IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Robert Blythe, :

Petitioner :

: No. 437 C.D. 20 20
v. : : Submitted: November 20 , 20 20 Workers’ Compensation Appeal : Board ( City of Chester) , :

Respondent :

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE J. ANDREW CROMPTON, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE McCULLOUGH FILED: December 29 , 2021

Robert Blythe (Claimant) seeks review of the April 10, 2020 o rder of the Workers’ Compensation Appeal Board (WCAB)
, which affirm ed the May 15, 2019
d ecision and o rder of the Workers’ Compensation Judge (WCJ) to award the City of Chester ( City ) the entitlement of a pension benefit offset credit. Factual and Procedural History Claimant injured his right shoulder while employed as a police officer for the City and was awarded total disability benefits at the rate of $845.00 per week as of August 8, 2013. On February 8, 2016, the City filed a petition for suspension alleging that (1) as of November 30, 2015, Claimant had voluntarily withdrawn from the workforce, and (2) it was entitled to a credit for pension benefits paid to Claimant but
funded b y the City . By decision circulated June 19, 2017, the WCJ denied the petition2

for suspension. The WCJ also denied the City ’s request for a credit for pension benefits
because the City did not present sufficient evidence to establish its entitlement to a
credit: This [WCJ] finds further that even if Claimant could be said

to be retired, [the City’s] evidence does not establish an entitlement to a suspension of Claimant’s workers’ compensation benefits. [ T he City’ s witness, Dejuana ] Mosley did not testify as an expert and did not adequately explain Exhibit D

- 4 so as to allow it to form the basis of any alteration in Claimant’s benefits. [Exhibit] D

- 4 has no authentication. This [WCJ] has no idea who prepared it or what the figures purport to show. This [ WCJ] accepts that [Exhibit] D

- 3 shows that Claimant’s pension

. . . is $6,061.58 per month, but even if this [p] etition [for suspension] was granted and Claimant had voluntarily removed himself from the workforce, there is no evidence as to the proper cred it. (WCJ decision, June 19, 2017, Finding s of Fact (F.F.) No. 12 .)

The City appealed the decision to the WCAB, which (1) affirmed the denial of the petition for suspension and the denial of the credit, but (2) remanded the matter to the WCJ “to allow [ th e City ] to submit substantial competent evidence which, if found to be credible, will establish the amount of its funding of [Claimant]’s pension benefit and support the assertion of a credit under section 204(a) of the [Act ]

. [ 1 ] ” ( WCAB decision, May 16 , 201 8 , at 8.)

1 Act of June 2, 1915, P.L. 736, as amended , 77 P.S. § 7 1

. Section 204(a) of the Act, reads, in pertinent part: The severance benefits paid by the employer direc tly liable for the

payment of compensation and the benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award mad e under sections 108 [ added by the Act of October 17, 1972, P.L. 930, 77 P.S. § 27.1] and 306 [77 P.S. §§ 511

- 517], except for benefits payable under section 306(c) [77 P.S. § 513]. The employe shall provide the insurer with proper authorization (Footnote continued on next page...)3 The City ’s Expert On remand, the City presented the testimony of its Deputy Controller, Dejuana Mosley (Mosley), who had previously testified in the underlying proceedings.
The WCJ summarized Mosley’s prior testimony relevant to the pension credit issue, as
follows: a. Ms. Mosley is the Deputy Controller for the City of

Chester and handles all issues related to the pe nsion and internal controls for the City. She also handles the deferred retirement option program (“DROP”). Ms. Mosley explained in detail the provisions of the “DROP” program which is a retirement benefit offered to police and fire personnel. Claimant entered the DROP program on December 1, 2010, and his separation date would be five years later on November 30, 2015.
b. Ms. Mosley testified that an employee contributes to a Pension Fund with payroll deductions. The City receives State Aid through Act 44 [ 2 ] and then the City is responsible to make municipal minimal obligation annual contributions. The City, State and employee contribute. When an employee is in the DROP program, the State aid is still contributed through the plans, but they are deeme d retired and are no longer making pension contributions. The City still receives State Aid but not for the person enrolled in the DROP program because they are no longer making pension contributions. When Claimant entered the DROP program, there was no longer any State aid for him, but he was still getting credit for what the City paid in for him. Once you go

to secure the amount which the employe is receiving under the Social Security Act. 77 P.S. § 7 1 (emphasis added).

2 Act of September 18, 2009, P.L. 396, No. 44 (commonly known as Act 44) amended the Municipal Pension Plan Funding Standard and Recovery Act, Act of De cember 18, 1984, P.L. 1005, No. 205, as amended , 53 P.S. §§895.101

- 895.1131 (commonly known as Act 205) by adding Chapter 11, titled “Deferred Retirement Option Plans.” See Sections 1101

- 31 of Act 205, 53 P.S. §§ 895. 1101

- 31.4

into the DROP program your pension deduction automatically ceases. Once you enter the DROP program only Act 205 money and City money would be put in.
c. Ms. Mosley testified that [] the City of Chester offers a defined benefit plan and payment is based off of a contract or city ordinance obligation based on criteria which is usually set up by age and service years. Once an employee qualifies for obtaining years or age, the benefit is based off your calculations that are described in your contract or city ordinance. For police officers, once they reach retirement age or years the benefit is their last twelve months that they worked. The City con tribution into the pension fund is a global contribution for all people that the City is paying for within the fund. In order to tell what contribution was made on behalf of Claimant, Ms. Mosley had to consult with consultants and the State Actuary.

d. C laimant separated from the DROP program on November 30, 2015 and he started receiving his actual pension and his DROP benefit in December of 2015. This means he has retired from the City of Chester. On cross examination, Ms. Mosley testified that as a DRO P participant Claimant is receiving a weekly check from the City in his pension benefit that was calculated as being invested for him. The plan can determine the City ’ s Municipal Minimum Obligation (MMO) payment from the year Claimant started working unti l he separated from the DROP program. The plan can determine what the City required to put in as well as the State Aid invested and the investment earnings. This would show whether or not the City made the MMO or overpaid it. Ms. Mosley testified that e xcept for 2014, 2015 and 2016, the City has made [MMO] contributions although they were late. When the contributions are late, the City is charged seven and a half percent (7.5%) interest which is credited to the respective pension fund. (WCJ decision, May 15, 2019, F.F. No. 8(a)

- (d).)5

On remand, t he City also presented the testimony of Larry Brisman (Brisman), who was employed with the Beyer

- Barber Company as a vice president and actuary. He ha s been an enrolled actuary since 1992. ( Reprod uced Record ( R

. R .) at 29a, 182a

- 84a

. ) He was responsible for close to 400 municipal pension plans. He explained that “we would run the evaluations of the pension plans every two years. It’s my responsibility to review the results, help prepare reports t hat go to the municipalities to show them what their funded status is at the particular point in time. Also, what the required contribution is that needs to be made in order to satisfactorily fund the pension plan.” (R

. R

. at 29a, 183a

. )

Brisman was requ ested by the City , through its third

- party administrator, Thomas Anderson & Associates, to review the pension plan with respect to the
Claimant. Brisman reviewed an employee pension face sheet that provided C laimant’s date of birth, salary , and monthly be nefit as well as a list of the contributions that were made by Claimant, the City , and the Commonwealth of Pennsylvania. After review of the materials, Brisman prepared a letter to the third

- party administrator detailing the
calculation that was done in o rder to determine the City’s contribution to Claimant’s pension benefit. (R

. R

. at 29a, 188a, 191a , 212a

- 16a

. )

Brisman explained how he performed the calculations. The calculations were based on Claimant’s personal information such as date of birth, date of employment, and date of disability. Brisman t hen factored an interest rate assumption
or real rate of return of 71⁄2% per year , as that represent ed a long

- term rate of return of the pension plan. Brisman explained that o ne must look at the asset alloca tion of the plan and “apply capital market assumptions to it to get a sense of what the long

- term rate would be.” (R.R. at 29a, 191a

- 94a.) The rate of interest/real rate of return of 71⁄2%

was within the average range of what municipalities use. Id

.6

Brisman further explained that to determine Claimant’s contribution, he
looked at the accumulated value of Claimant’s contributions as of December 1, 2010. That amount was $75,157.00. The accumulated value wa s divided by an annuity factor
which was deter mined from the 71⁄2% interest and mortality table to obtain the annual benefit or contribution made by Cl aimant. Claimant’s annual contribution was $5,822.66. (R

. R

. at 29a, 195a

- 96a

. ) Brisman explained that t he remaining benefits in the amount of $66,916.3 0 were then attributable to either the Commonwealth or the City

. Using the figures provided by the third

- party administrator, Brisman determined
that the accumulated contributions from the Commonwealth were $40,671,799 and the City were $13,222,520. Divi ding the remaining amount of $66,916.30 by each of the accumulated contributions, he determined that the City ’s portion of the contributions was $21,754.70, which was 29% of the total annual benefit. Brisman determined that Claimant’s portion was 8% and t he Commonwealth’s portion wa s 62% of the total figure. Brisman confirmed that e ven if the City did not make the MMO, the calculations accurately reflect ed only the years money was contributed. He explained
that i f the City made a late payment, it paid in terest and the contribution to the pension fund was only considered in the year the contribution was made. (R

. R

. at 29a

- 30a,
196a

- 97a, 200a

- 01a, 213a

- 16a

. )

Brisman explained in detail how he calculated the annual portion of benefits paid to the portion of the pension fund attributable to Claimant by the City to be $21,754.70 or 29% of the total figure. Claimant provide d no rebuttal evidence to
show there wa s no entitlement to a credit and did not provide any documents or calculations that differ ed from the documents and Brisman’s testimony regarding the City ’s credit. (R

. R

. at 30a

. )7 WCJ Decision By decision dated May 15, 2019, the WCJ granted the City ’s s uspension

p etition and awarded the City a 29% credit against Claimant ’s ongoing temporary to tal disability benefits from December 25, 2015, and ongoing , as long as the Claimant continued to receive both workers’ compensation benefits and his pension benefits. (W CJ decision, May 15, 2019 , F.F. No. 13 .) The WCJ found that the City was entitled

to an additional credit of 20% against Claimant’s temporary total disability benefits
until the City had recouped the credit that it was owed from December 25, 2015, until
the date that the City took its credit. Id. F.F. No. 14. In F inding of Fact No. 11, the WCJ found the testimony of the City ’s witnesses, Mosley and Brisman, credible and persuasive. The WCJ noted that Claimant failed to provide rebuttal evidence to show
that the City was not entitled to a pension offset credit or p rovide any documents or calculations that differ ed from the documents provided by the City’s experts

.

Claimant appealed to the WCAB, arguing that (1) the City waived its right to present evidence to establish its entitlement to a credit, and that the WCAB erred by ordering a remand; and (2) the evidence was not sufficient to establish the amounts contributed by the City and Claimant to permit the appropriate ca lculations under the
Act

– specifically, because the actuarial evidence accepted as credible by the WCJ included contributions from the Commonwealth, which was not his employer, and
because the City did not address pension underfunding. WCAB Opinion
On Ap ril 10 , 20 20 , the WCAB circulated an opinion affirming the WCJ ’s
decision

. With regard to the issue of waiver and whether the WCAB erred in remanding the matter to allow the City to present additional evidence , the WCAB held
that no error had occurred . It reasoned that section 204(a) of the Act requires that8

employer

- funded contributions to a claimant’s benefits under a pension plan must be credited against a workers’ compensation award. 77 P.S. §71(a). It concluded that because the language of section 204(a) is mandatory, a remand was not improper.

Regarding the pension benefit offset credit, the WCAB rejected Claimant’s argument that the City failed to establish the extent of its funding of Claimant’s pension benefits. The WCAB did not agree with Claimant that Brisman’s testimony was deficient. The WCAB concluded that Brisman calculated the separate contributions by Claimant, the City, and the Commonwealth, and that he did not evade questions concerning MMO payments and that he explain ed that late payments are included in the year they were actually made.
Issues and Analysis
In his petition for review, 3 Claimant raises two issues: (1) w hether the
WCAB erred in remanding the case to the WCJ to allow the City to submit additional
eviden ce on the pension benefit offset credit ; and (2) w hether the WCAB erred by concluding that the City met its burden of proving its entitlement to a pension benefit
offset credit

. 1.

In his first issue, Claimant argues that the WCAB erred by remanding this matter to the WCJ for further evidence, and the WCJ’s acceptance of additional
evidence was error. He submits that a failu r e to present evidence to establish the entitlement to spec ific relief is fatal to a petition in workers’ compensation matters. (Claimant’s Br. at 10 (citing Romaine v. Workers’ Compensation Appeal Board (Bryn

3 This Court’s scope of review is limited to determining whether necessary findings of fact are supported by substantial evidence, whether an error of law was committed, or whether constitutional rights were violated. Schriver v. Workers’ Com pensation Appe al B oard (Department of Transportation) , 699 A.2d 1341 (Pa. Cmwlth. 1997).9

Mawr Chateau Nursing Home ), 901 A.2d 477 (Pa. 2006) ) .) He contends that in the original proceedings bef

ore the WCJ, the City chose not to present expert testimony
and that was fatal to its request for a credit for pension benefits

. (Claimant’s Br. at 9

- 14 (citing Commonwealth v. Workers ’ Com pensation Appeal B oard (Harvey) , 993 A.2d 270 (Pa. 2010), and othe r cases for proposition that actuarial expert testimony is required to establish entitlement to a pension offset when there is a defined pension plan).) He asserts that the WCAB found that the City had failed to present substantial competent evidence to e stablish its entitlement to a credit. In Claimant’s view, t hat should have ended the WCAB’s inquiry. He argues that the purpose of a remand is not to allow a party to present evidence it failed to present previously.

We discern no error in the WCAB’s remand to permit the City to provide substantial competent evidence to establish how much it contributed to the pension. The WCAB has broad discretionary authority under section 419 of the Act, added by the Act of June 26, 1919, P.L. 642, 77 P.S. §852 , to remand to a WCJ. Section 419 of
the Act provides:

The [WCAB] may remand any case involving any question of fact arising under any appeal to a [WCJ] to hear evidence and report to the [WCAB] testimony taken before him or such testimony and findings of fact thereon as the [WCAB] may order. . . . 77 P.S. §852. See also McDaniel v. Workers’ Compensation Appeal Board (M aramont Corp oration ) , 157 A.3d 544, 548 (Pa. Cmwlth. 2016). S ection 204(a) of the Act provides that the benefits of a pension plan, to the extent funded by the employer directly liable for the payment of compensation, shall be credited against a workers’ compensation award. 77 P.S. §71(a) (emphasis added). The purpose of section 204(a)
of the Act is to reduce the cost of workers’ compensation benefits in Pennsylvania by allowing employers to avoid paying duplicate benefits for the same loss of earnings.10

Kramer v. Workers’ Compensation Appeal Board (Rite Aid Corporation) , 883 A.2d 518, 536 (Pa. 2005) ; Harvey , 993 A.2d at 281 ( citing Kramer and noting the Legislature ’ s clear intention in enacting section 204(a) was “ to afford effective
redress ” ) ; Pennsylva nia State University v. Workers’ Compensation Appeal Board (Hensal) , 911 A.2d 255 (Pa. Cmwlth. 2005). Here, the City presented evidence in the original proceedings before the WCJ that the City had definitely contributed funds to Claimant’s pension. I n li ght of the clear legislative intent to provide employers relief from concurrent payment of workers ’ compensation and employer

- funded pension
benefits , we cannot say the WCAB erred in requiring the WCJ to take evidence and to make findings on a crucial issue necessary for the proper application of the law

. See Craftsmen v. W

orkers’ Compensation Appeal Board (Krouchick) , 809 A.2d 434 (Pa.
C mwlth. 2002) ( upholding WCAB’s remand pursu ant to section 419 of the Act where
the WCAB was convinced that additional findings were needed on the issue of causation, for proper application of the law surrounding the claimant ’ s burden of proof in a cardiac death case). Because the language of s ecti on 204(a) is mandatory, we conclude that the WCAB correctly held that a remand to the WCJ was proper. 77 P.S §71(a)

. 2.

Next , Claimant argues that , under section 204(a) of the Act , an employer is only entitled to offset workers’ compensation disability b enefits from a pension plan “to the extent funded by the employer directly liable for the payment of compensation.” 77 P.S §71(a). Referring to the WCJ’s F inding of Fact No. 8(3) (“[t]he remaining benefits were then attributable to either the Commonwealth or [the City]”), Claimant argues that the City’s evidence did not reflect its actual contributions because Brisman
i ntermingled the City’s contributions with those of the Co mmonwealth. He contends11

that because the offset calculations included the Commonwealth, not Claimant’s actual employer, the City’s evidence was hypothetical and did not represent its actual
contributions. We disagree with Claimant’s assessment

.

Under s ection 204(a) of the Act , 77 P.S. §71(a) , the e mployer bears the burden to establish the extent of its funding of the c laimant’s pension benefits. Department of Public Welfare/Polk Center v. Workers’ Compensation Appeal Board (King) , 884 A.2d 343 , 347 (P a. Cmwlth. 2005)

. Actuarial assumptions and calculations may be used to determine the employer

- funded component of a defined benefit pension plan. Harvey , 993 A.2d at 281

- 82

. The Act does not require the employer to prove the
amount of its actual contri butions. Id

.

Based on the record, we conclude that the City’s evidence, as accepted by the WCJ, meets this standard. The City presented unrebutted evidence that it
contribute d $21,754.70 to Claimant’s annual pension benefits that he receive d in
addition to his workers’ compensation benefits. 4 The WCJ credited the testimony of Mosley, the City’s Deputy Controller, which was taken in the original proceeding. The
WCJ also foun d Brisman’s testimony credible, observing that Brisman explained his calculations in detail and that Claimant did not present rebuttal evidence to show that there is no entitlement to a credit, or provide differing calculations. We do not agree
that Brism an’s testimony was deficient in the manner argued by Claimant. Claimant
fails to take into consideration the remainder of Brisman’s testimony. Specifically, Brisman explained that the accumulated value of Claimant’s contributions as of December 1, 2010 , was $75,157.00. That sum was divided by an annuity factor of 12.907684, yielding an annual benefit of $5,822.66 attributable to Claimant’s

4 In his brief, Claimant cites to a “Report on Municipal Pension Funds” and a n article titled “State: Chester’s pension fund is going broke.” However, because this “evidence” was never submitted to the WCJ during the underlying litigation or on remand , we will not consider it on appeal.12

contributions. Although Brisman noted that t he remaining benefit of $66,916.30 was
attributable to the Commonwealth aid and the City’s contributions , he went on to calculate the total of the combined contributions of Claimant, the Commonwealth and the City

. Precisely , t he remaining benefit was multiplied by a ratio of the City’s
accumulated contributions to the total of the combined Commonwealth and the City’s
contributions. The same calculations were used to determine the Commonwealth aid

amount. The portion of Claimant ’ s benefit attributable to his contribution was determined to be 8% of the total; the Commonwealth ’ s contribution was determined to
be 62.1% of the total ; and the City’s portion wa s determined to be 29 .9 % of the total. (WCJ decision, May 15, 2019, F.F. No 8(c).)

The WCJ has complete authority over questions of credibility, conflicting evidence and evidentiary weight. Daniels v. Workers ’ Com pensation Appeal B oard (Tristate Transp ortation ) , 828 A.2d 1043, 1052 ( Pa. 2003). The WCJ is free to accept or reject, in w hole or in part, the testimony of any witness. Lombardo v. W orkers’ Compensation Appeal Board (Topps Company, Inc.) , 698 A.2d 1378 (Pa. Cmwlth. 1997). Because an employer may sustain its burden of proof for offset purposes through expert actuarial opinio n, and the WCJ here found the City’s offer of this evidence credible, the City is entitled to an offset

. City of Phila delphia v. W orkers’ Compensation Appeal Board (Grevy) , 968 A.2d 830, 839 (Pa. Cmwlth. 2009) (explaining that, “[i]f the actuarial testimony is accepted as credible, it is legally sufficient to establish the extent of an employer ’ s funding for offset/credit purposes”).

The order of the WCAB is affirmed.

________________________________ PATRICIA A. McCULLOUGH, JudgeIN THE COMMONWEALTH COURT OF PENNSYLVANIA

Robert Blythe, :

Petitioner :

: No. 437 C.D. 2020
v. : : Workers’ Compensation Appeal : Board (City of Chester), :

Respondent :

ORDER

AND NOW, this 29 th day of December , 20 2 1 , the April 10, 2020 opinion and order of the Workers’ Compensation Appeal Board is hereby
AFFIRMED.

________________________________ PATRICIA A. McCULLOUGH, Judge