SDRS Definition of Disability

A disability is defined for SDRS purposes as any medically determinable physical or mental impairment that is expected to last one year or more and prevents you from performing the usual duties of your job. Any condition that results from willful or self-inflicted injury does not qualify as a disability.

 

Eligibility Requirements

You are eligible to apply for disability retirement benefits after you have three or more years of consecutive contributory service with your most recent entry into active status. If you became disabled by accidental means while performing your usual job duties, you are eligible to apply regardless of your years of consecutive service.

If you have already quit working as a result of a condition that occurred while you were employed and are no longer making monthly contributions to SDRS, you have three years from your last contribution date to apply for disability retirement benefits. You must be able to prove that you were disabled at the time you left employment. You are not eligible for disability retirement benefits if more than three years have passed since your last contributions to SDRS or if you are receiving or have received a retirement benefit.

 

Amount of SDRS Disability Retirement Benefits

If you are approved for an SDRS disability retirement benefit, your benefit will be the greater of:

• 25% of your final average compensation at the time of disability*

OR

• Your unreduced accrued retirement benefit at the time of disability

* Please consult your Class handbook to determine how your final average compensation (FAC) is calculated.

Provided you remain disabled, the disability retirement benefit will be payable for your lifetime. SDRS disability retirement benefits receive an annual cost-of-living adjustment (COLA) effective July 1 of each year. To be eligible for the COLA, you must have received benefits during the entire prior fiscal year period (July-June). The annual COLA ranges from a minimum of 0% to a maximum of 3.5%.

If you recover from your disability, your benefit will terminate 30 days after your health care provider certifies that you are no longer disabled.

 

Important Points to Remember

• Applying for disability retirement benefits from SDRS does not mean that you will be approved for disability and receive a benefit. You must satisfy the SDRS definition of disability and meet the eligibility requirements.
• The complete submission of information pertaining to your application for disability retirement benefits is essential to the prompt processing of your application.
• Check with your employer about possible continuation of life and health insurance while on disability.
• Note while you are receiving disability retirement benefits, you must report changes in your employment status to SDRS. If you are or were under the age of 59 1/2 at the time of your effective date of SDRS disability retirement benefits, the Internal Revenue Service (IRS) can impose a tax penalty on your benefit payments if you return to service with any SDRS employer withing three consecutive calendar months of the effective date of your SDRS disability retirement benefits. This is service in any capacity, including part-time, temporary, seasonal, contractual, leased employee, or any other designation. South Dakota Retirement System staff cannot provide tax advice. We recommend that you consult with a qualified tax advisor.

 

Disability Retirement Application Process

The application process involves three participants: you, your employer, and SDRS. Each participant has distinct responsibilities in the process.

Your Responsibilities

1. First, you must thoroughly discuss with your employer the physical or mental impairment that prevents you from performing the usual duties of your job and ask for accommodations. Sometimes, workplace accommodations can be made to enable you to continue to perform the usual duties of your job. Also, if you are unable to perform the usual duties of your job, your employer may have comparable employment** with duties you can perform. Visiting with your employer may result in changes so you do not have to consider applying for disability benefits.
   **Comparable employment is defined as a different job with similar pay that your education, training, or experience enables you to perform.
2. After discussing the situation with your employer, you may contact SDRS to discuss eligibility requirements, the differences between disability retirement and retirement, the amount of disability retirement benefits, and the application process. SDRS will mail you a disability retirement application packet.
3. You have one year from the date we receive your Application for SDRS Disability Retirement Benefits to provide all information required for a complete application.
4. It is your responsibility to ensure that SDRS receives all the necessary documentation. Any costs associated with securing medical records are your responsibility.

Your Employer’s Responsibilities

1. Your employer must discuss any possible workplace accommodations for your current job. If performing the usual duties of your current job is no longer possible, your employer will discuss any available comparable employment with you.
2. These preliminary steps are necessary to enable your employer to complete and return the Employer Statement and Questionnaire. This form along with other documentation (i.e., job description, performance evaluation, salary history, etc.) is required before your application can be evaluated.
3. When you have ended your employment, your employer will submit a form to SDRS certifying the dates of your final day and final contribution to SDRS. Note: If you are on leave and continue to make contributions to SDRS, you may wait until a decision on your application has been reached before terminating employment; however, no disability retirement benefit will be paid until the termination form and final contributions are received by SDRS from your employer.

SDRS’ Responsibilities

1. Once all information has been submitted, the disability retirement planner will compile your complete application to be presented to the Disability Advisory Committee. The Disability Advisory Committee (consisting of a physician, an attorney, and a vocational rehabilitation specialist) will evaluate your complete application for disability retirement benefits and will recommend approval or denial of your application to the SDRS executive director. The committee may also defer your application to examine additional records before submitting a recommendation to the executive director. The executive director is not bound to the recommendation of the Disability advisory Committee.
2. The SDRS Executive Director will then approve or deny your application for disability retirement benefits. You will receive written notice of the decision via certified mail. If approved, SDRS will advise you in writing of the amount of your SDRS disability retirement benefit and additional forms necessary to start payments. If denied, you will be advised of your right to appeal in writing.
3. SDRS may conduct an annual review to determine if you continue to be disabled. Your disability retirement benefits will continue only as long as you remain disabled.

 

When You Reach Normal Retirement Age

When you reach normal retirement age (Foundation members: age 65 for Class A and Class B Judicial/age 55 for Class B Public Safety; Generational members: age 67 for Class A and Class B Judicial/age 57 for Class B Public Safety), your disability retirement benefit will be considered your retirement benefit.


Related Link:

Disability Retirement brochure


Note: If SDRS received your disability application prior to July 1, 2015, your benefit structure is different than that described above. Please contact SDRS for further details.