Disability Pensions

Boom Boom, it may sound like a subsidy, but I think it's what's called a "carve-out". The company's plan rules probably provide that they will only top up whatever other pension you are eligible for. There's no connection between the govt and the company. The govt pays you what you're owed like anyone else, and the company plan simply takes advantage of that by reducing its payment. Not uncommon. For example, if you're on most LTD plans (long term disability, but not a disability pension), and you reach the age where you qualify for a government pension, the plan will require that you apply for the pension and then they reduce their benefit accordingly - or, if you don't apply, they just carve it out as if you did! Likewise with SAAQ, which provides a replacement salary if you're disabled from work after an auto injury - most workplace disability insurance plans will carve that out (i.e. won't allow double-dipping).

Again, it depends strictly on the rules of your company pension plan, so without seeing those I couldn't say for sure - but it sounds typical. It helps reduce the employer's cost to the plan without reducing the employee's take-home pension benefit. Not trying to justify it - it's just reality.

ETA: Fidel's Algoma example is completely different I believe. Ontario has a special fund to supplement pension plans of companies that go belly up. It became notoriously short of money during the 2008 recession. Anyway, that's likely the Algoma situation. Has nothing to do with the carve-out I was explaining above. Plus, that doesn't exist in any other province to my knowledge, nor federally.

My suggestion with these insurance companies providing LTD, is that folks keep in mind these are profit making companies, and their objective is to get you off the books, not to help you. You are now liabilities.

Gnome sayin'? It sounds like you're all vets but ...just sayin'.

Boom Boom, believe me, insurance companies will do what they can to deny your claim. And if they accept it, they insist that you apply for whatever other monies are available, such as CPP Disabilty Benefits, in order to reduce what they pay you.

I am glad to hear you haven't had any problems. It perhaps depends on the nature of your disabilty as to how difficult insurers make it for you to be covered. I can, however, attest that many people who cannot work due to their disability nevetheless struggle to have this recognized by their insurer. It is the insurers job to minimize loss, and claims mean a hit to their bottom line. 

Jabberwock wrote:

I am glad to hear you haven't had any problems. It perhaps depends on the nature of your disabilty as to how difficult insurers make it for you to be covered. I can, however, attest that many people who cannot work due to their disability nevetheless struggle to have this recognized by their insurer. It is the insurers job to minimize loss, and claims mean a hit to their bottom line.

Jabberwock speaks the truth from my vantage point too. It's a civil matter, regardless of what the doctor signs in a note. And the companies try to weasel out of paying. Come on, don't tell me you've never heard of a PI jumping out of a bush taking a picture of the guy with a back injury picking up a dropped twenty dollar bill in front of his door? Well you have now!

Boom Boom wrote:

Well, I've been on disability since 2002, no problems with insurance agents bothering me - none whatsoever. As I mentioned in an earlier post, the Quebec Pension Plan took over about a third of my pension benefits - and that's the only part of LTD that is taxable. Because it's such a small amount, I don't pay income tax. I know a few folks also on LTD, their experience is the same as mine.

You can add up numerous cases where nothing happens, and that kind of evidence will always be null, so yes there are LTD cases where nothing untoward happens by the insurer, they don't tend to be problemmatic for people. The problem is when benefits are jerked away willy nilly in cases where the company feels it can deny funds (naturally this varies by disability type and numerous other variables), which I'm assured by a decent disability lawyer, happens quite frequently (e.g., it keeps him employed, right?)

I might have helped some poor guy/gal some day to fight his insurer by giving him a 'heads up' as I did, about insurers and the nature of the LTD civil contract and how insurers think of you, so I'm content in the reasonableness of my injection into the conversation, truthfulness of it, and it's value.

You may doubt the value of this interjection to the dialog on disability for other reasons, I'd be interested to know what they are, but if you doubt publicly, please phone the law society and take advantage of their free 30 minutes talking to a lawyer first, and if she/he doesn't back up what I say I'll retract it - I'm in ON/CAN. Consider too that this high handed behaviour of which I speak 'could' be a recent phenomenon and maybe that's why you won't see it (cause your LTD started 2002) perhaps you were closer to retirement when the disability happened.

Of course, once the person has their benefits withdrawn unilaterally by the company, they now have to choose to fight it in a court of law, which costs them money. So the company 'forces' a settlement which, if you don't have a decent lawyer, can mean a lot less money and benefits for you than was contained in the LTD policy, you see. I sat down and chatted briefly with a friend of mine yesterday who was similarly forced into a settlement she didn't want - a cash settlement no benefits - all she wanted was for them to honour their LTD policy. But citing cases isn't usually good argument is it - I just wanted you to have that one to remember.

I hope you can see the financial / practical / legal aspects to the case I've tried to make about the company and their possible future behaviour(s).