How Does A Disability Pension Through My Employer Affect My Workers’ Comp Benefits?
This is a very common scenario. Many times, a public Employee who sustains a work-related injury is entitled to a “Disability Pension” in addition to workers’ compensation benefits under M.G.L. Chapter 152.
A “Public” employee works for a City, Town, State or Municipality. These “Public” employers have pension systems in place, for the benefit of the their employees. These pension systems more often than not, substitute Social Security, although, there are circumstances in which the Employee can receive both. These systems often have pensions for injuries that occur both in the course of employment, such as a slip and fall at work, as well as non-work related injuries, such as if the employee were involved in a car accident on his or her own time.
While every pension system is different, almost all pensions based on a work-related disability are offset when the Employee is receiving workers’ comp benefits for the same injury. What that means is that the receipt of a weekly workers’ comp check will likely reduce that employee’s disability pension.
For example, if a lineman for a city’s electric department fell from a ladder and sustained a career ending injury to his leg, he would be entitled to both workers’ compensation, and, because he was a public employee, a disability pension. He could collect a weekly workers’ comp check, as well as a monthly disability pension. However, his pension will, in all likelihood, be reduced as a result.
These pensions based on a “work related” injury are known as Accidental Disability Retirement, or ADR. For an employee to get ADR, three criteria must be satisfied: 1) The Employee must be mentally or physically incapable of performing the essential duties of his/her job, 2) The disability must likely be permanent, and 3) The disability must be related to the injury at work.
As mentioned above, if the injured employee is collecting weekly workers’ compensation benefits, and also gets approved for ADR through his employer, the pension will most likely be reduced. In “offset situations” such as these, many times it is in the Employee’s best interest to settle his or her workers’ compensation case. This will, in most circumstances, allow the employee to receive money from the settlement of the workers’ compensation case, and eliminate the offset against his/her pension, thus allowing the employee to receive their pension at the full rate.
Settling a workers’ comp case pursuant to M.G.L. Chapter 152, Section 48, under these circumstances, requires some very careful planning on the part of the Employee’s attorney. It also requires somewhat of a negotiation with the Employer’s Retirement Board, and this generally require a payback to the retirement board. Though this amount varies, most retirement boards accept between 15% and 20% of the gross settlement as a buy back, and as a result, allow the employee to collect the ADR pension in full.
As mentioned above, disability pensions can be different depending on the employer in question. However, it is more probably than not that such pensions will likely have an “offset provision” if the employee is also entitled to workers’ comp.
Situations that involves entitlement to both workers’ compensation and “disability pension” are highly complex. Though most situations generally go down a certain path, there is a fairly large degree of leeway involved. Thus, it is essential to have an attorney who is experienced in these matters, to ensure that your rights are protected.
At Troupe Law Office, we have over 40 years of experience in these fields. Please visit our web site at https://www.troupelawoffice.com for more information. Or, call us at (978) 531-7401. We offer free consultations for all cases.