With the exception of the Tier 1 Firefighters Retirement System, URS does not offer a disability retirement plan. Refer to information later in this section about the Tier 1 Firefighters Disability Retirement Plan.
Members have an opportunity to accrue retirement service credit, if their employer covers them with a benefit protection contract through URS. Exception: Members of the Utah Governors and Legislators Retirement Plan are not eligible for benefit protection coverage.
Benefit Protection Contract – A contract between URS and a participating employer. An approved contract allows service credit to accrue during the period eligible members receive LTD benefits or for members of the Tier 2 Defined Contribution Plan to receive nonelective employer contributions.
With benefit protection members accrue retirement service credit during the time they receive LTD monthly benefits until they are either terminated from LTD by their insurance company, or they can apply for a monthly URS retirement benefit without an early age reduction, if they qualify. Members of the Tier 2 defined contribution plan will receive nonelective employer contributions until they are either terminated from long-term disability by their insurance company, or when the member would have been eligible to retire if the member was covered by the defined benefit portion of the Tier 2 hybrid retirement system.
Approval for LTD benefit protection coverage is contingent on the employer’s disability plan meeting substantial equivalency guidelines in accordance with statutory and Board requirements. Refer to the list of substantial equivalency guidelines later in the Employer Guide. Employers are not required to sign a benefit protection contract if they have LTD coverage through PEHP.
URS does not require contributions for Tier 1 LTD benefit protection coverage because the cost of service credit accrual is incorporated into the Tier 1 contribution rate of active members.
Employers have the option of covering Tier 2 members under their current benefit protection contract or waiving such coverage (with the exception of Tier 2 Public Safety and Firefighter Service Employees which is required for either long-term disability or workers’ compensation).. If the employer decides to cover Tier 2 members under their current benefit protection contract, they will be required to pay the total contribution rate for any Tier 2 member approved for LTD.
If employers want LTD benefit protection for their employees, they should complete and submit a Benefit Protection Contract Request (BPCR-1) to URS before their LTD plan goes into effect. Employers must submit a copy of their entire LTD policy for us to review for substantial equivalency.
If the policy complies, eligible employees will accrue retirement service credit after the effective date of the contract for the period approved for LTD benefits or for members of the Tier 2 Defined Contribution Plan to receive nonelective employer contributions.
If the policy does not comply, URS will notify the employer and explain the deficiencies in the policy. In this case, employers have the option to amend their policy to meet substantial equivalency to provide benefit protection for their eligible employees.
Members of the Tier 1 Public Safety Retirement Systems and the Tier 2 Public Safety & Firefighter Retirement System must be covered by their employers with LTD insurance either through PEHP or a substantially similar LTD program, or they must be covered through a workers’ compensation benefit protection contract.
Firefighters in the Tier 2 Public Safety & Firefighter Retirement System must be covered by their employers’ LTD insurance through PEHP or they must be covered through a workers’ compensation benefit protection contract.
Tier 1 Firefighters may be covered by a benefit protection contract.
Any insurance company that pays a lump-sum settlement, to a member approved and receiving monthly disability benefits, and covered by a benefit protection contract, jeopardizes benefit protection coverage. Service accrual will cease for all members covered by the insurance policy.
Employers must inform our office if they change insurance companies or are considering changing companies after a benefit protection contract is in place. Changing LTD insurance companies requires employers to go through the benefit protection process anew if they wish to provide retirement service accrual for their disabled employees.
Our office approves LTD policies for substantial equivalency according to each employer’s individual LTD policy. There is no blanket approval of LTD policies written by individual insurance companies. Also, any changes affecting substantial equivalency of an LTD policy previously approved by our office could make a benefit protection contract invalid.
Benefit protection is not automatic unless members have LTD coverage through PEHP (this excludes Tier 2 members).
Tier 1 employees who have exempted from retirement coverage are not eligible to accrue service credit under a benefit protection contract.
Members who return to work for a participating employer after retirement are not eligible for PEHP LTD or any type of benefit protection.
Employees who apply for LTD or are approved for LTD benefits, and are covered under a benefit protection contract, are not eligible to receive a refund of member retirement contributions.
Employers covered by a benefit protection contract are required to submit an annual report to our office that identifies the following:
» The employees receiving LTD benefits under policies approved under the benefit protection contract;
» The employees who applied for LTD benefits and are waiting for approval; and
» The insurance carriers that are actively providing LTD benefits.
Under Utah law, if employers fail to provide the annual report, benefits that would have accrued under the benefit protection contract are forfeited.
Procedures
1. Contact our Retirement Benefits Department at 801-366-7770 or 800-695-4877 for information on how your retirement account may be affected if you apply for, or have been approved to receive, LTD benefits.
2. Contact our Retirement Benefits Department if your insurance company offers you a lump-sum settlement or informs you LTD benefits will be terminated. Our office requires verification of separation from your insurance company if you apply for a monthly service retirement benefit or a refund of member contributions.
1. Contact Employer Services at 801-366-7318 or 800-753-7318 for more information about benefit protection for your employees.
2. Notify Employer Services at 801-366-7318 or 800-753-7318 when a member applies for LTD or is approved for LTD benefits through completion of the Long-Term Disability Explanation of Benefits (Form LTD-2).
3. Certify LTD information annually based on criteria set by our Employer Services Department.
4. Notify Employer Services at 801-366-7318 or 800-753-7318, if a member who receives LTD benefits returns to work or has their LTD benefits terminated for any other reason.
For members of the Public Employees Noncontributory and Contributory Retirement Systems, report earnings and pay retirement contributions if members meet one of the following:
a. Return to employment normally requiring an average of 20 or more hours per week and receive benefits normally provided as approved by the Retirement Board; or
b. Return to teach half time or more and receive benefits normally provided as approved by the Retirement Board; or
c. Return to employment normally requiring an average of 20 or more hours of work per week as a classified school employee, regardless of benefits provided.
5. Report earnings and resume paying retirement contributions if members of the Public Safety or Judges Retirement Systems return to work at the rate of 40 hours per week.