April 13, 2018 Article

Maine WC Alert: Insurer Entitled to Offset Under Employer-Provided Pension Benefit Plan

Maine Workers' Comp Alert

In Jordan v. Bath Iron Works, WCB App. Div. No. 18-14 (March 29, 2018), Bath Iron Works (BIW), insured by AIG, appealed a decision not allowing AIG from taking offsets for payments for pensions funded by BIW.

The issue was whether an insurer is entitled to take an offset for payments received by an employee under an employer-provided pension plan not in effect during the insurer’s period of coverage.

The Appellate Division found that, because the Act includes insurers in its definition of “employer,” an insurer has the right to the pension offset, noting that the purpose of the pension offset is to “ensure a minimum income during the period of an employee’s incapacity and to prevent a double recovery of both retirement and compensation benefits.” The Appellate Division concluded, “[i]n ordinary cases, when an insured employer contributes to an employee’s pension, section 62-B operates to give the benefit of whatever offsets results to the responsible insurer.”

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