.
However, in the event of a conflict between this Summary Description and the County
Code, the County Code will govern.
While Montgomery County Government (the "County") expects to continue the LTD
Plan, it is the County's position that there is no implied contract between employees and
the County to do so. The County reserves the right to change or discontinue any of the
terms of the LTD Plan, subject to applicable laws and collective bargaining agreements.
In addition, the County may amend the LTD Plan, either prospectively or retroactively, as
required by Federal or State law.
The LTD Plan is sponsored by the County. Other government agencies and quasi-
government agencies elect to participate in the County's LTD Plan.
If
you are an
employee of one of those agencies, you participate under the same terms and conditions
as a County employee.
Eligibility
You are eligible for the LTD Plan if you are budgeted to work for the County or a
participating agency at least 20 hours a week and participate in the:
Retirement Savings Plan,
Guaranteed Retirement Income Plan, or
Elected Officials' Plan.
Your LTD coverage begins automatically on your date of retirement plan membership.
Definition of Disability
To qualify for LTD Plan benefits, you must meet the LTD Plan's definition of disability.
Disability is divided into two stages: initial disability and continued disability.
If
you
qualify for an initial disability, the County will re-evaluate you before the end of 36
months (12 months for a public safety employee who has a non-service-related disability)
to determine if you meet the requirements for a continuing disability.
Disability benefits are also divided into two categories:
service-connected, depending upon the disability.
non-service-connected and
Initial Disability
You are considered disabled if you cannot perform the job you held when you became
disabled. Your condition must be the result of an accident, illness or injury and not
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caused by your willful misconduct or willful negligence. See non-service-connected and
service-connected for more information.
Tempo rary Disability
After you qualify for an initial disability, you may be approved for a temporary disability
for one or more one year periods. At the end of the period of the temporary disability, a
determination will be made as to whether you will continue to receive payments under
this LTD Plan.
Contin uing Disability
If
you qualify for an initial disability, at the end of the initial period you are generally
considered disabled if:
• your condition has not changed;
• you cannot perform any job for which you are reasonably suited, based on your
education, training or retraining and experience; and,
• your condition is likely to be permanent.
If
you are a public safety employee, you
also must also be unable to earn substantially similar final earnings.
If
you qualify for service-connected benefits, you may be considered partially
incapacitated.
If
you are partially incapacitated, you are considered unable to perform
one or more of the essential functions of the job you held when you became disabled but
you may still perform other substantial gainful employment.
See non-service-connected and service-connected for more information.
Application Process
You (or your representative) may file an application for disability benefits with the Chief
Administrative Officer. Applications should be filed through the Montgomery County
th
Employee Retirement Plans (MCERP), 101 Monroe Street, 15 Floor, Rockville, MD
20850.
In
applying for LTD benefits, MCERP will provide you with the proper forms and any
assistance you require with the application process.
In
addition to completing the forms
and submitting to MCERP, you will also need to provide copies of your medical records
to the MCERP Disability Manager. Your application and your medical records will be
forwarded to the Disability Review Panel.
In
order to receive service-connected benefits for an accidental injury that does not cause
mental impairment, you must report the injury as soon as practicable, but within one year
of the injury or you must submit a timely claim for workers' compensation. You must
also file an application for benefits within one year of separation from County service.
These time periods do not begin if you have incapacitating injuries and are unable to
make a report due to the injuries.
For a non-service-connected disability, the disabling condition or injury must have
occurred prior to termination of employment.
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Disability Review Panel
The Disability Review Panel will review your application and medical records. Upon
completion of the review, the Panel will recommend to the Chief Administrative Officer
whether or not you are eligible to receive LTD benefits. When making its determination,
the Disability Review Panel may require you to undergo an independent medical
examination.
MCERP will notify you in writing of the Chief Administrative Officer's decision. The
effective date of your payments would be the earlier of the date by which you have
exhausted all accrued sick and compensatory leave in excess of 80 hours or the date of
the Chief Administrative Officer's decision.
Benefits
The monthly benefits (payments) you receive from the LTD plan replace a percentage of
your final earnings. Your final earnings are your highest average annual pay earned at the
County or participating agency (less shift pay differential) for any 18 consecutive-month
period. The amount you receive depends on whether your disability is service-connected
or non-service-connected. Employment taxes (FICA) will be withheld from your
payments for the first six months.
Service-Connected Disability
A service-connected disability is a condition due to an accident, illness, occupational
disease or condition which is aggravated while performing your duties as an employee.
Amount of Benefits
Partial Incapacity - You receive 52-1/2% of your final earnings (minus
any offset) if the Disability Review Panel determines that you do not
qualify for total incapacity.
If
you are partially incapacitated, you are
considered unable to perform one or more of the essential functions of
the job you held when you became disabled, but you may still perform
other substantial gainful employment.
Total Incapacity - You receive at least 70% of your final earnings
(minus any offsets) if the Disability Review Panel determines that the
disability meets the Social Security Administration's requirements for
disability. In order to be determined to be disabled by the Social
Security Administration, you must be 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
last for at least 12 months.
You do not have to actually have a Social Security determination in
order to be eligible for the 70% benefit.
Social Security Award - You will receive 70% of your final earnings
(minus any offsets) if you meet the following conditions:
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(a) you are awarded Social Security disability benefits;
(b) you applied for Social Security benefits within 90 days of the
Count y's notification to you of the disability determination.;
(c) you submi t the information within 60 days of receiving the
Social Security decision; and
(d) the Social Security benefits were based on the same impairment.
Ineligibility
You are not eligible to receive service or non-service-connected benefits until you
have been employed by the County (or participating agency) for at least 6 months
and you are a member of a County retirement plan.
You are not eligible to receive service-connected disability benefits if you
committed an offense that would justify termination for misconduct.
Alternative Position
You may receive a 5% salary increase if you accept an alternative position in the
County government for which you are qualified. Your salary in the alternative
positi on will not exceed the maximum salary of the pay grade assigned to the
position. A member of the Office, Professional and Technical Bargaining Unit or
the Service, Labor and Trades Bargaining Unit who accepts an alternative
placement incentive is not eligible to apply for a service-connected disability
benefit based on the disability for which the alternative placement was made.
Non-Service-Connected Disability
A non-service-related disability is a condition due to an accident or illness that is not the
ts
direct result of performing your duties as an employee. You will not receive any benefi
for an accident or illness caused by your own willful misconduct or willful negligence.
You must have worked for the County for the six months immediately preceding the
disability.
gs
If
your disability is non-service-connected, you will receive 2% of your final earnin
multiplied by the number of years you have been a memb er of one or more of the
County's retirement plans, up to a maximum of 60% of your final earnings. You will
in
receive a minimum benefit of 30% of your final earnings. In addition, see Reduction
Benefits section.
Examples:
1.
If
you have been a memb er of the Count y's retirement plan for 17 years, your
monthly payment is 34% of your final earnings (2% x 17 years of service).
If
you have been a memb er of the retirement plan for 10 years, your monthly
payment is 30% of your final earnings. The minim um payment is 30%.
2.
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Public Safety Employee Cost of Living Adjustment
If
you are a public safety employee, you will receive a cost of living adjustment each
year. This will equal 60% of the annual change in the cost of living index (as determined
by the Baltimore-Washington Area Consumer Price Index). The cost of living adjustment
is limited to 3% each year.
If
you receive a disability retirement benefit for a disability
occurring after June 30, 2011, as determined by the Disability Review Panel, any
adjustment of your benefit payment will not exceed 2.5%.
Reduction in Benefits
Your benefits will be reduced for the following:
1. Other LTD Benefits
Your benefits will be reduced one dollar for each one dollar you receive from:
Social Security disability benefits (including benefits paid to your dependents
because of your disability)
any other government group income maintenance insurance coverage
any government disability plan
the Employees' Retirement System
the GRIP or RSP - any amount you are entitled to receive (i.e., your plan
account) for a public safety employee
A.
If
you receive any of these payments as a lump sum, your LTD benefit will be
adjusted as if the lump sum were being paid as an annuity.
B. You are required to apply for Social Security disability benefits. If you
receive retroactive benefits covering the period of time you received benefits from
the LTD Plan, you must reimburse the County.
C. The benefit calculated under this formula may be adjusted by benefits from
other sources and you may receive less than 30% of your final earnings.
2. Employment
Your County disability benefit will be reduced one dollar for each three dollars of
your earnings or income you receive because of employment, including net
earnings from self-employment.
3. Workers' Compensation
The LTD payment you receive from the County is subject to a reduction by any
workers' compensation award for which you may be eligible.
If
you are eligible
for both and your disability benefit is greater than what you are entitled to receive
from workers' compensation, you will receive only the disability benefit. (Your
7
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ation obligation.) You
LTD payment satisfies the Cou nty' s workers' compens
must report any changes in your income to the MCERP.
Payment Period
disability benefits will generally
If
you are a non public safety employee, your continued
last until:
• you recover from your disability (before age 65)
cer with any necessary
• you fail to provide the Chi ef Administrative Offi
if you refuse to see a
information (such as any earnings or tax information), or
doctor)
62), or
• you reach age 65 (unless you became disabled after age
• your death.
If
you are disabled at age 62 or older your benefits will last
as follows:
service-connected, your benefit
If
you are a public safety employee and your disability is
bled and provide requested
will last for your lifetime (as long as you remain disa
n you
turn
65.
information). Your benefits will not automatically end whe
Plan and Guaranteed Income
Employer Contributions to the Retirement Savings
Retirement Plan
me disabled, you may receive
If
you are a non-public safety employee and you beco
reach age 62. To qualify for
employer contributions to your retirement plan until you
determined by the Disability
these employer contributions, your disability must be
ial gainful activity by reason
Review Panel to make you unable to engage in any substant
ent which can be expected to
of any medically determinable physical or mental impairm
last for a continuous period of
result in death or which has lasted or can be expected to
ion of your account balance in
not less than 12 months. You may not receive a distribut
s.
the RSP or GRIP while you are receiving these contribution
Re-Evaluation of Continuation of Payments
ical examination to determine
After the initial disability period, you mus t undergo a med
fits.
If
you are found to be
if you are entitled to receive continued disability bene
end.
ineligible, the disability benefits under this LTD Plan will
Re-Employment Program
ugh a program for employees
The Chi ef Administrative Officer may offer you a job thro
ld assign you a job you could
who are on disability. The re-employment program wou
you based on your training,
perform with your disability, and which is suited for
ies. You will be notified if you
education, experience and physical and mental capabilit
8
@)
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qualify for this program.
If
you are selected for the program, you must participate or you
will forfeit your benefits.
Appeals
The Chief Administrator has the full discretion to interpret the Plan.
If
you disagree with
any decisions regarding your eligibility for disability benefits, including a decision to
discontinue your benefits, you may appeal the decision within 20 days of your receipt of
written claim denial. The appeal should be sent to the Office of Human Resources at 101
Monroe Street, 7
th
Floor, Rockville, Maryland 20850. The Disability Arbitration Board
will review your appeal and should issue a decision within 30 days after a hearing.
Errors
If
you receive any monetary amount due to an error, you must return it to the County.
Resources
MCE RP
th
101 Monroe Street, 15 Floor
Mail:
Rockville, MD 20850
Retirement@montgomerycountymd.gov
Email:
Phone:
240-777-8230
301-279-1424
Fax:
www.montgomerycountymd.gov/retirement
Web:
Disability Mana ger
th
101 Monroe Street, 15 Floor
Mail:
Rockville, MD 20850
Phone:
240-777-8238
9
@
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MEMORANDUMOF UNDERSTANDING
BETWEEN THE MONTGOMERY COUNTY GOVERNMENT
AND THEMUNICIPAL
&
COUNTY GOVERNMENT EMPLOYEES ORGANIZATION
UNITED FOOD
&
COJMMERCIAL WORKERS, LOCAL 1994, AFL-CIO
The Montgomery County Government (Employer) and the Municipal
&
County Government
Employees Organization, UFCW Local 1994, AFL-CIO (Union) (hereinafter parties) engaged in
a collective bargaining mid-term change
to
the Long Term Disability Benefits (LTD2) for
affected Montgomery County bargaining unit employees hired after October 1994, who are non-
public safety and public safety employees who participate in the Retirement Savings Plan or the
Guaranteed Retirement Income Plan.
This Memorandum of Agreement is to address what the parties recognize is a needed change in
the Montgomery County Code (Code), Sec.33-133 regarding Termination of Benefits, for non-
public safety and public safety employees who participate in the LTD2 program. In the Code, the
administrator must terminate initial or continued disability benefits to a non-public safety or
public safety employee covered by the program
if
the.employee has attained the age of 65 or a
later age
if
required under federal law.
After discussions on the termination of LTD2 benefits for affected employees turning 65, the
parties have come
to
an agreement to recommend amending the termination date in the County
Code
:&ofil:
age 65 to age 70.
This Agreement takes into account that full unreduced Social Security benefits are not available
to employees born after 1943 until the they reach the age of 66 or later (reduced benefits are still
available at age 62). On average affected County employees were born after 1943. The income
replacement, or monthly benefit, payable from the County's Long Term Disability Plan (LTD2)
stops at age 65 as defined in the Code. Stopping at age 65 forces participants receiving LTD2
benefits, who are not i:eceiving Social Security disability benefits, to apply for the reduced Social
Security benefits when the L1D2 benefit ends ~t 65. Taking a reduction from the full benefit
from Social Security places an undue hardship on the LTD2 participants. The bulkofthose
participants receiving LTD2 benefits became disabled performing their day-to-day County duties
and were awarded service connected disability benefits. Providing-this increased benefit for the
approximately 6,000 employees covered by the program results in a very minimal increase in the
monthly
premium paid by the County and employees and results
in
a better alignment with
benefits provided by the Social Security Administration.
However
minimum,
the parties recognize that there is an increased cost both to the County and
to the affected employees. To address this increase in LTD2 benefits,
the
parties agree that the
contribution amount will increase for each party, but the cost sharing will remain the same at the
current 75/25 percentage level, with the County's share at 75 percent and the affected employees
.at25%.
.
The parties will submit legislation to the County Council that would amend Montgomery County
Code
to
provide for this change in LTD2 benefits. This change to the benefits
will
be effective
0
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.,
,
•· 1.,
January 1, 2017 and
will
also apply
to
individuals receiving benefits or entitled to benefits as of
that date.
IN WITNESS WHEREOF, the parties hereto have caused their names to be subscribed by their
duly authorized officers and representatives this_ day of October 2017.
For the Union
_gL".':1,..:s,
~.
Isiali Leggett,
Cul.L'Ul.L V-1-:,
!'.)_
/0-
11-17
Date
Gino Renne, President
IJ/JJ/rf
~~ t./~ _;f ~
Timo thyL Firestine, CAO
Chief Administrative Officer
Date
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Agenda Item 4B
October 31, 2017
Introduction
ME MO RA ND UM
October 27, 2017
TO:
FROM:
County Council
'
Robert H. Drummer, Senior Legislative Attorney
:
'
l . \,
v1
ent Savings Pla n-
Introduction:
Expedited Bill 33-17, Employees' Retirem
SUBJECT:
ments
Disability Benefits Pla n-T erm inat ion of Benefits - Amend
- Disability Benefits Plan -
Expedited Bill 33-17, Employees' Retirement Savings Plan
Council President Berliner
ion of Benefits -Am end men ts, sponsored by Lead Sponsor
Terminat
duced on October 31, 2017. A
request of the County Executive, is scheduled to be intro
at the
at 1:30 p.m.
public hearing is tentatively scheduled for November 28
Bill 33-17 would increase the age long term disability ben
Background
efits end from 65 to 70.
Savings Plan, the Guaranteed
County employees who are participants in the Retirement
eligible for benefits under the Disability
Retirement Income Plan, or the Elected Officials Plan are
1
disability benefits for both service-
Benefits Plan (the Plan). The Plan provides long term
nected benefit is 52.5% of salary
ed and non-service connected disabilities. A service con
connect
A non-service connected benefit is 2%
for partial disability and 70% of salary for total disability.
benefit of 30% and a maximum benefit
of salary per year of County employment with a minimum
Plan and each employee
salary. The County contributes 75% of the cost of the
of 60% of
and the Summary of the Plan
tes 25% of the cost. See the basic outline of the Plan at ©9
contribu
Description at ©10-18.
when a participant reaches the
The Plan requires the CAO to terminate disability benefits
from age 65 to age 70. 0M B
Bill 33-17 wou ld extend eligibility for disability benefits
age of 65.
age 70 wou ld be $420,000. The
ates that the Cou nty' s annual cost to extend benefits to
estim
2 per month per employee. See the
ual total cost to all employees would be $140,000 or $2.2
ann
e disability benefits was negotiated
Fiscal Impact Statement at ©5. This increase in employe
the Executive and MCGEO is at ©19-
between the Executive and MCGEO. The MOU between
MCGEO, the Bill would increase the
20.
In
addition to the eligible employees represented by
including elected officials.
disability benefit for eligible non-represented employees,
loyee's Retirement System are eligible for a
participating
in
the defined benefit plans under the Emp
Employees
ted by Bill 33-17.
different disability retirement pension that would not be affec
1
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Thi s pac ket contains:
Exp edit ed Bill 33-17
Leg isla tive Req ues t Rep ort
Me mo from Cou nty Exe cuti ve
Fisc al and Eco nom ic Imp act stat eme nt
Pla n Out line
Sum mar y of Plan Des crip tion
MO U wit h MC GE O
Cir cle#
1
3
4
5
9
10
19
Disability Benefits Plan\lntro Memo.Docx
F:\LAW\BILLS\1733 Employees' Retirement Savings Plan-
2
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33-1 7
Expedited Bill No.
Retirement
Concerning: Employees'
Savings Plan - Disability Benefits
Plan - Termination of Benefits -
Amendments
Revised: October
18, 2017
Draft No.
_1
October
31, 2017
Introduced:
May 1,
2019
Expires:
[date]
Enacted:
[date signed]
Executive:
[date takes effect]
Effective:
Sunset Date: -'-'- No =n= e'-- ---- ---
[year)
Ch. Jta. ._, Laws of Mont. Co.
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
nty Executive
Lead Sponsor: Council President at the request of the Cou
AN EXP EDI TED ACT
to:
fits; and
amend the age for termination oflo ng term disability bene
(1)
Plan.
generally amend the laws governing the Disability Benefits
(2)
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-133
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 unqffected by bill.
the following Act:
County Council for Montgomery County, Maryland approves
The
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8<PEDITED BILL
NO. 33-17
1
2
3
4
Sec.
1.
Section 33-133 is amended as follows:
33-133. Termination of Benefits.
(a)
Non-public safety employee.
The administrator must terminate initial or
continued disability benefits to a non-public safety employee if the
employee:
(1)
(2)
recovers from the disability, as determined by the administrator;
does not provide the administrator with information that the
administrator requires; or
(3)
attains age 70 [65], or a later age if required under federal law.
5
6
7
8
9
10
(b)
11
12
Public safety employee.
The administrator must terminate initial or
continued disability benefits to a public safety employee if the employee:
(1)
(2)
recovers from the disability, as determined by the administrator;
does not provide the administrator with information that the
administrator requires; or
(3)
attains age 70 [65], or a later age if required under federal law, if
the benefit is for a non-service connected disability.
13
14
15
16
17
18
Sec. 2.
Expedited Effective Date.
19
20
21
22
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on January 1, 2017. The
amendments in Section 1 apply to all participants receiving benefits or entitled to
receive benefits on or after January 1, 2017.
Approved:
23
Roger Berliner, President, County Council
Date
benefits plan\bill 1.docx
0
f:\law\bills\1733 employees' retirement savings plan-disability
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LEGISLATIVE REQUEST REPORT
Expedited Bill 33-17
ination of Benefits
-
Employees' Retirement Savings Plan
-
Disability Benefits Plan
-
Term
Amendments
The legislation would change the benefits provided under the Long
Term Disability Program (LTD2) by extending the age at which
benefits end from 65 to age 70. The change brings the LTD2
program's income replacement in line with the changes made to the
availability for full unreduced Social Security benefits. Full Social
Security benefits are not available to employees born after 1943 until
they reach the age of 66 or later (reduced benefits are still available at
age 62).
Stopping the benefits at age 65 forces participants receiving LTD2
benefits, who are not receiving Social Security disability benefits, to
apply for the reduced Social Security benefits when the LTD2 benefit
ends at 65. Taking a reduction from the full benefit from Social
Security places an undue hardship on the LTD2 participants. The bulk
of those participants receiving LTD2 benefits became disabled
performing their day-to-day County duties and were awarded service
connected disability benefits. Providing this increased benefit for the
approximately 6,000 employees covered by the program results in a
very minimal increase in the monthly premium paid by the County and
employees and results in a better alignment with benefits provided by
the Social Security Administration.
To provide income replacement to County and participating
employees who become disabled.
Montgomery County Employee Retirement Plans & the Office of
Human Resources
Office of Management and Budget
Department of Finance
DESCRIPTION:
PROBLEM:
GOA LSA ND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
NIA
To be researched.
Montgomery County Employee Retirement Plans
Office of Human Resources
NIA
NIA
ts Plan\LRR.Docx
F:\LAW\BILLS\1733 Employees' Retirement Savings Plan-Disability Benefi
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.. · i
_-- ... ' ... ----· -
i
1:
.· ..
·::
.:.-· ... ..-
-~-!
OFFICE OF THE COUNTY EXECUTIVE
ROCKVlLLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
October 16, 2017
TO:
Roger Berliner, President
Montgomery County Council
Isiah
Leggett,
County E x e c u t i v ~
Legislation to Amend Chapter 33, Personnel and Human Resources
i
I.
i
FROM:
SUBJECT:
I am attaching for Council 's consideration a bill that would amend the
County's law related to the payment of long-term disability benefits to participating
employees. The legislation would change the benefits provided under the Long Term
Disability Program (LTD2) by extending the age at which benefits end from 65 to age 70.
The change brings the LTD2 program 's income replacement in line with the changes
made to the availability for full, unreduced Social Security benefits. Full Social Security
benefits are not available to employees born after 1943 until they reach the age of 66 or
later (reduced benefits are still available at age 62). On average, affected County
employees were born after 1943.
Stopping the benefits at age 65 forces participants receiving LTD2
benefits, who are not receiving Social Security disability benefits, to apply for the
reduced Social Security benefits when the LTD2 benefit ends at 65. Taking a reduction
from the full benefit from Social Security places an undue hardship on the LTD2
participants. The bulk of those participants receiving LTD2 benefits became disabled
performing their day-to-day County duties and were awarded service connected disability
benefits. Providing this increased benefit for the approximately 6,000 employees
covered by the program results in a minimal increase in the monthly premium paid by the
County and employees, and results in better alignment with benefits provided
by
the
Social Security Administration.
Thank you for your consideration of this matter.
Attachments
Linda Herman, Executive Director, MCERP
c:
Shawn Stokes, Director, Office of Human Resources
montgome rycountym d.gov/311
,;~31 1)
240-773-3556 TTY
'ENift'IHIIIMl:••·iti-
@
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I ,- ,
. .
.. i
1·-
\
''
Fiscal
lmpact
Statement
Expedited Bill XX-17
-Disability
Benefits Plan
1l
1.
Legislative
Summary
The biil would amend the
age for
termination of long term disability benefits from
age
65
to age 70,
and generally amend the laws governing the County's
Long
Term Disability
Benefits Plan (LTD2).
2. An estimate
of
changes in County revenues and expenditures regardless of whether
the revenues
or
expenditures are assumed in the recommended or approved budget.
Includes
source of informatio n,
assumptions, and methodologies used.
This bill would change the benefits provided by LTD2 by extending the age at which
benefits end from 65 to
70.
An
actuarial analysis performed by the Fund's actuary, Aon,'
estimates the annual cost of the County's portion of these benefits to increase from
$873,000 to $1,293,000; an increase of $420,000, The employee portion of the benefit
would increase from $291,000 to $431,000, an increase of $140,000. This charge is
administered through payroll, and would result in a monthly increase of $2.22 per
employee. The analysis assumes the current cost share arrangement between the County
and employees of7S%/25%.
3.
Revenue
and
expenditur e
estimates covering at least the next 6 fiscal years.
Assuming an increase of$420,000 annually, this bill would have an estimated impact of
$2,520,000 in increased expenditures over the next6 fiscal years. There is no anticipated
·
impact on revenues.
4. An actuarial analysis
through
the entire amortization period for each
bill
that would
affect retiree
pension or
group insurance costs.
See above.
S. Later actions that may affect future revenue and expenditures
if
the
bill
authorizes
·
future spending.
Not applicable.
6.
An
estimate
of
the
staff
time needed to implement
the
bill.
There are no additional costs for staff to implement the legislation.
7. An explanatio n of
how
the addition of new staff responsibil ities
would affect
other
duties.
Not applicable.
®
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1~?:- :
.
_I
. -.·.,:
;'~r-~----J
r
!
·-
I
I
riation is needed.
8. An estimate of costs when an additional approp
Not applicable.
revenue and cost estimates.
9. A description of
any
variable that could affect
Not applicable.
ertain or difficult to project.
10,
Ranges of
revenue or expenditures that are unc
Not applicable.
t is the
case,
11. If
a
bill
is likely to have no
fiscal impact,
why
tha
Not applicable.
12. Other fiscal impacts or comments.
Not applicable.
h this analysis:
13. The following contributed to and concurred wit
Corey Orlosky, Office of Management and
Budget -
nty Employee- Retirement Plans
Linda Hennan, Executive Director, Montgomery Cou
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· 1
····.··-·..:-· -·
·---·-·.
__ _
I
.1
····-·cc-·· -.
>1
Economic Impact Statement
Expedited Bill xx-17, Disability Benefits Plan
Background:
;
I
This legislation would amend Montgomery County Code Section 33-133, Termination of
Benefits, to increase the age from
65
to
70
for termination of long
tenn
disability
·
benefits.
1.
The sources of information, assumptlons, and methodologies ·used,
i;
j'
Source
of
information
is
the Montgomery County Long-Term Disability Benefits
Plan (LTD2).
An
actuarial valuation is performed every two years for the program to
set the contribution rate for
the
County, participating agencies
and
employees. Based
on the actuarial analysis performed by the fund's actuary for Expedited
Bill ##-17,
an
estimate of the increase in the annual cost of the County's portion would be $420,000
from $873,000
to
$1,293,000. The employee portion of the benefit would increase
from
$291,000 to $431,000,
an
increase of$140,000, resulting
in
a monthly increase
of
$2.22
per
employee. The analysis conducted by the actuary assumes the current
cost share agreement between the County and employees of 75%/25%.
2. A description
of
any
variable that could affect the
economic i~pac t
estimates.
The variables that could affect the economic impact estimates are the number of
recipients who reside in the County receiving long-tenn disability benefits, the total
amount of benefits or income received by those recipients, and the deduction from the
salary of County employees.
3. The
Bill's
positive or negative effect,
if
any on
employment, spending, savings,
investment,
incomes,
arid property values
in
the County.
County receiving long-term disability benefits, it is uncertain whether Expedited Bill
##-17 would have a significant effect on the Collllty' s economy and total personal
income. The increase
in
benefits would
have
a positive impact on
an
individual
recipient's personal income.· However, since the estimated annual cost of the
County's portion
of
these benefits
would
increase by
only
$420,000, the economic
impact on the County's overall economy
and
income would be minimal. Finally,
since
Expedited
Bill ##-17
would change the employee benefit portion
and
result
in
an
increase
or $2.22
per
month or
$26.64 per year, it
would
also have
a
minimal
impact on the economy.
4. Ha Bill is likely to have no economic impact, why
is
that the case?
Becau se of the lack of data
on
the number of recipients
currently
residing in
the
Please
see paragraph #3
Page
1
of2
(j)
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- I
..
--:-:
Economic Impac t Statem ent .
Expedi~ed Bill xx-17, Disabil ity Benefits Plan
5. The following
contrib uted
to
or
concurred with this analysis:
David
Platt, and
Rob Hagedoorn,
Finance;
Linda Herman and Robert Goff, MCERP.
Alexandre Espin •
ecto r
Date
Department of Finance
Page2 of2
®
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Montgo mery County
Long
Term Disability Benefits Plan (LTD2)
Background:
When the Retirement Savings Plan (RSP) was created in October 1994 for all non-un iformed
public safety and non-public safety employees, the LTD2 plan was also created.
o An actuarial analysis is performed every two years to set the contrib ution rate for the
County, participating agencies and employees.
As part of collective bargaining with MCGEO, the County is required to make employ er
contrib utions (8% of the LTD2 participant's salary) until the participant turns 62
The County pays the employ er contrib ution for insurance benefits for LTD2 participants
LTD2 participant's RSP or Guaranteed Retirement Income Plan (GRIP) account is frozen until age
62, if employer contrib utions are required
Covered employees:
All County employees hired after October 1994, who are non-uniformed public safety or non-
public safety, who participate in the RSP and GRIP
Total covered employees - approximately 6,000 (including participating agencies)
Benefits:
Service Connected
o 52.5% or 70% of salary until age 65
Non-Service Connected
o 2% per year of County employ ment with a minimu m of 30% and a maximum of 60%
until age 65
Contributions:
FY 17/18
o 75% - County - $13.82 per month, per participant, annual total - $873,000
o 25% - Employees - $4.61 per month, per participant, annual total - $291,000
Recom mende d Change:
Continuing service connected disability until age 70
o
Benefits
Monthl y disability payments would continue until age 70
• Health insurance benefits would continue, if eligible
Estimated Cost increases
• County from $873,000 to $1.293 million - $420,00 annually
• Employees from $291,000 to $431,000 ($4.61 per month to $6.83) - $140,000
annually
o
{j)
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MO NT GO ME RY CO UN TY
Disability Benefits Pl an
Su mm ary Plan Description
October 2016
.......__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____.(!)
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lcontentsl
Introduction ..................................................................
................................................................................. 3
......................................................................... 3
............
Eligibility ..................................................................
Definition of Disability ................................................
................................................................................. 3
........................................................................... 3
...................................................... 4
4
......
Initial Disability ............................................................
..............................
Temporary Disability ................................................
Continuing Disability ................................................
....................................................................................
........................
Application Process ......................................................
Disability Review Panel ................................................
......................................................... 4
................................................................................ 5
.......................................................... 5
........................
Benefits ........................................................................
Service-Connected ......................................................
......................................................................... 5
........................................................... 6
............
Non-Service-Connected................................................
............
Public Safety Employee Cos t of Livi ng Adjustment
......................................................................... 7
.................................................................. 7
8
..................
Reduction in Benefits ................................................
Payment Period ............................................................
..................................................................................
..................
Employer Contributions to the Retirement Plan............
Re-evaluations of Continuation of Payments ............
.............................................................. 8
8
....................................................................................
............
Re-Employment Progrrun ..........................................
........................................................................ 8
.......................................................... 9
.9
........................
Appeals ........................................................................
Errors ........................................................................
....................................................................................
........................
Resources ..................................................................
............................................................. 9
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Introduction
The purpose of this Summary Description is to provide you with an informal guide to the
key provisions of the Disability Benefits Plan (Long Term Disability (LTD) Plan), as
provided for in the Montgomery County Code, Chapter 33, Article VIII, Division 2
("County Code"). Every effort has been made to accurately summarize the LTD Plan.
However, in the event of a conflict between this Summary Description and the County
Code, the County Code will govern.
While Montgomery County Government (the "County") expects to continue the LTD
Plan, it is the County's position that there is no implied contract between employees and
the County to do so. The County reserves the right to change or discontinue any of the
terms of the LTD Plan, subject to applicable laws and collective bargaining agreements.
In addition, the County may amend the LTD Plan, either prospectively or retroactively, as
required by Federal or State law.
The LTD Plan is sponsored by the County. Other government agencies and quasi-
government agencies elect to participate in the County's LTD Plan.
If
you are an
employee of one of those agencies, you participate under the same terms and conditions
as a County employee.
Eligibility
You are eligible for the LTD Plan if you are budgeted to work for the County or a
participating agency at least 20 hours a week and participate in the:
Retirement Savings Plan,
Guaranteed Retirement Income Plan, or
Elected Officials' Plan.
Your LTD coverage begins automatically on your date of retirement plan membership.
Definition of Disability
To qualify for LTD Plan benefits, you must meet the LTD Plan's definition of disability.
Disability is divided into two stages: initial disability and continued disability.
If
you
qualify for an initial disability, the County will re-evaluate you before the end of 36
months (12 months for a public safety employee who has a non-service-related disability)
to determine if you meet the requirements for a continuing disability.
Disability benefits are also divided into two categories:
service-connected, depending upon the disability.
non-service-connected and
Initial Disability
You are considered disabled if you cannot perform the job you held when you became
disabled. Your condition must be the result of an accident, illness or injury and not
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caused by your willful misconduct or willful negligence. See non-service-connected and
service-connected for more information.
Tempo rary Disability
After you qualify for an initial disability, you may be approved for a temporary disability
for one or more one year periods. At the end of the period of the temporary disability, a
determination will be made as to whether you will continue to receive payments under
this LTD Plan.
Contin uing Disability
If
you qualify for an initial disability, at the end of the initial period you are generally
considered disabled if:
• your condition has not changed;
• you cannot perform any job for which you are reasonably suited, based on your
education, training or retraining and experience; and,
• your condition is likely to be permanent.
If
you are a public safety employee, you
also must also be unable to earn substantially similar final earnings.
If
you qualify for service-connected benefits, you may be considered partially
incapacitated.
If
you are partially incapacitated, you are considered unable to perform
one or more of the essential functions of the job you held when you became disabled but
you may still perform other substantial gainful employment.
See non-service-connected and service-connected for more information.
Application Process
You (or your representative) may file an application for disability benefits with the Chief
Administrative Officer. Applications should be filed through the Montgomery County
th
Employee Retirement Plans (MCERP), 101 Monroe Street, 15 Floor, Rockville, MD
20850.
In
applying for LTD benefits, MCERP will provide you with the proper forms and any
assistance you require with the application process.
In
addition to completing the forms
and submitting to MCERP, you will also need to provide copies of your medical records
to the MCERP Disability Manager. Your application and your medical records will be
forwarded to the Disability Review Panel.
In
order to receive service-connected benefits for an accidental injury that does not cause
mental impairment, you must report the injury as soon as practicable, but within one year
of the injury or you must submit a timely claim for workers' compensation. You must
also file an application for benefits within one year of separation from County service.
These time periods do not begin if you have incapacitating injuries and are unable to
make a report due to the injuries.
For a non-service-connected disability, the disabling condition or injury must have
occurred prior to termination of employment.
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Disability Review Panel
The Disability Review Panel will review your application and medical records. Upon
completion of the review, the Panel will recommend to the Chief Administrative Officer
whether or not you are eligible to receive LTD benefits. When making its determination,
the Disability Review Panel may require you to undergo an independent medical
examination.
MCERP will notify you in writing of the Chief Administrative Officer's decision. The
effective date of your payments would be the earlier of the date by which you have
exhausted all accrued sick and compensatory leave in excess of 80 hours or the date of
the Chief Administrative Officer's decision.
Benefits
The monthly benefits (payments) you receive from the LTD plan replace a percentage of
your final earnings. Your final earnings are your highest average annual pay earned at the
County or participating agency (less shift pay differential) for any 18 consecutive-month
period. The amount you receive depends on whether your disability is service-connected
or non-service-connected. Employment taxes (FICA) will be withheld from your
payments for the first six months.
Service-Connected Disability
A service-connected disability is a condition due to an accident, illness, occupational
disease or condition which is aggravated while performing your duties as an employee.
Amount of Benefits
Partial Incapacity - You receive 52-1/2% of your final earnings (minus
any offset) if the Disability Review Panel determines that you do not
qualify for total incapacity.
If
you are partially incapacitated, you are
considered unable to perform one or more of the essential functions of
the job you held when you became disabled, but you may still perform
other substantial gainful employment.
Total Incapacity - You receive at least 70% of your final earnings
(minus any offsets) if the Disability Review Panel determines that the
disability meets the Social Security Administration's requirements for
disability. In order to be determined to be disabled by the Social
Security Administration, you must be 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
last for at least 12 months.
You do not have to actually have a Social Security determination in
order to be eligible for the 70% benefit.
Social Security Award - You will receive 70% of your final earnings
(minus any offsets) if you meet the following conditions:
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(a) you are awarded Social Security disability benefits;
(b) you applied for Social Security benefits within 90 days of the
Count y's notification to you of the disability determination.;
(c) you submi t the information within 60 days of receiving the
Social Security decision; and
(d) the Social Security benefits were based on the same impairment.
Ineligibility
You are not eligible to receive service or non-service-connected benefits until you
have been employed by the County (or participating agency) for at least 6 months
and you are a member of a County retirement plan.
You are not eligible to receive service-connected disability benefits if you
committed an offense that would justify termination for misconduct.
Alternative Position
You may receive a 5% salary increase if you accept an alternative position in the
County government for which you are qualified. Your salary in the alternative
positi on will not exceed the maximum salary of the pay grade assigned to the
position. A member of the Office, Professional and Technical Bargaining Unit or
the Service, Labor and Trades Bargaining Unit who accepts an alternative
placement incentive is not eligible to apply for a service-connected disability
benefit based on the disability for which the alternative placement was made.
Non-Service-Connected Disability
A non-service-related disability is a condition due to an accident or illness that is not the
ts
direct result of performing your duties as an employee. You will not receive any benefi
for an accident or illness caused by your own willful misconduct or willful negligence.
You must have worked for the County for the six months immediately preceding the
disability.
gs
If
your disability is non-service-connected, you will receive 2% of your final earnin
multiplied by the number of years you have been a memb er of one or more of the
County's retirement plans, up to a maximum of 60% of your final earnings. You will
in
receive a minimum benefit of 30% of your final earnings. In addition, see Reduction
Benefits section.
Examples:
1.
If
you have been a memb er of the Count y's retirement plan for 17 years, your
monthly payment is 34% of your final earnings (2% x 17 years of service).
If
you have been a memb er of the retirement plan for 10 years, your monthly
payment is 30% of your final earnings. The minim um payment is 30%.
2.
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Public Safety Employee Cost of Living Adjustment
If
you are a public safety employee, you will receive a cost of living adjustment each
year. This will equal 60% of the annual change in the cost of living index (as determined
by the Baltimore-Washington Area Consumer Price Index). The cost of living adjustment
is limited to 3% each year.
If
you receive a disability retirement benefit for a disability
occurring after June 30, 2011, as determined by the Disability Review Panel, any
adjustment of your benefit payment will not exceed 2.5%.
Reduction in Benefits
Your benefits will be reduced for the following:
1. Other LTD Benefits
Your benefits will be reduced one dollar for each one dollar you receive from:
Social Security disability benefits (including benefits paid to your dependents
because of your disability)
any other government group income maintenance insurance coverage
any government disability plan
the Employees' Retirement System
the GRIP or RSP - any amount you are entitled to receive (i.e., your plan
account) for a public safety employee
A.
If
you receive any of these payments as a lump sum, your LTD benefit will be
adjusted as if the lump sum were being paid as an annuity.
B. You are required to apply for Social Security disability benefits. If you
receive retroactive benefits covering the period of time you received benefits from
the LTD Plan, you must reimburse the County.
C. The benefit calculated under this formula may be adjusted by benefits from
other sources and you may receive less than 30% of your final earnings.
2. Employment
Your County disability benefit will be reduced one dollar for each three dollars of
your earnings or income you receive because of employment, including net
earnings from self-employment.
3. Workers' Compensation
The LTD payment you receive from the County is subject to a reduction by any
workers' compensation award for which you may be eligible.
If
you are eligible
for both and your disability benefit is greater than what you are entitled to receive
from workers' compensation, you will receive only the disability benefit. (Your
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ation obligation.) You
LTD payment satisfies the Cou nty' s workers' compens
must report any changes in your income to the MCERP.
Payment Period
disability benefits will generally
If
you are a non public safety employee, your continued
last until:
• you recover from your disability (before age 65)
cer with any necessary
• you fail to provide the Chi ef Administrative Offi
if you refuse to see a
information (such as any earnings or tax information), or
doctor)
62), or
• you reach age 65 (unless you became disabled after age
• your death.
If
you are disabled at age 62 or older your benefits will last
as follows:
service-connected, your benefit
If
you are a public safety employee and your disability is
bled and provide requested
will last for your lifetime (as long as you remain disa
n you
turn
65.
information). Your benefits will not automatically end whe
Plan and Guaranteed Income
Employer Contributions to the Retirement Savings
Retirement Plan
me disabled, you may receive
If
you are a non-public safety employee and you beco
reach age 62. To qualify for
employer contributions to your retirement plan until you
determined by the Disability
these employer contributions, your disability must be
ial gainful activity by reason
Review Panel to make you unable to engage in any substant
ent which can be expected to
of any medically determinable physical or mental impairm
last for a continuous period of
result in death or which has lasted or can be expected to
ion of your account balance in
not less than 12 months. You may not receive a distribut
s.
the RSP or GRIP while you are receiving these contribution
Re-Evaluation of Continuation of Payments
ical examination to determine
After the initial disability period, you mus t undergo a med
fits.
If
you are found to be
if you are entitled to receive continued disability bene
end.
ineligible, the disability benefits under this LTD Plan will
Re-Employment Program
ugh a program for employees
The Chi ef Administrative Officer may offer you a job thro
ld assign you a job you could
who are on disability. The re-employment program wou
you based on your training,
perform with your disability, and which is suited for
ies. You will be notified if you
education, experience and physical and mental capabilit
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qualify for this program.
If
you are selected for the program, you must participate or you
will forfeit your benefits.
Appeals
The Chief Administrator has the full discretion to interpret the Plan.
If
you disagree with
any decisions regarding your eligibility for disability benefits, including a decision to
discontinue your benefits, you may appeal the decision within 20 days of your receipt of
written claim denial. The appeal should be sent to the Office of Human Resources at 101
Monroe Street, 7
th
Floor, Rockville, Maryland 20850. The Disability Arbitration Board
will review your appeal and should issue a decision within 30 days after a hearing.
Errors
If
you receive any monetary amount due to an error, you must return it to the County.
Resources
MCE RP
th
101 Monroe Street, 15 Floor
Mail:
Rockville, MD 20850
Retirement@montgomerycountymd.gov
Email:
Phone:
240-777-8230
301-279-1424
Fax:
www.montgomerycountymd.gov/retirement
Web:
Disability Mana ger
th
101 Monroe Street, 15 Floor
Mail:
Rockville, MD 20850
Phone:
240-777-8238
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MEMORANDUMOF UNDERSTANDING
BETWEEN THE MONTGOMERY COUNTY GOVERNMENT
AND THEMUNICIPAL
&
COUNTY GOVERNMENT EMPLOYEES ORGANIZATION
UNITED FOOD
&
COJMMERCIAL WORKERS, LOCAL 1994, AFL-CIO
The Montgomery County Government (Employer) and the Municipal
&
County Government
Employees Organization, UFCW Local 1994, AFL-CIO (Union) (hereinafter parties) engaged in
a collective bargaining mid-term change
to
the Long Term Disability Benefits (LTD2) for
affected Montgomery County bargaining unit employees hired after October 1994, who are non-
public safety and public safety employees who participate in the Retirement Savings Plan or the
Guaranteed Retirement Income Plan.
This Memorandum of Agreement is to address what the parties recognize is a needed change in
the Montgomery County Code (Code), Sec.33-133 regarding Termination of Benefits, for non-
public safety and public safety employees who participate in the LTD2 program. In the Code, the
administrator must terminate initial or continued disability benefits to a non-public safety or
public safety employee covered by the program
if
the.employee has attained the age of 65 or a
later age
if
required under federal law.
After discussions on the termination of LTD2 benefits for affected employees turning 65, the
parties have come
to
an agreement to recommend amending the termination date in the County
Code
:&ofil:
age 65 to age 70.
This Agreement takes into account that full unreduced Social Security benefits are not available
to employees born after 1943 until the they reach the age of 66 or later (reduced benefits are still
available at age 62). On average affected County employees were born after 1943. The income
replacement, or monthly benefit, payable from the County's Long Term Disability Plan (LTD2)
stops at age 65 as defined in the Code. Stopping at age 65 forces participants receiving LTD2
benefits, who are not i:eceiving Social Security disability benefits, to apply for the reduced Social
Security benefits when the L1D2 benefit ends ~t 65. Taking a reduction from the full benefit
from Social Security places an undue hardship on the LTD2 participants. The bulkofthose
participants receiving LTD2 benefits became disabled performing their day-to-day County duties
and were awarded service connected disability benefits. Providing-this increased benefit for the
approximately 6,000 employees covered by the program results in a very minimal increase in the
monthly
premium paid by the County and employees and results
in
a better alignment with
benefits provided by the Social Security Administration.
However
minimum,
the parties recognize that there is an increased cost both to the County and
to the affected employees. To address this increase in LTD2 benefits,
the
parties agree that the
contribution amount will increase for each party, but the cost sharing will remain the same at the
current 75/25 percentage level, with the County's share at 75 percent and the affected employees
.at25%.
.
The parties will submit legislation to the County Council that would amend Montgomery County
Code
to
provide for this change in LTD2 benefits. This change to the benefits
will
be effective
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.,
,
•· 1.,
January 1, 2017 and
will
also apply
to
individuals receiving benefits or entitled to benefits as of
that date.
IN WITNESS WHEREOF, the parties hereto have caused their names to be subscribed by their
duly authorized officers and representatives this_ day of October 2017.
For the Union
_gL".':1,..:s,
~.
Isiali Leggett,
Cul.L'Ul.L V-1-:,
!'.)_
/0-
11-17
Date
Gino Renne, President
IJ/JJ/rf
~~ t./~ _;f ~
Timo thyL Firestine, CAO
Chief Administrative Officer
Date