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

JOHN J GULD JR, Employee

INVENSYS SYSTEMS INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 10003091MD


An administrative law judge 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 administrative law judge. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee is a member of the International Association of Machinists and Aerospace Workers, AFL-CIO, Blackhawk Lodge No. 957. He worked for a company called APB North America, which is owned by Invensys, the named employer. The employee's last day of work at APB North America was December 28, 2009 (week 1). The employee initiated a claim for benefits in that week and has filed weekly benefit claims thereafter. His weekly benefit rate is $363.

During the course of his employment the employer paid into a pension fund for the employee. Pursuant to a labor agreement, the employer's contributions to the pension fund were frozen in April of 1998. Thereafter the employer maintained the pension fund, but stopped paying into it. Another pension plan, administered by the employee's union and paid into by the employer, took effect after the first one was frozen.

In August of 2008, the employee began receiving an early retirement benefit from the "frozen" pension fund in the amount of $687.91 a month. He also began receiving monthly checks of $445 from the successor pension plan beginning in April of 2009. The latter payment was not reported to the department and is not the subject of this decision.

The issue to be decided is whether the employee was receiving a pension payment of as week 1 of 2009 that results in a reduction of his eligibility for unemployment insurance benefits.

Wis. Stat. § 108.05(7) provides, in part, as follows:

(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.

(c) Required benefit reduction. Except as provided in par. (cm), 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.

(e) Total employer funding. If no 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 reduce the weekly benefits payable for a week of partial or total unemployment by an amount equal to the weekly pension amount if:

1. The claimant has base period wages from the employer from which the pension payment is received; and

2. 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 employee received a pension payment from a retirement account that was totally employer funded. It is undisputed that the employer made all the contributions to the fund and that no contributions were made by the employee himself.

The employee's base period is the third quarter of 2007 through the second quarter of 2008. He had base period wages from the employer from which the pension was received and performed work for the employer since the start of the base period.

However, the statute also requires that the employee's work for the employer during the base period have affirmatively affected his eligibility for the pension or increased the amount of the pension payment. This factor has not been satisfied. The pension was "frozen" in 1998. No additional contributions were made to the pension since the start of the employee's base period.

The commission therefore finds that the employee's receipt of a monthly pension in the amount of $687.91 beginning in week 1 of 2009 will not reduce benefits for that week or subsequent weeks under the pension provisions of the statute, Wis. Stat. § 108.05(7).

DECISION

The decision of the administrative law judge is reversed. Accordingly, beginning in week 1 of 2009 the employee is eligible for benefits, if otherwise qualified. There is no overpayment as a result of this decision. This matter is remanded to the department for further proceedings with regard to the employee's second early retirement benefit of $445 per month. The department should conduct an investigation and issue a determination as whether the employee is receiving a pension payment and, if so, whether that payment results in a reduction of his eligibility for unemployment insurance benefits.

Dated and mailed September 23, 2010
guldjo . urr : 164 : 5 UW 980

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

NOTE: The commission did not confer with the administrative law judge about witness credibility prior to reversing. The facts here are not in dispute. The commission's reversal is as a matter of law.

cc: Invensys Systems (Kaukauna, WI)
Attorney Vicki Zick


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