PA Workers’ Comp Credit For Max Amount Injured Worker Could Have Received on Pension, Not What Injured Worker Actually Received

We have discussed Section 204(a) of the Pennsylvania Workers’ Compensation Act (Act) on this blog in the past.  This is the provision of the Act that provides a credit to the workers’ comp insurance carrier for certain other benefits an injured worker might receive, such as pension, social security retirement, unemployment compensation or severance.  While the Act may be specific on the credit due, the interpretation by the courts is puzzling.

In relevant part, Section 204(a) reads, “the benefits from a pension plan to the extent funded by the employer directly liable for the payment of which are received by an employee shall also be credited against the amount of the award made under [the Act].”  Given its ability to do so, the Pennsylvania Bureau of Workers’ Compensation then promulgated regulations on this offset, stating in pertinent part, “If the employe receives the pension benefit on a monthly basis, the net amount contributed by the employer and received by the employe shall be divided by 4.34.”  While not exciting, at least the language sounds clear.

In Harrison v. Workers’ Compensation Appeal Board (Commonwealth of Pennsylvania), the Commonwealth Court of Pennsylvania dealt with this Section directly.  The injured worker had the option of two pensions to take, either the maximum amount of money (which would have created a monthly offset of $1,885.03) or a lesser amount of money which included a survivor benefit for his wife (which would leave a monthly offset of  $1,537.79).

Considering the language in both the Act, and the regulation, one would conclude the correct offset would be based on the amount the injured worker actually receives.  One would be wrong.  In what can only be described as judicial activism, the Court essentially rewrote the Act, ignoring the clear language.  The Court found that the funding of both  pensions would be “actuarially equivalent,” so the offset should be as well.  Therefore, the Court elected to treat the injured worker as if he had taken the higher pension, when he had, in fact, elected the opposite.

While we understand the Court’s dissatisfaction with the situation, we respectfully disagree that the role of the court is to rewrite the laws.  We believe this is the domain of the legislature.  There are many aspects of the Act we would like the courts to rewrite, but that simply is not how a democracy works.  Two of the judges did dissent from the decision, also noting the clear wording of the Act.