I have been receiving LTD benefits from Cigna since April 2014. I am still considered an employee with an “active” status for the company I worked for before I got sick. Recently, I’ve received communication from my company that they will be closing down our pension fund and this Fall I will be offered a lump sum or an annuity to be paid out over time. I have read online that LTD benefits can be reduced once retirement income is received. So, my husband and I reviewed my company’s LTD policy to see what it says about my pension. Here is an excerpt from the policy:
The benefits under the Plan are reduced dollar for dollar by disability benefits you receive from other sources, such as Social Security disability, disability retirement benefits from employer sponsored retirement plans
, disability benefits from workers' compensation, occupational disease, or similar law, and disability benefits from federal, state, county or municipal government disability or retirement plans or laws. If you are eligible for disability benefits from other sources, you are required to apply and reapply as necessary for such benefits. You are also responsible for supplying verification of application and appeal of such benefits.
However, when I asked my employer whether my LTD benefits would be impacted when I receive pension benefits, they said yes that it would be reduced dollar for dollar. My pension is not a disability pension. It’s just a pension that I could access at age 55 or 62 (depending on my preference). Since the policy states that “disability” benefits would be impacted, how is it that my pension would be impacted?