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Cypen & Cypen
NEWSLETTER
for
January 12, 2012

Stephen H. Cypen, Esq., Editor

1.      MEDICAL ADVISORY PHYSICIAN HAD FULL AUTHORITY TO MAKE BINDING DETERMINATION REGARDING APPLICATION FOR LINE-OF-DUTY DISABILITY BENEFITS:  Grant appealed denial of line-of-duty disability benefits provided under Bert Bell/Pete Rozelle NFL Player Retirement Plan, an employee benefit plan governed by Employee Retirement Income Security Act of 1974.  Grant is a former National Football League player, and is a participant in the retirement plan at issue by virtue of his NFL career.  The retirement plan provides retirement, disability and related benefits to eligible NFL players.  As to entitlement to line-of-duty disability benefits, any player who incurs a substantial disablement (as defined using American Medical Association Guides to the Evaluation of Permanent Impairments) arising out of League football activities will receive a monthly line-of-duty disability benefit continuing for the duration of such substantial disablement but not for longer than ninety months.  Basically, an applicant must demonstrate any combination of lower extremity, upper extremity and spine impairments that results in a 25% whole body impairment.  The physician to whom Grant was referred by the Plan determined that Grant’s disability failed to meet threshold requirements for receipt of  line-of-duty benefits.  According to a physician retained by Grant, threshold percentage requirements for line-of-duty benefit eligibility had been met.  The Plan also arranged for another medical evaluation, which found that Grant met the threshold for line-of-duty benefits.  After the Plan’s Medical Director concluded that the doctors’ contrary ratings could not be reconciled, the Board referred Grant’s claim to a Medical Advisory Physician.  (If the voting members of the Board are deadlocked with respect to a medical decision, including whether an applicant meets the requisite percentage disability requirement to be eligible for line-of-duty disability benefits, the Board may submit the medical decision to Medical Advisory Physician.)  Eventually, the MAP found that Grant did not meet criteria, and the application was denied.  On appeal the Court denied Grant’s motion for summary judgment and granted the Board’s.  In accordance with the Plan, the cal Advisory Physician has full and absolute discretion, authority and power to make a final and binding determination regarding medical issues.  Contrary to Grant’s contention, under terms of the Plan, conclusions the MAP are final and binding on the Board.  The Board thus was not permitted to accept conclusions of the other doctors, and its failure to do so, cannot possibly render the Board’s decision “wrong.”  We question the subject provision, which appears to delegate the trustees’ fiduciary duty to decide entitlement to pension.  Grant v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, Case No. 1:09-CV-1848 (N.D. Ga., December 16, 2011). 
 
2.      NEW YORK PENSION FUND WILL NOT RELEASE DATA: New Yorkstate Teachers’ Retirement System will not release names of teachers receiving taxpayer-funded pensions, after a state appeals court ruled in October that a New York City police pension fund was off limits to the public.  The decision by the Teachers’ Retirement System is the latest pension fund to say it would not release publicly who receives pensions and for how much, according to democratandchronicle.com.  The Teachers’ Retirement System interprets that October court ruling as not requiring disclosure of names and addresses of retirees.  In fact, after the earlier appellate decision, all five New York City pension funds have declined to release names of public workers and what they are earning in retirement.  (The state’s Common Retirement Fund, which handles pensions for about 1 million state and local government retirees and workers, will continue to make its pension data public.)  Meanwhile, the Teachers’ Retirement System will continue to release names of current teachers and salaries -- which they collect yearly to help calculate pension amounts -- but not retirees.  Worth about $90 Billion, the Teachers’ Retirement System covers around 145,000 retirees and nearly 300,000 active members.  As of last year, the average teacher pension in the system was $37,000. 
 
3.      WHY DISABILTY APPLICATION RATES VARY ACROSS STATES:  Social Security Disability Insurance applications and benefit receipts vary greatly by state, which has led to concerns about potential inconsistencies in the way that states apply disability standards.  According to a new Brief from Center for Retirement Research at Boston College, this possibility has prompted numerous Congressional hearings and reports, and led the Social Security Advisory Board to express concern about the Social Security Administration’s ability to disentangle the potential causes.  Using a longer time period and more comprehensive list of variables than other studies, the brief explores the extent to which health, demographic and employment characteristics -- as well as state policies or politics -- explain the variation across states.  The first section describes an individual’s SSDI application decision and factors that may influence state-level application rates.  The second section presents variables used to determine the underlying causes of the state-level variation in application rates.  The third section summarizes the results.  The conclusion is that the health, demographic and employment characteristics of each state explain the largest variations in SSDI application rates.  Politics have little effect.  Interestingly, states that require employers to provide temporary disability insurance have lower SSDI application rates.  Number 12-1 (January 2012)
 
4.      2011 BANNER YEAR FOR FCPA ACTIONS:  It was another banner year for the Foreign Corrupt Practices Act, with the U.S. Securities and Exchange Commission and Justice Department trying more cases in 2011 than in any other year.  According to law.com, enforcement actions also reached their second-highest level in the 34-year history of the act, with a total of 48.  That number is down from an unprecedented 74 actions in 2010.  (Last year’s statistics were skewed by a single large-scale sting operation.)  For some reason, enforcement numbers were lagging at mid-year, but came on strong during the second half.  FCPA’s anti-bribery provisions make it illegal corruptly to offer or provide money or anything of value to officials of foreign governments or foreign political parties with intent to obtain or retain business.  In addition, FCPA’s books-and-records provision requires covered parties to make and keep accurate books, records and accounts, which, in reasonable detail, accurately and fairly reflect their transactions and disposition of assets. 
 
5.      WIS. GOV. UNDAUNTED BY RECALL:   Embattled Wisconsin Governor Scott Walker said politicians should boldly pursue a budget-cutting agenda even if Tea Party enthusiasm and popular support fades away.  Walker, as reported by thehill.com, urged his fellow governors to follow the path he has blazed in Wisconsin, and seek structural reforms like eliminating collective bargaining rights for public workers.  Walker was defiant in face of a looming recall election, which will be triggered if his opponents can gather enough signatures by January 17, 2012.  The governor acknowledged the recall is likely to happen.  Although he does not plan on losing, he is not afraid of losing.  The governor said he had no regrets about policies he has pursued in office, even if he was unprepared for the level of union opposition to them.
 
6.      DESPITE DOJ ISSUES, ARIZONA COUNTY SHERIFF WILL RUN AGAIN:  Despite U.S. Justice Department accusations of discrimination against Latinos (see C&C Newsletter for December 22, 2011, Item 4), Maricopa County, Arizona Sheriff Joe Arpaio will run for reelection.  Politico.com reports that Arpaio will seek a sixth four-year term and will continue to protect the citizens of Maricopa County by enforcing all the laws.  The announcement comes just one day after Arpaio said in a letter to the Justice Department that he was certainly interested in participating in constructive dialogue but demanded that by January 18, 2012 DOJ provide facts and information on which it bases its findings that his office had engaged in racial profiling.  Apparently Coach Arpaio believes the best defense is a good offense. 
 
7.      FED PAYS U.S. ALMOST $77 BILLION:  The Federal Reserve paid the federal government $76.9 Billion in 2011, the second highest amount in history, according to advisen.com.  The central bank earned the money from investments made to bolster the U.S. economy.  The Fed reported that the 2011 payment is down from an all-time record of $79.3 Billion made in 2010.  Part of the decline reflected lower earnings that the Fed made from its support for insurance giant American International Group, which repaid a loan early last year, cutting the Fed’s interest earnings.  The Fed began buying Treasury bonds and mortgage-backed securities during the recession and 2008 financial crisis to try to lower long-term interest rates.  Fed officials say such unconventional efforts are necessary until economic growth becomes stronger.  Critics have charged that those purchases could ultimately contribute to higher inflation.  All of the Fed’s efforts have pushed the central bank’s balance sheet to $2.9 Trillion, more than three times the size of the balance sheet before the financial crisis struck in fall of 2008.  The Fed is funded from interest earned on its portfolio of securities.  After covering its expenses, the Fed makes a payment of the remaining amount to the Treasury Department.  By contrast to the payments of the past two years, the payment in 2008 was just $31.7 Billion. 
 
8.      FLORIDA ISSUES WORKERS COMP REPORT:  Florida Office of Insurance Regulation has issued its 2011 Workers’ Compensation Annual Report.  As mandated by Chapter 627, Florida Statutes, the Florida Office of Insurance Regulation has presented its 2011 report, finding as follows: 

  • Based on a comparative analysis across a variety of economic measures, the workers’ compensation market in Florida appears to be competitive.  The market in Florida is served by a large number of independent insurers, none of which have sufficient market share to exercise any meaningful control over the price of workers’ compensation insurance. 
  • Of the six most populous states, Florida is the largest market dominated by private market insurers, rather than a state-sponsored residual market.  This degree of private activity indicates that coverage should be generally available in the voluntary market.  
  • Reforms to Chapter 440, Florida Statutes, which affected attorneys’ fee provisions, were a significant factor in decline of workers’ compensation insurance rates, and the reforms continue to impact rates. 
  • Affordability within Florida Workers’ Compensation Joint Underwriting Association, Inc., which is the residual market, has been an on-going issue.  Recent legislation has addressed affordability in the voluntary and residual market, and both markets are remaining stable.
  • OIR is in compliance with the requirements of Chapter 627, Florida Statutes. 

 
Exciting news. 
 

9.      GOLF WISDOMS:  Never wash your ball on the tee of a water hole. 
 
10.    PARAPROSDOKIAN:  (A paraprosdokian is a figure of speech in which the latter part of a sentence or phrase is surprising or unexpected in a way that causes the reader or listener to reframe or reinterpret the first part.  It is frequently used for humorous or dramatic effect.):  “If I am reading this graph correctly, I would be very surprised." — Stephen Colbert 
 
11.    QUOTE OF THE WEEK:   “If you’re careful enough, nothing bad or good will ever happen to you.”  Ashleigh Brilliant  
 
12.    ON THIS DAY IN HISTORY:  In 1948, Mahatma Gandhi begins his final fast. 
 
13.    KEEP THOSE CARDS AND LETTERS COMING:  Several readers regularly supply us with suggestions or tips for newsletter items.  Please feel free to send us or point us to matters you think would be of interest to our readers.  Subject to editorial discretion, we may print them.  Rest assured that we will not publish any names as referring sources. 
 
14.    PLEASE SHARE OUR NEWSLETTER:  Our newsletter readership is not limited to the number of people who choose to enter a free subscription.  Many pension board administrators provide hard copies in their meeting agenda.  Other administrators forward the newsletter electronically to trustees.  In any event, please tell those you feel may be interested that they can subscribe to their own free copy of the newsletter at http://www.cypen.com/subscribe.htm.  Thank you.

 

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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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