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An injured claimant does not have to accept a modified position from his employer that will greatly reduce his pension benefits, the Commonwealth Court of Philadelphia has ruled. In City of Philadelphia v. Workers’ Compensation Appeal Board (Szparagowski), a three-judge panel led by Commonwealth Court Judge James Kelley and including Judges Doris Smith and Samuel Rodgers, affirmed the Workers’ Compensation Appeal Board’s ruling rejecting the city’s modification petition. The claimant, George Szparagowski, injured his lower back while working as a firefighter for the city in February 1989. The city accepted liability for his injuries, and Szparagowski soon began receiving workers’ compensation benefits. In March 1996, the city petitioned to modify Szparagowski’s benefits, alleging he was capable of returning to light-duty work as a fire communication dispatcher. Szparagowski claimed the city’s offer was not made in good faith and that the position was not available to him because if he were to accept it, he would lose a significant portion of his pension benefits. According to the workers’ compensation judge’s findings, because of Szparagowski’s age and length of service, his pension had already vested. He was already receiving benefits at the time of the hearing. A pension program coordinator testifying for the city said Szparagowski’s current pension plan would be terminated if he were to become re-employed with the city, and he would be enrolled in a new program appropriate for the municipal position. Szparagowski’s retirement benefits would then be re-calculated under the new plan, the coordinator said. Szparagowski’s current plan provides a lower retirement age and a better pension calculation than the municipal position’s plan. If Szparagowski were to accept a position with any employer other than the city he would continue to receive his vested benefits, the coordinator testified. The WCJ concluded the city had proved a change in Szparagowski’s disability and that the city’s offer of employment was made in good faith. “The WCJ specifically found that the deferral of [Szparagowski's] pension upon return to work with the city was not a qualitative loss sufficient to render the position of fire dispatcher unavailable,” Kelley said. The Workers’ Compensation Appeal Board reversed. On appeal, the city argued the fire dispatcher position was available to Szparagowski under the seminal job-availability case Kachinski v. WCAB, handed down by the state Supreme Court in 1987. The Kachinski test sets forth the process for an injured employee’s return to work: � The employer who seeks to modify benefits must first produce medical evidence of a change in condition. � The employer must then produce referrals of available jobs fitting the claimant’s physical and occupational capabilities. � Once those first requirements are met, the claimant must then show that he or she has made a good faith effort to follow through on the referrals. � If, despite claimant’s good faith effort, the referral does not lead to employment, benefits must continue. In another case, St. Joe Container Co. v. WCAB, the justices held that a clearly definable qualitative loss that cannot be regained through a subsequent position can render the position unavailable to a claimant. The city argued St. Joe was distinguishable because the claimant in that case stood to lose various union benefits that were not at issue in Szparagowski’s case. However, Kelley said the Supreme Court case was both “instructive” and “persuasive.” “In the instant case, it is uncontested that acceptance of the dispatcher position by [Szparagowski] would require him to sacrifice his vested pension in a currently payable status with a retirement age of 45, and be placed in a pension plan that was not yet vested and carried a retirement age of 55,” Kelley said. “Notwithstanding [the city]‘s argument that, under no circumstances would [Szparagowski's] pension benefits be less than what he had already received under his prior plan, we agree with the board’s focus on what [Szparagowski] would actually lose — a vested pension in payable status with a retirement age of 45 — in determining whether a qualitative loss existed under St. Joe Container.” (Copies of the eight-page opinion in City of Philadelphia v. Workers’ Compensation Appeals Board, PICS NO. 01-0511, are available from The Legal Intelligencer.)

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