This was a win. Yes we pay 35% of the cost, but the wholes in the PDI coverage were huge. This should make vacation donation a thing of the past.
The ONLY people that should opt out, are those that are within a year or two of Retirement and have enough sick leave to carry them through.
A Brief Look at Pilot Long Term Disability Income
An emphasis topic for today’s Tentative Agreement Update is the new Long Term Disability (LTD) plan in the TA. This plan would replace the former Pilot Disability Income (PDI). A comparison of both plans from the Retirement and Insurance Committee follows:
Q: Today PDI is completely paid for by the company, and pays 55 percent. Does the LTD program in the Tentative Agreement cost more and pay less? Is it inferior to Delta’s plan?
A: It is true that pilots will have to pay monthly premiums ranging from $150 to $221 depending on their earnings, a new experience for s-UA pilots. It is also true that the maximum monthly benefit is $8,000 – the equivalent of a 50% benefit on $192,000 annual income. It is not true that the new LTD Plan provides less disability coverage. Specifically:
• PDI pays a benefit of 55% of pre-disability earnings, fully taxable, so, for a pilot in the 28% tax bracket, the net PDI benefit is really only 39.6% of pre-disability income. The new LTD Plan will pay a benefit equal to 50% of pre-disability income, tax-free (up to $8,000 / month maximum).
• PDI provides benefits only to pilots who are permanently medically grounded; “permanence” is a continuing source of disputes under PDI. The new LTD Plan pays benefits to any pilot who is unable to exercise the privileges of his FAA medical; that is a very clear delineation which basically eliminates disputes over benefit entitlement.
• In the UAL STD / PDI structure, pilots frequently exhaust their vacation, sick leave and STD entitlements, only to discover that even though they still can’t fly they don’t meet the “permanence” test for PDI benefits. Those pilots wind-up on Illness Leave of Absence, a no-man’s land, without pay, for indeterminate periods of time – months and sometimes a year or multiple years. The LTD Plan eliminates that concern.
• There is an ongoing, unresolved dispute between the Company and ALPA regarding the duration of PDI benefits after the FTEPA change in mandatory retirement age, with the Company claiming the right to terminate benefits before age 65. Benefits under the new LTD plan continue to the legally-mandated pilot retirement age. Period.
• A number of offsets to PDI benefits – such as Workers Compensation, the 72-month “other income” offset and pension benefits (which the Company claims includes PBGC payments, a claim disputed by ALPA but unresolved as of the TA) – have been completely eliminated under the new LTD Plan.
• LTD benefits are provided for pilots with substance dependence/abuse problems and who are compliant with a continued UAL-style HIMS/EAP program, subject to a one-year lifetime maximum. PDI was not generally available at all to pilots in this situation.
• The benefit of every pilot who goes on LTD will be fully actuarially funded by assets of a VEBA trust which can never revert to the Company and will be absolutely legally immune from claims of the Company’s creditors. The actuarial assumptions used in funding benefits require ALPA approval. PDI benefits are completely unfunded and totally exposed to being eliminated in a Company bankruptcy.
• PDI is completely Company-administered. The LTD Plan will have pilot representatives on both its Administrative and Investment Committees.