LTD plan at FedEx
02-19-2022, 01:37 PM
#41
Banned
Joined APC: Jun 2018
Posts: 1,838
Originally Posted by MelT
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.
"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.
Section 27.J of the CBA
13. An LTD Plan reduction arising out of other employment or self-employment
during the term of a pilot’s disability shall be applicable to a
pilot only after the disability payments plus the outside income earned
by the pilot exceed the pilot’s pre-disability income. For purposes of
this provision, a pilot’s pre-disability income shall be measured as the
average earnings (Company and outside earned income) over the 12
months immediately preceding the pilot’s disability.
For example, a pilot programs software as a side business in addition
to flying. He breaks his arm on July 1, 2016, and goes on LTD disability
after his sick leave runs out on September 1, 2016. Between July
1, 2015, and July 1, 2016, the pilot made $100,000 as a FedEx pilot
and $25,000 in his software business, for a monthly average total of
$10,416.66. While on disability, the pilot continues to program software
and makes $4,000 per month in addition to drawing a monthly disability
of $5,000.00 (for the first 24 months; $4,166 thereafter) from the Company.
The $9,000.00 monthly average income is below the $10,416.66
he earned before his disability, so no offset is required. If however,
the pilot earned $7,000 per month in the software business, then his
total monthly earnings ($12,000.00) would exceed his combined predisability
monthly income ($10,416.66) by $1,583.34. In this situation,
a monthly disability reduction of 50% of the $1,583.34, or $791.67 per
month would be required.
So a pilot making 500k a year could easily make over 60k a year and not have his benefit reduced.
02-22-2022, 07:38 AM
#42
Gets Weekends Off
Joined APC: Apr 2013
Posts: 1,622
Originally Posted by Noworkallplay;[url=tel:3343345
3343345[/url]]
With the FDX MEC LTD Plan, you can elect a Benefit Qualifying Period of 12 months or 24 months. The Benefit Qualifying period begins the first day you become disabled. Your benefits will begin the later of the 12 or 24 Benefit Qualifying Period or exhaustion of your regular and disability sick banks.
With the FDX MEC LTD Plan, you can elect a Benefit Qualifying Period of 12 months or 24 months. The Benefit Qualifying period begins the first day you become disabled. Your benefits will begin the later of the 12 or 24 Benefit Qualifying Period or exhaustion of your regular and disability sick banks.
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
02-22-2022, 08:00 AM
#43
Gets Weekends Off
Joined APC: Nov 2013
Posts: 2,756
Originally Posted by PurpleToolBox
Are there any pros or cons with electing the 12 or 24 month qualifying period?
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
02-22-2022, 08:02 AM
#44
Banned
Joined APC: Jun 2018
Posts: 1,838
Originally Posted by PurpleToolBox
Are there any pros or cons with electing the 12 or 24 month qualifying period?
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
02-22-2022, 10:04 AM
#45
Gets Weekends Off
Joined APC: Nov 2017
Posts: 2,099
LTD plan at FedEx
Originally Posted by PurpleToolBox
Are there any pros or cons with electing the 12 or 24 month qualifying period?
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
I’ve heard some say when they were junior they elected the 12 months because it was cheap. As they grew older and built up a nest egg they switched to the 24 months to save in premiums.
Any ideas? Thanks.
Twenty four months also coincides when your company benefit is reduced from 60% to 50%.
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