In a recent Massachusetts Supreme Judicial Court case, Worcester Regional Retirement Bd. & others vs. Public Employee Retirement Admin Comm’n, the Court held an employee’s receipt of vacation or sick time (supplemental pay) in conjunction with his/her receipt of workers’ compensation benefits is not “regular compensation” and therefore, cannot be used to deny an employee a longer period of retroactive retirement benefits in a superannuation or ordinary disability retirement claim. This decision clarifies the Court’s prior decision in Public Employee Retirement Admin, Comm’n v. Contributory Retirement Appeal Bd., 478 Mass. 832 (2018), also known as Vernava, which applied this rule to an accidental disability retirement application.

In Vernava, the employee worked at the Swampscott Department of Public Works from September 30, 1985, to July 7, 2012. On June 13, 2010, he sustained an injury at work and began receiving workers’ compensation benefits. Pursuant to the Massachusetts Workers’ Compensation Act, M.G.L. Ch. 152 x69, he also received 2 hours of vacation/sick pay (supplemental pay) to bring him up to his full salary every week in order to continue paying for his union dues and life insurance.

On February 1, 2012, an application for accidental disability was filed as Vernava was not able to return to his job at the public works department as a result of his work injury. Vernava received workers’ compensation and supplemental pay until July 7, 2012.

Under M.G.L. Ch. 32 x7(2), there are three possible dates that can be used to determine an employee’s effective date of retirement. The latest date is the one that must be used. The possibilities are (1) the date of the worker’s injury; (2) six months prior to the date the retirement application was filed; (3) the date the employee last received “regular compensation”.

In Vernava’s case the potential dates would have been, (1) June 13, 2010, the date of his work injury; (2) August 1, 2011, six months prior to the filing of his application; (3) July 7, 2012 if his receipt of vacation/sick pay was considered “regular compensation”.

The Public Employment Retirement Administration Commission (PERAC) used July 7, 2012, as the effective date of Vernava’s retirement instead of August 1, 2011. The Supreme Judicial Court overturned this finding reasoning that supplemental pay received while an employee is not capable of working is not “regular compensation. In other words, vacation and sick time is not the same as wages.

The outcome of this case resulted in Vernava receiving an extra 11 months of retirement benefits. A similar case handled by our office resulted in our obtaining the employee over $30,000.00 in additional retirement benefits.

Public Retirement is a very complicated area of the law. In general, PERAC, which is responsible for overseeing the process and administering the funds, is inclined to take a position that is the least beneficial to a retiree. Mistakes can be very costly and sometimes irreversible. We strongly recommend you consult an attorney before you file your application.

The Law Offices of Juliane Soprano specializes in Public Retirement benefits and welcomes your inquiries.