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JAMES P. EGAN v. COMMONWEALTH PENNSYLVANIA (07/10/84)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: July 10, 1984.

JAMES P. EGAN, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT

Appeal from the Order of the Unemployment Compensation Board of Review in case of In re: Claim of James P. Egan, No. B-217553.

COUNSEL

Gary M. Lightman, with him, Anthony C. Busillo, II, Mancke, Lightman & Wagner, for petitioner.

Michael D. Alsher, Associate Counsel, with him, Richard L. Cole, Jr., Chief Counsel, for respondent.

Judges MacPhail, Doyle and Barry, sitting as a panel of three. Opinion by Judge Barry.

Author: Barry

[ 83 Pa. Commw. Page 563]

James P. Egan (claimant) seeks review of an order by the Unemployment Compensation Board of Review (Board) which affirmed a referee's decision denying unemployment compensation benefits to claimant.

Claimant was last employed by the Borough of Coraopolis (Borough) in Allegheny County, Pennsylvania, as a policeman, a position he held for thirty-five years.

From December 22, 1981, until February 28, 1982, claimant was disabled and receiving workmen's compensation benefits. During claimant's illness-related absence from work, the Borough Council, for economic reasons, voted to reduce the number of policemen within the Borough and to furlough claimant from his job effective January 17, 1982.

Throughout the last twenty-five years of his employment claimant participated in a pension plan which required him to contribute five (5%) per cent of his gross pay. Claimant's contributions to the pension plan totaled more than $12,600.00 during the course of his employment.

Effective March 1, 1982, claimant was compulsorily retired from the police force and then became entitled to receive monthly pension payments of $1,024.99, an amount based upon his years of service, final average pay, and his own contributions.

[ 83 Pa. Commw. Page 564]

In December, 1982, claimant applied for, but was denied unemployment benefits by the Office of Employment Security (OES). That decision was affirmed by a referee and the Board. The OES, the referee, and the Board each decided that the amount of the pension that was deductible pursuant to Section 404(d)(iii) of the Unemployment Compensation Law (Law)*fn1 exceeded the weekly benefit rate and, such being the case, claimant was not entitled to unemployment compensation benefits under the Law.

Where the party with the burden of proof did not prevail before the Board, our scope of review is limited to determining whether the findings of the Board are consistent with each other and with the Board's conclusions of law and its order and whether they can be sustained without a capricious disregard of competent evidence. Hughes v. Unemployment Compensation Board of Review, 51 Pa. Commonwealth Ct. 448, 414 A.2d 757 (1980). In this case there is no dispute as to the relevant facts. The claimant limits his appeal to the contention that the Board committed an error of law by failing to treat the initial pension payments made to claimant as a return of contributions and, as such, not deductible for the purposes of determining the amount of unemployment benefits claimant would otherwise be entitled to under Section 404(d)(iii) of the Law. Section 404(d)(iii) of the Law provides:

[E]ach eligible employe . . . shall be paid . . . compensation in an amount equal to his weekly benefit rate less . . . (iii) an amount equal to the amount of a governmental or other pension, retirement or retired pay, annuity, or any other similar periodic payment which is based on the previous work of such individual. . . .

[ 83 Pa. Commw. Page 565]

This section reflects a substantial change created by amendment of the Law in 1980.*fn2 Prior to the 1980 amendment, the Law, in pertinent part, then read as follows:

Notwithstanding any other provisions of this section each eligible employe who is unemployed with respect to any week ending subsequent to the first day of July, one thousand nine hundred seventy-four, shall be paid, with respect to such week, compensation in an amount equal to his weekly benefit rate less the total of . . . (iii) that part of a retirement pension or annuity, if any, received by him under a pension plan to which a base-year employer of such employe has contributed which is in excess of forty dollars ($40.00) per week. Retirement pension or annuity payments received by the employe under the Federal OASI program, the Federal Railroad Retirement program or under any retirement plan to which the employe was the sole contributor, shall not be considered a deductible retirement pension or annuity payment for the purpose of this subsection.

In regard to that amendment this court has noted:

The 1980 amendatory language is broad, general and all inclusive. It mandates that the employee's unemployment compensation benefits to which he might otherwise be entitled, shall be reduced by the amount of a governmental or other pension, retirement or retired pay, annuity or any other similar periodic payment based upon the employee's previous work. (Emphasis in original.)

[ 83 Pa. Commw. Page 566]

Claimant's reliance on federal income tax practice is misplaced. We have previously rejected application or interjection of federal income tax law in similar circumstances. See Byrd v. Unemployment Compensation Board of Review, 64 Pa. Commonwealth Ct. 212, 439 A.2d 898 (1982); Goldsmith v. Unemployment Compensation Board of Review, 15 Pa. Commonwealth Ct. 57, 324 A.2d 892 (1974).

Finally, a close reading of our decision in Latella reveals that no support for claimant's position is found in that case. Rather we find Latella fully consistent with the statute and case law interpreting it:

Section 404(d)(iii), and similar pension offset provisions rationally advance two legitimate government objectives: (1) the promotion of the fiscal integrity of the unemployment compensation fund; . . . and (2) the elimination of the payment of duplicative, "windfall" unemployment benefits to those who, primarily because of their retirement eligibility, are receiving adequate wage replacement income and thus experiencing greater economic security than those less fortunate. . . . (Citations omitted, emphasis added.)

Latella, 74 Pa. Commonwealth Ct. at 20-21, 459 A.2d at 468-69. See also: Martin v. Unemployment Compensation Board of Review, 63 Pa. Commonwealth Ct. 629, 439 A.2d 207 (1982); Unemployment Compensation Board of Review v. Miedama, 27 Pa. Commonwealth Ct. 207, 365 A.2d 900 (1976).

The statute and case law being clear, we find that the denial of unemployment compensation to claimant was a decision fully comporting with the letter and spirit of the law.

Therefore, we affirm the Board's order denying benefits to claimant.

[ 83 Pa. Commw. Page 568]

Order

And Now, July 10, 1984, the order of the Unemployment Compensation Board of Review, decision No. B-217553, dated April 28, 1983, is hereby affirmed.

Disposition

Affirmed.


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