Employee A is laid off in July and reports in Sept. that he is going on medical leave for an unknown amount of time. He is on workmans comp. He has not been on payroll since July and does not know when he will be able to return. He is asking to be terminated from the plan. Can he do this if he is on workmans comp? Thanks

What does your plan say? Our defined contribution document says that a disability benefit is payable if the participant has separated from service, rather than terminated from employment. We recently used this wording to justify payment to a disabled participant who was not yet officially terminated so that he could qualify for long term disability insurance coverage with the employer. Because he required nursing home care, the family was anxious to collect all funds available.

Some defined benefit plans specifically provide that the benefit will be reduced for workers compensation payments. Typically this is a plan that pays unreduced retirement benefits at normal retirement age.