LONG TERM DISABILITY
If you have an injury or illness that keeps you away from work for an indefinite period of time, the Long Term Disability (LTD) Plan can help protect you and your family. The LTD Plan provided by the Firm is designed to provide you with continued income replacement after your Short Term Disability runs out.
Non-Partner Attorneys and Team Members have the option to pay taxes on the Firm-paid cost of your LTD premium on a per paycheck basis. By choosing this option, should you become disabled and receive Long-Term Disability, the benefit you receive would not be subject to taxes. See the example below for how electing this option may be advantageous to you.
Joe is a Team Member whose annual earnings are $82,000 a year. If he should go out on LTD, his monthly gross benefit would be $4,100 (60% of his monthly earnings). Below are the results of Joe’s LTD benefit based upon whether or not he chooses to elect the taxable or non-taxable benefit.
Taxable Benefit
Monthly Gross LTD Benefit: $4,100
Monthly Net LTD Benefit (after 15% tax withheld): $3,485
Monthly Tax on Benefit: $615
Joe pays $0 per month in taxes on the Firm-paid LTD premium, resulting in a taxable benefit to him if he becomes disabled.
Non-taxable Benefit
Monthly Gross LTD Benefit: $4,100
Firm-Paid Monthly LTD Premium: $26.31
Employee Paid Monthly Tax on Firm-Paid LTD Premium (15%): $3.95
Joe will pay $3.95 per month in taxes from his paycheck on the Firm-paid LTD premium to receive an additional $615 in benefits if he became disabled.
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Long Term Disability Benefits |
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Team Members |
Associates/Counsel/Partners |
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Percent of your salary that you will receive |
60 % |
60 % |
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Maximum benefit you can receive |
$18,200/month |
$25,000/month |
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When benefits start |
After 90 days of disability |
After 90 days of disability |
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How long you may receive benefits |
Until Social Security Normal Retirement age or you recover, |
Until Social Security Normal Retirement age or you recover, |
WHEN ARE YOU DISABLED?
The definition of “disabled” changes over time.
For Exempt and Non-Exempt Team Members
- During the first two years of your disability, you are considered disabled if you cannot perform the material and substantial duties of your regular occupation.
- After two years, you are considered disabled if you cannot perform the duties of any gainful occupation for which you are reasonable fitted by education, training, or experience.
For Partners, Executive Directors, Associates, and Counsel
Until age 70, you are unable to perform the Material Duties of your Own Occupation.
For Attorneys
“Material Duties” means the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation that cannot be reasonably modified or omitted.
Please see your Summary Plan Description for more details.
If there is ever a question about this benefit, or if there is a conflict between the information in this summary and the formal language of the Plan documents, the formal wording in the Plan documents will govern. Please note the benefits described in this summary may be changed at any time and do not represent a contractual obligation on the part of Locke Lord LLP.
