Severance and LTD


#1

I don’t want to beat this subject with a stick but I still am not clear about a few things.
#1: I am on LTD & past the 2 year mark and am on CPP-D. My company will be sending me a letter soon re: frustration of contract and with that is a severance package. If I get a lump sum how does the insurance company offset that from my LTD monthly payments? (My policy clearly states they can offset Severance) Severance is for payment going forward not like CPP-D where they give you retro active lump sum and that goes to the insurance and then the max allotted amount per month is split between the two.
#2: Is CPP-D impacted by Severance?
#3: If I decide to close off with LTD, do I get to keep the Severance or does LTD still get it?
#4: I am about 2.5 years away from turning 65 so depending on how much I get for Severance and how it is offsetted by LTD if I remain with them, it may be helpful to do this or not. If my Severance as an offset will take me close to 65 anyway, what is the point of having LTD again and will they even start back up with me to cover the bridge between the time left and when I turn 65?
How complicated would that be?
#4: If it is okay to close off with LTD and keep the Severance, can I start my early retirement shortly afterwards or is there a wait period due to receiving a Severance.

Thanks for your support on this topic.


#2

Unfortunately, your questions are too specific to answer in context of general information on the forum or as a free consultation. You really need to seek specific legal advice because of the implications. There is no general answer for your situation, it will depend a lot on your specific work situation, any applicable collective agreement, your employee pension plan rules and your group disability policy. Too many moving parts for anyone to answer your questions without having a good chance of getting it wrong. The answers could be yes or no to all of your questions depending on the factors above. Unless you are speaking with a co-worker, who has been through this and has the same LTD Plan, Pension Plan and Collective Agreement, I would be very cautious on relying on the experience of others because there are too many variables involved.


David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.


#3

#1. My guess would be that that the insurance company going forward doesn’t pay you until the total monthly payments have become greater than the amount of severance.

#2. CPP-D is not affected.

#3. I don’t think the insurance company would sue you to get it so it is probably yours.
I think you need legal advice but I would wait until you you know the amount of severance.

You have two #4s. :slight_smile:

#4a. No idea what they will do after 2 years.

#4b. I doubt there is a waiting period. Do you have a defined benefit pension plan?


#4

Thanks David and Jammer!
Yes Jammer I do have a defined retirement pension and am non-union.
I am hearing you David. I guess I keep thinking this should be more simple than it is turning out. The problem in our policy is that the details are missing. For example, how something is offset. It seems that this whole process from getting STD & LTD etc is one big secret which is not fair to the consumer. It seems that you get a little information let out at a time when it is convenient No wonder people have a lot of questions, are confused and anxious. The big problem here is that if you don’t ask or know to ask the RIGHT questions and you can’t afford professionals you are sunk. Most of us are on very reduced income. People have a right to be well informed and have someone connected to these insurance programs to inform them (verbal and written) without fear of repercussions. I guess I am also naive - the world is never fair. As I go thru this whole process I become more disalusioned Maybe I will write a little booklet and get someone who is unionized to do so as well for our particular agreements. I know David that you have done some good work i.e. the CPP-D booklet/Webinars, responded to general questions/this forum and that has been so helpful to others. But I believe that we have a right to know the facts without being concerned that it will raise red flags! I am just feeling frustrated, confused and anxious because I want to be able to make some realistic, sound decisions ahead of time based on the potential options and the facts. The income we receive is our safety net - so very important.
Sorry for the vent. Thank you.


#5

Yep.
I had to ask my insurance company if they were going to try to offset my yearly bonus.
The policy didn’t say and I had to be prepared to have a legal fight (or give up the money) just for asking.

The earlier you retire, the less income you will get.
The exact amount/formula is hopefully spelled out.
Hopefully you can still log in to work or you have copies of the documents about your pension (or can ask a coworker :-)).


#6

Thanks Jammer. I plan to do that.