VDI FAQs
We know that navigating leave and disability benefits can feel complex, and we want to make it simple. Below you’ll find answers to the most common questions about how the Pepperdine VDI Plan works, how it compares to California’s State Disability Insurance (SDI), and what it means for you and your family. Our goal is to give you clarity and confidence so you can focus on what matters most—your health and loved ones.
The Pepperdine Voluntary Disability Insurance (VDI) Plan is a University-sponsored, legally approved alternative to the California State Disability Insurance (CA SDI) program. Like CA SDI, our plan offers financial support when you need to take time away from work and experience a loss of wages due to:
- Caring for yourself during a serious illness, injury, or pregnancy
- Welcoming and bonding with a new child through birth, adoption, or foster care placement
- Providing care for a seriously ill family member, including a child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner
- Supporting a loved one during a qualifying military deployment event
The Pepperdine VDI Plan works hand in hand with the University’s leave benefits so that you can focus on what matters most: your health and your family. Please refer to the comprehensive comparison chart for a high-level description of the VDI benefits.
California employees will receive the same or better benefits (payment amounts during short-term disability or paid family leaves) under the Pepperdine VDI Plan than they would from the CA SDI Plan at a much lower cost.
In addition, the Pepperdine VDI Plan will provide you with an improved leave experience. Your claim will be handled by a specific team familiar with Pepperdine University’s benefits. Rather than filing with the State for your benefit payments, you will file with Unum, a Pepperdine-managed partner, to file a claim and receive benefit payments during approved leaves of absence.
No. By law, the Pepperdine VDI Plan cannot provide less in benefit payments than the CA SDI Plan provides.
Similar to CA SDI, employee payroll deductions are held in a dedicated account established to pay the claims and expenses of the Pepperdine VDI Plan. This account is audited by the State to ensure that only allowable expenses are charged against this account.
Any Pepperdine VDI Plan savings may be used exclusively for the benefit of participating employees, such as further improvements in Pepperdine VDI Plan benefits or reducing the Pepperdine VDI Plan employee contributions in future years.
While participating in the Pepperdine VDI Plan, the University will continue to report your quarterly earnings to the state of California and build up wage credits for the CA SDI Plan benefits.
If you leave Pepperdine University and subsequently experience a short-term disability or paid family leave claim, you will be eligible to receive the CA SDI Plan benefits at the same weekly benefit level and duration you would have received if you had stayed on the CA SDI Plan and never participated in the Pepperdine VDI Plan. The Pepperdine VDI Plan pays an assessment to the CA SDI Plan to provide this coverage to you.
The CA SDI Plan and the Pepperdine VDI Plan benefits will have similar tax treatment.
- Disability benefit payments are NOT subject to federal or state income tax.
- Paid Family Leave (PFL) benefit payments are subject to federal income tax but not state income tax.
PFL is a program that provides you with income when you need to take time off of work to:
- Bond with a new child entering your life by birth, adoption, or foster care placement;
- Care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner; or
- Participate in a qualifying event of a military deployment of a child, parent, spouse, or registered domestic partner.
PFL contributions are part of the same deduction from employees' wages covered by the CA SDI Plan or Pepperdine VDI Plan.
No. PFL benefits are distinct from disability benefits. Please refer to the Pepperdine VDI Plan vs. CA SDI Plan Comparison Chart for a high-level description of PFL and disability benefits.
As with the CA SDI Plan, to be eligible for Paid Family Leave benefit payments under Pepperdine VDI, employees must first apply for leave under the Family and Medical Leave Act (FMLA) and any other applicable statutory leave entitlements under federal, state, and local law. This means all applicable leaves run concurrently and must be taken at the same time.
Neither the Pepperdine VDI Plan nor the CA SDI Plan grant leave (i.e., time off from work). Both Plans provide a partial income replacement for employees who are on an approved leave of absence.
Filing claims will be simpler and faster, since you will work with a team dedicated to Pepperdine at Unum (our Plan administrator), rather than the State. For more information on leaves of absence and filing a claim for benefits, review our LOA website and contact Human Resources at benefits@pepperdine.edu or 310.506.4397 for assistance.
Yes. The University is responsible for ensuring that all California employees receive the benefits they are entitled to.
The Pepperdine VDI Plan will work similarly to that of the CA SDI plan—including the same or more favorable periods of time to file a claim, limits to retroactive payments, and the total amount of benefit payments you are eligible to receive.
In no event will your benefits under the Pepperdine VDI plan be less than what you would receive from the CA SDI Plan. Like the CA SDI Plan, Pepperdine VDI Plan benefits will be reduced by any workers’ compensation benefits available to you for the same period for which the disability benefit is payable.
Like California SDI, the Pepperdine VDI Plan is a wage replacement program that does not offer job protection.
Unlike California SDI, your contributions to Pepperdine VDI are not considered taxes; therefore, they are not eligible to itemize as a state tax under the State and Local Income Tax (SALT) deduction on federal income tax returns. If you do not itemize your deductions on your federal tax return (i.e., you claim the standard deduction), then you will likely not be impacted.
Despite this difference, the Pepperdine VDI Plan is still a better overall option for Pepperdine employees since:
- The Pepperdine VDI Plan offers a reduced contribution rate with annual savings outpacing any increased tax liability.
- The Pepperdine VDI Plan provides an improved employee experience of filing with and receiving benefits directly from a University-managed partner for approved leaves of absence.
If you wish to retain the tax deductibility of your CA SDI Plan deductions, you may choose to participate in California SDI (i.e., CA SDI tax) rather than the Pepperdine VDI Plan. You can request to remain in the CA SDI Plan by emailing your request to Human Resources at benefits@pepperdine.edu.
Yes, you may choose to change from the Pepperdine VDI Plan to CA SDI - or the reverse - once a calendar quarter. To complete this, you must email Human Resources at benefits@pepperdine.edu.
Yes. If you opt out of the Pepperdine VDI Plan and choose to remain enrolled in the CA SDI Plan, you will still be eligible for the same benefits through the California Employment Development Department. You will simply pay the higher SDI tax rate each paycheck.
Yes. If your leave of absence is approved, Human Resources will coordinate your accrued leave plans or your base wages, respectively, with the Pepperdine VDI Plan—just like we do today with CA SDI.