Cypen & Cypen
APRIL 21, 2005
Stephen H. Cypen, Esq., Editor
CFO.com reports that finance executives are not optimistic that their employees will have enough money when they retire. This conclusion comes from a survey conducted by Hewitt Associates, which found that just 30% of financial executives are confident that their workers will retire with sufficient assets. On the other hand, 70% believe that their employees’ ability to retire comfortably is connected with their organization’s ability to manage its workforce effectively. Nearly 60% of respondents plan to increase employee education about retirement savings. Of those companies offering defined benefit plans, 60% said that they did not expect to make any significant changes to their plans in the short term. However, in what seems to be a developing trend, 16% of participants said they plan to close their defined benefit plans to new employees.
2. EXECUTIVE-MAYOR GENERALLY NOT SUBJECT TO FLORIDA SUNSHINE LAW:
The Florida Government-in-the-Sunshine Law covers public collegial bodies. The statute is applicable to meetings of two or more members of a public board or commission, and has been interpreted to encompass informal discussions and deliberations as well as formal action taken by a public body. In Sanford, Florida, the mayor is not a member of the city council and cannot vote on council appointments, even in case of a tie vote of the council. The mayor is, however, responsible as chief executive officer of the city for making recommendations to the city council on appointment of various board of commission members, as well as their staff and consultants to the city. Because the mayor is not a member of the city council and has not been delegated authority to act in behalf of the city council, meetings between the mayor and a prospective council, board or committee member or prospective staff member/consultant are not “meetings” subject to the Sunshine Law. Further, the mayor may meet privately with an individual council member to discuss the mayor’s recommendation to the city council of appointed personnel. Finally, the Sunshine Law would not appear to be applicable to a meeting of a city council member (or the mayor) with a non-council member regarding dismissal of a non-elected appointed official, employee or consultant by the city council. Informal Attorney General Opinion dated April 7, 2005.
3. SUPREME COURT OF FLORIDA LETS STAND DECISION ON WORKERS’ COMP OFFSETS:
As we previously reported, the decision of our client Board of Trustees of the City Pension Fund for Firefighters and Police Officers in the City of Pembroke Pines to offset Harlan Terry’s service incurred disability using the workers’ compensation wage as a cap was approved by the District Court of Appeal (see C&C Newsletter for September 30, 2004, Item 1). Now, the Supreme Court of Florida has unanimously denied Terry’s petition for writ of certiorari and assessed attorney’s fees against him. Terry v. Board of Trustees of the City Pension Fund for Police Officers and Firefighters in the City of Pembroke Pines, Case No. SC04-2410 (Fla., April 13, 2005).
4. PENSION BENEFITS EQUITABLY DISTRIBUTED TO PARTY MAY BE CONSIDERED IN DETERMINING AMOUNT OF ALIMONY:
Apparently overruling almost twenty years of prior precedent, the Supreme Court of Florida has held that pension benefits equitably distributed to a party may be considered in determining the proper amount of alimony. The needs of a spouse should be based on that spouse’s financial situation after, not before, equitable distribution. Obviously, the portion of a pension that has been equitably distributed to a spouse cannot be considered in determining the other spouse’s ability to pay alimony because the other spouse no longer has that portion of the marital asset. Acker v. Acker, 30 Fla. L. Weekly S235 (Fla., April 14, 2005).
5. CHRONIC OBSTRUCTIVE PULMONARY DISEASE ACQUIRED DURING ONE’S EMPLOYMENT IS AN ORDINARY DISEASE OF LIFE:
Farthing, a heavy smoker for thirty years, was diagnosed with chronic obstructive pulmonary disease, which includes asthma, emphysema and bronchitis. In a workers’ compensation trial, he was successful in showing he suffered from a compensable occupational disease, as defined in Section 440.151, Florida Statutes. That section requires a claimant to satisfy all prongs of the following test:
On appeal by the employer/carrier, the appellate court reversed. Although the court agreed that the first three criteria had been satisfied, Farthing presented no evidence showing incidence of COPD was substantially higher in his particular occupation (maintenance foreman) than in the general public. The only evidence he submitted relevant to the question was that he was the single employee within his occupation who suffered from COPD. City of Cooper City/Florida Municipal Ins. Trust/Florida League of Cities v. Farthing, 30 Fla. L. Weekly D929 (Fla. 1st DCA., April 7, 2005).
6. IRS AND TREASURY ISSUE GUIDANCE ON ANTI-CUTBACKS:
On June 7, 2004, the United States Supreme Court held that Section 204(g) of the Employer Retirement Income Security Act of 1974, the “anti-cutback” rule, prohibits a plan amendment expanding categories of post retirement employment that trigger suspension of payment of early retirement benefits already accrued (see C&C Newsletter for June 11, 2004, Item 1). IRS and Treasury now say qualified plans that adopted amendments before the ruling will not be disqualified solely because of an amendment adding or expanding a suspension of benefit provision. The reforming amendment must provide that as of June 7, 2004 the original change that suspended benefits does not apply with respect to benefits accrued as of the applicable amendment date for the original amendment. Participants must also be given an option to start receiving payment of their benefits. The guidance is a precursor to formal rules, which will be issued in the future. Revenue Procedure 2005-23.
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