Incorrect, if the current Pilot Benefits Book (2018) on the PFC website is correct. That appears to be the latest version of the PBB available.

"Offsets for Earned Income from Other Employer or Self-Employment - an LTD reduction arising out of other employment or self-employment during the term of your disability will be applied to your benefit only after the disability payment plus the outside income you earn exceed your pre-disability income. For purposes of this provision, your pre-disability income is measured as the average earnings (Company + outside earned income) over the 12 months immediately preceding your disability."

Interesting that the income your LTD benefit is calculated from is based on is the highest 12 consecutive months in the past 36. So if you killed it for 2 years and then coasted for a year and went out on disability your pre-disability total income could be determined off a lower income than your actual LTD benefit amount was calculated from.

For demo purposes, assume constant 10K earnings per month for the 36 months prior to going on to LTD. During those last 12 months you earned 5K on your side gig. Total pre-disability income for you is 15K per month.

Your LTD benefit for the first 2 years would be .6 of 10K, or 6K per month. You could now earn 9K per month on the side and not have any offset to your LTD payment of 6K as your post-disability income would be 15K per month.

If you worked more on the side and earned say 14K per month, you would now have a post-disability income total of 20K per month, exceeding your pre-disability income. The company would reduce your LTD benefit by 50% of the difference between the two incomes (20K - 15K). So half of 5K would be 2.5K, and now your LTD benefit would only be 3.5K to combine with your other income (14K) so you could now make 17.5K total each month. This would obviously adjust each year based on your other income.

After the first 2 years on LTD your benefit would drop to .5 of the 10K per month, or 5K per month. So now your could earn 10K per month on the side without causing any offset in your LTD benefit.

A bit of a disincentive to work more on the side than you need to match your pre-disability income.

Anyway, that is how I understand it, please check for yourself and let me know if I've goofed it up.