Cypen & Cypen
MARCH 3, 2011
Stephen H. Cypen, Esq., Editor
1. A DEFINITIVE PIECE ON UNDERSTANDING A PUBLIC PENSION PLAN’S UNFUNDED LIABILITY: Florida Public Pension Trustees Association has released a paper on Understanding a Public Pension Plan’s Unfunded Liability. Here is the Executive Summary:
Here is a link to the whole piece, which should be mandatory reading for everyone in the “pension community:” http://bit.ly/gFdASC.
2. 1974 DOCUMENT SHOWS HOW FLORIDA BENEFITED WHEN FLORIDA RETIREMENT SYSTEM BECAME NON-CONTRIBUTORY: The August 1974 Florida Retirement Bulletin gives insight into why the state of Florida stopped requiring employees to contribute part of their salaries to the Florida Retirement System: to save the state money, according to tampabay.com. (The first page of that 36-year-old document is available at: http://miamiherald.typepad.com/files/1974-florida-retirement-bulletin.pdf). Back in 1974, employees contributed 4 percent of their salaries to their retirement fund, while special risk members (police, firefighters, etc.) contributed 8 percent. But if those employees had left the state workforce, they were entitled to have their contributions returned to them in the form of a refund -- costing the state just that year a whopping $30 Million, and setting up an unfunded liability. The primary purpose in changing FRS to a non-contributory plan was to help eliminate the unfunded liability documented in past actuarial studies of state retirement systems. The end result of the change was to increase the state's contribution from 4 percent to 9 percent for regular class members -- where it remains today -- and from 8 percent to 13 percent for special risk members. We thank the member of Florida Public Pension Trustees Association who unearthed the musty, but significant, document.
3. FEDERAL GRANTS WILL ALLOW HIRING OF 51 CALIFORNIA FIREFIGHTERS: Sacramento area fire officials announced they have been awarded $11 Million in federal grant money to pay for 51 additional firefighters. Most significantly, according to sacbee.com, the grant will allow the Sacramento Fire Department to hire 27 firefighters, and restore the two companies that have been "browned out" as a result of budget cuts. The city department will receive $5.6 Million. The Sacramento Metropolitan Fire District will hire an additional 24 firefighters, with the $5.4 Million that agency will receive. Officials from both agencies said the money would improve response times and reduce firefighter workload, resulting in better-rested firefighters on the front line and less overtime. The money came from the federal Staffing for Adequate Fire and Emergency Response (SAFER) program, administered by the Federal Emergency Management Agency.
4. AMITYVILLE, NY, SETTLES EEOC FIREFIGHTER AGE DISCRIMINATION SUIT: U.S. Equal Employment Opportunity Commission has announced that the Village of Amityville, New York, and the Amityville Fire Department will pay $209,280 to settle a class age-discrimination lawsuit brought by EEOC. EEOC’s suit alleged that Amityville refused to let volunteer firefighters over age 65 accrue credit toward a “length of service award,” the equivalent of a retirement pension, because of their age. As a result, senior firefighters lost pension amounts after they turned 65, in violation of Age Discrimination in Employment Act, a federal law that protects workers age 40 and older from age discrimination. EEOC filed suit in U.S. District Court for the Southern District of New York, after first attempting to reach a pre-litigation settlement. The consent decree filed in resolution of this suit permanently eliminates an age restriction on service credit, mandates training for individuals responsible for the program and institutes an anti-discrimination policy. Further, retroactive payments will be made to 23 volunteer firefighters who had been barred from receiving credit for their service because of their age. The settlement also provides for increased monthly pension amounts for 15 of those firefighters still living.
5. IT’S GOOD TO BE THE KING: … OR THE PRESIDENT: The net worth of all American presidents has been examined by 24/7 Wall St. The resulting article provides net worth figures for each, in 2010 dollars. Because a number of presidents, particularly in the early 19th Century, made and lost huge fortunes in a matter of a few years, the number for each man is based on his net worth at its peak. In the case of each president, the authors took into account hard assets like land, estimated lifetime savings based on work history, inheritance, homes and money paid for services. Royalties on books have also been taken into account, along with ownership of companies and yields from family estates. The net worth of presidents varies widely. George Washington was worth over half a billion in today’s dollars. Several presidents went bankrupt. Here is the list: http://247wallst.com/2010/05/17/the-net-worth-of-the-american-presidents-washington-to-obama/2/
6. BOSS’S VOICE MADE HIM VOMIT: Here is a lawsuit that probably is not going to go very far, according to findlaw.com. Anthony Dingle, New York Housing Authority Superintendent, sued his boss claiming that her voice made him vomit. The boss constantly dressed him down, so that every time he heard her voice it triggered a sickening feeling inside of him. Dingle claimed he went to the doctor in order to get his intestinal system properly functioning. Dingle says the boss thoroughly enjoyed his suffering, allegedly saying she did not know that she made men throw up, followed by a fit of hysterical laughing. Actually, the lawsuit comes down to allegations of verbal abuse due to whistle blowing. Dingle alleges that he informed his boss's superiors of her poor management techniques, which led to his abuse. Our readers know that employees fired for whistle blowing can file wrongful termination claims against their employers, and, if successful, are entitled to recover lost wages, back pay and other damages.
7. EMPLOYEE WHO FELT PRESSURED TO RETURN TO WORK STATED CLAIM UNDER FMLA: Terwilliger, an employee of Howard Memorial Hospital, requested leave under the Family and Medical Leave Act because she needed back surgery. Her request was approved. However, during her recovery, Terwilliger's immediate supervisor contacted her weekly to inquire when she was going to return to work. According to Terwilliger, she felt pressured by the calls to return to work. Terwilliger brought suit in federal court for interference and retaliation under FMLA. On the hospital’s motion for summary judgment, the retaliation claim was dismissed, but the interference claim will proceed to trial. An employer is prohibited from interfering with, restraining or denying an employee's exercise of or attempted exercise of any right contained in FMLA. An employer's action that deters an employee from participating in protected activities constitutes an interference of the employee's exercise of his rights. To prove interference, an employee must show that the employer denied his benefits to which he was entitled under FMLA. An interference claim includes the "chill theory:" a chilling of FMLA rights is sufficient for an FMLA interference claim. A reasonable jury could conclude that the hospital interfered with Terwilliger's exercise of FMLA rights by discouraging or chilling her exercise of those rights. Terwilliger v. Howard Memorial Hospital, Case No. 09-cv-4055 (WD Ark., January 27, 2011).
8. IDENTITY THEFT STRIKES SOUTH FLORIDA FIREFIGHTERS: A 21-year old South Florida man has been arrested in what authorities say is a scheme to steal identities of hundreds of firefighters in the area through their nest eggs. According to NBC, Hansy Pierre has been charged with 12 counts of using another person’s identity without consent, after police found 17 pre-paid debit cards in his car, most with names of firefighters on them. Pierre is likely just one part of a band of thieves who hacked into a local firefighter database and stole personal information of hundreds of local heroes. So far, 31 Oakland Park firefighters claim they have fallen victim to an ID thief, who filed false tax returns and collected the refunds. The victims found out when they tried to file legitimate tax returns this year. Delray Beach firefighters have also fallen victim to the scam. Federal agents say the common link is that the two pension funds used the same retirement plan administrator.
9. U.S. SUPREME COURT DENIES REVIEW IN NOVARTIS: The U.S. Supreme Court has denied certiorari review in In Re Novartis Wage and Hour Litigation, Case No. 09-0437 (U.S. 2d Cir., July 6, 2010) (see C&C Newsletter July 15, 2010, Item 6). The Second Circuit had held that pharmaceutical sales representatives employed by Novartis are not bona fide administrative employees within meaning of Fair Labor Standards Act of 1938 and the regulations. Novartis Pharmaceuticals Corporation v. Lopes, Case No. 10-460 (U.S., February 28, 2011) (on petition for certiorari denied).
10. THE LUCKIEST PEOPLE ON EARTH: The caption says it all: http://bit.ly/hfVZQO.
11. TIPS AND TRAPS FROM CONSUMER REPORTS: Consumer Reports Money Adviser published three big secrets of happy retirement and three costly traps. Here they are in that order.
Three Big Secrets of Happy Retirement
Here is a happy statistic: Sixty-eight percent of retirees surveyed said they were highly satisfied with retired life. Another 27 percent said they are fairly satisfied. Overall, the survey found the following three explanations for why some retirees are happier than others:
Three Costly Traps
If you were brought up to work hard and save money for your golden years, watch out. Get too comfortable in retirement and you might have to fork over higher premiums for Medicare, pay taxes on your Social Security benefits and perhaps lose some of them. If you want to maximize your benefits and minimize your tax bill, here are three traps to avoid:
12. HANDBOOK FOR 2011: Here are some Personality Tips for 2011:
13. REMARKABLE QUOTES FROM REMARKABLE JEWS: Bankruptcy is a legal proceeding in which you put your money in your pants pocket and give your coat to your creditors. Sam Goldwyn
14. BLESSED ARE THE CRACKED, FOR THEY LET IN THE LIGHT: The gene pool could use a little chlorine.
15. 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.): Knowledge is knowing a tomato is a fruit; Wisdom is not putting it in a fruit salad.
16. QUOTE OF THE WEEK: “Laziness is nothing more than the habit of resting before you are tired.” Jules Renard
17. 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.