OAR 459-015-0055: Selection of Benefit Option and Commencement of Allowance

(1) Upon filing an application for a disability retirement allowance, the member may make a preliminary designation of beneficiary and a preliminary selection of benefit option. A member may not choose a lump-sum option. (2) Within 90 days following the Director’s, or the Director’s designee’s, approval of the application for disability retirement allowance, the member must submit a disability benefit application provided by PERS. Receipt of the final forms will supersede any preliminary beneficiary designation or preliminary benefit option. (a) The final option selected applies only to the corresponding time period the member is receiving a disability retirement allowance. (b) The beneficiary designation or benefit option may be changed up to 60 days after the date of the first actual (not estimated) benefit payment as provided in ORS 238.325(2). The beneficiary or benefit option change will be retroactive to the effective disability retirement date. (c) If a member’s disability retirement allowance is canceled before the first benefit payment or is discontinued, the option selected for the purposes of that disability retirement allowance is canceled and a new option may be selected upon a subsequent disability or service retirement. (3) If the member does not submit a disability benefit application within 90 days following the Director’s, or the Director’s designee’s, approval of the application for disability retirement allowance: (a) The benefit will be the benefit as set forth under ORS 238.320(1) if the member is single, or the benefit as set forth under ORS 238.462 if the member is married; and (b) For single members, the latest beneficiary designation on file for the PERS Chapter 238 Program will be used to determine the default beneficiary. If no designation exists, the beneficiary will be as provided for under ORS 238.390(2). (c) The payment will commence within a reasonable period of time following the 90th day after approval. (4) Purchases. If a member is eligible to make a purchase to restore creditable service or obtain retirement credit under ORS Chapter 238 or section 2, chapter 971, Oregon Laws 1999, the member must submit payment for the purchase(s) no later than the earlier of: (a) 90 days following the date of the Director’s, or the Director’s designee’s, approval of the application for disability retirement allowance; or (b) The date the member submits the final disability benefit application required under section (2) of this rule. (5) If the member elects to purchase all or a portion of creditable service or retirement credit through a trustee-to-trustee transfer as described in OAR 459-005-0580, the transfer must be received within the time line in section (4) of this rule. (6) The payment of a disability retirement allowance shall commence within 10 business days following receipt by PERS of all of the items in (a) and (b) of this section, or the date the first payment is due, as set forth in section (7) of this rule, whichever is later: (a) From the member: (A) Completed disability benefit application; (B) Proof of member’s age; (C) Proof of age for the designated beneficiary if a joint survivor option is elected; and (D) Certification of marital status form. (b) From the employer: Financial and demographic information indicating the member has separated from PERS-covered employment. (7) A disability benefit accrues from the effective date of disability retirement. Except as provided as in section (8) of this rule, the benefit accrued for a month of disability retirement is payable on the first of the following month. (8) Notwithstanding section (7) of this rule, no payment shall be made before the end of the period of 90 consecutive days beginning with the date of disability and shall be retroactive to the effective date of disability retirement. (9) If PERS cannot calculate the actual disability benefit payment, an estimated payment will be made until PERS receives all the necessary information needed to calculate the actual benefit payment. The payment will be made retroactive to the effective date of disability if the benefits become due before the 90 consecutive day period of incapacitation has elapsed. (a) If the estimated payment results in an underpayment of $10 or more a month, the member will receive interest based on the provisions set forth in OAR 459-007-0015. (b) If the estimated payment results in an overpayment of any amount, the overpayments may be recovered by decreasing the monthly benefit amount until the difference between the amount the member received and the amount the member should have received is recovered. (10) Minimum disability benefit. A disability benefit will not be less than $100 per month under the non-refund Option 1 benefit or the amount the member would have received for service retirement, if eligible, whichever is higher. (11) In the event a member applying for a disability retirement allowance dies before the Director’s approval of the application: (a)(A) If the member has made a preliminary benefit option election, the preliminary election shall be effective upon the Director’s approval of the application for disability retirement. (B) If the deceased member was eligible to purchase additional creditable service or retirement credit under ORS Chapter 238, the beneficiary, if any, designated in the preliminary election may make the purchase(s) by submitting the required forms and payment within 90 days from the date the disability application is approved. (b) If the member has not made a preliminary benefit option election, the member will be considered as having died before retirement. (A) If the beneficiary designated under ORS 238.390(1) is the surviving spouse, the surviving spouse may, within 90 days from the date the disability application is approved, elect to have either Option 2 or 3 disability benefits or pre-retirement death benefits, as provided in 238.390 or 238.395, if eligible. (i) Regardless of the election made by the surviving spouse under paragraph (b)(A) of this section, all benefits will cease upon the surviving spouse’s death. (ii) If the deceased member was eligible to purchase additional creditable service or retirement credit under ORS Chapter 238, a surviving spouse who elects disability benefits under paragraph (b)(A) of this section, may make the purchase(s) by submitting the required forms and payment at the time of the election. (B) If the beneficiary designated under ORS 238.390(1) is not the surviving spouse, the beneficiary will receive pre-retirement death benefits as provided in 238.390 or 238.395, if eligible.