WAC 415-104-480   LEOFF Plan 2 duty disability benefits.  This section applies to you if you are a LEOFF Plan 2 member who incurs a disability in the line of duty per RCW 41.26.470 (6) and (7) and this section.

     (1) Who is entitled to duty disability benefits? Any member of LEOFF Plan 2 who the department determines has:

     (a) Incurred a physical or mental disability in the line of duty;

     (b) Become totally incapacitated for continued employment in a LEOFF eligible position; and

     (c) Separated from a LEOFF eligible position due to the disability.

     (2) How is "line of duty" defined? Line of duty means any action or activity occurring in conjunction with your employment or your status as a law enforcement officer or fire fighter and required or authorized by law, rule, regulations, or condition of employment or service.

     (3) When are the duty disability provisions effective? The duty disability provisions under RCW 41.26.470 (6) and (7) are effective June 10, 2004.

     (4) How do I apply for duty disability benefits? The department must receive:

     (a) A completed three-part disability retirement application on the form provided by the department.

     (i) Part 1: Disability retirement application. You must complete and sign the application. If you are married, your spouse must sign consenting to the retirement payment option you choose. Your signature(s) must be notarized.

     (ii) Part 2: Employer's statement and report. Your employer must complete, sign and return it directly to the department.

     (iii) Part 3: Medical report. You must complete Section 1. The remainder must be completed and signed by a person licensed according to Washington state law to practice medicine and surgery, osteopathic medicine and surgery, chiropractic, clinical psychology, podiatry, dentistry, or optometry;

     (b) Additional information requested by the department; and

     (c) Any other material you want the department to consider.

     (5) What evidence will the department use to determine whether I am entitled to benefits under this section? The department will consider any relevant information submitted by you or your employer, or otherwise available to the department, including:

     (a) Information and determinations by the department of labor and industries (L&I) or a self-insurer;

     (b) Medical, vocational, and other information about your disability;

     (c) Your job description;

     (d) Your membership records, maintained by the department; and

     (e) Any other relevant evidence.

     (6) What would disqualify me for duty disability benefits? You are not eligible for duty disability benefits if any of the following apply:

     (a) Your application does not provide adequate proof that you are totally incapacitated for continued employment in a LEOFF-eligible position;

     (b) Your application does not provide adequate proof that your disability was incurred in the line of duty;

     (c) The disability occurred as a result of intentional misconduct including but not limited to:

     (i) An action you took intentionally to bring about your own disability;

     (ii) Gross negligence on your part; or

     (iii) Your voluntary intoxication. As used in this section, "intoxication" means a disturbance of mental or physical faculties resulting from the introduction of:

     (A) Alcohol into the body as evidenced by:

     (I) A blood alcohol level of .20 per centum or greater; or

     (II) A blood alcohol level of at least .10 per centum but less than .20 per centum unless the department receives convincing evidence that the officer or fire fighter was not acting in an intoxicated manner immediately prior to the injury; or

     (B) Drugs or other substances in the body.

     (7) Who decides if I meet the requirements for benefits under this section? The LEOFF plan administrator.

     (8) May I petition a decision made by the LEOFF plan administrator? Yes. If the LEOFF plan administrator denies your request for a disability benefit under this section, you may petition for review under chapter 415-04 WAC.

     (9) What are the duty disability retirement benefits? As a duty disability retiree, you may choose between:

     (a) A nontaxable, one-time lump sum payment equal to one hundred fifty percent of your retirement contributions; except that, any payments made to restore service credit after the five-year deadline will be paid at one hundred percent; or

     (b) A monthly allowance equal to:

     (i) Ten percent of your final average salary (FAS), which is nontaxable; and

     (ii) Two percent of your FAS for each year of service beyond five years.

     Your monthly allowance will not be adjusted for early retirement. However, if you choose a benefit option with a survivor feature as described in WAC 415-104-215, your monthly allowance will be actuarially reduced to offset the cost. The factors used to determine the amount of the reduction are in WAC 415-02-380.

Example:

Tom incurs a duty disability at age 42 after twenty years of service. His final average salary is $5000 per month. Tom's wife is also age 42. He chooses Benefit Option Two so that, after his death, his wife will receive a monthly allowance equal to the gross monthly allowance he was receiving. See WAC 415-104-215 (2)(b).

     Tom's minimum duty disability allowance, calculated at 10 percent of his final average salary (FAS) is:

Allowance	$5000 X 10% =	$500
Allowance after the actuarial reduction for Option Two (survivor feature)	$500 X 0.87 =	$435 (nontaxable)

     In addition, Tom will receive:

Allowance	15 years X 2% X FAS ($5000) =	$1500
Allowance after the actuarial reduction for Option Two (survivor feature)	$1500 X 0.87 =	$1305

     Tom will receive $435 (nontaxable) plus $1305 (taxable), for a total monthly allowance of $1740.

     (10) Are my duty disability benefits taxable? The department reports disability benefits to the Internal Revenue Service as required by federal law. Based on current federal law, part of your benefit may be taxable. You should consult with your own tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department.

     The department does not:

     (a) Guarantee that payments are exempt from federal income tax;

     (b) Guarantee that it was correct in withholding or not withholding taxes from benefit payments to you;

     (c) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its determination; or

     (d) Assume any liability for your compliance with the Internal Revenue Code.

     (11) If I previously withdrew my contributions, may I apply for duty disability benefits? If you separated from employment due to a disability and withdrew your contributions, you may apply for duty disability benefits according to the provisions of subsection (4) of this section.

     (12) If I previously withdrew my contributions and am approved for duty disability benefits, what will I receive as a benefit? If the LEOFF plan administrator determines you are entitled to duty disability benefits, the department will amend Internal Revenue Service reporting to designate your previous withdrawal as nontaxable. In addition, you may choose either of the following:

     (a) If you previously withdrew 100% of your contributions, you may choose to receive an additional lump sum payment equal to 50% of the contributions you withdrew. The payment will be nontaxable; or

     (b) If you previously withdrew 100% or 150% of your contributions, you may choose to receive a monthly allowance according to subsection (9) of this section. You must repay the amount you withdrew, either in a lump sum payment or by having your monthly allowance permanently actuarially reduced to offset the amount of your previous withdrawal.

Example:	John was injured on the job and separated from his LEOFF position in March 2002. At the time he separated, he was 43 years old, had 10 years of service, and his final average salary was $5,000.00 per month. At that time, John chose to withdraw $75,000, which equaled 150 percent of his retirement contributions.
	John subsequently applied under the provisions of RCW 41.26.470 (6) and (7) and was deemed eligible for duty disability benefits.
	The department calculated John's benefit according to the methods in subsection (9) of this section. John determined it was to his advantage to take a monthly allowance.

     If John repays the entire amount he withdrew in a lump sum, his monthly allowance will be calculated according to the formula in subsection (9)(b) of this section:

Minimum monthly allowance	10% X FAS ($5000) =	$500 (nontaxable)
	Plus:
Monthly allowance	5 years X 2% X FAS ($5000) =	$500
John's total monthly allowance will be $1,0001.

     If John repays the withdrawn amount through a permanent actuarial reduction, his monthly allowance will be reduced as follows:

Monthly allowance (calculated above)	=	$1000
Reduction to repay the withdrawn amount ($75,000)	$75,000 X .0049904 (annuity factor, which is based on the retiree's age) =	-$374.28
Monthly allowance		$625.722

	1 Annuity factors are provided in WAC 415-02-340.
	2 If John chooses a benefit option with a survivor feature, as described in WAC 415-104-215, his monthly allowance will be actuarially reduced to offset the cost. Survivor option factors are provided in WAC 415-02-380.

     (13) When does a duty disability retirement benefit end? The department may require comprehensive medical examinations to reevaluate your eligibility for continued disability benefits according to the provisions of RCW 41.26.470(2). Your duty disability benefit will cease if:

     (a) You return to work in a LEOFF-eligible position; or

     (b) Medical examination reveals that you are no longer totally incapacitated for employment in a LEOFF eligible position and you are no longer entitled to workers' compensation benefits under Title 51 RCW.

     (14) If I retire for a duty disability and die, will my survivor beneficiary receive a monthly allowance? If you choose a benefit option with a survivor feature under WAC 415-104-215(2) at the time of retirement, your survivor beneficiary will receive a monthly allowance after your death.

     (15) What happens if I return to a LEOFF-eligible position? If you return to a LEOFF-eligible position, your monthly allowance will stop.

     (16) If I return to a LEOFF-eligible position, how will my future retirement benefit be affected? When you reretire, your monthly allowance will be calculated pursuant to RCW 41.26.500 and WAC 415-104-111.



[Statutory Authority: RCW 41.50.050(5) and 41.26.470 (6) and (7). 06-18-007, § 415-104-480, filed 8/24/06, effective 9/24/06. Statutory Authority: RCW 41.50.050(5) and41.26.470 . 04-22-074, § 415-104-480, filed 11/1/04, effective 12/2/04.]