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Cypen & Cypen
FEBRUARY 14, 2008

Stephen H. Cypen, Esq., Editor


Chapter 121, Florida Statutes, the Florida Retirement System, provides for normal retirement dates and early retirement dates. Section 112.0801, Florida Statutes, requires a public agency that provides life, health, accident, hospitalization or annuity insurance for its officers and employees through a group insurance plan or self-insurance plan to allow all former personnel who have retired, the option of continuing to participate in a group insurance or self-insurance plan. Retirees and their eligible dependents shall be offered the same health and hospitalization insurance coverage as is offered to active employees at a premium cost of no more than the premium cost applicable to active employees. For purposes of said section, “retiree” means:

[A]ny officer or employee who retires under a state retirement system or a state optional annuity or retirement program or is placed on disability retirement and who begins receiving retirement benefits immediately after retirement from employment. In addition to these requirements, any officer or employee who retires under the Public Employee Optional Retirement Program [PEORP] established under part II of chapter 121 shall be considered a "retired officer or employee" or "retiree" as used in this section if he or she:

(a) Meets the age and service requirements to qualify for normal retirement as set forth in s. 121.021(29); or

(b) Has attained the age specified by s. 72(t)(2)(A)(i) of the Internal Revenue Code [59½] and has 6 years of creditable service.

The Florida Attorney General has opined that the statute’s plain language requires a retiree under PEORP to have met the age and service requirements for normal retirement prescribed in the Florida Retirement System or attained the age of 59½ with six years of creditable service. An individual who takes early retirement under PEORP and does not meet the age and service requirements to qualify for normal retirement or has not attained the age of 59½ with six years of creditable service, would not be eligible to participate in the group insurance program immediately after retirement under provisions of section 112.0801, Florida Statutes. The Attorney General was also asked whether an early PEORP retiree who is ineligible as set forth above is entitled to participate in the group insurance program once he reaches the qualifying age or date he would have met service requirements. Once again, the answer is “no.” Given the lack of clear legislative direction, the Attorney General could not conclude that pursuant to provisions of section 112.0801, Florida Statutes, it would be required that an early retiree who participated in PEORP and was not otherwise eligible for participation in the group insurance program when he retired would be able to begin such coverage once reaching the statutorily- prescribed age. The Attorney General did suggest that the Florida Legislature clarify the issue of whether PEORP participants who retire early may participate in an agency’s group insurance program once they reach minimum age requirements. AGO 2008-05 (February 8, 2008).

Section 5(a), Article II, Florida Constitution, precludes an individual from simultaneously holding more than one office under the under the government of the state, counties and municipalities. It applies to both elected and appointed offices, and it is not necessary that the two offices be within the same governmental unit. The Florida Attorney General was asked whether a country building code administrator or inspector could also serve as a commissioner for the county independent special mosquito control district. After discussing the meaning of “office,” the Attorney General found that it was unnecessary to determine whether the positions in question are officers or employees, because the Constitutional dual office-holding prohibition refers only to state, county and municipal offices; it does not refer to special district offices. Once again, we wonder why people ask the same questions over and over again, when previous answers have been clear and unequivocal. Watch out for them skeeters. AGO 2008-06 (February 8, 2008).


Effective February 19, 2008, Bank of America Corp. and Chevron Corp. will replace Altria Group, Inc. and Honeywell International, Inc. in the Dow Jones Industrial Average. These changes are the first in the 111-year-old stock index since April 8, 2004, when three stocks out of 30 were replaced (see C&C Newsletter for April 7, 2004, Item 3). Charles H. Dow created “The Dow” in 1896 as a 12-stock index, which is now the best-known stock market barometer in the world. It is overseen by the managing editor of The Wall Street Journal. Altria, formerly Philip Morris Cos., has been in the industrial average since October 30, 1985. Its current name was adopted in 2003. Last year it spun off Kraft Foods, Inc. It has announced the spin-off next month of Philip Morris International, Inc., which will leave it as a purely domestic tobacco company. Honeywell is being dropped because it is the smallest of the industrials in terms of revenue and earnings. AlliedSignal acquired Honeywell in 1999, and adopted its name for the new entity. The predecessor of AlliedSignal was Allied Chemical & Dye Corp., formed in 1920 and added to The Dow in 1925. Chevron has been in the industrial average twice before. The first time, as Standard Oil Co. of California, was from 1924 to 1925. The company rejoined The Dow in 1930, but was replaced in 1999. The Chevron name was adopted in 1984. Changes in The Dow do not cause disruption in the level of the index. The divisor used to calculate The Dow from its components’ prices on their respective home exchanges will be changed prior to the opening on February 19. This procedure prevents any distortion in The Dow’s reflection of the U.S. Stock Market.


By letter dated January 24, 2008, Sarabeth Snuggs, State Retirement Director, has advised former Broward County Sheriff Ken Jenne that his rights and benefits under the Florida Retirement System are forfeited as a result of his guilty plea in the United States District Court, Southern District of Florida, for acts committed in connection with his employment with the Broward County Sheriff’s Department. Specifically, on or about September 4, 2007, Jenne was charged, by information, with one count of conspiracy to commit mail fraud, a felony, in violation of 18 U.S.C. Section 371, and three counts of filing a false tax return, a felony, in violation of 26 U.S.C. Section 7206(1). On or about September 5, 2007, Jenne pled guilty to these crimes, and on or about November 16, 2007, was adjudicated guilty of these crimes. Ms. Snuggs wrote Jenne that, if he believes his rights have been wrongfully determined and he desires an administrative hearing on the matter, it is necessary for him to file a formal petition with the Division of Retirement. Under applicable administrative rules, if Jenne fails to file a formal petition within 21 days of receipt of the notice, he will be deemed to have waived his rights to appeal the decision. (By the time this item is published, Jenne may have already filed such petition.) Jenne’s guilty plea led to a 366 day sentence in Federal penitentiary. If otherwise entitled, Jenne would receive about $125,000 a year, representing his public service as a prosecutor, state legislator and sheriff.


The U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division, has given notice of proposed rulemaking to amend the Family and Medical Leave Act Regulations. By way of background, the Family and Medical Leave Act of 1993 was enacted on February 5, 1993, and became effective for most covered employers on August 5, 1993. FMLA required the Department of Labor to issue regulations to implement Title I and Title IV of FMLA within 120 days of enactment, or by June 5, 1993, with an effective date of August 5, 1993. The Department issued an interim final rule on June 4, 1993 that became effective on August 5, 1993. Subsequently, the Department issued final regulations effective April 6, 1995. The new Notice of Proposed Rulemaking is the result of a comprehensive review of the Department’s fifteen years of experience administering the law, two previous Department of Labor studies of FMLA (1996 and 2001), several U.S. Supreme Court and lower court rulings and over 15,000 public comments received in response to a Request for Information published in the Federal Register on December 1, 2006. In addition, recent amendments to FMLA were enacted on January 28, 2008, as part of the National Defense Authorization Act of Fiscal Year 2008 (see C&C Newsletter for February 7, 2008, Item 1). The amendments provide two new leave entitlements to eligible specified family members: (1) up to 12 weeks of leave for qualifying exigencies arising out of a covered family member's active military duty, and (2) up to 26 weeks of leave in a single 12-month period to care for a covered servicemember recovering from a serious illness or injury. (Eligible employees are entitled to a combined total of up to 26 weeks of all types of FMLA leave.) In addition to proposing changes to the current FMLA regulations, the Notice of Proposed Rulemaking includes a description of the new military family leave provisions, discussion of issues the Department has identified under those provisions and a series of questions seeking public comments on subjects and issues that may be addressed in the final regulations. Surprisingly, the Bush Administration has come out on the side of labor groups on at least one point: time spent performing “light duty” work does not count against an employee’s FMLA leave entitlement. Because of the need to issue regulations as soon as possible so that employees and employers are aware of their respective rights and obligations regarding military family leave under FMLA, the Department anticipates that the next step in the rulemaking process, after a full consideration of comments received in response to discussion of the military family leave provisions in the Notice of Proposed Rulemaking, will be issuance of final regulations. The entire 127-page tome is available through


In an unusual grant of a motion for rehearing, Texas’s 10th Court of Appeals in case of first impression affirmed the trial court’s judgment awarding workers’ compensation benefits to Chad Hennings, former defensive lineman for the Dallas Cowboys. The case is also unusual because the Chief Justice, recused himself after his two fellow justices refused to allow the opinion to reflect that he did not “participate” in the decision. Thus, the ruling was 2-0. Under Texas workers’ compensation law, professional athletes are a distinct class of employees. A professional athlete employed under a contract for hire or a collective bargaining agreement who is entitled to benefits for medical care and weekly benefits that are equal to or greater than the benefits provided by workers’ compensation may not receive workers’ compensation benefit and equivalent benefits under the contract or collective bargaining agreement. An athlete covered by such contract or agreement who sustains an injury in course and scope of his employment shall elect to receive either workers’ compensation benefits or benefits under the contract or agreement. The statute does not mandate lumping together the two types of benefits to determine whether the employment set of benefits is equal to or greater than benefits under the statute. Gulf Insurance Co. v. Hennings, Case No. 10-06-00192-CV (Tex. App. 10th, January 30, 2008).


What lessons can pre-retirees draw from experiences of today’s retirees? Looking forward to a future full of possibilities can be exciting, especially when you have developed an income strategy to fund it. If only you had the ability to foresee what your retirement income needs would be; the reality is that there are many things you simply cannot predict and often do not expect. A study from Sun Life Financial takes a deeper look into retirement lifestyles and spending patterns of both pre-retirees and retirees. Prior research shattered the old rule that people in retirement should plan to live on a fixed 80% of their pre-retirement income. Instead, many boomers will need much more income early in retirement than previously expected, and will need more income flexibility throughout retirement to be able to live their retirement their way. To help pre-retirees start planning for expenses, a national survey of people at different stages of retirement was conducted. The results identify differences in spending for respondents across four age groups: mid- to late-50s, 60s, 70s and 80s. The survey sought to find out:

  • If there were any expense surprises along the way;
  • What expenses they are currently addressing beyond normal living expenses;
  • For what activities or investments they were spending; and
  • How much they had planned to spend on activities.

Surveyors discovered that not only will boomers need flexible income, they need to start planning for expenses earlier, since anticipated spending above and beyond normal living expenses can be quite costly over the course of retirement. Listen up.


For most Americans, the value of their Social Security is the biggest accumulation of dollars they will take into retirement. In fact, according to a new report reviewed by PR Newswire, for two-thirds of recipients over the age of 65, Social Security is more than half of their income during retirement. The report, released by the non-partisan National Academy of Social Insurance, is entitled “Social Security: An Essential Asset and Insurance Protection for All.” Some other interesting data from the report are

  • The average monthly benefit for retirees is $1,045 in 2007. A 65-year old who wanted to buy a guaranteed income of that amount -- with payments increasing for cost of living and continuing for a widowed spouse -- would need to pay an insurance company $225,000.
  • Although 69% of Social Security benefits go to retired persons, 17% go to disabled workers or their families and another 14% go to survivors.
  • The value of disability benefits for disabled workers was the equivalent of purchasing a $414,000 disability insurance policy in 2006.
  • Among all beneficiaries 65 and older, 42% of single persons and 22% of married couples relied on Social Security for almost all (90% or more) of their income in 2006. Among African-Americans, the figures were 54% for single persons and 33% for married couples. Among Latinos, the figures were 62% and 37%. Among Asian Americans, the figures were 55% and 27%. And among Indians/Alaskan Natives, the figures were 61% and 25%.

Regardless of anything else, most people do not realize the real value of Social Security.


As our readers know, the Family and Medical Leave Act of 1993 requires employers of 50 or more employees to give up to 12 weeks of unpaid, job-protected leave to employees for a serious illness or to care for a child, spouse or parent. A number of states -- both before and since the federal act -- have passed similar protections that may apply to more workers than the federal law, differ in terms of unpaid leave required and provide more specific or additional types of unpaid leave. Two states (California and Washington) offer paid family leave, and other states are exploring proposals to establish paid leave systems through the state’s unemployment insurance programs, through temporary disability programs or through some other wage-replacement mechanism. Florida has a provision requiring the state to offer up to 6 months for birth or adoption of a child or upon serious illness of the employee, child, spouse or parent. National Conference of State Legislatures has published a comprehensive table identifying state family and medical leave laws, qualifying employers and amount of leave offered. The handy table is accessible at


In the early 1980s, Congress responded to the Social Security Program’s long-term financing shortfall, in part, by raising the Full Retirement Age from 65 to 67. When fully phased in, for those who turn 62 in 2022, workers will have to wait an additional two years to get the same monthly benefit. If they do not postpone claiming, the increase in FRA will cut their benefits by about 13%. Congress did not change the earliest age at which workers can claim. The Earliest Eligibility Age remains 62. When the increase in FRA is fully phased in, workers who claim at 62 will get 70%, rather than 80%, of their FRA benefit. Concerns have been raised that benefits claimed at EEA will be too low, especially as retirees age and other sources of income decline. A new Issue Brief from Center for Retirement Research at Boston College says one response would be to raise EEA from 62 to 64, in line with the 2-year rise in FRA. There are, however, two important objections to an increase in EEA. The primary concern is that it would create hardship for those unable to work or find employment and who lack resources to support themselves without working until age 64. A second objection is that raising EEA is unfair to disadvantaged groups with low life expectancy. The brief addresses these concerns by considering an “Elastic” EEA, which gives different workers different Earliest Eligibility Ages. An Elastic EEA that sets a worker’s earliest claiming age based on average lifetime earnings can capture many of the benefits of the higher EEA while avoiding many of the pitfalls. It should also be easy to implement. The example of an Elastic EEA presented in the brief also demonstrates potential shortcomings. A non-trivial portion of the population classified as “at-risk,” especially those classified as “moderate risk,” is not protected or only partially protected. In addition, most men who qualified for an early EEA were classified “not at risk,” partly due to downward bias in measurement of average lifetime earnings.


It’s hard to imagine that Kleenex was initially a flop. But, according to How the Cadillac Got Its Fins, Kleenex was first marketed solely as a cold cream and makeup remover. In 1930, marketing people went to Peoria (where else would they go?) with clipboards and questions to find that two-thirds of people used them as disposable handkerchiefs, not to remove makeup. The company quickly changed advertising to slogans like “Don’t put a cold in your pocket!” and “Smother sneezes with Kleenex tissues!” The same ads also suggested using Kleenex tissues as coffee filters: “Now my coffee’s clearer -- my husband’s happier!” Within two years, Kleenex sales quadrupled. Oops, I thought your nose was bleeding, but it’s not.


Experience: The name men give to their mistakes.


“Be careful what you pretend to be, because you are what you pretend to be.” Kurt Vonnegut

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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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