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R&I Committee: "Know Your Benefits" (11/23/10)
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R&I Committee: "Know Your Benefits" (11/23/10)

Consider a scenario where you incur a disabling condition. What contractual benefit is available to you when your Disability Sick Account runs out? Well, most of us can spell LTD, but do you know roughly what that benefit amount will be? How about the duration?

This explanation of LTD benefits is very generic and does not include the FedEx MEC LTD supplement.

From the R&I Committee: "Know Your Benefits"
November 23, 2010


Consider a scenario where you incur a disabling condition. What contractual benefit is available to you when your Disability Sick Account runs out? Well, most of us can spell LTD, but do you know roughly what that benefit amount will be? How about the duration?

This explanation of LTD benefits is very generic and does not include the FedEx MEC LTD supplement. Should you encounter a real disability, please consult the Pilot Benefit Book and speak with an ALPA FDX MEC Benefits Specialist.

From the Pilot Benefit Book - Disability: Long Term Disability (LTD) Plan

Benefit Amount
LTD benefits provide 60% of your basic monthly compensation. Basic Monthly Compensation is calculated using the average of the 12 highest consecutive months in the last 36 months immediately preceding the disability commencement date. The disability commencement date is the first day you begin drawing from your sick bank in conjunction with your disability......This maximum monthly benefit amount is subject to limitations set forth in Internal Revenue Code Section 401(a)(17) and will be indexed based on periodic adjustments to the compensation limits........

The 401(a)(17) Annual Compensation Limit for Plan Years 6/1/2009-5/31/2012 is $245,000.

Basic Compensation
Basic Compensation is the gross pay shown on your pay stub, less:

Domestic and International Per Diem
Earnings above the IRS compensation limit
Reimbursed expenses
Vacation buyback
Bonuses, including the signing bonus paid in 2006 and 2007

Benefit Duration
If you have an occupational disability and all Plan provisions are met, LTD payments will continue until the end of your occupational disability or for a maximum of 24 months. If your occupational disability exceeds 24 months or if you have experienced a seat change or returned to work in a non-pilot position (covered by the Collective Bargaining Agreement), please refer to Supplementary Disability Benefit.

There are other criteria which apply to the duration of LTD benefits. Please refer to the Pilot Benefit Book for a listing.

From the Pilot Benefit Book - Disability: Pilots’/Crew Members’ Supplementary Disability Coverage

Benefit Amount
Supplementary Disability benefits provide 50% of your basic monthly compensation. Basic monthly compensation is calculated using the average of the 12 highest consecutive months in the last 36 months immediately preceding your disability commencement date. The disability commencement date is the first sick day you begin drawing from your sick bank....The maximum monthly benefit amount is subject to limitations set forth in Internal Revenue Code Section 401(a)(17).....

Supplemental Disability Duration
Supplemental Disability benefits continue to age 65 for disabilities commencing on or after October 30, 2006.

There are other criteria which apply to the duration of Supplemental Disability benefits. Please refer to the Pilot Benefit Book for a listing.

There is certainly more to know such as offsets from other income sources and limits for mental health, alcohol or substance abuse that may be applied to your benefit. Please consider this update as a brief and not a comprehensive overview. More information on the LTD can be found in the Pilot Benefit Book and in the CBA - 27.J. Insurance Benefits - Disability Plan.

 


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