Secure Your Future
When serious illness strikes...
Disability protections for UFT members
Mar 30, 2006 4:37 PM
What would happen to a member who becomes seriously ill, uses up her or his sick days and still cannot come back to work? The member gets a grace period and then begins a leave of absence without pay. After the grace period the UFT Welfare Fund provides a benefit of $275 per week for up to 28 weeks. But what if after that, the member still cannot return to work? Perhaps the person can never come back to work. What’s a member to do?
We have frequently talked about service retirement benefits and about the important death benefits available from the Teachers’ Retirement System. We have not as often talked about the very valuable set of benefits available from TRS and Social Security to protect you from the financial ruin of a long-term disability. Statistics show that for in-service members who are younger than 65 (more than 97 percent of TRS members) it is much more likely in the short term that they will suffer a long disabling condition than that they will die. Disability protection is essential.
Social Security provides significant disability benefits for eligible disabled workers. These benefits cover the worker, a spouse and children up to age 16. The family benefit in 2006 for a low earner ($20,000 per year) is more than $1,300 per month and for a high earner ($94,200 per year) is more than $3,000 per month. The size of the benefit depends on the age of the disabled worker, the spouse and children, as well as the size of the family, and is indexed for inflation. This is a significant base of income and is one of the reasons why the UFT fights so hard to keep Social Security as a complete insurance program.
In addition, TRS benefits protect members with three different disability programs:
Ordinary Disability Retirement — In-service members of TRS who have become physically and/or mentally incapable of performing their work duties may apply for disability retirement. In order for it to be granted, most members must have 10 years of total service (Tier III members have special rules). The application requires supporting medical documentation. The TRS Medical Board will review the application and arrange for an examination with the Board’s doctors.
Once approved, a Tier I/II member gets a disability benefit of at least 20 percent of final average salary (FAS). It could be more. Tier III/IV members get a minimum benefit of 33.3 percent of FAS — or more. As of the latest readily available information, there were 1,801 TRS retirees collecting disability pensions. The average allowance they were collecting was more than $18,600 per year and their ages ranged from 35 to 90-plus, with many in their 30s or 40s. As you can see, a person can collect this benefit for a lifetime. If the member recovers, she or he has the right to return to work.
Accident Disability Retirement — Unfortunately, even a brand-new TRS member might be injured in the line of duty and become disabled as a result of that injury. Therefore, there is no 10-year service requirement. There are currently 459 TRS members collecting an Accident Disability Retirement and their average allowance is about $34,000 per year. For the last four school years an average of 16 Accident Disability Retirements have been granted.
It is essential that every accident that occurs be reported officially to both the school administration and to the UFT chapter leader in order to protect the member. Application time limits are very rigorously enforced. An accident report must be on file in order to begin the application process.
The application must be accompanied by medical documentation and the member’s physician must state that not only is the member disabled but that the disability was caused by the accident.
If Tier I/II members are approved they get a benefit equal to at least 75 percent of their five-year FAS. Tier IV members get a benefit of at least 66.6 percent of their three-year FAS.
Speak to your tax advisor about the very favorable federal tax treatment of an Accidental Disability Retirement Allowance. Inform him or her that this benefit is in lieu of Worker’s Compensation.
Lump-Sum Disability Benefit — In general, in-service members of TRS who have been diagnosed with a terminal illness and have a life expectancy of one year or less may be eligible to receive a lump-sum disability benefit instead of a monthly check. This benefit is calculated to be the value of the death benefit the member would receive if he or she died in active service.
This benefit is generally selected by a person with large medical or care-related expenses that are not covered by insurance who needs money to meet them. If this benefit is elected, there will be no benefits payable to surviving beneficiaries.
Questions on these topics can be answered by TRS staff or pension consultants in your UFT borough office.
While these benefits provided by Social Security and TRS are considerable, they may not be sufficient and many members feel the need to get additional disability insurance. The NYSUT Member Benefits Trust makes available a Disability Insurance Program. For information, contact NYSUT Member Benefits at 1-800-626-8101 or at www.memberbenefits.nysut.org.
TRS reminders
- Have you documented your date of birth?
- Do you have up-to-date designations of beneficiary on file for the QPP and the TDA?
- Is your current address on file?
