If you are a disabled State of Connecticut employee, you may be eligible for both worker’s compensation benefits and a disability retirement. You can be eligible for worker’s comp if an injury happened at work. You will get biweekly payments, based on your previous salary. What happens to your State disability pension when you are eligible for both benefits? It gets complicated. Sometimes a worker’s comp case will be settled – this is called a “stipulation.” This doesn’t happen very often for State employees, but when it does, it can lead to unexpected problems. When the parties settle a worker’s comp case, the State pays the claimant a lump sum amount of money. In return for this payment, the claimant releases the State from any further claims from the injury. The parties may choose to agree that the release only covers payments to the claimant, and not claims for medical treatment. Sometimes the stipulation will show the amount received as a monthly amount. The lump sum payment is divided by the life expectancy of the claimant, and this results in a monthly amount. The claimant still receives the full payment as a lump sum. This calculation is often made to preserve entitlement to Social Security Disability benefits. The Social Security Administration will honor the stipulation.
The Retirement Services Division [RSD] of the State of Connecticut will reduce its disability pension, taking the worker’s comp and Social Security payments into consideration. But will the RSD reduce the pension by the pro-rated worker’s comp amount or some other amount? Right now, the RSD is using the pre-stipulation monthly amount, not the pro-rated amount shown in the stipulation. The pre-stipulation monthly amount is much higher than the pro-rated stipulation amount. This results in a large reduction in the State’s payment of disability retirement benefits. The benefit can be reduced to zero or almost zero.
The RSD wants to reduce its pension by the pre-stipulation amount. This is unfair. It deprives employees of the pension they worked for. The employee may be worse off financially because of the stipulation.
Zimberlin Law LLC believes that the RSD should honor the stipulation and use the lower pro-rated stipulation amount in its calculation. If you are a State of Connecticut employee on worker’s comp benefits, and are considering filing for disability retirement, call Zimberlin Law LLC first.