Opinion ID: 1359056
Heading Depth: 2
Heading Rank: 5

Heading: amount of offset: pension benefits earned during base period

Text: In 1980 Congress amended 26 United States Code section 3304(a)(15), to read in pertinent part: (A) the [ pension offset ] requirements of this paragraph shall apply to any pension ... only if  [¶] (i) such pension ... or similar payment is under a plan maintained (or contributed to) by a base period employer or chargeable employer (as determined under applicable law), and [¶] (ii) in the case of such a payment not made under the Social Security Act or the Railroad Retirement Act of 1974 ..., services performed for such employer by the individual after the beginning of the base period ( or remuneration for such services ) affect eligibility for, or increase the amount of, such pension, ... or similar payment, and [¶] (B) the State law may provide for limitations on the amount of any such a reduction to take into account contributions made by the individual for the pension, ... or other similar periodic payment.... (Italics added.) (10) Petitioners interpret the amended federal statute as limiting the amount that may be offset against unemployment insurance benefits to the increase in pension benefits earned (i.e., the amount of pension benefits accrued) during the base period. We do not agree. The amended federal statute does not purport to limit the amount of offset to the increase in pension benefits earned during the base period. Rather, it mandates that no offset is to be made at all unless two conditions are met: (1) only if the pension or payment to be offset is under a plan maintained or contributed to by a base period employer or the chargeable employer and (2) only if the services performed for that employer by the individual after the beginning of the base period affected his or her eligibility for or increased the amount of the pension or payment to be offset. Prior to the 1980 amendment, states were required to offset an unemployment insurance claimant's pension against current benefits even though those benefits were being drawn against the unemployment insurance account of an employer who did not contribute to the employee's pension. It was primarily that inequity which Congress sought to remedy by the 1980 amendment. There is no evidence to suggest that the purpose of subparagraph (A)(ii) was to limit the amount of pension subject to the offset to the increase in pension benefits earned during the base period. The federal courts have recently confronted this very issue and concluded that the entire pension, not just the incremental increase, is to be offset against unemployment insurance benefits. ( Rivera v. Becerra (9th Cir.1983) 714 F.2d 887, 893-894, affirming on this point Rivera v. Patino (N.D.Cal. 1982) 543 F. Supp. 1160, 1167-1172.) As to that portion of the special payment which is not equivalent to accrued vacation pay, therefore, the Board correctly reduced unemployment insurance by the entire amount of special payment received.