Ruling gives Sandusky back $4,900-a-month Penn State pension
Law School News
The state must restore the $4,900-a-month pension of former Penn State assistant football coach Jerry Sandusky that was taken away three years ago when he was sentenced to decades in prison on child molestation convictions, a court ordered Friday.
A Commonwealth Court panel ruled unanimously that the State Employees' Retirement Board wrongly concluded Sandusky was a Penn State employee when he committed the crimes that were the basis for the pension forfeiture.
"The board conflated the requirements that Mr. Sandusky engage in 'work relating to' PSU and that he engage in that work 'for' PSU," wrote Judge Dan Pellegrini. "Mr. Sandusky's performance of services that benefited PSU does not render him a PSU employee."
Sandusky, 71, collected a $148,000 lump sum payment upon retirement in 1999 and began receiving monthly payments of $4,900.
The board stopped those payments in October 2012 on the day he was sentenced to 30 to 60 years in prison for sexually abusing 10 children. A jury found him guilty of 45 counts for offenses that ranged from grooming and fondling to violent sexual attacks. Some of the encounters happened inside university facilities.
The basis for the pension board's decision was a provision in the state Pension Forfeiture Act that applies to "crimes related to public office or public employment," and he was convicted of indecent assault and involuntary deviate sexual intercourse.
The judges said the board's characterization of Sandusky as a Penn State employee at the time those offenses occurred was erroneous because he did not maintain an employer-employee relationship with the university after 1999.
The judges ordered the board to pay back interest and reinstated the pension retroactively, granting him about three years of makeup payments.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.