Court Decides Retirement benefits are not a part of Workers’ Compensation

Getting injured on a job can be a tough ordeal for any person. It is a sad fact that the injured person often faces financial difficulty after such incidents. Hence, the employer needs to pay a hefty sum to ensure financial safety of an injured employee. The Supreme Court of Iowa recently cleared the air on whether the retirement benefits are a part of workers compensation or not. It said that they are not a part of workers compensation as they are just a fringe benefit that is not usually spent by an employee on a weekly basis.

Why are Retirement benefits not a part of Workers’ Compensation?

The decision that says that the retirement benefits are not a part of workers’ compensation was made by a district court. However, the Supreme Court of Iowa just recently agreed to it. The reason behind the ruling is that the court believes that retirement benefits are just a part of fringe benefits. They were not a part of his weekly earnings. It is pertinent to add here that it is the very first time the Supreme Court of Iowa has taken any stand on the matter.

The Case

The case that highlighted the need for making a decision on whether the retirement benefits are a part of workers’ compensation or not has also gained some popularity. The case was related to a person named David Evenson who had injured his elbow when he was on the job. He was working for Winnebago Industries when he got injured. The whole incident happened in May of the year 2010.

When the case was in court, he stated that the company contributions to his 401-K plan must be considered when the amount of workers’ compensation payments was to be set. It can be seen that Evenson clearly wanted better workers’ compensation payments like almost all the employees who get injured on the job and he wished for a financially secure future.

The Ruling

After the appeal made by Evenson, the district court didn’t side with him. The court upheld an arbiter’s ruling which stated that the 401-K payments or retirement benefits were just a fringe benefit. The ruling further added that the money is not a part of weekly spendable earnings of the employee and hence they should not be considered when the workers’ compensation payments are to be decided.