Section 123.9. Application of offset for pension benefits

(a) Offsets of amounts received from pension benefits shall be achieved on a weekly basis. If the employe receives the pension benefit on a monthly basis, the net amount contributed by the employer and received by the employe shall be divided by 4.34. The result is the amount of the weekly offset to the workers’ compensation benefit.

(b) When an employe receives a pension benefit in the form of a lump-sum payment, the actuarial equivalent of the lump-sum with respect to the annuity options (qualified joint and survivor annuity or life annuity) available at the time of the employe’s receipt shall be used as the basis for calculating the offset to the workers’ compensation benefit. The monthly annuity equivalent shall be divided by 4.34. The result shall be the offset to the workers’ compensation benefit on a weekly basis.

(c) Pension benefits which are rolled over into an IRA or other similarly restricted account may not offset workers’ compensation benefits, so long as the employe does not withdraw or otherwise utilize the pension benefits from the restricted account while simultaneously receiving workers’ compensation benefits from the liable employer.

(d) If the employe, while receiving workers’ compensation benefits from the liable employer, withdraws or otherwise utilizes pension benefits from the IRA or other similarly restricted account, when the IRA or account is funded in whole or in part by the liable employer’s contributions, the insurer is entitled to an offset to workers’ compensation benefits.

(1) If the employee begins receiving a monthly payment from the IRA or other similarly restricted account, the insurer shall receive an offset to the workers’ compensation benefit equal to the offset the insurer would be entitled to if the employee were receiving a monthly pension benefit under subsection (a).

(2) If the employee withdraws or otherwise utilizes an amount from the IRA or other similarly restricted account which is greater than the actuarial equivalent of the lump sum with respect to the annuity options (qualified joint and survivor annuity or life annuity) available at the time of the employee’s receipt, the insurer shall be entitled to an offset against future payments of workers’ compensation benefits in an amount equal to the amount of the pension benefit withdrawn or otherwise utilized by the employee. The amount of the pension benefit withdrawn or otherwise utilized by the employee shall be divided by the weekly workers’ compensation rate. The result shall be the number of weeks, and fraction thereof, the insurer may offset against future payments of workers’ compensation benefits.

(e) The employee shall report the subsequent receipt of pension benefits from the IRA or other similarly restricted account to the insurer on Forms LIBC-756 and LIBC-750, ‘‘Employee Report of Wages (Other Than Workers’ Compensation Benefits Received).’’

Notation

Cross References

This section cited in 34 Pa. Code § 123.1 (relating to purpose); and 34 Pa. Code § 123.5 (relating to offset for benefits already received).