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Cypen & Cypen
March 24, 2016

Stephen H. Cypen, Esq., Editor

1. FOCUS ON WHAT IS IMPORTANT: QUALITY: Writing in the March 2016 Florida Public Pension Trustees Association Newsletter, Susan Marden begins with a quote from the Sage of Omaha, Warren Buffett: “Price is what you pay. Value is what you get.” Here follows the sad state of affairs:

  • Firefighters in Longboat Key have not had a wage increase in 7 years, but they are paying 14% of their salaries to keep their defined benefit pensions after joining FRS. In 2013 when their plan was frozen, the city was told it would cost 20% of every employee’s salary to have them enrolled in FRS, but rather than lose their DB plan, the firefighters agreed to pay half that cost, plus the 3% FRS required contribution -- additional increases since have hiked the firefighters’ contribution to a total of 14%. Their contract is up for negotiation this year.
  • Despite the fact that North Port’s police pension fund is 87% funded, and its firefighter pension fund is 94% funded, the city recently decreed that police and fire employees hired after March 1, 2016 will automatically be enrolled in FRS. The City of North Port will have to contribute 22% of each employee’s total salary into the Florida Retirement System. It is unclear at this time what that will cost the employees.
  • Since 2012, Palm Beach has lost 39 firefighters 17 other public safety employees, mostly to attrition. The city has become a training ground for employees who soon depart to other cities with more competitive benefits. Sixty percent of the town’s total public safety force has three or fewer years’ experience according to a January news report in the Palm Beach Daily News. Public Safety Director Kirk Blouin told the town’s Finance and Taxation Committee “that’s a problem.”
  • And a five-county FPPTA poll in 2014-2015 revealed that 63 of 106 pension plans that were surveyed reported making cuts to employee benefits and changes to the pension plans -- a plurality of them making multiple cuts to benefits or curbs to calculating benefits. At least 41 plans made three or more of nine (typically identified) cuts and changes, like eliminating COLAs and increasing employee contributions, while 28 made four or more of the nine identified changes.

Meanwhile, most cities and towns are reporting increases in property tax revenue, sales tax revenue, employment and earnings. Many investment funds have met or exceeded their pre-recession levels. It is time for public officials and taxpayers to recognize the difference between crisis management and knee-jerk response. It is time to recall the importance of having qualified public service professionals, who add value to their communities… and usually you get what you pay for. Ms. Marden is FPPTA’s Public Relations Consultant.  

2. STATE OF AMERICAN RETIREMENT: Today, many Americans rely on savings in 401(k) type accounts to supplement Social Security in retirement, according to a very informative piece from Economic Policy Institute. The shift is pronounced from a few decades ago, when many retirees could count on predictable, constant streams of income from traditional pensions. This chartbook assesses the impact of the shift from pensions to individual savings by examining disparities in retirement preparedness and outcomes by income, race, ethnicity, education, gender and marital status. The first section of the chartbook looks at retirement plan participation and retirement account savings of working age families. The charts in this section focus on families headed by someone whose age is 32–61, a 30-year period before the Social Security early eligibility age of 62 when most families should be accumulating pension benefits and retirement savings. The second section looks at income sources for seniors. Since many workers transition to retirement between Social Security’s early eligibility age and the program’s normal retirement age (currently 66, formerly 65), the charts in the second section focus on retirement outcomes of people age 65 and older. Here are key findings of the first section of charts:

  • Retirement wealth has not grown fast enough to keep pace with an aging population and other changes.
  • The shift from traditional pensions to individual savings has widened retirement gaps.
  • Workers’ retirement prospects are increasingly affected by economic downturns.
  • The growth in retirement inequality has not been random -- the rich have gotten richer and the poor, poorer.
  • The shift from define benefit to defined contribution plans has exacerbated racial and ethnic disparities.
  • Retirement readiness gaps have widened between workers with and without a college education.
  • Single people and women face particular challenges.

Here are key findings of the second section of the charts:

  • Less educated, minority, single, and female seniors are most likely to have low incomes in retirement.
  • Social Security is the most important and evenly distributed source of retirement income.
  • Many seniors are still working.
  • A diverse group of retirees relies on pension benefits.
  • 401(k)s and IRAs are not an important source of retirement income.

Read the entire piece, including the charts, at

3. JOB TENURE: PUBLIC-SECTORS VS. PRIVATE-SECTORS:Recent analysis from Employee Benefit Research Institute updates the well-known difference between public- and private-sector job tenure, showing that government workers stay on the job roughly twice as long as do those working for private employers. Among all wage and salary workers ages 20 or older, median job tenure (or the mid-point, half above and half below) in 2014 was 5.0 years. It had held steady at just above 4.0 years from 1983-2008, and jumped to 5.1 years in 2012. However, among private-sector workers, median job tenure reached 4.3 years in 2014, after holding relatively steady at around 3.5 years form 1983-2002. Among public-sector workers, median job tenure was 8.0 years in 2014, a slight drop from 8.3 years in 2012. Here is a link to the full analysis:  EBRI Notes, Volume 36, No. 2.   

4. AND YOU THIS WE HAVE A BIG PENSION PROBLEM?: Dreams of lengthy cruises and beach life may be just that, with 20 of the world's biggest countries facing a pension shortfall worth $78 trillion, according to Social security systems, national pension plans, private sector pensions and individual retirement accounts are unfunded or underfunded across the globe. Government services, corporate profits or retirement benefits themselves will have to be reduced to make any part of the system work. This poses an enormous challenge to employers, employees and policymakers all over the world. The total value of unfunded or underfunded government pension liabilities for 20 countries belonging to the Organization for Economic Co-operation and Development, a group of largely wealthy countries, is $78 trillion. (The countries studied include the U.K., France and Germany, plus several others in western and central Europe, the U.S., Japan, Canada, and Australia.) The report added that corporates also failed consistently to meet their pension obligations, with most U.S. and U.K. corporate pensions plans underfunded. Countries with large public pension systems in Europe appear to have the greatest problem. Germany, France, Italy, the U.K., Portugal and Spain had estimated public sector pension liabilities that topped 300% of gross domestic product. Improvements in health care mean retirees need to string out their income for longer. Meanwhile, the increase in the retirement-age population versus the working population is straining government pension schemes. Several countries, including the U.K., France and Italy are gradually hiking retirement ages. It was recommended that governments explicitly link the retirement age to expected longevity. It was also advised that government-funded pensions should serve merely as a "safety net," rather than the prime pension provider, and that corporate pensions should be "opt out" rather than "opt in" to encourage greater enrollment. Here in the good-old USA, we are doing just fine, thank you.

5. IN MINIMUM WAGE WARS, PUBLIC WORKERS OFTEN BENEFIT FIRST: Many Governors and Mayors are struggling to raise the minimum wage for their jurisdictions, according to Governing. In the meantime, some are giving their own employees a raise. The Mayor of Jersey City wants to increase the local minimum wage to $15 an hour, but he cannot. New Jersey law preempts cities from enacting their own minimum wage laws, so he decided to change what is under his direct control: wage rates for the city's own workforce. So, he signed an executive order that will result in about 500 Jersey City employees seeing an increase in pay. That is less than one-fifth of the total workforce, but crossing guards, 911 dispatchers and other people in lower-skill positions will be getting a raise. The Jersey City Mayor is not alone in giving public employees a raise. Last year, New York Governor. Andrew Cuomo ordered the minimum wage for state workers to increase to $15 over the next few years -- making it the first state to do so. The idea of raising the minimum wage to $15 for all employees in New York has met resistance in the legislature. Pennsylvania Governor Tom Wolf signed an executive order guaranteeing that state workers will be paid at least $10.15 an hour. His order will also cover employees of state contractors who spend at least 20% of their time performing work on commonwealth projects. No state has a minimum wage as high as $15 for all employees. California and Massachusetts require employers to pay at least $10 an hour and the District of Columbia's minimum wage is $10.50. Although President Obama has sought a higher federal minimum wage, his proposals have met resistance in Congress, leaving the national minimum wage at $7.25. Let’s share a Big Mac.

6. THE 2016 RETIREMENT CONFIDENCE SURVEY: WORKER CONFIDENCE STABLE, RETIREE CONFIDENCE CONTINUES TO INCREASE: Employee Benefit Research Institute, has published the 26th wave of the Retirement Confidence Survey, and finds that American workers’ confidence in their ability to afford a comfortable retirement has maintained its increase after the record lows experienced between 2009 and 2013. However, retiree confidence in their ability to afford a comfortable retirement continued to increase in 2016. While workers and their spouses who have a retirement plan have much larger savings and are also more likely to have taken steps to prepare for retirement, in the aggregate, only a minority of all workers appear to be taking basic steps needed to prepare for retirement. Here are some of the findings:

  • The percentage of workers very confident about having enough money for a comfortable retirement, at record lows between 2009 and 2013, increased from 13% in 2013 to 22% in 2015, and, in 2016 has leveled off at 21%. The percentage of workers somewhat confident increased from 36% in 2015 to 42% in 2016, while the percentage not at all confident decreased from 24% in 2015 to 19% in 2016.
  • This move out of the not-at-all-confident group is observed primarily among those reporting they or their spouses do not have a retirement plan (defined benefit, defined contribution, or individual retirement account). Whereas in the recent prior years, increases in retirement confidence occurred among those with a plan.


  • Retiree confidence in having enough money for a comfortable retirement, which historically tends to exceed worker confidence levels, continued to increase in 2016 reaching 39% who are very confident (up from 18% in 2013). The percentage not at all confident was 12% (statistically unchanged from 14% in 2013).
  • Worker confidence in the affordability of various aspects of retirement continued its increase in 2016. In particular, the percentage of workers who are very confident in their ability to pay for basic expenses increased (43% in 2016, up from 25% in 2013 and 37% in 2015). The percentages of workers who are very confident in their ability to pay for medical expenses (22%, up from 14% in 2013) and long-term care expenses (16%, up from 11% in 2013) are slowly inching upward.


  • Sixty-nine percent of workers report they or their spouses have saved for retirement (statistically equivalent to 67% in 2015). Still, a sizable percentage of workers report they have virtually no savings and investments. Among RCS workers providing this type of information, 26% say they have less than $1,000, though those who indicate they and their spouse do not have a retirement plan -- a defined benefit, defined contribution, or individual retirement account -- are far more likely than those who have a plan to report this low level of savings (67% vs. 9%) and far less likely to report having saved at least $100,000 (5% vs. 34%).
  • Retirees are more likely than workers to describe their level of debt as not a problem. Sixty-seven percent of retirees and 44% of workers indicate they do not have a problem with their level of debt.

EBRI Issue Brief #422 (March 2016.)

7. BETTER NOT MESS WITH CalPERS: Nearing the finish line in the biggest scandal in CalPERS’ history, California officials accepted $20 million to settle civil charges over the bribery case that has hounded the giant pension fund for years. A piece in Trusted Insight indicates that Arvco Capital Research, a defunct Nevada investment bank owned by late financier Alfred Villalobos, agreed to pay the state $20 million to resolve a state lawsuit accusing Villalobos and his firm of bribing officials at CalPERS. The sum includes $10 million in attorneys’ fees. Fred Buenrostro, former chief executive of CalPERS, is scheduled to be sentenced in May on criminal charges. He pleaded guilty in 2014 to accepting cash and other bribes from Villalobos. The state filed a civil suit against Villalobos, Arvco and Buenrostro in 2010, accusing them of defrauding CalPERS by engaging in a multiyear scheme to steer pension investment dollars to private equity firms represented by Villalobos. The suit said others at CalPERS accepted gifts from Villalobos as well, although no one else was ever charged with wrongdoing.

8. MALE AND FEMALE LEADERS APPROACH JOBS THE SAME WAY: Men and women in business leadership roles approach their jobs in similar ways, and are about equally committed to ethics in the workplace, but female leaders and women employees, at all levels, face much greater ethics risks than their male counterparts, the Ethics & Compliance Initiative said in a new study of gender in the workplace. Researchers found relatively small differences between male and female leaders in exercising ethical leadership in their approach to leadership. But researchers were surprised to find that female leaders are more vulnerable than their male counterparts to pressures that can lead to ethics violations. Employees said that male and female leaders generally shared the same priorities: (a) maintaining integrity in the company, (b) meeting business goals even at the expense of ethics standards and (c) treating all employees fairly and with dignity. When asked how their leaders dealt with crises, employees credited female leaders with a somewhat greater concern for employee well-being, while male leaders were a bit more concerned about protecting the brand and maintaining employees’ trust. The study was primarily designed to examine the role of gender in ethics leadership. It identified very real differences in the workplace ethics environment for men and women. Women, including female leaders, are more likely to feel pressured to compromise ethics standards. Female employees also are more likely to experience retaliation for reporting workplace misconduct. These differences appear to have eroded trust among women, as they are far more skeptical than their male colleagues about leadership’s commitment to workplace integrity. That skepticism is evident whether leaders are male or female.

9. WOMEN LIVE LONGER, BUT NOT AS WELL AS MEN: Although women continue to have a longer life expectancy than men, they are now living worse and suffering more disabilities in their golden years, according to Researchers compared data from studies of people 65 and older and enrolled in Medicare that were done in 1982, 2004 and 2011. The studies surveyed participants about whether a disability kept them from carrying out various daily activities, and then followed the participants in the years after the survey to determine their mortality rate. Between 1982 and 2011, the number of additional years that women at age 65 could expect to live increased by two years, from 18.5 years to 20.5 years; while the life expectancy of men at age 65 increased by five years from 14 to 19 years. More striking was the improvement in how men spent their golden years. Whereas women at age 65 were estimated to spend 30% of their remaining years with a disability in both 1982 and 2011, the proportion of the time left that men at 65 would have a disability decreased from 22% in 1982 to 19% in 2011. Researchers considered an individual as having a disability if he reported that a disability or health problem prevented them from doing at least one of their normal activities, such as eating, shopping for groceries and getting out of bed. It came as a surprise to see that men and women traded places between 1982 and 2011, and that men started to surpass women in terms of disability-free years. For both genders, trends in disabilities were moving in the right direction between 1982 and 2004. The number of women and men age 65 who experienced a physical limitation dropped from 25.8% to 20.2% and from 22.3% to 15.5%, respectively. But then from 2004 to 2011, the number leveled off for men and actually climbed back up to 24.2% for women. As the baby boomer generation ages, it is expected that 20% of the population will be 65 and older in 2030, compared with 15% in 2015.

10. CalPERS TAKES UNPRECEDENTED CLIMATE CHANGE ACTION: Governing reports that in an effort to highlight the potential impacts of global warming, the nation’s largest public pension fund is asking corporations to include climate change experts on their governing boards. The investment committee for California Public Employees' Retirement System voted to start requiring the corporations it invests in to include people on their boards who have expertise in climate change risk management strategies. The first U.S. pension system to establish such a requirement, the move comes months after California experienced the largest gas leak in U.S. history and the state's largest oil spill in decades.  As major investors, pension plans can -- and do -- leverage the power of their wallets with corporations, as a way of influencing policy. (CalPERS is worth $288 billion.) New York State Common Retirement Fund, third largest U.S., is among a group of major investors that wants ExxonMobil to start publishing an annual assessment of its impact on public climate change policies. Predictably, Exxon is trying to block its request. One of the other ways pension funds leverage their clout is through social divestment from companies associated with or in support of controversial issues. The cause has varied over the years. In the 1980s, many pension funds divested from companies that were doing business in South Africa, as a reaction to apartheid policies there. CalPERS, itself pulled $9.5 billion. In 2013, a number of pension funds, including CalPERS and the New York City pension funds, divested from gun manufacturers, after mass shootings in Aurora, Colorado, and Newtown, Connecticut. Climate change and environmental stewardship has been the latest focus.

11. MIAMIANS SHOULD STOP COMPLAINING ABOUT THE TRAFFIC: The TomTom Traffic Index measures congestion worldwide. Specifically, it measures the road networks of 295 cities around the world. The Index gives drivers detailed information on the impact congestion has on their city's travel times. Road authorities can use the Index to measure the performance of their network, and pinpoint areas where traffic flow can be improved. Over the years, TomTom has built up a database with 14 trillion historical travel time measurements, and provides detailed and accurate traffic updates for drivers in 50 countries. So, here are some the rankings of cities, based upon the congestion level (extra travel time):

  • Mexico City
  • Bangkok
  • Istanbul
  • Rio de Janeiro
  • Moscow
  • Bucharest
  • Salvador, Brazil
  • Recife, Brazil
  • Chengdu
  • Los Angeles

Other crowded cities are San Francisco (31), New York (39), Seattle (44), San Jose (51-- are you kidding?) Honolulu (54). And, at (66) we find Miami, which until now, we thought was bad. (Those mathematicians in the audience can deduce that Miami is number 7 in the U.S.)

12. THE 25 RICHEST PRIVATE COLLEGES BY ENDOWMENT:When it comes to receiving financial contributions, private universities seem to have plenty of donors willing to contribute, according to In 2013, the University of Southern California received a $70 million donation from Jimmy Iovine and Andre Young, better known as Dr. Dre. Not all donors are well known celebrities, but contributions small and large can add up quickly for the big name schools. Using the most recent data reported to the National Center for Education Statistics, StartClass ranked the top 25 richest private colleges based on endowment. According to the NCES, endowment assets are gross investments of endowment funds, term endowment funds and funds functioning as endowment for the institution and any of its foundations and other affiliated organizations. Endowment funds are funds whose principal of which is nonexpendable and is intended to be invested to provide earnings for institutional use. Term endowment funds are funds which the donor has stipulated that the principal may be expanded after a stated period or on the occurrence of a certain event. Funds functioning as endowment are established by the governing board to function like an endowment fund but which may be totally expended at any time at the discretion of the governing board. These funds represent non-mandatory transfers from the current fund rather than a direct addition to the endowment fund, as occurs for the true endowment categories. Of the 25 schools on the list, only five have at least 10,000 undergraduate students, with New York University (24,985 undergraduate students) and USC (18,739) leading the way. The University of Pennsylvania, with 11,548 undergraduate students, has the largest undergraduate enrollment of schools in the top 10. California Institute of Technology (Endowment: $2.12 billion) is number 25.  Here follow the top ten:

  • Harvard University (Endowment: $36.43 billion)
  • Yale University ($23.86 billion)
  • Stanford University ($21.47 billion)
  • Princeton University ($20.58 billion)
  • Massachusetts Institute of Technology ($12.43 billion)
  • University of Pennsylvania ($9.58 billion)
  • Columbia University in the City of New York ($9.22 billion)
  • University of Notre Dame ($8.19 billion)
  • Northwestern University ($7.5 billion)
  • Duke University ($7.04 billion)

13. THE 25 HIGHEST PAYING JOBS IN THE COUNTRY: Based on employee reviews, the online career site Glassdoor released its annual report Top 25 highest paying jobs, providing benefit advisers and employers insight into what industries are paying some of their top performers:

  • Physician (Median base salary - $180,000)
  • Lawyer ($144,500)
  • Research & Development Manager ($142,120)
  • Software Development Manager ($132,000)
  • Pharmacy Manager ($130,000)
  • Strategy Manager ($130,000)
  • Software Architect ($128,250)
  • Integrated Circuit Design Engineer ($127,500)
  • IT Manager ($120,000)
  • Solutions Architect ($120,000)
  • Engagement Manager ($120,000)
  • Applications Development Manager ($120,000)
  • Pharmacist ($118,000)
  • Systems Architect ($116,920)
  • Finance Manager ($115,000)
  • Data Scientist ($115,000)
  • Risk Manager ($115,000)
  • Creative Director ($115,000)
  • Actuary ($115,000)
  • Data Architect ($113,000)
  • Tax Manager ($110,000)
  • Product Manager ($107,000)
  • Design Manager($106,500)
  • Analytics Manager ($106,000)
  • Information Systems Manager ($106,000)

14. DON’T CALL ME A LOBLOLLY, YOU BLATHERSKITE: From, here are ten rare and amusing insults:

  • Loblolly -- a stupid, rude or awkward person
  • Blatherskite -- a person who talks foolishly at length
  • Succubus -- a demon assuming female form in order to have sex with men in their sleep
  • Poltroon -- a spiritless coward
  • Cacafuego -- a swaggering braggart
  • Crepehanger – killjoy
  • Harridan -- an ill-tempered, scolding woman
  • Slubberdegullion -- a dirty rascal
  • Pilgarlic -- a man looked upon with humorous contempt
  • Chawbacon -- bumpkin

15. SO YOU THINK YOU KNOW EVERYTHING: There are more chickens than people in the world. Dumb cluck.

16. 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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