OHIO BELL TELEPHONE COMPANY,
OHIO BUREAU OF EMPLOYMENT SERVICES, Defendant-appellee
COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT,
1998 Ohio App. LEXIS 5078
October 29, 1998, Date of Announcement of
CHARACTER OF PROCEEDING: Civil appeal from the Court of Common
Pleas. Case No. CV-334135.
For Plaintiff-Appellant: THOMAS A. LINTON, ESQ.,Cleveland,Ohio.
ForDefendant-AppelleeOhioBureau of Empl.Services: CHARLETTE BUNDY, ESQ., ASST.
For Patricia A. Dettling: PETER H.
WEINBERGER, ESQ., SPANGENBERG, SHIBLEY, TRACI, LANCIONE, &
ANN DYKE, JUDGE. PORTER, P.J., AND MCMONAGLE, J., CONCUR.
JOURNAL ENTRY AND OPINION
Appellant, Ohio Bell Telephone Co., is appealing the trial court's
affirmance of the decision of the Ohio
Unemployment Compensation Review Commission. For the following
reasons, we affirm.
The claimant, Patricia Dettling,
worked for Ohio Bell fromJuly
13, 1970toOctober 4, 1996. Dettling's job
was relocated toChicago. She
was paid $ 27,200 in severance pay. Dettling had vested rights in an employer
funded pension fund. She elected a lump sum pension payment of $
258,897.34, instead of periodic payments. The lump sum was
deposited into an IRA. No withdrawals have been made from the IRA.
Dettling was 53 years old when her
employment was terminated.
The Review Commission denied benefits for the week endingOctober 12, 1996, because the severance pay exceeded the
weekly unemployment benefit. The Review Commission found that the
pension should not be offset against the unemployment benefits.
This decision became the law of the case concerning future
benefits. See Hawley v. Ritley (1988),
35OhioSt.3d 157,160, 519 N.E.2d 390, New Winchester Gardens
Revision (1997), 80OhioSt.3d 36, 41, 684 N.E.2d 312.
Appellant's sole assignment of error states:
THE ADMINISTRATOR AND THE BOARD OF REVIEW ERRED IN FAILING TO
COMPLY WITH OHIO REV. CODE § 4141.312(A) BY OFFSETTING AGAINST
UNEMPLOYMENT COMPENSATION BENEFITS OTHERWISE PAYABLE THE PRO-RATA
WEEKLY AMOUNT OF THE $ 259,471.94 PAID TO APPELLEE DETTLING UPON
HER SEPARATION AS THE PRESENT VALUE OF HER LIFE ANNUITY
Ohio Bell contends that R.C. 4141.312 mandates that Dettling's unemployment benefits be offset by
the pro-rata weekly amount of her pension. This section
*** to the extent that the following provisions are required as a
condition for full tax credit against the tax imposed by the
"Federal Unemployment Tax Act of 1976" *** then the following
conditions shall apply:
(A) The amount of benefits payable to a claimant for any week with
respect to which the claimant is receiving a governmental or other
pension, retirement or retired pay, annuity or any other similar
periodic payment which is based on the previous work of the
individual, shall to the extent required by such federal act, be
reduced by an amount equal to the amount of the pension *** which
is reasonably attributable to that week. (Emphasis added.)
R.C. 4141.312. The Review Commission
found that Dettling did not "receive"
the pension. The Commission based its decision upon Ohio Adm. Code
4141-30-12, which provides:
(B) Payments, interest, and other distributions under pensions,
retirement plans, and annuities will not be deemed to have been
received by the claimant with respect to a week of unemployment if
(1) the claimant had a right to defer receipt of payments,
interest and other distributions under the pension plan with
respect to the week; and
(2) The claimant did not receive payments, interest, or other
distributions under the plan with respect to the week; and
(3) The claimant elected, within sixty days after the initial
distribution under the plan to transfer or roll over the entire
pension payment, interest or distribution to an individual
retirement account . . .
(C) Payments, interest, and other distributions under pensions,
retirement plans, and annuities that are transferred or rolled
over, as provided in paragraph (B) of this rule shall not reduce
the benefits payable to a claimant effective with weeks after the
date of the transfer or roll over, if such payments, interest, or
distributions are transferred or rolled over into . . .:
(1) Individual retirement accounts . . .
Appellant contends that Ohio Adm.Code
4141-30-12 does not comply with federal or state law. Section
3304(a)(15), Title 26, U.S. Code
The amount of compensation payable to an individual ... which
begins in a period with respect to which such individual is
receiving a ... pension ... or any other similar periodic payment
which is based on the previous work of such individual shall be
reduced (but not below zero) by an amount equal to the amount of
such pension ... which is reasonable attributable to such week. .
The wording of the federal and theOhiostatutes do not clearly mandate that lump sum
pensions rolled over into an IRA must be offset. Both statutes use
the term "receiving" a pension or "similar periodic payment." The
term "receiving" is ambiguous and may mean constructive receipt or
actual receipt of money The reference to
"similar periodic payments" implies that lump sums are not required
to be offset. The phrase "reasonably attributable to such week"
does not necessarily mean that a lump sum must be allocated over
the weeks and offset against compensation.
An Unemployment Program Letter (UIPL) issued by the Secretary of
Labor states that each state may decide whether lump sum pension
payouts should be offset against unemployment compensation. UIPL
No. 22-87. The Department of Labor informs the states of the
minimum federal requirements via the UIPLs. See Gleason v.OhioBureau
of Employment Services (1985), 17OhioSt.3d
107,108, 478 N.E.2d 225.
UIPL No. 7-81 did not specifically reach the issue and in any case,
it was superseded by UIPL 22-87. The issue at hand was also never
reached in Cabais v. Egger (D.C.C.
1981), 527 F. Supp. 498. Appellant submits no authority
demonstrating that federal law mandates that lump sum Pensions
rolled into IRAs must be offset.
Some states have held that a lump sum pension distribution rolled
over into an IRA must be offset against unemployment compensation.
See Lincoln National Bank v. Review Board
(Ind.App. 1983), 446 N.E.2d
1337,AlabamaDept. of Ins. Rels.v. Brown (Ala.Civ.App. 1996), 678 So. 2d 785. These out-of-state decisions are based
upon the language of the state statutes in question, and do not
hold that federal law mandates this result. Other states have held
that a lump sum pension distribution rolled over into an IRA should
not be offset against unemployment compensation. See Redin v. Empire Oldsmobile Inc. (Col.App. 1987), 746 P.2d 52, Johnson v. Dept.
of Employment Services (1989), 112Wash.2d
172, 769 P.2d 305. Thus, the states are free to decide whether to
offset the rolled over pension.
Ohiocases have held that when a person is actually
receiving money from their pension, the pension must be offset.
Gleason v. Bur. of Employment Services (1985), 17OhioSt.3d 107,478 N.E.2d 225;Independencev.Ventura(1996), 113OhioApp.3d
661, 681 N.E.2d 1352. There is noOhiocase
law holding that a lump sum pension placed in an IRA must be
deducted from unemployment compensation.
Appellant argues that failing to deduct the pension would violate
the purpose of the unemployment compensation laws. The purpose is
to provide subsistence for the involuntarily unemployed. SeeIrvinev. Unemployment Compensation Bd. of Review
(1985), 19OhioSt.3d 15,17, 482 N.E.2d 587. Ohio Bell asserts
that a person with access to a pension fund does not need the
subsistence payments from the government. There is also a public
policy that the involuntarily unemployed should not be forced to
deplete their retirement savings before retirement age. See Redin v. Empire Oldsmobile Inc. (Col.App. 1987), 746 P.2d 52. By promulgating
Ohio Adm.Code 4141-30-12, the Ohio
Bureau of Employment Services has chosen to further the public
policy of protecting employee pensions. No federal or state law
prohibits the adoption of such a policy.
Accordingly, appellant's assignment of error is overruled.
The decision of the trial court is affirmed. It is ordered that
appellee recover of appellant its costs
The Court finds there were reasonable grounds for this
It is ordered that a special mandate issue out of this Court
directing theCommon Pleas
Courtto carry this judgment into
A certified copy of this entry shall constitute the mandate
pursuant to Rule 27 of the Rules of Appellate Procedure.
PORTER, P.J., AND
MCMONAGLE, J., CONCUR.
N.B. This entry is an announcement of the court's decision. See
App. R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be
journalized and will become the judgment and order of the court
pursuant to App. R. 22(E) unless a motion for reconsideration with
supporting brief, per App.R. 26(A), is filed within ten (10) days of the
announcement of the court's decision. The time period for review by
the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement
of decision by the clerk per App.R.
22(E). See, also S.Ct.Prac.R. II, Section 2(A)(1).