STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

CRAIG A ARMSTRONG, Employee

J H FINDORFF & SON INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 08003775MD


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked as a carpenter for 45 years. In May of 2008 the employee applied for a pension. By letter dated July 16, 2008, and received by the employee on July 18, 2008 (week 29), the employee received notice of the amount of his pension. His gross monthly benefit was $1,458.40. The first pension check was received on August 1, 2008 (week 31). The employee filed a claim for unemployment insurance benefits on July 13, 2008 (week 29), reporting as the reason for separation, a layoff.

The employee's pension was 100 percent funded by contributions from various employers, including the named employer from which he earned base period wages applicable to his benefit claim at issue here, who by contract with the employee's trade union, contributed to the pension fund over the years as part of his compensation. The employee contended that he paid for his pension entirely because the contributions were paid as part of his wage. Such contention cannot be sustained. The commission set forth the distinction between an employer contribution and an employee contribution in Thomas Widzinski, UI Dec. Hearing No. 07402385OS (LIRC March 7, 2008) as follows:

The commission position is that if a contribution is from an employee's taxed compensation it is considered a contribution by the employee. However, if the source of the contribution is a pre-tax contribution, the department considers that contribution to be employer funded. Zimmerman v. Army, UI Dec. Hearing No. 07200677EC (LIRC Oct. 26, 2007), citing Mayer v. Local 1056 Millwrights, UI Dec. Hearing No. 04404010GB (LIRC March 17, 2006).

The employee does not pay taxes on the contributions the employer makes to the union for his pension. The arrangement whereby the employer makes the contribution to the union or a designated fund is not unfamiliar to the commission. Ardell Helland, cited in the appeal tribunal decision involved a union worker and pension contributions made by the employer out of the worker's total wage compensation. The arrangement by which the pension contribution was made in this case is similar to others the commission has reviewed, including that in Murphy v. LIRC and Miron Construction Company, Inc., Case No. 06 CV 125 (Wis. Cir. Ct., Oconto Co., June 18, 2007).

In Murphy, the claimant was a member of the Wisconsin Carpenter's Union and received monthly pension payments from the Wisconsin Carpenters' Pension Fund. When he worked for the employer, it paid him a "normal hourly rate" for his wage, and also made hourly-based contributions to various funds including to the WCPF. The contributions were made without deductions for federal or state taxes and no unemployment tax was paid on the amount contributed. The amounts the employer were required to pay to the claimant and to the WCPF were negotiated between the claimant's union and the Associated General Contractors (AGC) of Wisconsin. The claimant Murphy made arguments similar to those made by the employee in this case:

Plaintiff alleges that the only wage item negotiated between his union and AGC is the "Normal Hourly Total" to be paid for each hour worked by a carpenter, millwright, or pile driver. He further alleges that after the "Normal Hourly Total" is negotiated, his union representatives unilaterally determine how much of that figure will be allocated to the WCPF, and then they inform AGC of their decision. According to plaintiff, the AGC contractors then simply follow the union's dictate and contribute this hourly amount to the WCPF, making the contractors mere conduits through which the employees' "own funds" pass on their way to the WCPF. In other words, plaintiff asserts that the money contributed to the WCPF was his own money, and therefore his pension is composed entirely of his own contributions. The court cannot accept plaintiff's allegations or arguments.

The employee notes in his petition that he received the notice regarding his pension in July and was not paid until August. Pursuant to Wis. Stat. § 108.05(7) the employee's benefits are reduced after he has actually or constructively received a pension payment. Wis. Stat. § 108.05(7)(g) provides:

(g) Constructive receipt. A claimant constructively receives a pension payment under this subsection only for weeks occurring after:

1. An application for a pension payment has been filed by or on behalf of the claimant; and

2. The claimant has been afforded due notice from his or her retirement system of his or her entitlement to a pension payment and the amount of the pension payment to which he or she is entitled.

The employee was afforded due notice of his entitlement to a pension payment and the amount of the pension payment on July 18, 2008 (week 29). Pursuant to Wis. Stat. § 108.05(7)(g), he constructively received that pension in the week after he received such notice. Therefore, the employee's benefits are reduced as of week 30 of 2008, due to his constructive and actual receipt of a pension payment as of that week.

The commission therefore finds that as of week 30 of 2008, the employee was receiving a pension payment that when apportioned, reduced and calculated on a weekly basis amounted to $336.60 and benefits otherwise payable for a completed week of partial or total unemployment are reduced by that amount, within the meaning of Wis. Stat. § 108.05(7).

DECISION

The decision of the administrative law judge is affirmed in part and reversed in part. Accordingly, as of week 30 of 2008, benefits otherwise payable for any week of partial or total unemployment are reduced by $336.60. The employee is required to repay the sum of $337.00.

Dated and mailed December 23, 2008
armstcr . urr : 132 : UW 980  UW 990

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner



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