<html> <head> <title>Rule 47:03:01:07 Commutation of compensation payment.</title> <META NAME="Keywords" Content="Administrative Rules 47:03:01:07"> <META NAME="Description" Content="Administrative Rules 47:03:01:07 Commutation of compensation payment."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>47:03:01:07.&nbsp;&nbsp;Commutation of compensation payment.</b> Lump sum commutation for permanent partial disability shall equal the sum of the probable future payments capitalized at their present value on the basis of interest calculated at the rate of ten-year treasury notes on the date of injury as determined by the records of the federal reserve library, rounded to the nearest one-fourth of one percent, using the following formula:</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; P<sub>n</sub>&nbsp; =&nbsp;&nbsp;&nbsp; <u>V<sup>1/52</sup> - V<sup>n/52</sup></u></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; 1 - V<sup>1/52</sup></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; where</p> <h2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; P&nbsp;&nbsp; =&nbsp;&nbsp;&nbsp;&nbsp; Present value of $1.00 a week payable for n weeks</h2> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; V&nbsp; =&nbsp;&nbsp;&nbsp;&nbsp; Present value of $1.00 due at the end of the year</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; n&nbsp;&nbsp; =&nbsp;&nbsp;&nbsp;&nbsp; Number of weeks for which payments are to be made</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lump sum commutation for permanent total disability shall be calculated in the same manner except that the interest rate shall be reduced one percent as a setoff for the cost-of-living allowance provided by SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=62-4-7">62-4-7.</A> The number of weeks for which payments are made shall be determined by the life expectancy tables found in Appendix A at the end of this chapter. The interest rate used, exclusive of the cost-of-living allowance setoff, may not vary more than two percent above or below the interest rate on ten-year treasury notes on March 4, 1992, as determined from the records of the federal reserve library.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 11 SDR 22, effective August 13, 1984; 16 SDR 226, effective June 24, 1990; resolution of suspension, 17 SDR 22, effective July 27, 1990; 17 SDR 191, effective June 20, 1991; 18 SDR 138, effective March 4, 1992; 21 SDR 4, effective July 18, 1994; 27 SDR 1, effective July 19, 2000.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=62-7-6">62-7-6.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=62-7-6">62-7-6.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Note:</b> For information to contact the Federal Reserve Library, call the Division of Labor and Management at 605-773-3681.</p> </div> </body> </html>