Claim of Mace v. Owl Wire & Cable Co.Claim of Mace v. Owl Wire & Cable Co.
Appeal from a decision of the Workers’ Compensation Board, filed June 22, 1999, which determined what interest rate should be applied in calculating assessments to the Aggregate Trust Fund.
Claimant’s husband (hereinafter decedent) suffered an acute
The workers’ compensation carrier appealed, claiming that Workers’ Compensation Law § 27 (5) provides that the present value of the award should be calculated using a 6% assumed interest rate. The full Board ultimately disagreed, determining that the date of decedent’s heart attack in 1971 — and not his subsequent 1991 death — is the date of his “accident” which determines the assumed interest rate to be used under Workers’ Compensation Law § 27 (5) in calculating the present value of an award to be paid into the Fund by the employer or carrier. Thus, the Board ruled that under Workers’ Compensation Law § 27 (5), the assumed interest rate of 3% applies to calculate the present value of the award for this 1971 accident.
Notably, the statutory “interest” rate used to calculate an award’s present value acts essentially as a discount to the employer or workers’ compensation carrier, reducing the amount that they are required to pay into the Fund by the assumed interest rate to be earned on payments made to the Fund. In 1983, the Legislature increased the interest rate — or discount — from 3% to 6% to reduce employer/carrier costs when experience demonstrated that the 3% rate used to calculate the present value of awards resulted in employers/carriers paying large amounts of money into the Fund, whose assets were then reinvested at higher interest rates, causing a considerable surplus in the Fund (see, Governor’s Approval Mem, 1983 NY Legis Ann, at 185; Mem of State Executive Dept, 1983 McKinney’s Session Laws of NY, at 2536). The apparently novel question of statutory interpretation raised on the carrier’s appeal to this Court is whether the present value of an award to be paid into the Fund should be calculated based upon the assumed interest rate in effect on the date of the original injury or accident (3% in 1971) or the higher assumed
After an award for death benefits or other compensation requiring periodic payments has been granted the Board may, and in some cases must, require the employer or its workers’ compensation carrier to pay the present value of all future payments of the award, together with administrative costs, into the Fund created by Workers’ Compensation Law § 27 (see, Workers’ Compensation Law § 27 [2]; Minkowitz, Practice Commentaries, McKinney’s Cons Laws of NY, Book 64, Workers’ Compensation Law § 27, at 410). The Fund was created to secure the obligations of insurers to policyholders and beneficiaries in case of insolvency (see, American Ins. Assn. v Bouchard,
Workers’ Compensation Law § 27 (5) provides, as relevant to this appeal, that the employer or its workers’ compensation carrier is required to pay into the Fund the present value of an award, which is actuarially computed using the “survivorship annuitants table of mortality, the remarriage tables of the Dutch Royal Insurance Institute and interest at [3.5%] per annum on claims based on accidents occurring up to and including June [30, 1939], at [3%] per annum on claims based on accidents occurring from July [1, 1939] up to and including August [31, 1983], and at [6%] per annum on claims based on accidents occurring thereafter” (emphasis supplied). Here, the Board ultimately concluded that, consistent with its prior decisions interpreting Workers’ Compensation Law § 27 (5), the date of decedent’s original 1971 heart attack or “accident” controls for purposes of assigning the applicable assumed statutory interest rate of 3% in effect at that time under subdivision (5), and not the date of his causally-related 1991 death. Inasmuch as we find this statutory interpretation to be rational and reasonable and consistent with the Board’s prior decisions, we uphold it (see, Matter of Goodman v Pollio Dairy Prods.,
As with any case of statutory interpretation, ascertainment of legislative intent begins with the language of the statute itself (see, Majewski v Broadalbin-Perth Cent. School Dist.,
Concededly, since a cause of action for death benefits does not accrue prior to death (see, Matter of Zechmann v Canisteo Volunteer Fire Dept., supra, at 753) and an award for such benefits is likewise not made until after death, the Legislature could have provided for the more recent date of death to determine the assumed interest rate to be used to calculate the present value of unpaid death benefits thereafter payable into the Fund. Indeed, the Board’s November 23, 1998 determination, later rescinded, ruling that the 6% rate — in effect at the time of decedent’s 1991 death — applies, made just such a policy argument thát the more recent, higher interest rate is the one which more likely matches the interest rate that the Fund will earn on the employer/carrier’s payment. Such policy arguments, however, are better addressed to the Legislature (see, Joblon v Solow,
Crew III, J. P., Peters, Mugglin and Lahtinen, JJ., concur. Ordered that the decision is affirmed, without costs.