FDX - LTD, worth the price for private?
05-07-2008, 09:17 PM
#1
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Joined APC: Sep 2006
Position: MD11 FO
Posts: 1,109
FDX - LTD, worth the price for private?
I was reviewing the LTD the company pays for compared to that of ALPA and other vendors. It seems the company's is pretty good - am I missing something here? Is the only incentive to get ALPA's to give you some additional protection (above the 50% you'll get from the company) or am I missing something? thanks
05-08-2008, 01:49 AM
#2
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Joined APC: Mar 2006
Position: 757 CA
Posts: 153
O.k. I'll try and help a bit, but please read all the info available to you, and take your own situation in to account before you make a decision.
First off, yes, the FDX company LTD benefit is great! Other airlines would love to have this! Here is a simple breakdown of that benefit...
-You get disabled.
-You use all of your sick time and vacation time.
-FDX LTD kicks in, at 60% of your pre-disability income for 2 years.
-After 2 years, you get 50-60% of your pre-disability income until 60. (depending on type of injury.)
The ALPA sponsored Monthly Loss of Licence/Plus insurance is a little different, but basically the same benefit that FDX offers above. I really can't give a reason why a FDX pilot would want this ALPA plan. Don't get me wrong, it's a great deal for other airlines, but one FDX is already paying for.
Now, as a FDX pilot, we have that one 'special' insurance offered by our MEC, the 'Harvey Watt' one. This one would be well worth considering! This insurance will pay 66 2/3% of your pre-disability income up to $14,500 a month. Now, also consider that the FDX LTD is a benefit, and as such that 50 or 60% it's paying you is fully taxable, so the take-home is somewhere around 30-45% of your pre-disability income. The Harvey-Watt/FDX MEC pays the difference and will bump your check up to 66 2/3% up to $14,500 a month!
Confused yet? Again, this is just an overview, so please ask your MEC for info on the Harvey-Watt plan and consider adding that to the company paid plan. The majority of pilots I have talked to here have the Harvey-Watt insurance, and I don't know anyone (at FDX) who has the ALPA sponsored plan (besides apprentice members.)
First off, yes, the FDX company LTD benefit is great! Other airlines would love to have this! Here is a simple breakdown of that benefit...
-You get disabled.
-You use all of your sick time and vacation time.
-FDX LTD kicks in, at 60% of your pre-disability income for 2 years.
-After 2 years, you get 50-60% of your pre-disability income until 60. (depending on type of injury.)
The ALPA sponsored Monthly Loss of Licence/Plus insurance is a little different, but basically the same benefit that FDX offers above. I really can't give a reason why a FDX pilot would want this ALPA plan. Don't get me wrong, it's a great deal for other airlines, but one FDX is already paying for.
Now, as a FDX pilot, we have that one 'special' insurance offered by our MEC, the 'Harvey Watt' one. This one would be well worth considering! This insurance will pay 66 2/3% of your pre-disability income up to $14,500 a month. Now, also consider that the FDX LTD is a benefit, and as such that 50 or 60% it's paying you is fully taxable, so the take-home is somewhere around 30-45% of your pre-disability income. The Harvey-Watt/FDX MEC pays the difference and will bump your check up to 66 2/3% up to $14,500 a month!
Confused yet? Again, this is just an overview, so please ask your MEC for info on the Harvey-Watt plan and consider adding that to the company paid plan. The majority of pilots I have talked to here have the Harvey-Watt insurance, and I don't know anyone (at FDX) who has the ALPA sponsored plan (besides apprentice members.)
05-08-2008, 05:26 AM
#3
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Joined APC: Jun 2006
Posts: 919
Couple of thoughts, as I am very knowledgeable about insurance.
1) As far as the disability insurance benefit being taxable, there is an easy fix to this. Disability contracts that are paid for with AFTER-TAX dollars give a tax free benefit. DI contracts that are paid by the company, then the cost deducted as a benefit expense create a taxable disability benefit. It would be interesting to see if the pilot group could simply decide to be taxed on the amount of their annual disability premium. I know that nobody wants additional expense, but if you could pay taxes on your premiums (low) it would save you taxes on your benefit if needed (very high).
2) Some private insurance contracts will limit the amount of covereage you qualify for based upon other group or private contracts you already own. If this is the case, get the private contracts first, for whatever maximum benefit you would qualify for. After this contract is in place, for a maximum amount, layer the group contract available from FedEx on top of it. This will have the effect of potentially getting you from 60% or so of income to as much as 90%+ of income in the even of disability.
As I said, disability is very contract intensive insurance - be sure you read the fine print. If you can layer the coverages, as mentioned above (and based upon the definition of benefit) then you could potentially see no drop in income.
The key is to make the benefits non-taxable. If you can simply have the amount of premium put on your W-2 and pay applicable taxes then the benefit is tax-free.
1) As far as the disability insurance benefit being taxable, there is an easy fix to this. Disability contracts that are paid for with AFTER-TAX dollars give a tax free benefit. DI contracts that are paid by the company, then the cost deducted as a benefit expense create a taxable disability benefit. It would be interesting to see if the pilot group could simply decide to be taxed on the amount of their annual disability premium. I know that nobody wants additional expense, but if you could pay taxes on your premiums (low) it would save you taxes on your benefit if needed (very high).
2) Some private insurance contracts will limit the amount of covereage you qualify for based upon other group or private contracts you already own. If this is the case, get the private contracts first, for whatever maximum benefit you would qualify for. After this contract is in place, for a maximum amount, layer the group contract available from FedEx on top of it. This will have the effect of potentially getting you from 60% or so of income to as much as 90%+ of income in the even of disability.
As I said, disability is very contract intensive insurance - be sure you read the fine print. If you can layer the coverages, as mentioned above (and based upon the definition of benefit) then you could potentially see no drop in income.
The key is to make the benefits non-taxable. If you can simply have the amount of premium put on your W-2 and pay applicable taxes then the benefit is tax-free.
05-08-2008, 06:42 AM
#4
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Joined APC: Sep 2006
Position: Retired
Posts: 3,717
The FedEx paid Long Term Disability is a really good policy. Here's what happened to me when I went out with the heart condition.
1. After notifying the company of the situation, I used all my sick time, both sick banks were involved.
2. Shortly thereafter, I received a letter from Flight Crew Management, telling me that I was going on LTD.
3. I was pleasantly surprised when the first check came, because although taxes were taken out, my check was quite a bit higher than I had expected. That was primarily because I had no idea how LTD payments were calculated. I was a 727 S/O when I went out, but (for me it worked out great) what the company does is look back for a period of 36 months from the date of your sickness, and then they take the highest consecutive 12 months (of pay), then average that, then pay you 60% of that (before taxes.) In my case, that lookback showed that I was an MD-11 Captain, and so the checks I've been receiving have been based on that.
4. A month or so after I started to receive FedEx LTD checks, which by the way, come once a month, instead of the normal twice-a-month salary checks we are used to, I received a letter, again from FC Mgt, directing me to apply for Social Security Disability benefits. I contacted the local Social Security office, and made an appointment with them to assist me in applying (You could do it yourself, but this took any guesswork out of the process.) Anyway, 3 months later I received a letter from SS telling me that I'd been approved and that I'd start receiving checks the following month.
5. I notified the Company and faxed them a copy of the letter I'd received from Social Security. A few days later I got a letter from the Company, telling me to submit a check in the amount of the first months SS payment. It seems that any Social Security Disability payment you get, goes directly into offsetting the amount the Company pays you. So if you were getting 5K a month from the company and 1.5K from SS, then, your new Company payments would be 3.5K/month. Well, as it turns out, that's not exactly true. What our contract specifies is that 70% of any SS payments will be used to offset the Company LTD payments. So in effect, by applying for Social Security Disability, I gave myself another $700/month pay raise.
6. The Company LTD plan, which continues for up to 2 years, pays 60%, then you go onto the FedEx Supplemental Plan, which pays 50%, and continues until your 65th birthday.
7. Of particular interest is the fact that while you're on either of the above-mentioned plans, you continue to accrue both "years of service" and "seniority."
8. Another important fact, which I hope none of you will ever need to know, is that once you've been on Social Security Disability for 24 months, you're automatically entitled to Medicare insurance, which, I believe is a free insurance, that's good everywhere.
Hope the above helps you understand LTD and Supplemental benefits, as negotiated by our own ALPA negotiating committee. If you find fault with these policies, then blame DW.
JJ
1. After notifying the company of the situation, I used all my sick time, both sick banks were involved.
2. Shortly thereafter, I received a letter from Flight Crew Management, telling me that I was going on LTD.
3. I was pleasantly surprised when the first check came, because although taxes were taken out, my check was quite a bit higher than I had expected. That was primarily because I had no idea how LTD payments were calculated. I was a 727 S/O when I went out, but (for me it worked out great) what the company does is look back for a period of 36 months from the date of your sickness, and then they take the highest consecutive 12 months (of pay), then average that, then pay you 60% of that (before taxes.) In my case, that lookback showed that I was an MD-11 Captain, and so the checks I've been receiving have been based on that.
4. A month or so after I started to receive FedEx LTD checks, which by the way, come once a month, instead of the normal twice-a-month salary checks we are used to, I received a letter, again from FC Mgt, directing me to apply for Social Security Disability benefits. I contacted the local Social Security office, and made an appointment with them to assist me in applying (You could do it yourself, but this took any guesswork out of the process.) Anyway, 3 months later I received a letter from SS telling me that I'd been approved and that I'd start receiving checks the following month.
5. I notified the Company and faxed them a copy of the letter I'd received from Social Security. A few days later I got a letter from the Company, telling me to submit a check in the amount of the first months SS payment. It seems that any Social Security Disability payment you get, goes directly into offsetting the amount the Company pays you. So if you were getting 5K a month from the company and 1.5K from SS, then, your new Company payments would be 3.5K/month. Well, as it turns out, that's not exactly true. What our contract specifies is that 70% of any SS payments will be used to offset the Company LTD payments. So in effect, by applying for Social Security Disability, I gave myself another $700/month pay raise.
6. The Company LTD plan, which continues for up to 2 years, pays 60%, then you go onto the FedEx Supplemental Plan, which pays 50%, and continues until your 65th birthday.
7. Of particular interest is the fact that while you're on either of the above-mentioned plans, you continue to accrue both "years of service" and "seniority."
8. Another important fact, which I hope none of you will ever need to know, is that once you've been on Social Security Disability for 24 months, you're automatically entitled to Medicare insurance, which, I believe is a free insurance, that's good everywhere.
Hope the above helps you understand LTD and Supplemental benefits, as negotiated by our own ALPA negotiating committee. If you find fault with these policies, then blame DW.
JJ
05-08-2008, 07:03 AM
#6
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Joined APC: Aug 2006
Position: leaning to the left
Posts: 4,184
JJ,
I take it that you don't have the ALPA insurance? Harvey Watt type?
I've always been curious as to how much people are actually getting from that. I've been paying for it from day 1, on the 12 month wait plan.
I take it that you don't have the ALPA insurance? Harvey Watt type?
I've always been curious as to how much people are actually getting from that. I've been paying for it from day 1, on the 12 month wait plan.
05-08-2008, 07:07 AM
#7
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Joined APC: Sep 2006
Position: Retired
Posts: 3,717
BB,
Like you, I took the Harvey Watt plan out, but unlike you, I canceled it a number of years later, when my military retirement kicked in. The ALPA insurance never looked all that good to me, because I didn't like the wait period, either the 12 or 24 month plans. Just seemed to me that if I got sick, I'd like the money to start immediately, because who can foresee being out for over a year? Especially when one is 35 or 40 years old.
Like you, I took the Harvey Watt plan out, but unlike you, I canceled it a number of years later, when my military retirement kicked in. The ALPA insurance never looked all that good to me, because I didn't like the wait period, either the 12 or 24 month plans. Just seemed to me that if I got sick, I'd like the money to start immediately, because who can foresee being out for over a year? Especially when one is 35 or 40 years old.
05-08-2008, 08:14 AM
#8
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Joined APC: Jan 2007
Position: Right here, for now
Posts: 116
Originally Posted by Jetjok
BB,
Like you, I took the Harvey Watt plan out, but unlike you, I canceled it a number of years later, when my military retirement kicked in. The ALPA insurance never looked all that good to me, because I didn't like the wait period, either the 12 or 24 month plans. Just seemed to me that if I got sick, I'd like the money to start immediately, because who can foresee being out for over a year? Especially when one is 35 or 40 years old.
Like you, I took the Harvey Watt plan out, but unlike you, I canceled it a number of years later, when my military retirement kicked in. The ALPA insurance never looked all that good to me, because I didn't like the wait period, either the 12 or 24 month plans. Just seemed to me that if I got sick, I'd like the money to start immediately, because who can foresee being out for over a year? Especially when one is 35 or 40 years old.
05-08-2008, 08:18 AM
#9
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Joined APC: Sep 2006
Position: Retired
Posts: 3,717
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