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Cypen & Cypen
MARCH 27, 2008

Stephen H. Cypen, Esq., Editor


The United States Supreme Court has let stand a decision of the United States Court of Appeals for the Third Circuit, which upheld an Equal Employment Opportunity Commission regulation exempting from the Age Discrimination in Employment Act employer coordination of retirement benefits with, inter alia, Medicare benefits (see C&C Newsletter for August 30, 2007, Item 2 and C&C Newsletter for June 21, 2007, Item 1). The EEOC rule clarifies that employers can spend more on retirees under 65 years of age then those over 65, without running afoul of age discrimination laws. American Association of Retired Persons had sought intervention by the United States Supreme Court, but its most recent (in)action closes the book on this issue, at least for the time being. For legal scholars, the case is AARP v. EEOC, Case No. 07-662 (U.S., March 24, 2008), cert. denied.


As we celebrate National Women’s History Month, MediaNews Group, Inc. talks about women and Social Security. Although Social Security coverage is the same for men and women, there are things a woman should know that can make a difference in how well she does under the program. Following are ten things to be aware of:

  1. Be sure to change your name with Social Security. If you marry, remember to change your name on your Social Security card if you use your married name at work. If you do not make the change, your earnings may not be properly credited to your Social Security record.
  2. Watch your disability coverage. You need recent work under Social Security to qualify for disability benefits.
  3. Know your benefit options. Women may have to decide whether to take a benefit on their own work record or their husband’s.
  4. Be aware of your rights as a divorced spouse. If you have been married for ten years, you have the same rights to benefits on your ex-husband’s Social Security earnings as a current wife. And your benefits do not affect those of the current wife.
  5. How marriage affects your benefits. Generally, marriage terminates entitlement to a divorced spouse’s or mother’s benefits. Benefits as a widow are not affected by remarriage.
  6. Check your benefits statement for accuracy, especially earnings posted by current or previous employers.
  7. Check your family protection. Your earnings give you the same family protection that your husband’s earnings do.
  8. Note government pension offset (something we have been writing about for years). Receiving a pension from work and a government job not covered by Social Security could reduce your Social Security “spouse’s” benefit.
  9. Note windfall provision (something we have been writing about for years). If you receive a pension based on noncovered government employment, your Social Security benefits may be reduced.
  10. Note household workers reporting. If you hire a household worker, you are responsible for reporting wages and collecting and paying Social Security tax.

For details about Social Security taxes, call IRS at 800.829.1040.


The Social Security Board of Trustees has released its annual report on financial health of the Social Security Trust Funds. While the key dates for program costs exceeding tax revenues and trust fund exhaustion remain unchanged, the 2008 Trustees Report shows improvement in the projected long-term financial status of the Social Security program from last year -- particularly in the latter half of the long-range projection period. This improvement is principally the result of methodological changes for projecting certain aspects of immigration. In the 2008 Annual Report to Congress, the Trustees announced:

  • The projected point at which tax revenues will fall below program costs comes in 2017 -- the same as last year's estimate.
  • The projected point at which the Trust Funds will be exhausted comes in 2041, the same as last year.
  • The projected actuarial deficit over the 75-year long-range period is 1.70 percent of taxable payroll, down from 1.95 percent last year.
  • Over the 75-year period, the Trust Funds would require additional revenue equivalent to $4.3 Trillion in today's dollars to pay all scheduled benefits.

Other highlights of the Trustees Report include:

  • Income including interest to the combined Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds amounted to $785 Billion ($656 Billion in net contributions, $19 Billion from taxation of benefits and $110 Billion in interest) in 2007.
  • Total expenditures from the combined OASDI Trust Funds amounted to $595 Billion in 2007.
  • Assets of the combined OASDI Trust Funds increased by about $190 Billion in 2007 to a total of $2.2 Trillion.
  • During 2007, an estimated 163 million people had earnings covered by Social Security and paid payroll taxes.
  • Social Security paid benefits of $585 Billion in calendar year 2007. There were almost 50 million beneficiaries at the end of the calendar year.
  • The cost of $5.5 Billion to administer the program in 2007 was a very low 0.9 percent of total expenditures.
  • The combined Trust Fund assets earned interest at an effective annual rate of 5.3 percent in 2007.

For your information, the Board of Trustees comprises six members. Four serve by virtue of their positions with the federal government: Henry M. Paulson, Jr., Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Michael O. Leavitt, Secretary of Health and Human Services; and Elaine L. Chao, Secretary of Labor. The two public trustee positions are currently vacant. Readers can access the entire 220-plus page Report at


The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, whose members are also trustees of the Social Security Trust Funds, have released their 2008 Annual Report. In short, last year 44.1 million people were covered by Medicare: 36.9 million aged 65 and older and 7.2 million disabled. Total benefits paid in 2007 were $425 Billion. Income was $462 Billion, expenditures were $432 Billion and assets held in special issue U.S. Treasury securities grew to $369 Billion. The financial outlook for the Medicare program continues to raise serious concerns, and a “Medicare funding warning” is triggered again by findings of this report. The complete 230-plus page report is available at


A Qwest supervisor in Southwestern Colorado took his concerns over extended bathroom breaks to an uncomfortable level, union officials charged. As reported by Rocky Mountain News, the manager recently gave disposable urinal bags to about 25 male field technicians, with the message: when you have to go, don’t waste time searching for a public bathroom. A female (of course) spokesperson said there was no policy whatsoever requiring field technicians to use the bags. “They are there for convenience, and they are there because employees asked for them,” she said (with a straight face?). Not surprisingly, women are not being required to use the bags (gloves, please). One type of bag is called “Brief Relief” -- we are not making this stuff up, Folks. The union has not decided whether to file a grievance. Meanwhile, skip to my loo, my darlin’.


From yet another humorous piece, we learn that a postman in the United Kingdom was suspected of stealing items from the mail. Thus, his supervisors set up a sting operation, by including in his bag a bra and thong worth about 200 bucks. They spotted the man acting suspiciously on hidden camera. Although the postman denied stealing the items on his route, he did agree to searches of his person and vehicle, but not his home. When investigators went to search his person, they asked him to disrobe in the presence of an officer...and found him to be wearing the thong underwear. However, the bra was never recovered. How poignant.


“I prefer rogues to imbeciles because they sometimes take a rest.” Alexander Dumas

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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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