2002-2009 COLAs For Life Pensions and Permanent Total Disability Indemnity

In a published opinion issued last week (Duncan v WCAB and X.S., HO34040, 11/25/2009), the 6th District Court of Appeal ruled that pursuant to LC §4659(c), cost of living adjustments (COLAs) to life pension & permanent total disability (PTD) indemnity benefits that are based on annual increases in the State Average Weekly Wage (SAWW) must be applied starting January 1, 2004, and every January 1 thereafter, no matter when the first payment of those benefits is made. (See Significant Decision 09-7). This ruling, which nullified an earlier WCAB panel decision, applies to all life pension and PTD claims for injuries occurring on or after January 1, 2003.

If it stands, the ruling could eventually add thousands of dollars in costs to life pension and PTD cases, so it is likely to be appealed. In the meantime, however, this opinion is authoritative on the issue of the commencement of the COLAs, which would require claims administrators to make sure they have calculated in all of the SAWW increases dating back to 2004 in determining payments on any life pension or PTD claims with injury dates on or after 2003. The statutory formula for calculating increases in the SAWW uses the year-to-year change in the California SAWW figure from the first quarter of each calendar year, as determined by the US Department of Labor. CWCI prepared the table below to show the annual changes in the SAWW (rounded to the 5^th decimal place) since 2002.

(NOTE: If there is a decrease in the SAWW, as in 2003, no cost of living adjustment to the benefits is made.) In reevaluating TPD or life pensions awards, claims administrators are urged to review the attached 6^th DCA ruling in Duncan v. WCAB and X.S., HO34040 with counsel. For your reference, LC §4659(c) is noted below: