School District of Philadelphia v. Workers' Compensation Appeal Board
2011 Pa. Commw. LEXIS 612
| Pa. Commw. Ct. | 2011Background
- Employee claimant sustained a work injury in 2003 and began receiving workers' compensation; Employer sought an offset against benefits for claimant's pension after retirement in 2004; Offset petition filed December 2007; WCJ heard November 2008 with actuarial testimony from Cranna and Mumma; WCJ rejected the actuarial testimony as to exact employer funding but recognized potential Retained Investment Returns; Board affirmed the WCJ; Court reverses and remands for proper offset calculation under §204(a) and actuarial methodology
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether actuarial evidence can establish the extent of employer funding for a defined-benefit pension under §204(a). | Employer relied on actuarial findings to quantify funding. | Davis argued the method failed to isolate non-vested investment returns and thus could overstate funding. | Actuarial evidence is admissible and sufficient to establish funding extent. |
| Whether Retained Investment Returns from non-vested employees should reduce the employer's offset. | Employer should factor returns into funding calculation. | Retained Investment Returns are part of the Fund and do not reflect employer funding. | Retained Investment Returns may influence the offset calculation; not disconnected from funding method. |
| Whether the WCJ erred in rejecting credible actuarial testimony based on cross-examination questions. | Cranna/Mumma credible; cross-examination mischaracterized their method. | Questions about hypothetical figures undermine credibility. | Reversal of Board; remand to apply credited actuarial evidence for offset. |
| Whether claimant can force a precise, exact amount of employer funding for the pension. | Exact contributions can be determined. | Exact contributions are impracticable; actuarial method acceptable. | Actuarial method acceptable; exact proof not required. |
Key Cases Cited
- The Pennsylvania State University v. Workers' Compensation Appeal Board (Hensal), 911 A.2d 225 (Pa.Cmwlth.2006) (actuarial method to quantify employer funding in defined-benefit pensions)
- Harvey v. Department of Public Welfare, 605 Pa. 636, 993 A.2d 270 (Pa.2010) (actuarial assessment as reasonable approach to funding; four percent statutory rate context)
- City of Philadelphia v. W.C.A.B. (Grevy), 968 A.2d 830 (Pa.Cmwlth.2009) (actuarial testimony sufficient to establish employer funding for offset)
- The Pennsylvania State University v. Workers' Compensation Appeal Board (Hensal), 911 A.2d 225 (Pa.Cmwlth.2006) (reiterates funding determination by actuarial methods)