Section 1255.3-1 - Pension Deduction -General Principles(a) Scope. This section sets forth the principles the department shall apply to determine whether the pension payments a claimant is receiving are deductible from his or her unemployment compensation benefits as provided by Section 1255.3 of the code.(b) General Rule. The amount of unemployment compensation benefits, extended duration benefits, and federal-state extended benefits an individual is receiving shall be reduced, but not below zero, for any week with respect to which that individual, having received an initial pension payment, is currently receiving a periodic 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 if the following three conditions are met: (1) The pension, retirement or retired pay, annuity, or similar periodic payment is under a plan maintained (or contributed to) by a base period or chargeable employer;(2) The services performed by the individual for the employer after the beginning of the base period of the unemployment compensation claim affect eligibility for, or, increase the amount of such pension, retirement or retired pay, annuity, or similar periodic payment; and(3) The individual has made no contribution to the pension, retirement or retired pay, annuity, or similar periodic payment. If the individual has made any contribution to the pension, retirement or retired pay, annuity, or similar periodic payment, the pension payment shall not be deductible.
(c) Definitions. As used in the general rule, the following terms have the meanings assigned: (1) "Pension" means a sum of money paid regularly as a retirement benefit to an individual; and the pension is based on the individual's own work. "Pension" also includes retirement, retired pay, annuity, or any other similar periodic payment.(2) "Periodic payment" means that the payment is being made at regular intervals, e.g., monthly, annually, etc. A payment is not periodic if the full pension entitlement (whether at the employer's or the worker's option) is paid out in a lump sum.(3) "Base period" means base period as defined in Section 1275 of the Code.(4) "Base period employer" means an employer for whom the claimant worked during the base period of the unemployment compensation claim and who paid wages which were used in the calculation of the claim award. EXAMPLE 1: The claimant worked for employer C for 30 years and retired when the company transferred its operations out of state. The base period of the claim is the calendar year of 1990. The claimant worked only for employer C during the base period and the claim is based entirely on wages paid to the claimant by employer C. Employer C is a base period employer.
EXAMPLE 2: The claimant filed a claim effective May 5, 1991. The base period of the claim is from January 1, 1990, through December 31, 1990. The claimant worked for two employers during the base period of the claim. He worked for employer A through April 1990 and he worked for employer B beginning in July 1990 and continuing until April 1991. Employer A is a church. Wages paid by a church are not subject to coverage for unemployment compensation purposes. Therefore, employer A is not a base period employer since the wages from this employment are not used in the calculation of the unemployment compensation claim which in this case is based solely on wages earned with employer B.
(5) "Chargeable employer" means the same as a "base period employer".(6) "Maintained or contributed to" for purposes of subdivision (b)(1) of these regulations means that the base period employer made all contributions to the pension fund or, as a member of a multi-employer pension fund, contributed to the pension fund from which the pension is being paid. Examples of multi-employer pension funds are Social Security, union pension funds, PERS (Public Employees Retirement System) STRS (State Teachers Retirement System), etc.(7) "Affect eligibility" for purposes of subdivision (b)(2) of these regulations means that the services performed by the claimant after the beginning of the base period result in the individual meeting the minimum requirements (requisite age plus years of service) for being eligible to receive the pension. EXAMPLE 3. The claimant retired from employer D. The company pension provides an individual has to be at least age 55 and have completed 20 years of service to be eligible for the company pension. The base period of the unemployment insurance claim is the calendar year of 1990. The claimant worked for the employer for 25 years but did not attain age 55 until May 5, 1990. The claimant's services after the beginning of the base period, i.e., January 1, 1990, were necessary for her to become eligible to receive the pension, the pension is deductible.
(8) "Increase the amount of" for purposes of subdivision (b)(2) of these regulations means that the services performed by the claimant after the beginning of the base period resulted in the claimant's receiving a higher pension award than he or she would have received without having performed such additional services. EXAMPLE 4. The claimant worked for employer E who laid the claimant off effective March 31, 1991. At the time of the layoff, the claimant had worked for employer E for 31 years. The claimant began work on March 1, 1960. Since he was laid off, the claimant applied for his pension. The claimant also applied for unemployment insurance benefits. The base period of his claim is the calendar year of 1990. To calculate an employee's pension award, the company takes a certain dollar amount times years of service. At the time the claimant applied for his pension the dollar amount used by the employer was $26.75. The claimant's monthly pension amount was $829.25 ($26.75 x 31 years). Had the claimant applied for retirement in March 1990, the monthly amount of his pension would have been $802.50 ($26.75 x 30 years). The pension is deductible since the additional work after the beginning of the base period resulted in a higher monthly pension award.
(9) "Made no contributions to the pension fund" means that the individual did not contribute to the pension fund during any period of his or her employment. The contributions need not have been made during the base period of the unemployment insurance claim.(d) If the criteria listed in subdivision (b) above are met and the pension is deductible, then the entire monthly award of the pension shall be deductible, not just the amount by which the pension award increased because of the work after the beginning of the base period. The deductible amount of the pension shall be determined by taking the monthly award and prorating it over a weekly basis. The weekly amount of the pension shall be deductible dollar for dollar, but not below zero, from the unemployment insurance weekly benefit amount.Cal. Code Regs. Tit. 22, §§ 1255.3-1
1. New section filed 6-16-93; operative 7-16-93 (Register 93, No. 25). Note: Authority cited: Sections 305 and 306, Unemployment Insurance Code. Reference: Sections 1255.3 and 1275, Unemployment Insurance Code.
1. New section filed 6-16-93; operative 7-16-93 (Register 93, No. 25).