Thursday, February 19, 2015

How do pension payments affect Unemployment Compensation?

The bad news is that you were involuntarily terminated from your job through no fault of your own. But, the good news is that you're probably eligible for unemployment compensation benefits. Better yet, you're also eligible for a pension plan. But wait! Do the pension payments impact your UC benefits?

Pennsylvania has a statute directly on point. The short version is that the pension payments are generally deducted from your UC benefits but with a few exceptions. Here's DLI's guidance on the issue:
When filing for unemployment compensation (UC) benefits, you are required to report all pensions, including retirement, retired pay, annuities or other similar periodic payments and lump-sum pension payments. Pension and retirement payments are deducted from UC benefits if a base year employer maintained or contributed to the pension plan and if the base year employment affected your eligibility for, or increased the amount of, the pension. If the base year employer alone contributed to the pension, 100 percent of the prorated, weekly amount of the pension is deductible. If you contributed in any amount to the pension, 50 percent of the prorated, weekly pension amount is deductible. Pensions are deductible from weekly benefits on a dollar-for-dollar basis. The partial benefit credit is not applicable. 
A lump-sum pension payment is not deducted from UC, unless you had the option of taking a monthly pension. In addition, a lump-sum pension is not deductible if you "roll over" the lump sum into an eligible retirement plan such as an Individual Retirement Account (IRA) within 60 days of receipt. 
Social Security and Railroad Retirement pensions are not deducted from UC benefit payments
You can also check out the statute 43 P.S. § 804 and the regulations. Of course, if you want actual legal advice on your particular situation, contact a lawyer to assist you.