The opinion of the court was delivered by: Judge Cohn Jubelirer
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE JAMES R. KELLEY, Senior Judge.
Consolidation Coal Company (Employer) petitions for review of the order of the Workers' Compensation Appeal Board (Board), which reversed, in part, the order of the workers' compensation judge (WCJ) and granted the Petition for Review of Compensation Benefits Offset (Review Petition) of Donald Albani (Claimant). The Board held that the actuarial testimony presented by Employer was not sufficient to support Employer's right to an offset due to Claimant's receipt of a multi-employer defined benefit disability pension because the testimony did not conform to the requirements of the Bureau of Workers' Compensation's (Bureau) regulation at 34 Pa. Code § 123.10*fn1 and Section 204(a) of the Workers' Compensation Act (Act).*fn2 On the basis of our decision in Pennsylvania State University v. Workers' Compensation Appeal Board (Hensal), 911 A.2d 225 (Pa. Cmwlth. 2006) (en banc), we reverse and remand this matter to the Board for further proceedings.
Employer was a contributing employer to the UMWA Health & Retirement Funds' 1974 Pension Plan (Plan). Prior to working for Employer, Claimant had worked approximately seventeen and a half years for other employers who were contributors to the Plan. Claimant suffered a work-related injury while working for Employer on January 31, 2002. Claimant began receiving workers' compensation benefits at the rate of $662.00 per week. Claimant applied for a multi-employer defined benefit*fn3 disability pension from the Plan, which was awarded in February 2003. At that time, the Plan paid Claimant a $17,061.44 back payment. This sum constituted pension payments for the period between February 1, 2002 and the date on which the pension was awarded. After taxes, Claimant received $13,649.16 of the back payment. Claimant began receiving monthly pension payments of $1,386.37, less $200.00 for income tax and $6.00 in union dues, for a net total of $1,180.37. Claimant reported these benefits to Employer.
Employer, on August 9, 2004, issued a Notice of Workers' Compensation Benefits Offset (Offset Notice). (WCJ Decision, Findings of Fact (FOF) ¶ 3.) In the Offset Notice, Employer stated its intention to take a $139.74 weekly credit against Claimant's weekly benefit due to Claimant's receipt of the pension. (FOF ¶ 3.) Employer also asserted that, due to Claimant's receipt of the back payment, Claimant had received a $18,485.60 overpayment of his workers' compensation benefits. (FOF ¶ 3.) Employer notified Claimant that it was suspending his workers' compensation benefit payments for thirty-five weeks and taking a deduction of $206.50 from the subsequent check in order to recoup this overpayment.
In response, on August 10, 2004, Claimant filed his Review Petition. The matter was assigned to the WCJ, who held hearings at which Claimant presented his own testimony as well as that of Dale Stover, the comptroller of the Plan. Employer presented the testimony of Carol Gramer, the actuary of the Plan.
The WCJ found Ms. Gramer's testimony credible and made the following relevant findings:
d. Ms. Gramer uses a "service-based" methodology to determine how much a particular employer contributed to the pension.
e. Ms. Gramer noted that the claimant has a total credited service of 31.25 years.
f. The total service the claimant had with [Employer] was his last
13.75 years.*fn4 Ms. Gramer determined by looking at the benefit rate applicable for each of the years the claimant worked for [Employer], [that the monthly benefit attributed to Employer was] $708.73.... Ms. Gramer noted that this amount represents 51.12% of the claimant's total monthly benefits.*fn5
i. Ms. Gramer agreed that she was not giving a literal interpretation to Title 34 Section 123.10(a) to mean that the actual amount of money contributed by the employer should be used in calculating the offset. Instead, it was Ms. Gramer's opinion that this section meant that the actuary cannot attribute to the last employer any benefits that would be attributable to service with a prior employer. Ms. Gramer pointed out that a literal interpretation might make sense if this plan was a defined contribution plan, but it is not. Ms. Gramer noted that ...