CalPERS Requires Agencies Provide More Information to Support Decisions on Local Safety Members’ Disability Retirements

On March 15, 2023, CalPERS issued Circular Letter 200-014-23, setting forth new requirements that contracting agencies must follow when determining whether local safety members are substantially incapacitated from performance of their usual duties for the purposes of a disability retirement.  Specifically, under Circular Letter 200-014-23, agencies are now required to submit additional documentation and information to CalPERS, including several newly created CalPERS forms, when certifying an application for disability retirement, industrial disability retirement, and re-evaluation for continuous eligibility for disability retirement.

For context, CalPERS previously required agencies to certify the following information when making a decision regarding a member’s application for disability retirement:

1. A statement certifying under penalty of perjury that the agency made the determination based on competent medical opinion.
2. A statement certifying under penalty of perjury that the agency did not use the determination as a substitute for the disciplinary process.
3. A finding indicating the member’s substantial incapacitation from the performance of their usual duties.
4. A statement confirming whether the member filed a Workers’ Compensation claim for their disabling condition(s), and if so, a statement as to whether the claim was accepted.
5. A finding by the agency as to whether the member’s incapacity is industrial.
6. A statement documenting the member’s last day on payroll.
7. A statement as to whether there is the possibility of third party liability.
8. A statement identifying the disability condition(s)/body parts.
9. A statement supported by competent medical evidence that the duration of the disabling condition is expected to be permanent, last at least 12 consecutive months, or result in death.
10. A statement identifying the monthly amount and beginning date of Advanced Disability Payments, if they have been or will be paid to the member.

Now, in addition to the above-requirements, agencies must provide more information to CalPERS regarding the member’s job duties and the medical support for the agency’s decision.  For example, agencies must complete a form detailing how often the member performs various physical activities such as interacting with others, lifting weight, sitting, standing, kneeling, and climbing in the course of their employment.  The form also requires agencies to indicate if the member has been through the reasonable accommodation process, and if so, requires the agency to submit the reasonable accommodation documentation to CalPERS.

Agencies must also submit a form, signed by a physician, that includes the physician’s findings and diagnosis and answers specific questions regarding whether the member is substantially incapacitated.  If the member is found substantially incapacitated, the physician must list the specific job duties the member is unable to perform due to incapacity, and whether the incapacity is permanent or will last longer than 12 months.

In order for CalPERS to process the application, agencies must provide the following forms and documentation:

1. Physical Requirements of Position/Occupational Title (Local Safety) form.
2. Job duty statement.
3. Physician’s Report on Disability (Local Safety) form.
4. Worker’s Compensation Carrier Request (Local Safety) form.
5. All medical reports used in making the medical determination for Disability Retirement/Industrial Disability Retirement benefits including reevaluation.
6. The determination resolution or certification.

All of these requirements are new, except for the determination resolution or certification. The determination resolution or certification must still include the previously required information described in items No. 1-10 above.  See the Circular Letter for the required CalPERS forms.

CalPERS states in the Circular Letter that this additional information is necessary to ensure that disability retirement and industrial disability retirement benefits are provided only to eligible members.  Additionally, CalPERS notes that the new requirements are necessary to adhere to Government Code sections 21232 and 21233, which in part, provide limitations on employment while a retiree is receiving disability retirement or industrial disability retirement benefits.

CalPERS cites Government Code sections 20221 and 21028 as its authority for implementing these changes.  Government Code section 20221 requires agencies provide to CalPERS any information concerning its members that CalPERS may require in the administration of its system.  Government Code section 20128 requires that members or beneficiaries provide information that CalPERS deems necessary to determine its liability with respect to an individuals’ entitlement to benefits.

Take-Away for Agencies

Although it is not yet clear how CalPERS intends to use the additional information, CalPERS appears to require this additional information to more closely scrutinize contracting agencies’ decisions regarding local safety members’ disability retirement and industrial disability retirement applications.  For example, many agencies rely solely on workers’ compensation reports, which may contain presumptions or prophylactic work restrictions that are inapplicable under the Public Employees’ Retirement Law.  Government Code section 21154 provides that contracting agencies, rather than CalPERS, are responsible for determining whether local safety members (other than school safety members) are incapacitated from their duties.  It is uncertain if these new requirements will change who decides whether an application is granted or how applications are processed.  However, agencies will have to provide additional documentation to CalPERS supporting the underlying application and may have to obtain more independent medical examinations as a result of the changes.

Liebert Cassidy Whitmore attorneys are closely monitoring developments in relation to this Special Bulletin and are able to advise on the impact this could have on your organization. If you have any questions about this issue, please contact our Los Angeles, San Francisco, Fresno, San Diego, or Sacramento office.