Historically, Minnesota workers’ compensation permanent total disability benefits were subject to offset based on a disabled employee’s receipt of “old age and survivors insurance benefits.” Minn. Stat. § 176.101, Subd. 4. The Minnesota Workers’ Compensation Court of Appeals traditionally interpreted this statute to include public retirement pensions and benefits, including retirement benefits under the Teachers Retirement Association (TRA), the Minnesota State Retirement System (MSRS), and the Public Employees Retirement Association (PERA).
What this meant in practice is that if an injured worker was deemed to be permanently and totally disabled within the meaning of the Minnesota Workers’ Compensation Act, and that individual received a public retirement benefit under TRA, MSRS, or PERA, after the first $25,000.00 in permanent total disability wage loss benefits were paid, the workers’ compensation insurer was allowed reduce the workers’ compensation payments dollar-for-dollar based on the employee’s retirement benefit. For example, if the permanent total disability workers’ compensation benefit was the monthly equivalent of $2,500.00 per month and that same injured worker received a retirement pension of $2,000.00 per month, the workers’ compensation insurer would only have to pay the difference between the two – or $500.00 per month. In effect, this shifted the financial burden of a work injury to back to a permanently disabled injured worker.