Disability Retirement Benefits - PSERs

Public School Employees’ Retirement System
Let’s Talk About
Disability
Retirement
Benefits
Publication # 9540 4/2012

The Public School Employees’ Retirement
System (PSERS) provides this document
for educational and informational purposes.
Information in this document is general in
nature, does not cover all factual circumstances,
and is not a complete statement of the law or
administrative rules. The statements in this
document are not binding. In any conflict
between the statements in this document and
applicable law or administrative rules, the law
and administrative rules will prevail.
This document is designed solely to provide
an overview of benefi ts available to PSERS
members and is not intended to be a substitute
for retirement counseling. If you are considering
a disability retirement, you are encouraged
to contact PSERS to meet with a PSERS
Regional Representative. The representative
will guide you through the process to ensure
timely fi lling of your application.

Table of Contents
What is a Disability Benefi t? ................. 1
Eligibility................................................ 2
Monthly Payments ................................ 3
How do I Apply?.................................... 5
Charges for Requesting Medical
Information............................................ 6
Eligibility Determination ........................ 7
Date of Retirement Determination ........ 7
Appeals Process................................... 7
What if Appeals Process is
Exhausted?........................................... 8
Length of Benefi t .................................. 8
Benefi t Renewal Process ..................... 9
Working While Receiving a Disability
Benefi t ............................................. 9-10
Earnings Limitations ...................... 10-12
Health Insurance Choices ............. 13-14
Premium Assistance ........................... 15
Taxes on Benefi t ................................. 15
Retirement Options........................ 16-17
Topics to Discuss with Employer ........ 17
Contacting PSERS ............................. 18
Comparison of Benefi ts ................. 19-20

The disability retirement
benefit – What is it?
Unlike an insurance policy, a disability
retirement benefi t is an actual retirement
benefi t. You must fi le an Application for
Disability Retirement (PSRS-49) to be
considered for the benefi t.
Benefi ts are subject to approval, denial,
or renewal based on your medical
documentation and your job description.
PSERS reserves the right to review and/
or revoke your disability benefi t at any
time.
Generally, a disability retirement benefi t
is designed to provide at least one-third
of your fi nal average salary. If granted
disability benefi ts, you will receive a
monthly retirement benefi t payment for
as long as you are deemed disabled
and comply with the necessary requirements.
Your benefi t is subject to an
annual earnings limitation and ongoing
submission of medical documentation.
You may receive a disability retirement
benefi t from PSERS and receive a disability
benefi t from another plan such as
workers’ compensation, social security,
and/or an independent insurance company.
Receiving other disability benefi ts
will not affect your PSERS disability retirement
benefi t; however, your PSERS
disability retirement benefi t may affect
other disability benefi ts. Your insurance
provider or workers’ compensation carrier
may require you to reimburse them
for any retroactive disability retirement
1

enefi ts paid to you by PSERS. It is
your responsibility to contact those
insurance carriers regarding PSERS
payments.
Am I eligible?
To apply for a disability retirement
benefi t, you must:
Have become disabled while an
active member of PSERS and still be
disabled at the time you submit your
application. NOTE: Should you
become disabled after you terminate
service with your employer, you are
not eligible for a PSERS disability
retirement benefi t.
Have at least fi ve years of credited
service with PSERS.
Be physically or mentally unable to
perform the duties as stated in your
job description.
Apply for disability retirement benefi
ts within two school years of your
last day of service or paid leave,
whichever is later; and you must be
disabled at the time of application.*
*For example, if you leave service in March of
the current school year, you have two school
years (July 1 through June 30) from the close
of the current school year to apply. If you do
not apply within the two school years, you will
forfeit all rights to apply for a disability retirement
benefi t.
2

PSERS does not require you to terminate
your position to be eligible to apply
for a disability retirement benefi t. If you
apply while an active contributing member,
you must go on unpaid leave or
terminate employment within 30 days of
submitting your application to PSERS.
If at a later date you are able to return to
the job, there is no guarantee that your
employer will keep the position open for
you. You may want to discuss this with
your employer.
You may not “switch” from a normal or
early retirement benefi t to a disability retirement
benefi t. A disability retirement
benefi t is not available to members who
are already receiving a normal or early
PSERS retirement benefi t.
How much retirement income
will I receive if I retire with a
disability retirement benefit?
Provided you have reached at least
16.667 years of credited service, your
disability retirement benefi t is equal
to the Maximum Single Life Annuity
(MSLA) minus any reductions for options
chosen by you. If you have less
than 16.667 years of credited service,
additional factors are applied.
3
A disability supplement may be included
as a part of your disability retirement
benefi t. The disability supplement
removes the effects of early retirement
penalties if you have not reached
normal retirement age. If you have
reached normal retirement age, the

supplement is not included in the benefi t
calculation.
For Class T-C or Class T-E members,
PSERS disability retirement benefi t is
intended to provide you with at least
one-third of your fi nal average salary
if you are not eligible for normal retirement.
For Class T-D or Class T-F
members, a PSERS disability retirement
benefi t is intended to provide you with
40% of your fi nal average salary if you
are not eligible for normal retirement.
PSERS suggests that you obtain a
disability retirement estimate before applying
for the benefi t. Contact PSERS
to receive a Request for Retirement
Estimate (PSRS-151) form. This form is
also found on the PSERS website.
When you complete the estimate
request, be sure to check the Disability
box to request a disability retirement
estimate. Return the completed form to
the PSERS fax number or address listed
on the form. PSERS will prepare and
send you a regular retirement estimate
and a disability retirement estimate by
return mail.
4

How do I apply for a disability
retirement benefit?
PSERS strongly suggests that you
attend a disability retirement counseling
session conducted by a PSERS Regional
Representative before applying
for a disability retirement benefi t. By
attending a PSERS counseling session,
you avoid some of the common
mistakes which may lead to a delay in
processing.
At the counseling session, the Representative
will review your retirement estimates,
explain the application process,
and assist you in completing the PSERS
Application for Disability Retirement
Packet which will be provided at that
session. Attendance at a counseling
session will ensure that you are
provided with the information you need
to have your benefi t processed timely.
The contact information to schedule an
appointment with a PSERS regional
offi ce is found on page 18.
To apply for a disability retirement
benefi t, you must complete and submit
the following forms to PSERS no earlier
than 30 days before you begin an unpaid
leave or your date of termination:
Application for Disability Retirement
(PSRS-49). You will complete this
application during or after your
PSERS counseling session.
Job Description (PSRS-1236). Your
employer completes this form.
5

Physician’s Medical Report(s)
(PSRS-1237). Your physician(s)
complete this form.
Your physician should provide an
evaluation of your medical history as it
affects your ability to perform assigned
duties. This information should refl ect
your physical and/or mental condition as
of your last day of paid service as well
as your current condition. If the medical
information submitted is insuffi cient
to make a determination, the PSERS
medical examiners will request that you
provide additional information from your
physician(s).
If you are applying prior to your termination
or unpaid leave start date, your
employer must electronically submit
to PSERS an unpaid leave status or
a termination date within 30 days of
the date your application is received
by PSERS. The effective date of your
unpaid leave status or termination must
be within 30 days of your application.
Any missing and/or insufficient required
medical information will delay
the processing of your application.
Who is responsible for
charges incurred to provide
the medical information?
You are responsible for any cost to
obtain the medical information needed
to determine your disability status.
6

Who determines my eligibility
for the disability retirement
benefit?
PSERS determines approval or denial
of the disability retirement benefi t with
recommendation from PSERS medical
examiners.
How is my date of disability
retirement determined?
The benefi t effective date of a disability
retirement is the day after your last day
of paid service or paid leave, whichever
is later. You may not select your own
disability retirement effective date.
What if my request for a
disability retirement is denied
by PSERS?
If your request is denied by PSERS, you
may appeal the denial and request an
Administrative Hearing by writing to:
Offi ce of Chief Counsel
Public School Employees’ Retirement
Board
5 N 5th Street
Harrisburg PA 17101-1905
This hearing is held before an independent
hearing examiner. Legal counsel
may represent you and you may appear
before the hearing examiner.
7

If you do not receive a favorable result
at the conclusion of the administrative
hearing process, you may appeal the
decision to the Commonwealth Court.
What if I have exhausted all
steps in the appeals process
and I’m still denied?
There are a number of options available
to you if you are denied a disability
retirement benefi t. Different membership
classes and circumstances have
different benefi t eligibility requirements.
Contact your PSERS Regional Offi ce
to speak to a counselor regarding the
choices available to you.
More information is also found on the
PSERS website and in the PSERS
publication Your Retirement Benefi ts
and Leaving Employment (PSRS-9580).
How long am I entitled to a
disability retirement benefit?
At the time your disability retirement
benefi t is approved, PSERS will
determine the terms and conditions of
your benefi t. The length of time of your
disability is determined by the fi ndings
of the PSERS medical examiners review.
You may be subject to a periodic
renewal and/or review process.
8

How will I know when it’s
time to renew the benefit?
PSERS sends an Application to Reapply
for Disability Benefi ts (PSRS-1238)
to those retirees subject to a periodic
renewal. The renewal application must
be completed by your physician and
returned to PSERS by the date stated
on the application. If you fail to return
the application by the due date, you risk
having your monthly disability retirement
benefi t suspended.
Continued failure to return the application
will result in the denial of
your disability retirement renewal
and stop your disability retirement
benefit. You will also need to return
to PSERS any overpayment of your
benefit.
If your renewal is denied, you have the
right to appeal the decision. Refer to
“What if my request for a disability retirement
benefi t is denied?” on page 7.
If you are denied a continuation of your
disability retirement benefi t and you are
eligible to receive an early retirement
benefi t, your retirement benefi t is calculated
using the reducing factors in effect
at the time of your original disability
retirement date.
May I work while receiving a
disability retirement benefit?
9
You may be employed while receiving a
disability retirement benefi t from
PSERS. You are not, however,

permitted to return to work for a Pennsylvania
public school employer without
the loss of your monthly benefi t unless
you qualify for specifi c exceptions.
These exceptions are further explained
in the PSERS publication, PSERS Return
to Service Guidelines (PSRS-9682),
located on the PSERS website.
If you are employed while receiving a
PSERS disability benefi t, an earnings
limitation is imposed on the amount you
earn yearly. See “Is my disability retirement
benefi t affected by other earnings
that I may have?” next.
Please note: Your ability to be employed
in any capacity, inside or outside of
Pennsylvania, may raise questions
about your medical eligibility to receive a
disability retirement benefi t.
Is my disability retirement
benefit affected by other
earnings that I may have?
Each year PSERS sends an Annual
Earnings of a Disability Annuitant letter
to each retiree under normal retirement
age receiving a disability retirement
benefi t. The purpose of this letter is to
determine whether or not you are working
in another job, and if so, whether you
are exceeding the amount you may earn
per year without having to return money
to PSERS.
10

Your yearly earnings plus your yearly
disability benefi t cannot exceed your
annual earnings limitation, which is
generally based on your last school year
salary.
For example - Your last school year
salary was $40,000. This makes your
earnings limitation also $40,000. If your
annual PSERS disability retirement
benefi t is $25,000, you cannot earn
more than $15,000 of additional earned
income per year without having to return
money to PSERS.
If your yearly income exceeds your earnings
limitation, you will need to return the
difference to PSERS. You may choose
to return the excess earnings in one of
two ways:
A lump-sum payment within 30
days
Your monthly benefi t is reduced
by the amount of the disability
supplement until the overpayment
is recovered.
When completing the Annual Earnings
Statement, you should only report
earned income. Earned income is
compensation received by you for work
as an employee of any business or by
being self-employed. The following are
not earned income and should not be
reported:
11

Disability payments
Retirement benefi ts
Social Security benefi ts
Workers’ compensation
Investment income
Dividends
Child support
Spousal support
Additionally, you should not report
wages received from your school employer
earned before the effective date
of your disability retirement.
The Annual Earnings Statement should
be completed and returned to PSERS as
soon as possible, but no later than the
date specifi ed on the statement. If this
form is not completed and returned to
us by the requested date, your monthly
disability retirement benefi t will be
suspended.
Continued failure to return the form will
result in the forfeiture of all rights to the
disability retirement benefi t in excess of
any early or normal retirement annuity to
which you were entitled.
You will need to complete an Annual
Earnings Statement yearly until you
reach superannuation age. For
superannuation requirements, refer to
the PSERS publication, Your Benefi ts
and Leaving Employment (PSRS-9580)
found on the PSERS website.
12

What health insurance
choices are available to me?
1. You may be eligible to have private
health insurance coverage, including
individual or spousal. Such coverage,
however, does not qualify for
premium assistance. (See following
question.)
2. You may be eligible to remain in your
employer’s group health insurance
plan. Consult with your employer
regarding continuance of their health
insurance coverage.
3. The PSERS Health Options Program
(HOP) is available for all retirees,
their dependents and survivors.
HOP offers comprehensive medical
coverage before and after you
become eligible for and enroll in
Medicare.
You and your eligible dependents
may enroll in HOP within 180 days of
a qualifying event:
13
You retire or lose health care
coverage under your school
employer’s health plan. (Coverage
under your school employer’s
health plan includes any COBRA
continuation of coverage you may
elect under that school employer
plan.)
You involuntarily lose health
coverage under a non-school employer’s
health plan. (Coverage
under your non-school employer’s

health plan includes any COBRA
continuation of coverage you
may elect under that non-school
employer’s health plan.)
You or your spouse reach age 65
or become eligible for Medicare.
You experience a change in family
status (including divorce, your
death or the death of a spouse,
addition of a dependent through
birth or adoption, your marriage,
or loss of a dependent through
loss of eligibility.)
You become eligible for premium
assistance due to a change in
legislation.
A plan approved for premium assistance
terminates, or you move
out of a plan’s service area.
HOP provides pre-65 health insurance
coverage for individuals not eligible for
Medicare. You may choose a managed
care plan, where available, or a
fee-for-service plan. HOP also provides
Medicare supplemental and Medicare
Advantage if you are eligible for Medicare.
You must be receiving Medicare
Part A and B coverage to enroll in a
Medicare supplemental and Medicare
Advantage plan.
Comprehensive descriptive material and
enrollment information is available upon
request by contacting the HOP Administrative
Unit at 1-800-773-7725 or on the
HOP website at www.hopbenefi ts.com.
14

Is a disability retiree eligible
for Premium Assistance?
Premium assistance is a reimbursement
of out-of-pocket expenses for the cost of
the retiree’s basic health insurance. Up
to $100 per month is available to eligible
PSERS retirees receiving a disability
retirement benefi t provided they have an
out-of-pocket expense for basic health
insurance coverage from one of the
following:
PSERS Health Options Program
A Commonwealth public school
employer’s group health insurance
plan that is certifi ed with
PSERS.
The amount of premium assistance
you receive cannot exceed the actual
premium you pay for basic coverage.
Premium assistance is a tax-free
reimbursement added to your monthly
benefi t. Contact the Internal Revenue
Service (IRS) if you require further
details regarding tax implications.
Is my disability retirement
benefit taxable?
Your PSERS disability retirement benefi t
is subject to federal taxes but not to
Pennsylvania state or local taxes. If
you reside in or you move to another
state, you should check with that state
regarding taxes that may be due on your
disability retirement benefi t.
15

For additional information on taxes,
please contact a tax advisor or the Internal
Revenue Service (IRS).
What disability retirement
options are available to me?
Maximum Single Life Annuity
(MSLA) - You will receive the maximum
monthly benefi t for as long as your disability
benefi t continues to be granted.
If you die, any remaining balance in the
present value of your retirement benefi t
will be paid to your benefi ciary(ies). Under
this option, you may name more than
one benefi ciary and you can change your
benefi ciary(ies) at any time.
Option 2 - You will receive a reduced
monthly benefi t based on your age and
gender and the age and gender of your
survivor annuitant at the time of disability
retirement. At the time of your death, your
survivor will receive the same amount per
month that you would have received if
you had retired under a normal or early
retirement benefi t. Under this option you
may name only one survivor annuitant.
Option 3 - You will receive a reduced
monthly benefi t based on your age and
gender and the age and gender of your
survivor annuitant at the time of disability
retirement. At the time of your death,
your survivor will receive one-half of
the amount per month that you would
have received if you had retired under
a normal or early retirement benefi t.
Under this option, you may name only
one survivor annuitant.
16

Customized (Special) Option 4 – This
is a customized payment plan for your
monthly benefi t. To select this plan,
it must be actuarially equivalent to
Maximum Single Life Annuity. As with
both Options 2 and 3, the disability
supplement (if applicable) is removed for
the survivor annuitant.
You may not change your survivor annuitant
or retirement option under Options
2, 3, or the Customized (Special) Option
4 unless your original survivor annuitant
predeceases you or your marital status
changes. If this situation occurs, contact
PSERS to discuss your next steps.
When you receive a PSERS disability
retirement benefi t, no matter what option
you select, you may not withdraw any
portion of your contributions and interest.
Special Rules for Class T-E and
Class T-F
If you are a Class T-E or Class T-F
member who has fewer than 10 years of
credited service with PSERS, you may
only select the Maximum Single Life
Annuity option.
Before I make a decision,
what would you suggest I
discuss with my employer?
The following is a list of suggested topics
to discuss with your employer. There
may also be other items to discuss
17

which are unique to your employer or
bargaining unit contract.
Sick, vacation, personal and
emergency paid leave
Workers’ Compensation
Sabbatical Leave
School-sponsored Disability
Insurance
Leave of Absence (Paid and/or
Unpaid)
o Length of leave
o How long position will be
held
Health Insurance
Life Insurance
Resignation
Contacting PSERS
You may contact PSERS toll-free at
1-888-773-7748 from 7:30 a.m. to 5:00
p.m., Monday through Friday, except
on State holidays. PSERS also has
regional offi ces located throughout the
state. Their core operating hours are
8:30 a.m. to 5:00 p.m. A complete list
of all PSERS regional offi ces is found
on PSERS website under Regional
Offices.
Harrisburg Headquarters
5 N 5th Street
Harrisburg PA 17101-1905
Toll-Free: 1-888-773-7748
Local Telephone: (717) 787-8540
Email address: ContactPSERS@pa.gov
Website: www.psers.state.pa.us
18

Comparison of Retirement Benefits
Terms of Retirement
Requires termination of employment to apply
Must meet medical eligibility
May withdraw contributions and interest at
retirement
May be revoked by PSERS at any time
based on medical status
Subject to renewal
Subject to yearly earnings statement
Restriction of earned income
School employment in another state may
jeopardize PSERS benefi t
May work in Pennsylvania public schools
under exceptions allowing retirees to be
employed for emergency, shortage of
personnel, or extracurricular situations
Eligible for cost-of-living adjustments without
regard to superannuation qualifi cations
Eligible for premium assistance without
regard to service credit and/or age
19

Normal/Early
Class T-C/T-D
Normal/Early
Class T-E/T-F
Disability
Yes Yes No
No No Yes
Yes
No
No
No No Yes
No No Yes
No No Yes
No No Yes
No No Yes
Yes Yes Yes
No No Yes
No No Yes
20

5 N 5th Street
Harrisburg PA 17101-1905
www.psers.state.pa.us
ContactPSERS@pa.gov