Court Determines MSA Funds Not To Be Considered When Calculating Pension Plan Offset Amounts

In Rood v. New York State Teamsters Conf. Pension & Ret. Fund, 2014 U.S. Dist. LEXIS 115722, the Plaintiff alleged a claim for disability pension benefits under the Employee Retirement Income Security Act (ERISA) and filed suit following a recalculation of his pension benefits, where the Defendant, a multi-employer plan that provides pension funds, included the amount of the Plaintiff’s Medicare-set Aside (MSA) in its calculation to offset the amount of monthly benefits he should receive.

The language of the Plan provides that the amount of Fund Disability Benefits the participant receives will be reduced by the amount of their worker’s comp benefits, “unless such amounts also are used to offset other payment sources (i.e., Social Security disability awards, long-term disability, etc.) for which he may be entitled.” The Plan’s language specifically names Social Security disability awards and long term disability as examples of this exception, and the Plaintiff argued that his MSA should be similarly considered under the title of “other payment sources.” The Court agreed and found that the “etc.” following the two enumerated categories left the language of the Plan open to interpretation. Because the MSA is used to offset another payment source, Medicare, the funds in the Plaintiff’s MSA should not have been included when the Defendant recalculated the Plaintiff’s pension benefits.  The Court’s analysis focused on the fact that the Plaintiff was only able to use part of his Worker’s Compensation Award without any restrictions since the portion allocated to the MSA is strictly for medical expenses otherwise reimbursable by Medicare and is not accessible by the Plaintiff.