New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on October 30, 2002, representing the position of the New York State Insurance Department.

Re: Offset of disability retirement benefits against group long term disability insurance policy benefits

QUESTION PRESENTED

May disability retirement benefits that an individual receives from the New York State and Local Employees Retirement System (hereinafter "Retirement System") be offset against payments under a group long term disability insurance policy from a private insurer?

CONCLUSION

Yes. Such offset would, under the facts presented, be permissible pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 52.18(d)(2)(i) (1999) (Regulation 62).

FACTS

An individual is receiving disability retirement benefits from the Retirement System. The individual's former employer, which is the same employer by which the individual was employed when he retired, purchased a group long term disability insurance policy from a private insurer. The private insurer seeks to offset the amount that it owes under the policy to the individual by the disability retirement benefits provided to him by the Retirement System.

ANALYSIS

N.Y. Comp. Codes R. & Regs. tit. 11, § 52.18(d)(2)(i) (1999) (Regulation 62) states:

(2) Life, annuity or pension benefits under a plan of the same or a related employer may be offset against disability income benefits, subject to the following:

(i) early retirement benefits may be offset only if such early retirement is elected by the employee or does not reduce the amount of his accrued annuity or pension benefits then funded. . . .

Since the early retirement benefits that the individual receives from the Retirement System would not be reduced by the amount of the disability benefits under the group policy, the private insurer may offset the benefits received from the Retirement System against any disability insurance benefits he may be entitled to under the group policy.

For further information, you may contact Senior Attorney Robert Freedman at the New York City Office.