Issues
of Disability and the D&S Trust payouts, look for them under this section
because in essence the trust is insurance.
Below
is an email from Kevin Garrison that, though it is new for Kevin, re-visits an issue that
has been happening for many who receive payouts from that trust.
From: Kevin Garrison
Date: 2/8/2013 4:48:42 PM
To: Mark Sztanyo
Subject: Re:
Help!
Hey Mark
Just got a letter from Delta telling me I owe them $68,000 for
repayment of disability retirement over payments they have made to me since
October of 2006!
I called delta and they said "oh yeah we were supposed to send you
letters about that on a regular basis for the past seven years but have just
now gotten around to it."
Karen Browne at ALPA says there are dozens of other disabled pilots
getting this letter. Do you think we all signed the petition???
Anyway, I don't understand any of this and we are now going to lose our
house.
Some direction on which way I should go with this would be appreciated.
best,
Kevin, this is of course crazy. The petition has nothing to do with it though, cuz i haven't delivered it to anybody. I will post your letter tonight as this is outrageous. Traveling now more later. Mark
Below are responses to Kevin about this issue ordered from informative to experience and opinion:
Mark,
This is addressed on the DDPSA website http://www.ddpsa.com/ under the news section. As you said it has nothing to do with the petition.
This is addressed on the DDPSA website http://www.ddpsa.com/ under the news section. As you said it has nothing to do with the petition.
Also, Ralph Kramden ralphbusdriver@gmail.com
sent in same info as Wendell below.
Mark, I don't know if these apply to this instance,
but they are on this
website page beginning about halfway down:
website page beginning about halfway down:
http://www.ddpsa.com/news.htm
December 20, 2011
**THE PBGC’S FINAL DETERMINATION OF BENEFITS UNDER THE DELTA PILOTS
RETIREMENT PLAN ONCE AGAIN HAS REQUIRED ADJUSTMENTS OF LONG TERM
DISABILITY (LTD) BENEFITS AND REPAYMENT TO THE D&S PLAN OF PREVIOUS
EXCESS BENEFIT PAYMENTS.
THE FOLLOWING ANSWERS TO FREQUENTLY ASKED QUESTIONS (FAQ’s) ABOUT THE
REPAYMENT OF EXCESS LTD PAYMENTS MAY PROVIDE FOR A BETTER UNDERSTANDING
OF THE ISSUE.
* Drafted 12/17/2011
/The answers to the following questions are based upon the research and
opinions of the author. Although the information is deemed to be
accurate, no warranties are made or implied as to the accuracy of the
answers. Furthermore, the answers are not intended or to be relied upon
as tax advice. Your professional tax advisors should assist you in
making decisions relating to filing your tax returns.
/ 1. How are payments from the PBGC related to my LTD benefits?
The D&S Plan specifies that retirement benefits actually received from
the Delta Pilots Retirement Plan (DPRP) reduce LTD benefits on a dollar
for dollar basis. Following termination of the DPRP, the PBGC became
responsible for making payments relating to that plan. Therefore,
benefits paid by the PBGC serve as an offset to the LTD benefit.
2. The term SLA is used in correspondence from Delta. What does
it mean?
SLA is an acronym for Single Life Annuity. The D&S Plan specifies that
if retirement benefits are received in a manner other than the form of a
single life annuity, the amount of offset for that benefit will be
converted to the actuarial equivalent of a single life annuity. For
example, lump sum distributions from the DPRP and the Money Purchase
Pension Plan (MPPP) were converted to a monthly benefit that was the
actuarial equivalence of the lump sum distribution. That actuarially
equivalent monthly benefit was included as part of the SLA offset to the
LTD benefit. Additionally, amounts received from the DPRP were
incorporated into the SLA offset to the LTD benefit (if a pilot elected
a joint life annuity from the DPRP, the actuarial equivalent of that
joint life annuity was incorporated into the SLA).
3. Why was I overpaid by the D&S Plan?
As part of the process of terminating the DPRP and turning the Plan over
to the PBGC, Delta made an estimate of the benefits that would be paid
by the PBGC. If the estimated benefit was less than the amount that the
pilot had been receiving from the DPRP, Delta reduced the retirement
offset to the LTD benefit, thereby increasing the amount of the LTD
benefit paid to the disabled pilot. In many cases, the PBGC made
subsequent increases in benefit payments, but did not inform Delta of
those increases. Those increases should have increased the retirement
offset to the LTD benefit and decreased the net amount of the LTD
benefit paid to the pilot. However, such adjustments did not occur.
Consequently, pilots received LTD benefit payments from the D&S Plan
that were in excess of the benefit to which they were entitled.
4. When was the discrepancy discovered?
In some cases, pilots informed Delta of the changes to the benefits
received from the PBGC and Delta made the appropriate adjustments to
their LTD benefit payments. However, in many cases the overpayment was
not discovered until the PBGC completed final benefit determinations.
Unfortunately, the aggregate amount that some pilots have been overpaid
by the D&S Plan during the past four years is substantial.
5. What are the options for making the repayment of excess
payments from the D&S Plan?
Section 26. N. of the Pilot Working Agreement between Delta and ALPA
effective September 1, 2001, is quoted for reference.
/“In the event of an overpayment from the D&S Plan or any retirement
plan, a pilot will be notified in writing of the circumstances resulting
in the overpayment and the amount of the overpayment. The pilot will be
informed that he has 45 days from the date of the letter to contact the
Company to make arrangements for repayment. The letter will advise the
pilot that if contact is not made within the 45 day period the Company
will recoup the overpayment in equal installments over the next six
months from payments due from the applicable plans, without interest. If
requested by the pilot during the 45 day period, an alternate
arrangement will be made to permit repayment in equal monthly
installments over a period of up to 48 months, without interest. In the
event that there are insufficient future monthly payments due from the
applicable plan, repayments will be made by the pilot in equal monthly
installments over the established repayment period (six months or up to
48 months), without interest. In the event of default of payment of one
or more installments, the entire amount will become immediately due and
the Plan Administrator may pursue collection of such amount (including
interest and collection fees) to the full extent permitted by law. This
procedure will apply to overpayments with respect to which the plan
initiates the repayment and/or recoupment process on or after the
Effective Date.”
/ 6. What are the income tax ramifications of repayment to the
D&S Plan?
Internal Revenue Service regulations do not allow Delta to reduce the
amount of income paid in the current year by the amount of repayment
made relating to overpayments from previous years. The following is an
excerpt from IRS Publication 15:
/“The wages paid in error in the prior year remain taxable to the
employee for that year. This is because the employee received and had
use of those funds during that year. The employee is not entitled to
file an amended return (Form 1040X) to recover the income tax on these
wages. Instead, the employee is entitled to a deduction (or credit in
some cases) for the repaid wages on his or her income tax return for the
year of repayment.”
/ IRS Publication 525, pages 36-37, details the manner in which the
repayment can be reported. You may want to have your income tax
professional refer to that section.
If the repayment is less than $3,000 in a given year, the individual may
have difficulty _recovering all of the excess taxes that were paid
previously_. According to IRS Pub 525, repayments of less than $3,000
are entered under a section of Schedule A (itemized deductions) that is
subjected to an offset in the amount of 2% of adjusted gross income.
If the repayment amount in a given year exceeds $3,000, IRS Pub 525
indicates that there are two options for recovering the taxes paid on
overpayments received in previous years.
a. The $3,000+ amount of repayment can be entered on Schedule A,
line 28 (which is not subject to offset by 2% of adjusted gross income).
In the event that overall itemized deductions are limited as a result of
taxpayer’s adjusted gross income, the previous overpayment of taxes
possibly will not be _fully_ recovered under this option.
b. The alternative procedure outlined in IRS publication 525 may
be cumbersome if the overpayments were received over several tax years.
The amount of overpayment for a given year can be deducted from taxable
income of that given year and a revised tax liability calculated for
that year. The differential between the taxes that were paid for that
year and the revised tax liability for that year becomes a tax credit
for the year in which repayment is made. The same process in used to
determine tax credits relating to each year that overpayments were
received. This process may require recalculating tax liabilities for
years 2006 through 2010.
Wendell Lewis wglewis7@bellsouth.net
December 20, 2011
**THE PBGC’S FINAL DETERMINATION OF BENEFITS UNDER THE DELTA PILOTS
RETIREMENT PLAN ONCE AGAIN HAS REQUIRED ADJUSTMENTS OF LONG TERM
DISABILITY (LTD) BENEFITS AND REPAYMENT TO THE D&S PLAN OF PREVIOUS
EXCESS BENEFIT PAYMENTS.
THE FOLLOWING ANSWERS TO FREQUENTLY ASKED QUESTIONS (FAQ’s) ABOUT THE
REPAYMENT OF EXCESS LTD PAYMENTS MAY PROVIDE FOR A BETTER UNDERSTANDING
OF THE ISSUE.
* Drafted 12/17/2011
/The answers to the following questions are based upon the research and
opinions of the author. Although the information is deemed to be
accurate, no warranties are made or implied as to the accuracy of the
answers. Furthermore, the answers are not intended or to be relied upon
as tax advice. Your professional tax advisors should assist you in
making decisions relating to filing your tax returns.
/ 1. How are payments from the PBGC related to my LTD benefits?
The D&S Plan specifies that retirement benefits actually received from
the Delta Pilots Retirement Plan (DPRP) reduce LTD benefits on a dollar
for dollar basis. Following termination of the DPRP, the PBGC became
responsible for making payments relating to that plan. Therefore,
benefits paid by the PBGC serve as an offset to the LTD benefit.
2. The term SLA is used in correspondence from Delta. What does
it mean?
SLA is an acronym for Single Life Annuity. The D&S Plan specifies that
if retirement benefits are received in a manner other than the form of a
single life annuity, the amount of offset for that benefit will be
converted to the actuarial equivalent of a single life annuity. For
example, lump sum distributions from the DPRP and the Money Purchase
Pension Plan (MPPP) were converted to a monthly benefit that was the
actuarial equivalence of the lump sum distribution. That actuarially
equivalent monthly benefit was included as part of the SLA offset to the
LTD benefit. Additionally, amounts received from the DPRP were
incorporated into the SLA offset to the LTD benefit (if a pilot elected
a joint life annuity from the DPRP, the actuarial equivalent of that
joint life annuity was incorporated into the SLA).
3. Why was I overpaid by the D&S Plan?
As part of the process of terminating the DPRP and turning the Plan over
to the PBGC, Delta made an estimate of the benefits that would be paid
by the PBGC. If the estimated benefit was less than the amount that the
pilot had been receiving from the DPRP, Delta reduced the retirement
offset to the LTD benefit, thereby increasing the amount of the LTD
benefit paid to the disabled pilot. In many cases, the PBGC made
subsequent increases in benefit payments, but did not inform Delta of
those increases. Those increases should have increased the retirement
offset to the LTD benefit and decreased the net amount of the LTD
benefit paid to the pilot. However, such adjustments did not occur.
Consequently, pilots received LTD benefit payments from the D&S Plan
that were in excess of the benefit to which they were entitled.
4. When was the discrepancy discovered?
In some cases, pilots informed Delta of the changes to the benefits
received from the PBGC and Delta made the appropriate adjustments to
their LTD benefit payments. However, in many cases the overpayment was
not discovered until the PBGC completed final benefit determinations.
Unfortunately, the aggregate amount that some pilots have been overpaid
by the D&S Plan during the past four years is substantial.
5. What are the options for making the repayment of excess
payments from the D&S Plan?
Section 26. N. of the Pilot Working Agreement between Delta and ALPA
effective September 1, 2001, is quoted for reference.
/“In the event of an overpayment from the D&S Plan or any retirement
plan, a pilot will be notified in writing of the circumstances resulting
in the overpayment and the amount of the overpayment. The pilot will be
informed that he has 45 days from the date of the letter to contact the
Company to make arrangements for repayment. The letter will advise the
pilot that if contact is not made within the 45 day period the Company
will recoup the overpayment in equal installments over the next six
months from payments due from the applicable plans, without interest. If
requested by the pilot during the 45 day period, an alternate
arrangement will be made to permit repayment in equal monthly
installments over a period of up to 48 months, without interest. In the
event that there are insufficient future monthly payments due from the
applicable plan, repayments will be made by the pilot in equal monthly
installments over the established repayment period (six months or up to
48 months), without interest. In the event of default of payment of one
or more installments, the entire amount will become immediately due and
the Plan Administrator may pursue collection of such amount (including
interest and collection fees) to the full extent permitted by law. This
procedure will apply to overpayments with respect to which the plan
initiates the repayment and/or recoupment process on or after the
Effective Date.”
/ 6. What are the income tax ramifications of repayment to the
D&S Plan?
Internal Revenue Service regulations do not allow Delta to reduce the
amount of income paid in the current year by the amount of repayment
made relating to overpayments from previous years. The following is an
excerpt from IRS Publication 15:
/“The wages paid in error in the prior year remain taxable to the
employee for that year. This is because the employee received and had
use of those funds during that year. The employee is not entitled to
file an amended return (Form 1040X) to recover the income tax on these
wages. Instead, the employee is entitled to a deduction (or credit in
some cases) for the repaid wages on his or her income tax return for the
year of repayment.”
/ IRS Publication 525, pages 36-37, details the manner in which the
repayment can be reported. You may want to have your income tax
professional refer to that section.
If the repayment is less than $3,000 in a given year, the individual may
have difficulty _recovering all of the excess taxes that were paid
previously_. According to IRS Pub 525, repayments of less than $3,000
are entered under a section of Schedule A (itemized deductions) that is
subjected to an offset in the amount of 2% of adjusted gross income.
If the repayment amount in a given year exceeds $3,000, IRS Pub 525
indicates that there are two options for recovering the taxes paid on
overpayments received in previous years.
a. The $3,000+ amount of repayment can be entered on Schedule A,
line 28 (which is not subject to offset by 2% of adjusted gross income).
In the event that overall itemized deductions are limited as a result of
taxpayer’s adjusted gross income, the previous overpayment of taxes
possibly will not be _fully_ recovered under this option.
b. The alternative procedure outlined in IRS publication 525 may
be cumbersome if the overpayments were received over several tax years.
The amount of overpayment for a given year can be deducted from taxable
income of that given year and a revised tax liability calculated for
that year. The differential between the taxes that were paid for that
year and the revised tax liability for that year becomes a tax credit
for the year in which repayment is made. The same process in used to
determine tax credits relating to each year that overpayments were
received. This process may require recalculating tax liabilities for
years 2006 through 2010.
Wendell Lewis wglewis7@bellsouth.net
++++
From: Jeannie Motley
<jeanmotley@bellsouth.net>
Date: February 8, 2013, 11:53:48 PM EST
To: Subject: Fwd: PCN - Delta Seeking Reimbursement??
Date: February 8, 2013, 11:53:48 PM EST
To: Subject: Fwd: PCN - Delta Seeking Reimbursement??
Tell me this
isn't real. To add injury to insult, Delta is spending 2 billion on outdoor
terraces/ lounges at JFK and ATL. What an injustice to those retired pilots who
lost ANY money and medical benefits. Such a disgrace to loyal, hard working men
who made many sacrifices in the name of "the Delta family". I am
personally ashamed for Richard Anderson and the DAL Board of Directors. I am
equally ashamed for the years I spent as a stewardess/flight attendant to have
my husband/pilot so unappreciated and disrespected. SHAME on you Delta. C.E.
Woolman and Dave Garrett would be appalled. How do you justify giving Northwest
retired pilots their pensions Mr. Anderson? To get NW pilots/union on board for
a merger/ buyout for Delta is an unacceptable answer. Business is business is
an unacceptable answer. Ethics is obviously not in Delta's vocabulary anymore.
My husband lost 50 percent of his pension in addition to our medical. We had
relied on this for our retirement. You and your predecessors/ BOD have caused
much hardship and heartache. How about a golden parachute payout- or better,
your pension/ benefits/ stocks etc., etc., etc...
From: Jean Motley
Date: 2/10/2013 2:46:59 PM
Subject: Fwd:
PCN - Delta Seeking Reimbursement??
Mark, I was floored to read the DAL claim to disability
reimbursement. My husband and I had a combined 60 years service. One month
notice on his losing his monthly salary, like all of this, is a disgrace. How
about pushing for major publicity with national news, Wall Street Journal, 60
minutes, Atlanta news, etc to get attention?
Jean B. Motley
Jean B. Motley
++++
Hi
Mark,
I saw this latest on your PCN email and thought I'd respond in an attempt to clarify for your readership.
There is basically a pretty simple explanation for this: Over the years, since taking over the terminated Delta Pilots Retirement Plan (DPRP), PBGC has periodically reviewed and in some cases INCREASED the monthly DPRP benefits to Delta Retirees. Disability Retirees have a total benefit payment in almost all cases which has a "formula benefit" that is higher than the (reduced) PBGC retirement benefit. Specifically, in the case of Disability Retirees who's initial RETIREMENT PLAN benefit was subsequently calculated by PBGC to be higher, those monthly increased amounts, as well as any “Lump Sum” back payments from the DPRP are, by Plan Provisions of the Delta Pilots Disability & Survivorship Plan – the “D&S Plan,” a required “Offset” to the pilot’s higher D&S Plan benefit. Also, per the language of the D&S Plan, that Plan (read “other eventual beneficiaries") is entitled to be reimbursed for any overpayments made.
In other words, guys on Disability Retirement cannot simply receive a “pay raise” from PBGC and say “Oh Great, a Bonus!” They should have notified Delta at the time of their retirement pay increase from PBGC. Any Lump Sum received as a result of a recalculation should have been paid back to the D&S Plan, along with any (small) increase in monthly PBGC payments, which then in practice would have been offset by an equal reduction in D&S Plan monthly benefits. By virtue of a pilot NOT having notified Delta, if the adjustment from PBGC was significant, and/or the overpayment from the D&S Plan was existant for a long time, the numbers can clearly add up.
The D&S Plan does have a provision for repayment over time, I believe, by providing for a reduced monthly benefit to the recipient until the debt to the Plan is paid back.
I hope this helps to clarify the situation.
As I understand it, the restriction of information between Delta and the PBGC on the grounds of privacy has been a factor leading up to the requirement for some of these large payback amounts, since PBGC is not allowed to communicate with Delta vis-à-vis the D&S Plan payments made to any individual.
Regards,
Jim George jggeorge@cox.net
I saw this latest on your PCN email and thought I'd respond in an attempt to clarify for your readership.
There is basically a pretty simple explanation for this: Over the years, since taking over the terminated Delta Pilots Retirement Plan (DPRP), PBGC has periodically reviewed and in some cases INCREASED the monthly DPRP benefits to Delta Retirees. Disability Retirees have a total benefit payment in almost all cases which has a "formula benefit" that is higher than the (reduced) PBGC retirement benefit. Specifically, in the case of Disability Retirees who's initial RETIREMENT PLAN benefit was subsequently calculated by PBGC to be higher, those monthly increased amounts, as well as any “Lump Sum” back payments from the DPRP are, by Plan Provisions of the Delta Pilots Disability & Survivorship Plan – the “D&S Plan,” a required “Offset” to the pilot’s higher D&S Plan benefit. Also, per the language of the D&S Plan, that Plan (read “other eventual beneficiaries") is entitled to be reimbursed for any overpayments made.
In other words, guys on Disability Retirement cannot simply receive a “pay raise” from PBGC and say “Oh Great, a Bonus!” They should have notified Delta at the time of their retirement pay increase from PBGC. Any Lump Sum received as a result of a recalculation should have been paid back to the D&S Plan, along with any (small) increase in monthly PBGC payments, which then in practice would have been offset by an equal reduction in D&S Plan monthly benefits. By virtue of a pilot NOT having notified Delta, if the adjustment from PBGC was significant, and/or the overpayment from the D&S Plan was existant for a long time, the numbers can clearly add up.
The D&S Plan does have a provision for repayment over time, I believe, by providing for a reduced monthly benefit to the recipient until the debt to the Plan is paid back.
I hope this helps to clarify the situation.
As I understand it, the restriction of information between Delta and the PBGC on the grounds of privacy has been a factor leading up to the requirement for some of these large payback amounts, since PBGC is not allowed to communicate with Delta vis-à-vis the D&S Plan payments made to any individual.
Regards,
Jim George jggeorge@cox.net
++++
We were told
almost 3 years ago that we had been paid $48,000.00 too much
over a number of years but were given the option of reducing our new monthly
benefit by $1,000.00/month until it was paid back. You might try working
out a similar solution. Jim Urban URBA4@aol.com
over a number of years but were given the option of reducing our new monthly
benefit by $1,000.00/month until it was paid back. You might try working
out a similar solution. Jim Urban URBA4@aol.com
++++
Kevin, I received my letter from Delta about the
overpayment by the D&S Plan on November 23, 2011, and have been paying it
back monthly on a 24 month basis. As you are probably aware, they have an
option for spreading it out over a 48 month period. The irony in my case was my
ex-wife receives the Delta pension as part of the divorce settlement, but I get
to pay back the overpayment that she received! Life is not always fair!! But to
answer your question, this letter you received is not related to the petition.
Tom Carey tomcarey797@gmail.com
++++
I received a letter to this effect several years ago
followed by a phone call asking that I send them money. I explained that my
attorney advised me that I did mot owe the money and I have not heard from them
again since.
Adrian Blackmon adrian.blackmon@mac.com
++++
Outrageous yes, They nailed me for $56,000.00 two years
ago,then last year for another $1600.00. Sad to say but they have you by the
short hairs. If you don't pay they quit paying and threaten you with criminal
intent. The real kicker was I had to take $72,000.00 out of my IRA to pay the
inept bums. Good luck though! Stan Hayden Shayde19@mindspring.com
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