Determining life pension benefits in cases with permanent disability ratings of 70% or higher may seem daunting, which is why the Law Offices of Bradford and Barthel have broken them down into the following primer.
First, let’s begin by taking a look at which types of cases are entitled to life pension benefits.
LIFE PENSION BENEFITS
How and when does an injured worker received life time benefits in California?
Labor Code 4659 provides for life pension benefits in cases where permanent partial disability is “at least 70 percent, but less than 100 percent.” These pension benefits are payable to the injured worker “during the remainder of life, after payment for the maximum number of weeks” of permanent disability indemnity “specified in Section 4658 has been made.”
Where are the number of weeks for each PD rating? Well, Labor Code section 4658 specifies how to compute the number of weeks of permanent partial disability (PD) indemnity. For example, for a date of injury from 2005 through 2023, 30% PD corresponds to 131.00 weeks of PD benefits.
Although weekly minimum and maximum PD rates have had legislative updates, and total PD values have increased, the number of weeks for each PD amount has not changed since 1/1/2005.
LIFE PENSION EXAMPLE
In this example, a worker with a date of injury of 7/15/14 receives an award for 75% PD. According to the PD charts, this entitles them to 513.25 weeks of PD benefits.
Those PD benefits are supposed to begin after the last date of temporary total disability benefits, or the date of P&S/MMI, whichever comes first. This is pursuant to LC4650 b(2).
In this example, if the PD start date was 6/7/16, PD would continue for 513.25 weeks after 6/7/16.
Let’s assume the applicant had an average weekly wage of $750. For that AWW, the maximum PD rate would be $290 per week. The beginning life pension rate would be $115.96 per week. Why is that lower than the PD rate? This is because life pension rates differ from TTD and PD rates.
In this example, PD of $290 per week would begin 6/7/16 for 513.25 weeks. The last full day of benefits would be due for 4/8/26, with the remaining a partial day of benefits due on 4/9/2026. At the conclusion of 513.25 weeks, life pension benefits would begin the next day (on 4/10/26), at $115.96 per week.
Now, we have to turn to the cost-of-living adjustment, or COLA. COLA calculations apply to life pension benefits every January 1st after the life pension begins. In this example, COLA applies beginning 1/1/27, because that’s the first January 1 after the life pension began.
This life pension benefit would continue for the life of the injured worker, with an annual COLA application for the life of the injured worker. (COLA adjustments only apply to dates of injury on or after 1/1/03).
A UNUSUAL PANEL DECISION
In the panel decision of Kevin Suh v. Metropolitan State Hospital (8/15/22), the WCAB called for an alternative life pension start date, and ordered life pension benefits be “accelerated.”
It’s important to note that panel decisions are only persuasive authority, they are not controlling authority. As such, this ruling did not set any authoritative precedent, but it’s worth looking at because it presented an unusual set of circumstances.
This case featured a:
- 2/7/17 Stipulated Award for 85% PD (plus life pension)
- 3/8/17 Petition for all Remaining PD
- Objection from defense; PD awarded over that objection
- 7/26/17 Petition to Reopen
- 1/8/20 Stipulated Award for 92% PD, included a commutation for all remaining PD. Stipulations in the award included:
- Life pension “reserved per terms of this agreement”
- The defendant would pay the applicant the difference between the two awards in a lump sum payment within 30 days of the 1/8/20 award
- Another stipulation that the “WCAB retains jurisdiction over all life pension issues”
Shortly thereafter, a question arose about when the life pension should start. The judge cited LC 4659, and ruled “life pension should not be accelerated by the commutation of permanent disability.”
The applicant’s attorney filed a petition for reconsideration. The Appeals Board granted reconsideration, and WCAB Chair Zalewski determined that PD benefits had been “exhausted,” which warranted an acceleration of life pension benefits. This meant that instead of waiting for the passage of all those weeks of PD before starting the life pension – the defendant would start the life pension immediately after the PD was paid.
Zalewski wrote that “the better practice” would have been for the parties to specify “how payment of the life pension was to be handled.” This would have avoided the parties’ confusion after the award.
Deputy Commissioner Schmitz concurred with the acceleration of life pension benefits; Commissioner Razo dissented, citing a different interpretation of LC 4659.
TAKEAWAYS FROM SUH
Because the Suh case was only a panel decision, technically the Suh case ruling applies only to that particular case.
However, there are some good lessons one can learn from Suh, which are:
- Specifically address how and when life pension benefits will start in a Stipulated Award. This means specifying which date the life pension would begin, and how it would be calculated.
- Commutations of attorney fees when life pension does or might apply would likely be better addressed by uniform reduction (from the side) rather than from the far end of the award. This should eliminate any gap between PD and life pension benefits, and therefore eliminate any confusion as to when life pension benefits should begin.
- Include a reference to “life pension payable pursuant to LC 4659” in the stipulations portion of the Stipulated Award.
The Suh decision appears to have resulted from unintentionally vague language about when the life pension benefits would begin and how they would be calculated in a Stipulated Award. Savvy parties can head those issues off at the proverbial pass, by addressing how and when life pension benefits will begin in a Stipulated Award.
Tim Mussack, the author of this blog post, leads Bradford & Barthel’s AMA Guides & Ratings Department. This division analyzes doctor reports to determine whether the physician has properly applied the AMA Guides, and also assists clients with complex COLA applications. Mr. Mussack and his associates have analyzed over 20,000 reports and identified tens of millions of dollars in potential savings for clients. For further information, see https://bradfordbarthel.com/areas-of-practice/bb-ratings/. If you have any questions about rating PD, please feel free to reach out to Tim at firstname.lastname@example.org or 916.569.0790.
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