13.1.2.9 Private Insurance and Pension Plans

• Jurisdiction: Arizona

Typical private insurance and pension plans, whether funded by employee contributions, employer payments, or jointly, provide no occasion for reduction of workers’ compensation benefits.^[38] However, there is usually little double compensation in this area because, by contract, private insurers and pension providers reduce the private benefits by the amount of workers’ compensation payments.^[39] In fact, some courts will broadly or narrowly construe these private contracts to prevent double recovery.^[40]

In addition, the Employee Retirement Income Security Act (“ERISA”),^[41] the federal law regulating pensions, plays a role here. In PPG Industries Pension Plan v. Crews,^[42] pensioned former employees were later found disabled for workers’ compensation purposes. Their retirement pensions were reduced pursuant to a coordination clause in the pension plan. The workers appealed the pension reduction, arguing that it was barred by the state workers’ compensation law. However, the appeals court ruled...