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Rue v. Kentucky Retirement Systems


RENDERED: MAY 12, 2000; 10:00 a.m.


Commonwealth Of Kentucky Court Of Appeals


The sole question in this appeal is whether the Kentucky Retirement Systems correctly calculated the amount of Bobby Rue's disability retirement benefit in accordance with the mandate set out in Kentucky Revised Statutes (KRS) 61.607. Finding no error in the methodology used by the retirement systems in arriving at the amount of appellant's "combined monthly benefit," we affirm the judgment.

Rue was unable to return to work after sustaining a back injury in the course of his employment as a mechanic with the Kentucky State Police. As part of his application for disability retirement benefits, Rue informed the retirement systems that he also had pending applications for social security benefits and workers' compensation benefits. In the administrative hearing Rue testified that he was advised that the total of his disability benefits, specifically his social security benefit and his workers' compensation award, could not exceed the amount he was making at the time of his injury. Rue argues in this appeal, however, that in calculating the total of the benefits he is receiving, the retirement systems erred in using the gross amount of his workers' compensation award instead of the reduced amount he actually receives after deduction of attorney's fees.

KRS 61.607 provides in pertinent part:

Notwithstanding any other provisions of KRS 16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852, a maximum disability benefit is hereby established which shall apply, upon disability retirement, to any disabled employee's account to which service credit is added to determine disability benefits or in any case where disability benefits are determined by computing a percentage of the disabled employee's final monthly rate of pay. The maximum disability benefit shall be determined by the following formula:

(1) Add the monthly benefit payable to the disabled employee from the retirement system, using the monthly disability retirement allowance (not optional plan) but excluding dependent children's allowances, if any, to his monthly benefit, if any, from Social Security, even though these payments may not begin for a period of time as required for qualification under the federal Social Security law, excluding spouse or dependent benefits, and his monthly benefit, if any, from workers' compensation, even though these payments may not have begun as of the date the disabled member applies for disability retirement benefits, excluding spouse or dependent children's allowances, from workers' compensation, to arrive at a projected combined monthly benefit.

(2) If the projected combined monthly benefit exceeds one hundred percent (100%) of the disabled employee's final rate of pay or his final compensation, whichever is greater, his disability retirement allowance from the retirement system shall be reduced to an amount which would cause his projected combined monthly benefit to equal one hundred percent (100%) of his final rate of pay or his final compensation, whichever is greater; . . . .

Thus the plain language of the statute dictates that the combined monthly benefit is to be determined using the basic disability allowance, not the amount the employee receives if he selects any of the various optional plans available to him. Next, the statute requires addition of the amount of the basic disability allowance to amounts the employee may be receiving from federal social security or a workers' compensation award. In this regard, the statute specifies which allowances shall not be considered. Rue

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