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Does An Employee Retirement Plan Affect Disability Eligibility?

Is your employee retirement plan a pitfall for disability eligibility?

A Supreme Court case (Kentucky Retirement Systems, et al v. EEOC) addressing the question, does an employee retirement plan affect disability eligibility, examines the legality of using the number of years remaining before retirement eligibility in calculating disability benefits. Once someone has achieved the years of service to qualify for normal retirement, they no longer have disability eligibility with this type of employee retirement plan. This is even if they would suffer an identical disability that qualifies a younger worker for the disability pension.

Indirect age discrimination.

Since an employee in this type of retirement plan who has reached retirement age would not receive the same benefits for a disability that a younger person would, this may constitute age discrimination. But, in practical terms the employee retirement plan does affect disability eligibility and a person within that type of plan should be aware of this potential outcome.

A different type of age disqualification in disability eligibility.

The plaintiff’s employee retirement plan had a provision for disability eligibility in the case of Anderson v. Emerson Elec, et al. An employee would need to be at least age 40 to qualify for disability eligibility. The plaintiff was only 33 when she became disabled and the employee retirement plan administrators denied her eligibility for a disability pension under the plan.

Employee retirement plans can affect disability eligibility.

In the two cases mentioned above, the employee retirement plans had provisions which served to cancel disability eligibility in some instances. So disability eligibility may hinge on several factors relating to age and length of service with the employer.



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