Supreme Court Grants Petition for Allowance of Appeal on "Footprint" Argument in Pension Benefit Offset

In Commonwealth of Pennsylvania DPW v. WCAB (Harvey) the Supreme Court granted allocatur to review the holding of the Commonwealth Court in Pennsylvania State University/PMA Insurance Group v. WCAB (Hensal), 911 A.2d 225 (Pa. Cmwlth. 2006) and Department of Public Welfare/Western Center v. WCAB (Cato), 911 A.2d 241 (Pa. Cmwlth. 2006) that an employer meets its burden of proof by only presenting evidence of an actuarially assumed rate of annual return on an employer’s contribution rather than evidence confirming the actual rate of return on the pension.

The second issue on which allocatur was granted is whether the Commonwealth Court's holdings disregard the plain language of Section 204(a) of the Workers’ Compensation Act, 77 P.S. § 71(a), which grants an employer a credit against an employee’s pension only“to the extent [the pension is] funded by the employer directly liable for the payment of workers’ compensation.

These issues arise in the "footprint" argument that posits a pension offset should be based on the actual contributions of the Employer while the Claimant worked there. This argument does not account for the contributions the Employer will make to keep the defined benefit plan solvent during the rest of the Claimant's "footprint" e.g. while the Claimant collects pension benefits.

Disposition of this appeal will be another interesting exercise in the sisyphean task of interpreting a statute that does not articulate a method for calculating defined benefit plan pension offsets.