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Cypen & Cypen
NEWSLETTER
for
MARCH 31, 2005

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. NCPERS WARNS AGAINST “OUR MONEY BEING USED AGAINST US”:

The National Conference on Public Employee Retirement Systems is the voice for public pensions. The latter, in turn, are the guardians of defined benefit retirement systems, which have successfully battled attempts to diminish or eliminate such plans that protect the welfare of millions of public employees, retirees and their families. Most people are aware of the legislative initiative underway in California to outlaw defined benefit plans for new public employees and place them in 401(k) type plans. This legislative effort in California has spawned interest in similar proposals in other states, and is quickly becoming a national issue. Proponents of eliminating DB plans are seeking money and support from the very firms and institutions that do business with public retirement systems. It is wrong that companies that already manage money for public retirement plans would, at the same time, be working to undermine the retirement plans of other public employees. To prevent public employee money from being used against public employees, NCPERS encourages all its member funds to ask their investment advisors the following three questions:

1. Does your firm support, finance or participate, either directly or indirectly, in any organization that promotes conversion of public defined benefit plans to defined contribution plans in California or any other state or local jurisdiction?

2. Does your firm support, finance or participate, either directly or indirectly, in any organization that promotes private accounts as a replacement for defined benefit plans in California or any other state or local jurisdiction?

3. Does your firm support, finance or participate, either directly or indirectly, in any organization or investments that undermine the long-term stability of defined benefit plans offered to government workers in California or any other state or local jurisdiction?

The NCPERS Executive Board unanimously supports the efforts of California’s public employees to preserve the integrity of their retirement plans and protect the safety and security of their families. It is incumbent on all public retirement systems to do the same. A word to the wise... .

2. COMPARING PRO SPORTS RETIREMENT BENEFITS:

The Atlanta Journal-Constitution recently took a look at pension plans of North America’s four major pro sports leagues. Here are the results:

Major League Baseball - In 1947, MLB was the first to provide a pension plan. The maximum benefit is $162,000 per year, which goes to players with 10 or more seasons who wait until age 62. Eligible players with less than 10 years of service get an annual pension at age 62 of $16,200 for each year they were in the major leagues. MLB easily provides the most generous of the four leagues’ pension plans.

National Basketball Association - The plan took effect in 1965. Players can collect $364 per month for each season they played in the League, starting at age 62. Some who played before the NBA’s mega-dollar era think current players should put more emphasis in labor negotiations on increasing pensions of former players.

National Football League - The NFL pension plan was started in 1959. Eligible former players receive $200 per month for each season they played before 1982, $230 per month for each season played from 1982 through 1992, $240 to $330 per month for each season played from 1993 through 1997 and $425 for each season played since 1998.

National Hockey League - Created in 1948, the NHL pension plan was tarnished by scandal in 1992, when the League’s owners paid $40 Million to settle claims they had been misappropriating pension funds since 1982. Former players with 160 to 400 NHL games played collect about $8,000 per year beginning at age 45. Former players with 400 or more games played collect about $12,200 per year beginning at age 45. In addition, players with 400-plus games are eligible for a supplement that could produce a one-time payment of as much as $250,000 at age 55. (Even though the NHL’s pension plan provides far smaller benefits than the other leagues’, it is not one of the issues that the players’ union is fighting over in the labor dispute that has wiped out this hockey season.)

3. NCPERS ON CREATING A TAX FREE RETIREMENT MEDICAL TRUST:

National Conference on Public Employee Retirement Systems has been aware of the disturbing trend of escalating health care costs for some time and has devoted time and resources to help its members cope with this problem. One outcome of its engagement in health care is a publication entitled Creating a Retiree Medical Trust: How Employers & Employees Can Use Pre-Tax Dollars to Fund Their Retirement. A retirement medical trust is a unique and advantageous method for employers and employees to prefund for retiree medical needs. Retirement medical trusts offer employers the benefit of fixed contribution levels, similar to defined benefit pension plans, provide retirees a lifetime of benefits. We have sent all of our clients a copy of this useful 14-page piece.

4. NCPERS DEVELOPS MODEL PROXY VOTING GUIDELINES:

In response to concerns about corporate governance, National Conference on Public Employee Retirement Systems has adopted model proxy voting guidelines, and recommends that every public pension board adopt a similar policy for its fund. The guidelines are designed to protect investments of the fund and make sure the board is acting like an owner -- not a rubberstamp -- in the corporate arena. Although most public plans allow their investment managers or others to vote their shares, the model proxy voting guidelines will enable funds, at no expense, to direct their equity managers or proxy voting agents how to vote on the most common and recurring issues. We have sent our clients copies of the guidelines, which are available in Word format from NCPERS at info@NCPERS.org.

5. CLAIMS FILED PURSUANT TO FLORIDA CIVIL RIGHTS ACT NOT SUBJECT TO PRESUIT NOTICE REQUIREMENTS:

Section 768.28(6)(a), Florida Statutes, provides that an action may not be instituted on a claim against the state or one of its agencies or subdivisions unless the claimant presents the claim in writing to the appropriate agency. Sections 760.01-760.11, Florida Statutes, are part of the Florida Civil Rights Act of 1992. In particular, Section 760.11(1), Florida Statutes, requires that a claimant comply with a set of presuit administrative procedures. The Supreme Court of Florida recently answered a question certified to it as a matter of great public importance, holding that claims filed against a state agency pursuant to the Florida Civil Rights Act of 1992 are not subject to the presuit notice requirements of Section 768.28(6), Florida Statutes. Thus, the court reinstated a case alleging discrimination, in which claimant had complied with the Florida Civil Rights Act of 1992 but not with the presuit notice requirements of Section 768.28(6), Florida Statutes. Maggio v. Florida Department of Labor and Employment Security, 30 Fla. L. Weekly S174 (Fla. March 24, 2005).

Copyright, 1996-2006, all rights reserved.

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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