Tag: saww calculation

By Posted on Posted in COLA, Commutation, PDRater No Comments Tagged with , , , ,
Where did this SAWW come from anyhow?
Where did this SAWW come from anyhow?

Even with the recent Baker v. WCAB decision settling when the increase in state average weekly wage (SAWW) is applied, litigation continues over the precise future SAWW percentage to use in a commutation of life pension benefits. The DEU is currently using an assumed annual SAWW increase of 4.6% “based on a 50 year average.”  ((Andrea Marutti via Compfight))

Before we consider how the DEU calculates future SAWW increases, it is necessary to look back to past SAWW changes.  In the last 50 years there have been only two instances where the SAWW has decreased from the prior year.  Since Labor Code Sections 4659(c) and 4453(a)(10) only apply increases in the SAWW to life pensions and permanent total disability benefits, there is no effect on the benefit rates for those two years.

When the DEU indicates a historical 50-year average of SAWW increases, they mean exactly that.  Thus, instead of averaging the decreases in the SAWW with the increases, the DEU averages only the increases of the historical SAWW data.  (I’ll save you the trouble of looking it up – 2004 and 2011 are the only instances in the last 50 years of any reduction in the state average weekly wage).  An average of just the SAWW increases over the last 50 years does come to 4.6%.

If you’re interested in verifying this information for yourself, I’ve prepared a list of the data used by the DEU in computing the 50-year average of SAWW increases.

By Posted on Posted in Almaraz / Guzman, Calculators, COLA, Commutation, Downloads, Free, Life Pension, PDRater, SAWW, Technobabble, Website Updates, Workers Compensation Resources No Comments Tagged with , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
XYZZXSJO2 - The motion picture!
XYZZXSJO2 - The sequel!

Last week I posted about a recent case from the San Jose WCAB that indicated a life pension SAWW ((SAWW means State Average Weekly Wage)) increase is applied on the first January 1 after the date of injury.  You can find a download of the XYZZXSJO2 case here.

I’ve just finished the COLA / SAWW future life pension rate calculator to determine what the future life pension rates are assuming a COLA / SAWW increase of 4.7% per year.  If you’re interested in becoming a beta tester for this COLA / SAWW calculator for life pension increases, please drop me a line and ask for access.  ((If you have already helped me out as a beta tester, you already have access to this calculator.))

Please keep in mind that this is not a life pension with SAWW / COLA increase commutation calculator.  The actuarial math involved in performing that calculation is … intense.

As an interesting side note, this week I saw my very first DEU commutation of a life pension with COLA increase.  Unlike the typical commutations everyone receives from the DEU, this commutation calculation was devoid of the actual methodology used.  I was pretty disappointed to find this out.

No matter!  Help beta test the new calculator by dropping me a line.  After you’ve given it a whirl, let me know what you think.

By Posted on Posted in Calculators, Case Law, COLA, Death Benefits, Life Pension, PDRater, Permanent Total Disability, SAWW, Website Updates, Workers Compensation Resources No Comments Tagged with , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
XYZZXSJO2 - The motion picture!
XYZZXSJO2 - The motion picture!

Last week while Steve was at the Sacramento WCAB he heard about a recent case that held the COLA / SAWW adjustments and increases are calculated based upon the first January 1 following the date of injury.  ((COLA = cost of living adjustment.)) ((SAWW = state average weekly wage.))

This case involving SIF (the subsequent injuries fund) is from the San Jose WCAB.  The name of the case is “XYZZXSJO2 v. Subsequent Injuries Benefits Trust Fund, ADJ 1510738, SJO 0251902”.  The name of the Applicant was anonymized to protect their identity.  ((I hope to have a scan of this decision for you soon!)) ((David DePaolo of WorkCompCentral.com has graciously allowed me permission to offer you a copy of XYZZXSJO2 for download!  Thanks David!))

Download a copy of XYZZXSJO2 now!

Thus far the conventional wisdom has been that the COLA/SAWW increases are calculated starting with the first January 1 after life pension gets paid out.  This is a tremendous change in the COLA/SAWW calculation of life pension.

Assuming a 1/1/2003 injury at exactly 70% permanent partial disability, there would be 426.5 weeks of permanent disability paid after the permanent and stationary date before the life pension gets paid out.  This equates to 8.2 years from the permanent and stationary date that has, thus far, not been taken into account with life pension calculations to date.  To put this in perspective, if someone had an injury on 1/1/2003 and became P&S on that same date ((Not likely.)) , the traditional method of calculating the life pension with COLA / SAWW increase would be too low by approximately 44%.

At the moment I’m finalizing a COLA / SAWW life pension calculator to determine what the future life pension rates are assuming a COLA / SAWW increase of 4.7% per year.  If you’re interested in becoming a beta tester for this COLA / SAWW calculator for life pension increases, please drop me a line and ask for access.

Unfortunately, I don’t have a citation for the 4.7% COLA / SAWW increase, but I believe it to be the offiical average used by the DEU ((Disaiblity Evaluation Unit.)) to calculate commutations of COLA / SAWW increases and adjustments.  If you have an official citation or document from the DEU, please drop me a line so I can include that citation here!