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Cypen & Cypen
January 26, 2012

Stephen H. Cypen, Esq., Editor

1.     FLORIDA DEATH BENEFITS FOR SURVIVING FAMILIES OF LAW ENFORCEMENT OFFICERS KILLED IN LINE OF DUTY:  Concerns of Police Survivors, Inc. (COPS) has created a comprehensive summary of death benefits of available to surviving families of Florida law enforcement officers killed in line of duty, which can be accessed at  Established in 1984, Concerns of Police Survivors, Inc., (COPS), is a national, non-profit organization that works with law enforcement agencies, police organizations, mental health professional and local peer-support organizations to provide assistance to surviving families of law enforcement officers killed in the line of duty.  Let’s hope that nobody ever has to refer to this document. 
2.      HONOR THE LIVING:  We serendipitously came across a Letter to the Editor of the Poughkeepsie (New York) Journal, which reads in part: 
So today I am putting in the mail a donation to my local fire company.  I hope many others will do the same.  Honor the dead by honoring the living who continuous the valorous work of first responders.  Support them in their work, the work of rushing to the aid of you and me. 
Written by Evangeline Jones and published on September 11, 2011, the letter says it all. 
3.      FIVE SUGGESTIONS FOR IMPROVING U.S. RETIREMENT SYSTEM:  Mercer has issued its 2011 Melbourne Mercer Global Pension Index, comparing countries’ retirement systems for adequacy, sustainability and integrity.  The United States’ retirement income system comprises a social security system with a progressive benefit formula based on lifetime earnings, adjusted to a current dollar basis, together with a means-tested top-up benefit; and voluntary private pensions, which may be occupational or personal.  The overall index value for the American system could be increased by:

  • raising the minimum pension for low-income pensioners
  • adjusting the level of mandatory contributions to increase the net replacement for median-income earners
  • improving the vesting of benefits for all plan members and maintaining the real value of retained benefits through to retirement
  • reducing pre-retirement leakage by further limiting access to funds before retirement
  • introducing a requirement that part of the retirement benefit must be taken as an income stream

The American index value increased slightly in 2011 due to an increase in adequacy, which was partly offset by a decline in sustainability due to a fall in asset values and a rise in government assets. 
4.      RAISING THE AGES OF ELIGIBILITY FOR MEDICARE AND SOCIAL SECURITY:   Congressional Budget Office has released an Economic and Budget Issue Brief finding that raising ages at which people can collect Medicare and Social Security would reduce federal spending and increase federal revenues by inducing some people to work longer.  However, raising eligibility ages for those programs also would reduce people’s lifetime Social Security benefits and cause many of the people who would otherwise have enrolled in Medicare to face higher premiums for health insurance, higher out-of-pocket costs for health care or both.  The issue brief reviews how ages of eligibility affect beneficiaries under current law and how delaying eligibility would affect beneficiaries, federal budget and the economy.  Among CBO’s findings: 
Policy Option 
Raise the Medicare eligibility age from 65 to 67
Raise the full retirement age for Social Security from 67 to 70
Raise the early eligibility age for Social Security from 62 to 64
Long-Term Budget 
Medicare spending declines by about 5 percent
Social Security spending declines by about 13 percent
Social Security spending changes little
Impact Implications for Beneficiaries 
Access to Medicare would be delayed for most people; many of the affected people would pay more for health care
People would face reduced benefits over a lifetime
Access to Social Security benefits would be delayed for many people, but their monthly benefit amounts would increase
Inducing people to work longer, raising any of the ages of eligibility would increase the size of the workforce and the economy.  Although the magnitude of those effects is difficult to predict, CBO estimates that:

  • Raising Social Security’s early eligibility age to 64 or the full retirement age to 70 would, in the long term, boost the size of the workforce and the economy by slightly more than 1 percent.
  • Raising Medicare’s eligibility age to 67 would also boost the size of the workforce and the economy, but by a much smaller amount.

5.      FEDERAL LAWSUIT BROUGHT BY TERMINATED POLICE OFFICER BARRED BY ISSUE PRECLUSION:  After her first termination from the City of Pasadena Police Department and subsequent reinstatement, White brought a lawsuit in state court claiming that she had been discriminated against and harassed by the city due to its perception that she had a disability.  After her second termination, she reiterated her discrimination and harassment claims in an administrative proceeding, where she also argued that the termination was retaliatory.  Both of White’s actions resulted in a decision in favor of the city.  White brought claims in federal court based on the same theories litigated in state proceedings.  The U.S. Court of Appeals concluded that California principles of issue preclusion prevented it from reaching those issues in the earlier actions.  The first case precluded White from arguing that the city discriminated against or harassed her based on her perceived disabilities.  The second precluded White from arguing that the city did not have an adequate justification for her termination or that the proffered explanation for her termination was a pretext for a retaliatory intent.  Because the court is required to apply California’s issue preclusion principles in federal court, there is nothing left, and therefore the district court’s order dismissing White’s complaint is affirmed.  White v. City of Pasadena, Case No. 08–57012 (U.S. 9th Cir., January 17, 2012).  
6.      SATISFACTION LEVEL RISE, BUT MANY AMERICAN WORKERS REMAIN APPREHENSIVE:  Towers Watson has issued its 2011 Towers Watson Retirement Attitudes Survey.  Here are some Survey highlights: 

  • While employees’ satisfaction with their overall finances improved, dissatisfaction remains widespread, especially among older workers, employees in poor health and those with only a defined contribution plan.
  • Employees with defined benefit plans are more than twice as likely to feel “very confident” about the first 15 years of retirement, and 2.5 times as likely to feel confident about 25 years of retirement. 
  • Many employees continue trying to pay off debt, reduce their spending, save more and think more carefully about their retirement targets. 
  • In 2011 only 37% of women felt comfortable making their own investment choices versus 62% of men.  Younger DB plan participants are most comfortable making their own investment decisions. 
  • Despite the fact that health costs will represent a major expense for most employees, 40% of employees do not consider these costs in estimating their retirement income needs. 
  • Older employees and employees in poor health are most likely to be delaying retirement -- 46% of older workers are postponing retirement versus 34% of younger workers. 
  • The majority of workers delaying retirement expect to work an additional three years, and one-third plan on five additional years.  Of workers who plan to retire later, 64% of those aged 50 and older cite keeping their health care coverage as the reason. 

Towers Watson’s fifth consecutive survey of U.S. employees’ attitudes toward their health care and retirement benefits was conducted in June/July 2011, and included responses from almost 10,000 full-time U.S. employees at nongovernmental organizations with 1,000+ employees. 
7.      JERSEY GOVERNOR POCKET-VETOES BILL TO DENY STATE PENSIONS TO NON-PUBLIC WORKERS:  A bill to take certain non-public sector workers out of the state pension system was pocket-vetoed by New Jersey Governor Chris Christie.  (According to, Christie allowed the bill to lapse rather than sign it, a tool known as a pocket-veto that is only applicable at the end of a two-year legislative session.)  The bill would have shut off pension eligibility for newly-hired officers and employees of New Jersey State League of Municipalities, New Jersey Association of Counties, New Jersey School Boards Association and several other private groups or companies that do public business.  Some people believe Christie put the interests of lobbyists ahead of taxpayers.  What a surprise. 
8.      WORST STATES IN WHICH TO RETIRE:  There are plenty of best places to retire lists, but how about the places where it is not such a good idea to retire?  Last year’s “worst 10 states” list caused such a stir, the list is back for 2012.  The purpose is to try to help baby boomers understand where, all other things being equal, they can enjoy their hard-earned retirement without taking on more problems.  Criteria used included fiscal health, property taxes, income taxes, cost of living and climate.  So, here are the 10 Worst States for Retirement (2012): 

  • Connecticut
  • Illinois
  • Rhode Island
  • Vermont(new)
  • Massachusetts
  • New Jersey
  • Minnesota(new)
  • New York
  • Maine(new)
  • Wisconsin

 Because three new states made the list, three were lucky enough to leave the list:  Ohio, Nevada and California. 
9.      MIAMI HAPPIEST CITY FOR WORK IN 2012…HA!:  Looking to make a big career move in 2012?  Then consider CareerBliss’s annual list of Happiest and Unhappiest Cities for Work.  Thousands of employees in the happiest cities say they are most satisfied with the people they work with, the way they work and the work they do, while employees in the unhappiest cities want to see better growth opportunities, compensation and company culture.  Following the new number one, Miami, FL, are Worcester, MA, Oklahoma City, OK, San Jose, CA, Oxnard, CA, Wichita, KS, Killeen, TX, Syracuse, NY, San Antonio, TX and Provo, UT.  The unhappiest city?  -- New Haven, CT.  (See Item 8 above.) 
10.    SECURITIES CLASS ACTION FILINGS INCREASE SLIGHTLY IN 2011:   Federal securities fraud class action filing activity increased slightly in 2011, according to Securities Class Action Filings - 2011 Year in Review, a report prepared by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research.  A total of 188 federal securities class actions were filed in 2011 compared with 176 filings in 2010, with an equal number of actions (94) being filed in the first and second halves of the year.  The number of class actions filed was 3.1 percent below the annual average of 194 filings observed between 1997 and 2010.  Consistent with a trend first observed in 2010, filings related to merger and acquisition transactions continued to constitute a large percentage of total filings, accounting for 22.9 percent of 2011 activity.  There were 20 such filings in the first half of 2011 and 23 filings in the last six months of the year.  In 2010, M&A filings constituted 22.7 percent of all filings.  The number of filings related to the credit crisis continued to decline.  There were only three such filings in 2011, a decrease from 13 in 2010 and 53 in 2009.  New analysis of the number of federal judges who presided over a specified number of class actions revealed that 329 judges presided over only one case between 1996 and 2011!  Only 65 judges presided over more than 10 class actions.  Even fewer judges presided over multiple cases that reached a ruling on summary judgment.  For judges who presided over cases that reached this stage, 133 presided over only one case.  No judge presided over more than three federal class actions that reached a ruling on summary judgment during this period.  Just think about it:  the vast majority of federal judges have very little experience in class action cases.  Incredible. 
11.    MACRO HEADWINDS IN 2011 DIMINISH VALUE OF FUNDAMENTAL ANALYSIS:  Correlations within asset classes reached new highs in 2011.  According to the Leuthold Group, the average correlation of individual companies in the S&P 500 and the index itself hit 86% during October (and remained over 80% at year end).  Thus, 86% of a stock’s price movement can be explained by the overall stock market rising or falling, while only 14% was attributed to the company’s specific fundamental characteristics.  This spike in correlation is unprecedented, reaching a level not seen during the Great Depression, market crash of 1987 or the financial crisis of 2008.  To understand the historical impact of the market’s correlation, Arbor Research states that in the entire history of the S&P 500 there has never been a day in which all 500 stocks in the index go up or all 500 go down.  There have been 11 days in which 490+ stocks all move in the same direction on any given day.  Of those 11 instances, 6 have occurred since July 2011!  This risk on/risk off trading market was not limited to the U.S., influencing nearly all risk-based assets during 2011 (especially the second half), resulting in sharply higher correlations between S&P 500 and foreign markets, currencies, commodities and interest rates.  So, now what, Kemo Sabe? 
12.    GOLF WISDOMS:  A two-foot putt counts the same as a two-foot drive. 
13.    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.):  “When I was 10, I beat up the school bully.  His arms were in casts.  That’s what gave me the courage.” — Emo Philips    
14.    QUOTE OF THE WEEK:   “Don’t find fault, find a remedy.”  Henry Ford
15.    ON THIS DAY IN HISTORY:  In 1998, President Clinton says “I want to say one thing to the American people:  I did not have se.xual relations with that woman, Miss Lewinsky.” 
16.    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. 
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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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