Jeff Pabst, CRC
As you know, LAGERS is considered a great tool for recruiting and retaining employees by providing a retirement benefit that continues to grow throughout their career. This growing retirement benefit is top of mind when employees think about what LAGERS offers them, but don’t forget: LAGERS also includes disability and survivor benefits. If something were to happen to an employee before retirement, they still may be eligible for a LAGERS benefit.
LAGERS Disability Benefits
When an employee becomes totally and permanently unable to perform their current job, they may be eligible for a LAGERS disability benefit. The amount paid in a monthly benefit and the employee’s eligibility will depend on the nature of the disability. If the disability occurred due to non-work related injury or illness, a vested employee will be eligible to receive their current vested benefit for life at the time of disability. However, if the disability was caused by work related activities, the employee doesn’t need to be vested to be eligible. As well, a duty related benefit extends service credit as if the employee worked until age 60.
LAGERS Survivor Benefits
When an employee passes away while an active LAGERS’ member, their surviving spouse or dependent children may be eligible for survivor benefits. Similar to LAGERS disability benefits, a survivor’s eligibility will depend on the member’s vested status and the nature of their death. If the death occurred because of non-duty related accident or illness, the member must have been vested upon their death and the benefit will be based on the member’s current service credit at the time of death. If the death was a duty related accident or illness, the member does not need to be vested at the time of death. As well, a duty related death benefit extends service credit as if the employee worked until age 60.
If there is a survivor’s benefit payable, the first person payable is a spouse of at least 2 years (no time requirement if death was an accident). The eligible spouse will receive approximately 60% to 64% of the member’s benefit for life determined by the Option A payment option. If there is no spouse payable, each dependent child will receive an equal share of 60% of the member’s benefit until they are no longer considered a dependent. For LAGERS purposes, a dependent child is defined as a biological or adopted child up to the age of 18. If the child goes from high school to higher education, it extends to the age of 23. If the dependent child gets married, they are no longer considered a dependent.
What’s it cost?
As an administrator of LAGERS benefits, I’m sure you’re asking, “How much do these benefits cost?” The answer: It’s already included in your current contributions to LAGERS! A portion of your rate, called the casualty rate, pre-funds a pooled fund that all of LAGERS employers pay into. When an employee leaves on a duty related disability or death benefit, the funds necessary to pay for the extension of service credit come from this fund. By utilizing a pooled fund, the risk of employee disabilities is spread across all of LAGERS 800+ employers, resulting in more stable long-term employer contribution rates.
So, don’t forget; LAGERS isn’t only a retirement benefit. We also provide you and the employees with disability and survivor benefits as well.
