APPEALS RESOLUTION OFFICER DECISION
decision number:
20250001
OBJECTING PARTY:
worker
REPRESENTED by:
worker representative
RESPONDENT PARTY:
employer
(not participating)
HEARING:
HEARING IN WRITING
HEARD by:
C. Goegan, appeals resolution officer
october 17, 2024
ISSUE
The estate of the worker is objecting to the May 29, 2019, decision of the Loss of Retirement Income (LRI) Manager. The decision limited the LRI pre-retirement death benefit payable to the worker’s beneficiary (spouse) to the mandatory LRI contributions made by the WSIB into the LRI fund and the accumulated investment income on the mandatory contributions.
BACKGROUND
The relevant background details of the case are well described in Appeals Resolution Officer (ARO) decisions dated September 26, 2002, and January 2, 2007. They are also extensively documented in a September 30, 2005, decision of the Workplace Safety and Insurance Appeals Tribunal (WSIAT). Therefore, it is not necessary for me to repeat them at length. I will, however, provide an overview of the case to place the issue before me in context.
On September 23, 1999, this then 43-year-old “helper” at a manufacturing facility experienced an onset of low back pain while flipping over a steel part. Health care benefits were approved for a low back strain as the worker did not lose time from work. The worker re-injured their low back on December 13, 1999, while pulling on a piece of steel. The employer assigned them modified duties. The worker remained on modified duties until September 8, 2000, when they stopped working because of back pain. The worker consulted a physician specialist on September 14, 2000, who recommended they continue working. On September 25, 2000, the employer laid the worker off. The Claims Adjudicator denied loss of earnings (LOE) benefits from September 14, 2000, because of the specialist’s recommendation.
The LOE benefits were ultimately reinstated on June 15, 2001. In July 2001, the worker attended a Regional Evaluation Centre (REC) assessment. The REC examiners felt that no further physical treatment was necessary for the lower back condition and suggested a psychological evaluation.
The worker participated in the psychological evaluation in September 2001 and was diagnosed with both a major depressive episode and a pain disorder.
In a March 12, 2002, decision the Claims Adjudicator, relying on the opinion of a WSIB Medical Consultant, found the worker did not have entitlement to a psychological condition, chronic pain disability (CPD), or a permanent low back impairment. As a result of the Claims Adjudicator’s decision, LOE benefits ended on March 22, 2002.
The worker objected to the denial of a permanent low back impairment as well as the closure of LOE benefits between September 2000 and June 2001, and from March 22, 2002. The ARO upheld the denial of a permanent low back impairment and the closure of LOE benefits in the September 26, 2002, decision. The worker appealed the ARO decision to the WSIAT. As the ARO did not specifically render a decision on a psychological condition or CPD, the Appeals Director confirmed on July 22, 2004, that the WSIAT could treat the Claims Adjudicator’s March 12, 2002, decision as the final decision of the WSIB.
In the September 30, 2005, decision the WSIAT granted the worker entitlement to full LOE benefits from September 14, 2000, to June 15, 2001, and from March 22, 2002. The nature and duration of LOE benefits beyond March 22, 2002, was remitted back to the WSIB for further adjudication. The WSIAT also granted the worker entitlement to a NEL assessment for CPD.
The Operating Area implemented the WSIAT decision in October 2005. The Claims Adjudicator determined the worker could work as a parking lot attendant earning minimum wage and authorized the payment of partial LOE benefits from March 22, 2002.
As the LOE benefit period was more than twelve continuous months, the WSIB began setting aside an additional amount equal to 5% of every subsequent LOE payment for the loss of retirement income (LRI) benefit. The Operating Area issued the worker a form on October 14, 2005, giving them the option to voluntarily contribute 5% of their LOE benefit payments to the LRI Fund. The worker completed the form, and their former representative returned it to the WSIB on October 24, 2005. The worker confirmed they had chosen to contribute the optional 5%. Due to an administrative error, the Operating Area did not deduct the optional 5% from the LOE benefit payments and direct it towards the LRI Fund.
The worker later received a 30% NEL award for CPD. They objected to the payment of partial LOE benefits from March 22, 2002, based on the determined wages of a parking lot attendant. In the
January 2, 2007, decision the ARO found the worker was competitively unemployable and directed the payment full LOE benefits from March 22, 2002, onward. Full LOE benefits continued until the worker passed away on February 28, 2019.
After the worker passed away, the worker’s beneficiary (spouse) received the LRI pre-retirement death benefit that consisted of the amount of mandatory LRI contributions made by the WSIB and the accumulated investment income on those contributions. It was also identified that no voluntary LRI contributions were ever deducted from the LOE benefit payments.
In a decision dated May 29, 2019, the LRI Manager determined that the pre-retirement death benefit payable to the beneficiary would only include the mandatory contributions made by the WSIB and the accumulated investment income. The estate of the worker objected to the May 29, 2019, decision and the matter was referred to the Appeals Services Division for consideration.
AUTHORITY
Operational Policy Manual
Published
18-03-07 – Loss of Retirement Income Benefits (Accidents on or after January 1, 1998) Section 45 – Workplace Safety and Insurance Act
December 6, 2018
ANALYSIS
I carefully considered all the available information, legislation, and relevant operational policies in reaching this decision. For the reasons explained below, I find the May 29, 2019, decision is appropriate and the LRI pre-retirement death benefit payable to the beneficiary should not include anything other than the mandatory contributions made by the WSIB and the accumulated investment income on the mandatory contributions.
The Worker Representative’s Position
In the April 23, 2024, Appeal Readiness Form (ARF) the worker representative submitted the appeal was made on the grounds that the worker completed and returned the pre-retirement death benefit election form in October 2005. He indicated that through no fault of the worker, the Operating Area did not deduct the optional 5% from the LOE benefit payments and contribute it to the LRI fund.
What LRI Pre-Retirement Death Benefit is the Beneficiary Entitled to Receive?
Section 45 of the Workplace Safety and Insurance Act (the Act) and Policy 18-03-07 (Loss of Retirement Income Benefits) provide that if a worker receives LOE payments for 12 continuous months, the WSIB sets aside an additional amount equal to 5% of every subsequent LOE payment for the LRI benefit. The worker may also voluntarily contribute 5% of their LOE payments toward the LRI benefit. Workers are entitled to receive LRI benefits on or after age 65.
When a worker approaches 12 continuous months of LOE payments, the WSIB notifies the worker that they may choose to voluntarily contribute 5% of their LOE payments toward the LRI benefit. This amount is deducted from the worker’s LOE payments. A worker makes the decision whether to voluntarily contribute to their LRI benefits by completing a WSIB election form. Once the worker completes the election form, the decision is irrevocable. If the election form confirms the decision to make voluntary contributions, the WSIB deducts 5% of every subsequent LOE payment and sets this amount aside toward the LRI benefit.
If the worker passes away before reaching age 65, the WSIB may pay the following types of LRI benefits:
Pre-retirement death benefit - the amount of LRI contributions made by the WSIB and accumulated investment income, and/or
Supplementary pre-retirement death benefit - the amount of voluntary LRI contributions made by the worker, if any, and the accumulated investment income.
The policy also states that prior to the payment of the LRI benefit, the WSIB may make corrective adjustments at any time in the maintenance of the LRI benefit account (e.g., account balance discrepancies).
Section 45 of the Act also stipulates that the WSIB must provide the worker with an annual statement setting out: (a) the amounts set aside by the WSIB into the LRI benefit fund in the year, (b) the amounts contributed by the worker in the year, if any, and (c) the accumulated investment income earned on the amounts referred to in clauses (a) and (b) in the year.
I will begin by pointing out there is no dispute concerning the payment of the pre-retirement death benefit consisting of the amount of mandatory LRI contributions made by the WSIB and the associated accumulated investment income. Rather, the problem arises because the Operating Area never deducted the elected voluntary 5% LRI contributions from the LOE benefit payments. This was an administrative error on the part of the WSIB and not the fault of the worker. The worker clearly completed the WSIB election form, and their former representative returned it to the WSIB within two weeks of its issuance in October 2005.
While the worker clearly elected to voluntarily contribute 5% of their LOE benefits to the LRI benefit fund in October 2005, they were also provided with annual statements from 2006 to 2017 in accordance with Section 45 of the Act that would have clearly shown that no voluntary contributions to the LRI benefit fund were ever made. I note the worker notified the Operating Area in writing of an address change on
June 11, 2007, but I could not locate any information in the record concerning the voluntary contribution error. Since the appeal is being brought posthumously, there is no way to ascertain whether the worker was aware of the error and opted not to have it corrected.
Although the worker representative did not provide a specific argument in the ARF, I understand the appeal in essence to be a request to place the worker’s estate in the position it would have been in had the voluntary 5% contributions been deducted from the LOE benefits from October 2005.
Despite the unfortunate error, I find there is no mechanism under Policy 18-03-07 (Loss of Retirement Income Benefits) based on the circumstances in this case to pay the supplementary pre-retirement death benefit. While the policy confirms the WSIB can make corrective adjustments at any time in the maintenance of the LRI benefit account, it also states that the supplementary pre-retirement death benefit is the amount of voluntary LRI contributions made by the worker, if any, and the accumulated investment income earned on those contributions.
In this case the worker received the 5% voluntary contributions directly over time in the form of the LOE benefit payments. Therefore, the only matter is whether the estate is entitled to any additional “accumulated investment income”. I interpret the term "accumulated investment income" to mean the income generated by investments from the contributions made by the worker, if any, and the amounts set aside by the WSIB, while those amounts are in the LRI benefit fund and administered by the WSIB.
Since the 5% voluntary contributions after October 2005 were paid continuously and directly to the worker over time as LOE benefits and were never invested into the LRI benefit fund administered by the WSIB, the contributions did not actually generate “accumulated investment income”. Accordingly, as no “accumulated investment income” was generated by the 5% LOE benefits paid directly to the worker, I conclude that the May 29, 2019, decision of the LRI Manager is appropriate and the LRI pre-retirement death benefit payable to the beneficiary of the worker’s estate should not include anything other than the mandatory 5% contributions made by the WSIB to the LRIF and the accumulated investment income on the mandatory contributions.
CONCLUSION
I conclude the May 29, 2019, decision is appropriate. The LRI pre-retirement death benefit payable to the beneficiary of the worker’s estate should not include anything other than the mandatory LRI contributions made by the WSIB and the accumulated investment income on the mandatory contributions.
The objection is denied.
DATED October 17, 2024
C. Goegan
Appeals Resolution Officer
Appeals Services Division