Retirement board not permitted to offset disability benefits with WC annuities
Case name: Metzinger v. Kentucky Retirement Systems, et al., No. 2007-SC-000363 (Ky. 08/27/09).
The Kentucky Supreme Court reversed and remanded a finding that the retirement systems agency could consider the worker's annuity payments received as a result of a global settlement of workers' compensation and civil claims in calculating maximum disability retirement benefits.
What it means:
In Kentucky, annuities paid to a worker from a workers' compensation settlement are not considered monthly benefits and are therefore not included when calculating maximum disability benefits. Absent any language by the legislature indicating a broader intent, the meaning of "workers' compensation benefits" means just that and not more.
Summary: An electrician for the city became disabled when he was electrocuted and suffered severe burns. He filed a workers' compensation action and a civil action against his employer and the electric company responsible for constructing and maintaining the light and pole. They entered into a global settlement in which the electrician received a lump-sum payment and monthly annuities from each company. The electrician agreed to release the city from its monthly payment obligation under the workers' compensation award, in lieu of its contribution to his annuity. Subsequently, the retirement systems agency told him that his combined monthly benefits exceeded his disability retirement benefits and required him to repay. The electrician contended that the agency erroneously included his annuity payments in its calculation and that he had not received workers' compensation payments. The Supreme Court agreed that the agency erred in including the annuity payments as workers' compensation payments. It pointed out that the law only refers to "monthly benefits . . . from workers' compensation" to reduce disability payments. The court stated without additional language suggesting a payment source substituted or equivalent to a workers' compensation award, it was not free to presume the law required any more.
The court noted that through the global settlement agreement, the electrician had forfeited his right to pursue any further claims against his employer. It also explained there would be difficulty translating the "uncertain and unique value of the [electrician's] annuity to that of a workers' compensation benefit."
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September 28, 2009
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