1.
STATUTE OF LIMITATIONS BEGAN TO RUN WHEN EMPLOYEE WAS HIRED AND DENIED
PARTICIPATION IN CITY PENSION PLAN:
Petrosino worked for the City of Hollywood from 1987
to 1999 as a community development housing inspector. Because his position
was funded by federal grant, at the time Petrosino was hired the City deemed
such employees not qualified to participate in the City’s pension
plan. In 1994, the City changed its position on the status of community
development employees, and gave them the option to join the pension plan,
without credit for prior service. Petrosino rejected the option and elected
not to join. In 2001, Petrosino filed a suit for declaratory judgment,
claiming he had met the definition of “employee” for purposes
of inclusion in the pension plan. Both parties agreed that the applicable
statute of limitation is five years. The trial court ruled that Petrosino’s
claim was not time-barred because it did not accrue until his 55th birthday
in 2001 -- the first time he became eligible to apply for benefits. The
City contended that the claim was time-barred because the cause of action
arose in 1987 when Petrosino was hired by the City and informed that he
was ineligible to participate in the pension plan. On review of the trial
court’s ruling in favor of Petrosino, the district court of appeal
reversed. For Petrosino to prevail in a declaratory judgment action, the
following elements had to be present:
(1) A bona fide, actual, present practical need for the declaration.
(2) The declaration should deal with a present, ascertained or ascertainable
state of facts or present controversy as to a state of facts.
(3) Some immunity, power, privilege or right of the complaining party
is dependent upon the facts or the law applicable to the facts.
(4) There is some person or persons who have, or reasonably may have
an actual, present, adverse and antagonistic interest in the subject
matter, either in fact or in law.
(5) The antagonistic and adverse interests are all before the court
by proper process or class representation and that the relief sought
is not merely the giving of legal advice by the courts or the answer
to questions propounded from curiosity.
Because all five elements existed at the time Petrosino was hired
and was informed he could not participate in the pension plan, his
cause of action accrued in 1987, and is clearly barred by the statute
of limitations. City of Hollywood v. Petrosino, 29 Fla. L. Weekly D163
(Fla. 4th DCA, January 7, 2004)
2. PROVIDENCE
WILL ATTEMPT TO REVOKE PENSIONS:
The City of Providence, Rhode Island, has suspended two police officers
and will try to revoke their pension benefits over allegations of cheating
on police promotional tests. (We assume that the two, a former chief
and captain, are in some sort of DROP plan, which explains why they
are active and also receiving pensions.) The investigation, reported
by Associated Press, concluded that the two ranking officers had received
test materials before promotional exams between 1996 and 1999. The
city will attempt to revoke or curtail the subject pension benefits
for “dishonorable service.” It is not clear whether “dishonorable
service” constitutes a ground for pension forfeiture under Rhode
Island law or under the subject local plan. Other charges may stem
from the investigation into allegations of cheating on the tests. The
city called the suspensions the first step to restoring the broken
trust in a department that has been plagued by low morale and embarrassing
revelations, including last year’s discovery that a computerized
system was secretly recording all officers’ telephone calls.
3.
IRS ISSUES REVENUE RULING ON ROLLOVERS:
Prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of
2001, certain restrictions applied to rollovers by individuals of funds accumulated
in retirement plans maintained by their employers or in IRAs maintained by them.
EGTRRA, as amended by the Job Creation and Worker Assistance Act of 2002, substantially
increased the rollover opportunities available to individuals, by expanding both
types of plans eligible to accept rollovers and the types of funds that can be
rolled over. Rules applicable to rollovers (including new portability rules)
are contained in Sections 402(c), 402(c)(2), 401(a)(31), 308(d)(3)(A), 402(c)(10)
and 402(f) of the Internal Revenue Code. The new revenue ruling holds that if
an eligible retirement plan separately accounts for amounts attributable to rollover
contributions to the plan, distributions of those amounts are not subject to
the restrictions on permissible timing that apply, under applicable requirements
of the Internal Revenue Code, to distributions of other amounts from the plan.
Accordingly, the plan may permit distribution of amounts attributable to rollover
contributions at any time pursuant to an individual’s request. Rev. Rule.
2004-12.
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