LTD plan at FedEx
 

Hi Everyone,

I am not a FedEx pilot ( I wish I was ), but I would like to ask you this question. What is your LTD plan at FedEx and is there also a supplemental loss of license insurance that is offered through the Union?

I've heard stories about FedEx pilots going on disability and retaining their full pay until retirement, which if true is awesome.

I know that FedEx and Delta are the 2 companies with superb pilot benefits and I would be so happy if I can make my union adopt similar LTD plans.

Thanks much and Happy Holidays!

cskafan

I think is pretty typical LTD for most major airlines: I “think” it’s 60% of salary initially, then 50% after two years. You can buy supplemental to bump it up to 66%. The huge benefit is that while out on LTD, you still get full service credit toward your pension payment (A-plan). So if you go out on LTD after 5 years, and are out for 20 years until you hit 65, you still get the full 25 year service credit for your pension payment calculation.

Oh wow! The A-Plan contribution is huge. So the supplemental buy plan is an additional 16%?
I guess I have heard wrong. I was told that you can buy up to 40% so one keeps full pay.

The difference is you do not pay taxes on the additional 16% and it’s not capped at the level the 50% company disability payment is and you can stop the union dues if your not coming back. If you do comeback you would owe the dues money to the union. I think you loose your b-fund contribution from the company.

Its also not unheard of for guys/gals on LTD to take an office job/special project in flight ops or go to the training department and bid pay only....effectively keeping their full pay. Obviously this can be dependent on what the medical issue is, where you live etc.

Unfortunately I am in this very position right now where I need to go on long-term disability 1 year into my Fedex career. fortunately the company has found some temporary work for me via TDNIF so I can at least build up my long-term disability calculation. I have a question and I can’t find the answer in the contract, if I was scheduled for a seat change in this last system bid, ie 75 to 76 FO, am I entitled to the increase pay while on TDNIF Once my training slot was available?

Two key points you did not mention in discussing disability programs are who funds the program. Is it pilot funded or company funded or a combination. The second consideration is how is the earnings calculation is made. Is it 50% of actual earnings, 50% of 75 or 80 hours ect..
Retirement was mentioned and is another important consideration. Delta for example pays 32% of disability payments into the DC plan effectively giving a pilot the exact same contribution as if he was working.

Thats nice. Still not as nice as the A-plan benefit though. And not sure why you need to chime in about Delta when the guy had a specific question about FedEx. Let’s keep this on track.

So is it 50% of the actual earnings or min guaranteed? When one is on disability and is offered a position outside of flying, does that person keep his last pay rate and if so is that until retirement?

I believe the monthly LTD benefit is calculated from the average monthly pay from your highest 12 month consecutive period in the 36 months preceding your date of disability. It is not based on min guarantee, unless that's all that you've earned on average prior to going out on LTD.

Short answer is actual earnings. Because its based on actual earnings prior to going on LTD a future hypothetical pay increase doesn’t matter.

“A pilot shall be eligible for LTD Plan benefits upon exhaustion of his regular and disability sick accounts, as described in Section 14, or upon his experiencing a seat change or upon moving to a non-pilot position because of disability, as described in the LTD Plan . Except as provided in Section 27.J.7., disability benefits paid to pilots who are disabled prior to October 30, 2006, shall be governed by the terms of the disability plans in effect on the date of commencement of the dis- ability . Pilots who become disabled on or after October 30, 2006, shall be governed by the provisions below .
LTD Plan benefits payable to a pilot whose disability commences on or after October 30, 2006, shall equal 60% of monthly earnings, as de- scribed in Section 27.J.6., for the first 24 months that a pilot is eligible to receive benefits under the LTD Plan, subject to the limits in Section 27.J.7. Thereafter, benefits payable to a pilot who becomes disabled and continues to have an occupational disability shall equal 50% of monthly earnings, as described in Section 27 .J .6 ., and subject to the limits in Section 27.J.7. Such benefits shall be paid through the earlier of the date on which such pilot (1) ceases to be disabled, or (2) the date on which the pilot attains age 65 .
In order for a pilot to continue to be eligible for a disability benefit under the LTD Plan, the pilot must fully cooperate with the Claims Paying Administrator, in coordination with the Aeromedical Advisor, and must diligently seek restoration of any required license or medical certificate to allow the pilot to return to work.
The Company shall pay the full cost of such coverage .
Monthly earnings shall continue to be defined as a pilot’s basic monthly compensation, i .e ., the 12 highest consecutive months out of the 36 consecutive months preceding the disability period .”

The supplemental is not taxed so its really like 23-25% depending on what you’re earnings had been prior to disability. The supplemental is also not earnings capped by 401.a.17 IRS limits like the primary disability is.

Thanks for asking. FDX LTD plan is funded by the company not the pilot. Its only limited by the 401.a.17 numbers set forth by the IRS. Our optional supplemental is not taxed and not limited by the IRS cap. It also includes pension accrual for years of service while out on LTD.

Is the actual payout limited to the 401 cap or is the FAE calculation limited by that number. If the later it would be a pretty severe restriction. If the former it should not effect most pilots.

I’m not sure if anyone specifically addressed the earnings cap. It used to be 260K, don’t know if it has gone up. So 60% of 260K is 156K as the max you would be paid out on LTD for the first two years.

Its the former per section 27.J.7. so no big deal for most. Plus the supplemental on top of that which is not restricted by any limits plus the A plan YOS accrual.

From my understanding the payout is limited to 401.a.17 which is 305k for 2022.

Section 27.J “A pilot’s monthly LTD Plan benefit during the first 24 months of disability may not exceed 60% of the monthly compensation limit set forth in Code § 401(a)(17)” after that its 50%

This is exactly what I was looking for. Thank you !!! Looks like your LTD combined with supplemental insurance and an A plan make you have the best LTD plan in the industry. So if one loses his/her medical they are financially set for life!

One more thing. Who is your supplemental Loss of license provider? Does it go through the union and is there a medical exam required to enroll?

Thanks you guys and gals and Merry Christmas!

It has been known to be best in class haha. No physical exam needed. Im not sure who the company is but the supplemental is an FDX ALPA specific plan not available to anyone else in ALPA since it was negotiated by FDX ALPA.

What we have is not typical. Look at the contract comparison document on negotiations web page. What we have combined with the supplemental and A plan accrual is far superior to anything else.

For a good example use the average pilot who most likely would use this benefit. Use the information I posted above.

Age - 50-55 (WB Captain)

YOS - 10-15 (has his high 5)

Average last 12 months - 400k

I’m happy you know what we have is far superior tk anything out there. No stop supporting that POS Pancake plan which has no provision to protect the things you’re boasting about. Especially absolutely no protection for those who go out in LTD.

I understand your disdain for any formula other than the one we have. I don’t understand your assumption of false facts. It was said numerous times by the union that the current accrued benefit while on LTD would continue in any new plan also. Now back on track.

"Changing from 7 to 6 credit hours per day will have no effect on your pay or number of days worked."

"Lie flat seats won't take away our first class deadheads".

"We won't negotiate to have two different retirement plans." (Unless, of course, one of them includes pancakes, in that case, everyone will have a different plan, depending on how hard they worked, and whether the legacy retirement still exists remains to be seen.)

"Those that didn't get their $25,000 VEBA bank account will get it in the next contract."

"We will fix retirement in the 2015 contract."

There have been lots of things said by the union over the years that turned out not to be true.

Read the fine print. Be spring loaded to vote no. Make them prove we are getting a good deal. Don't believe any "interpretation" anyone tells you.

The only thing that matters is what is written on the paper, and always remember that their lawyers are better than ours, so plan to lose any interpretations necessary.

Hey, NoWonkAllBull. Any specific language you can quote that shows the LTD folks won't be left in a lurch? I remember a unattributed second hand comment attributed to a Union officer about some will be left behind. Considering the track record, trusting on this issue maybe self critiquing in an ugly way. Keep up the good work though and go get your booster #8. You probably won't get tinnitus but if you did, it probably wont effect your personal employment status.

No physical exam needed, however, many questions. I got turned down the first time for reporting that I saw a cardiologist, who found something trivial and in the range of normal. He had to write them a letter, requesting they reconsider, then they finally gave me the FDX MEC policy. They doubled the premium, and the cost was too crazy expensive. I dropped the policy and started the ALPA policy. Easier to get, cheaper but lower benefits. Apparently so many people stopped the FDX MEC policy after the rate jump that they started allowing more people to get it, instead of looking for any reason to say no.

The hateful 8 came to derail another thread.

I had a previous medical issue also and had no problem getting on the FDX MEC policy. The rates got cut in half about 2 years ago and the 12 month wait is what the 24 use to be. I guess like any insurance experience can vary from time to time.

Yeah, I think what happened after they doubled the rates, is that many people dropped the policy, and they had to entice pilots to come back and get it. I think they also decided you only had to answer one question, maybe do you have a current FAA medical. Don't know what the situation is now, if they're still making it easy and cheaper, but it's kind of odd that they can just change things at the drop of a hat if they have too many claims or not enough customers.

My understanding is the underwriter controls the rates and requirements. Luckily it has changed back towards the cheaper and better.

Assuming you made $500K last year and just went out on LTD, you would get $183K (305x0.6) for the first 2 years and then 152.5K (305x0.5) till you turn 65. This is considered taxable income and would be adjusted up as the Federal limit on the $305K increases with time. If you have the supplemental LTD insurance (with 12 or 24month wait option), you would get an additional non taxable $85K (500x0.17) till you turn 65.

Does that sound about right?

From our union newsletter today. What timing.

The FDX MEC LTD Plan was designed by FedEx pilots for FedEx pilots. The pilot-designed FDX MEC LTD Plan provides monthly benefits for disabilities that prevent you from working in your own occupation as a pilot. This coverage is optional and paid for by the pilot, and benefits are paid in addition to the LTD benefits provided by FedEx under our CBA.
The FDX MEC LTD Plan was designed to supplement the negotiated LTD benefit in our CBA. The Federal Express Corporation Long-Term Disability Plan for Pilots (the CBA LTD Plan) benefit begins upon submission of a valid claim within 60 days of exhaustion of your regular and disability sick banks. If approved, you will receive a monthly benefit of 60% of your eligible pre-disability income for 24 months. After 24 months, you will receive a monthly benefit of 50% of your eligible pre-disability income until age 65 or recovery, whichever occurs first. For the 2021-2022 plan year (same as FDX fiscal year) the maximum earnings considered are limited to $290,000. This limit is indexed to the IRC 401(a)(17) limit and will increase to $305,000 for the 2022-2023 plan year. For the current plan year, the maximum monthly benefit at the 60% level is $14,500 and at the 50% level is $12,083.33. The CBA LTD benefit is a taxable benefit.
The FDX MEC LTD Plan provides a benefit of 17% of your pre-disability income until age 65 or recovery, whichever occurs first. While the benefit adjusts with your eligible earnings, it is not reduced or limited by the IRC 401(a)(17) limit like our negotiated LTD benefit. However, the plan is limited by a maximum benefit of $14,500 per month. In addition, the FDX MEC LTD Plan’s 17% benefit is not subject to federal income tax, since you are paying the premiums with after-tax dollars.
Some other benefits of the FDX MEC LTD Plan are the annual 3% COLA for maximum of 5 years and a survivor death lump sum benefit of 3 times your final monthly benefit.
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.

Income Offsets
 

I may have missed this in the thread...are there any income offsets on the plan? Meaning, if you have to go out on LTD and you get another job somewhere else, do they offset any of your LTD income, or do you make your new income on top of your LTD payout?

You can make up to (don’t quote me but my recollection of reading) 60k before the LTD benefit is reduced.

FedEx LTD and SSDI
 

Hi,

Does anyone have any insight on what happens when SSDI actually IS approved? Good/bad/ugly? I’m actually going thru this as of yesterday so any suggestions on others to contact are much appreciated!

How do the other benefits change? Are you forced to use Medicare instead of company insurance? Also, how do you calculate the repayment amounts? I’m sure there are many questions I’m missing, not sure who I should contact next.

Thanks,
Waldo

Context the FedEx ALPA Aeromedical committee. Contact info is in the pocket calendar or the FDX.ALPA.org website. Or you can call the FDX ALPA office.

Waldo1, I knew a guy whose nickname was Waldo................. And not at FDX. If you are one and the same, PM me, pretty familiar with the process, not in a happy way either. Or, my phone number hasn't ever changed. You used to have it, along with Bear and Scotty et al. having my number.

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.

Yes, I am pretty sure that is all correct.

PM sent Waldo

“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.[/QUOTE]

Does anyone know if guard/reserve pay would count as “side hustle money” when they calculate your total income prior to LTD?