The Commonwealth Court of Pennsylvania rendered a decision in the case of Philadelphia Gas Works v. WCAB (Amodei), dated February 4, 2009. The decision is highly technical but deals with the issue of pension offsets under Section 204 (a) of the Pennsylvania Workers’ Compensation Act.
Section 204 (a) allows the employer/workers’ compensation insurance carrier to take an offset or a credit for pension benefits paid. The question in this case was whether or not an offset gets taken by the net amount received by the employee or the gross amount received by the employee. There was prior case law that indicated that Section 204 (a) required the offset to be calculated via the gross amount. However, regulations were submitted by the Bureau which required the net amount to be considered.
In this case, The Commonwealth Court rules that the offset be based upon the net amount of pension benefits received. In layman’s terms, this means that it is the amount that the Claimant pockets from the pension, after all of the subsequent taxes are taken out, that would be the basis for the offset.
I am sure this case will be appealed to the Pennsylvania Supreme Court.