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

THOMAS G OBUKOWICZ, Employee

DELPHI AUTOMOTIVE SYSTEMS HUMAN RESOURCES LLC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 09610911MW


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 the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, as of week 45 of 2009, benefits otherwise payable for any week of partial or total unemployment shall be reduced by 50 percent of the weekly pension amount of $733.27.

Dated and mailed April 9, 2010
obukoth . usd : 150 : 1 UW 980

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION

The employee petitioned the appeal tribunal decision which found that the pension reduction applied to his eligibility for unemployment insurance benefits. As part of his petition, the employee cited the fact that the pension was now managed by another entity and that he would be facing reduced pension payments. He also cited other workers who were currently receiving a pension without having an unemployment insurance benefit offset.

The employee worked for 30 years for the entity ultimately closing as Delphi Automotive Systems. He worked as a facility maintenance manager and his last day of work was in the fourth quarter of 2008. Although the employee was under age 55, he was eligible for the pension because he had 30 years of service with the employer. During the course of his employment, his employer contributed the majority of the amount to his pension.

The employee received his first pension payment on December 12, 2008, while it was still under Delphi. From December 2008 through November 2009, his monthly pension was $3,177.08. Then the Delphi Retirement Program was terminated by the Pension Benefit Guarantee Corporation (PBGC) on July 31, 2009 (week 31) with PBGC becoming trustee of the plan effective August 10, 2009 (week 33). Because of the size of the plan, the actual transfer did not take place until January 1, 2010 (week 1) with the prior administrator, Fidelity, continuing until December 31, 2009 (week 1). The plan was considered under funded.

Delphi defaulted on the employee's health care, life and dental insurance resulting in a higher pension of $3,951.08 beginning in December 2009. Beginning in January 2010, his pension amount went back to $3,177.08. The employee has been notified by PBGC that his pension payments are going to change in the future with a possible reduction up to 50% and that he will have to "repay" the higher pension he received from July 31, 2009 with an additional pension reduction to offset the overpayment.

Department records reflect that the employee initiated a claim for unemployment insurance benefits on November 1, 2009 (week 45); his base period consists of the June 29, 2008 through June 27, 2009 (quarter 3 of 2008 through quarter 2 of 2009).

Wis. Stat. § 108.05(7) provides, in material part and with emphasis added:

(7) Pension payments. (a) Definitions. In this subsection:

1. "Pension payment" means a pension, retirement, annuity, or other similar payment made to a claimant, based on the previous work of that claimant, whether or not payable on a periodic basis, from a governmental or other retirement system maintained or contributed to by an employer from which that claimant has base period wages, other than a payment received under the federal Social Security Act (42 USC 301 et seq.) that is based in whole or in part upon taxes paid by the claimant.

2. "Rollover" means the transfer of all or part of a pension payment from one retirement plan or account to another retirement plan or account, whether the transfer occurs directly between plan or account trustees, or from the trustee of a plan or account to an individual payee and from that payee to the trustee of another plan or account, regardless of whether the plans or accounts are considered qualified trusts under 26 USC 401.

. . .

(c) Required benefit reduction. Except as provided in par. (cm),[(1)] if a claimant actually or constructively receives a pension payment, the department shall reduce benefits otherwise payable to the claimant for a week of partial or total unemployment, but not below zero, if pars. (d) and (e) or if pars. (d) and (f) apply.

. . .

(d) Allocation.

1. If a pension payment is not paid on a weekly basis, the department shall allocate and attribute the payment to specific weeks if:

a. The payment is actually or constructively received on a periodic basis; or

b. The payment is actually or constructively received on other than a periodic basis and it has become definitely allocated and payable to the claimant by the close of each such week, and the department has provided due notice to the claimant that the payment will be allocated in accordance with subd. 2. b.

2. The department shall allocate a pension payment as follows:

a. If the payment is actually or constructively received on a periodic basis, the amount allocated to each week is the fraction of the payment attributable to that week.

b. If the payment is actually or constructively received on other than a periodic basis, the department shall make the allocation at not less than the claimant's most recent full weekly wage rate, unless the department determines that another basis for the allocation is more reasonable under the circumstances.

. . .

(f) Partial or total employee funding. If any portion of a pension payment actually or constructively received by a claimant under this subsection is funded by the claimant's contributions, the department shall compute the benefits payable for a week of partial or total unemployment as follows:

. . .

2. If the pension payment is received under another retirement system,[(2)] the claimant has base period wages from the employer from which the pension payment is received, the claimant has performed work for that employer since the start of the claimant's base period, and that work or remuneration for that work affirmatively affected the claimant's eligibility for or increased the amount of the pension payment, the department shall reduce the weekly benefits payable for a week of partial or total unemployment by 50% of the weekly pension amount, or by the percentage of the employer's contribution if acceptable evidence of a contribution by the employer other than 50% is furnished to the department.

The termination of the Delphi Retirement Program by PBGC does not alter the applicability of Wis. Stat. § 108.05(7); the statute does not require that the employer manage the pension. PBGC is a federal corporation created to insure the pensions of workers and retirees in private-sector defined plans. When the Delphi fund "rolled" into PBGC, the total amount was not taxable and did not affect the employee's eligibility. However, when the employee is actually "paid" his pension, he is keeping it and it becomes taxable. Additionally because he had service in the base period for the employer that contributed to the pension, the statutory reduction applies.

Finally, with respect to the petitioner's claim of unfair treatment in relation to coworkers, the commission notes that the employee's eligibility is determined by the facts in his case and the application of the statute to those facts. Yet, the commission has reviewed the departmental records regarding the named individuals; the records reflect their circumstances differ from the employee. In particular, each is receiving unemployment insurance benefits without a pension reduction but each was determined to have ceased services before the base period. Again, the employee's situation differs because he worked during a portion of his base period for the employer, namely the fourth quarter of 2008.

The commission therefore affirms the appeal tribunal decision.

The commission finally notes that the employee has the ability under Wisconsin Statute 108.06(2)(d)(3) to request that the department set aside the benefit year that he initiated in week 49 of 2009. Specifically, if the employee's request were granted and he were to file a valid new claim for unemployment insurance benefits in the second quarter of 2010, it appears there would be no work performed by the employee for the employer in his base period, the calendar year 2009. The employee may wish to contact an unemployment insurance claims specialist line to discuss his options and whether the pension offset would apply for a valid new claim begun in the second quarter of 2010 and, what his benefit rate would be at that time.



[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]


uploaded 2010/05/12


Footnotes:

 

(1)( Back ) Paragraph (cm) applies to payments received under Social Security Act.

(2)( Back ) Subdivision 1. applies to pension payments received under the railroad retirement act, 45 USC 231 et seq.

(3)( Back ) Wisconsin Statute 108.06(2)(d) provides,

A claimant may request that the department set aside a benefit year by filing a written, verbal or electronic request in the manner that the department prescribes by rule. The department shall grant the request and cancel the benefit year if the request is voluntary, benefits have not been paid to the claimant and at the time the department acts upon the request for that benefit year the claimant's benefit eligibility is not suspended. If the claimant does not meet these requirements, the department shall not set aside the benefit year unless the department defines by rule exceptional circumstances in which a claimant may be permitted to set aside a request to establish a benefit year and the claimant qualifies to make such a request under the circumstances described in the rule.