Thread: United vs Delta
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Old 11-21-2022 | 10:15 AM
  #49  
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From: B777 CA
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Originally Posted by cskafan123
Was there a change in the LTD plan in the TA that you guys voted down?

Just curious which LCC you are talking about? Spirit?
Understanding LTD

C12 Update, Jul 22


Editor's Note: The TA Ballot is still “open”. As such, this reprint from C12 offers a perspective on the Long Term Disability (LTD) portion of the TA. It is presented here for your consideration to supplement MEC provided resources.


When the Con statement against the TA was written, it was not possible to detail every inadequate provision.


While the TA makes improvements to our existing, rather poor Long Term Disability (LTD) benefits, those improvements continue to fall well below the gold standard, Delta LTD.

Many pilots do not understand the importance of LTD until the day comes when they suddenly find themselves out on LTD. Additionally, most pilots who go out on LTD do so during their highest paid, most important, retirement savings years

Delta pilots on LTD have no maximum benefit cap. They get a true 50% of their Final Average Earnings rather than a capped amount. Under our TA, most of our pilots LTD dollars are fixed at a cap, and not truly 50% of 1026 hours/85.5 hours per month due to being capped.

Delta pilots on disability immediately receive a double Defined Contribution of 32% of their LTD benefit, such that they are made whole for their retirement contributions. Delta’s LTD is paid at 50% of their Final Average Earnings but their retirement calculation is based on 100% of their Final Average Earnings. Sixteen percent of all of the pre-LTD income is the same number as 32% of half of the pre-LTD income. By contrast, our TA continues to impose a low maximum benefit cap, much less than a pilot would be making if they were not out on LTD, even with the tax advantage. While our TA would, after a 36 month waiting period, provide an extra 16% to the benefit cap, this money would not go into our retirement plan to grow tax deferred. Instead it’s an extra 16% added to the LTD cap, to help make up for lost defined contributions while on LTD, which further decreases our tax free LTD treatment overall as compared to Delta’s taxable LTD plan. Currently a large percentage of pilots would yield less than a true 16% of the 50% (compared to Delta's 32% of the 50%), due to the LTD cap being less than 50% of their earnings.
Essentially all DAL pilots on day one of LTD receive full pre-LTD defined contribution (100% of their defined contributions from their Final Average Earnings) while on LTD, where our pilots under our TA get nothing for 36 months and then only 50%, which could be less due to the cap, not tax deferred. For simple math, on a pre-LTD income of $100,000, and an LTD of $50,000, at Delta a pilot would get $16,000 in defined contribution to their retirement. Under our TA, a United pilot would receive $8000, not tax-deferred. As the numbers rise, our capped LTD results in a greater disparity and lower percentage, of less than our TA’s 16% compared to Delta's 32%.

Additionally, Delta pays 100% of LTD plan premiums. This obviously benefits every single active Delta pilot. The fact that Delta pays the entire LTD premium is also beneficial for pilots who never go on LTD during their career in that they do not ever have premiums withheld for a benefit not used. While Delta LTD benefits are taxable and have an income offset for the first 36 months that the pilot is on disability, the lack of fixed and low max benefit caps, along with their double, 32%, immediate defined benefit retirement contributions, more than make up for the taxation.

The takeaway is Delta is getting a bigger gross benefit and a full 16% on their Final Average Earnings pre-LTD where our TA provides 16% on only half of 85.5 hours, and capped to less for most pilots.

Delta also has pilot short term disability and pilot mutual aid programs, which replace all of their disabled pilots’ income to 90% of their Final Average Earnings during shorter term disabilities. Finally, their sick leave is based upon years of service and resets each year.
A solution to get to a yearly reset system, along with LTD benefits and other benefits, are worthy of your opinion in the survey, if desired.
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