Disability Retirees Seek Relief From Court

MARCH 2001 - Controversy Over Earned Income Continues - For
disability retirees, the controversy over what is earned income
continues. As reported, the Public Employee Retirement Administration
Commission (PERAC) has been at odds with certain disability retirees,
whom it claims have earned in excess of what the retirement law allows.

To
refresh our memories, under Chapter 32 (retirement law) disability
retirees can supplement their pensions by earning no more than a
specific sum according to a formula in the law. Since PERAC adopted a
more broad definition of what should be considered earned income, some
disability retirees found that they have supposedly made too much under
the formula.

These
retirees turned to the Contributory Retirement Appeal Board (CRAB) for
relief from PERAC's broader definition. When we reported on this in
November, CRAB had ruled in PERAC's favor in a number of the cases.

And as we also reported then, we expected certain CRAB decisions would be appealed further. Our expectation proved accurate.

Two
disability retirees on whom we reported earlier - Theodus and Brown -
have taken their cases to the state's Superior Court. They are asking
the court to reverse the CRAB decisions against them.

Theodus
is seeking to have the court accept his definition of earned income,
that would exclude shareholder distributions to him from a small
business for which he is not working. In the Brown case, the dispute
centers on whether, as the retiree argues, earned income should exclude
deductions which he made for work-related expenses as an employee.

"We
anticipate that one of these cases will eventually find its way to the
state's higher court of appeals," comments Association Counsel Bill
Rehrey. "Hopefully then we would see some closure on this issue."

On
another front, the Association has introduced, as part of its
disability retirement bill, a provision which defines earned income for
disabled retirees more narrowly than PERAC. That legislation is
currently before the Public Service Committee.

Tags: