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Cypen & Cypen
APRIL 24, 2008

Stephen H. Cypen, Esq., Editor


The Employee Benefit Research Institute has released its 18th Annual Retirement Confidence Survey, which reflects the growing concern over health care costs and economic issues. American workers’ confidence in being able to afford a comfortable retirement has decreased over the past year by a rate unmatched in the previous 18 years. The following findings, from the Executive Survey:

  • Overall retirement confidence drops sharply - the percentage of workers very confident about having enough money for a comfortable retirement decreased sharply, from 27% in 2007 to 18% in 2008, a decline of 9 percentage points and the biggest one-year drop in the 18-year history of the survey. Retiree confidence in having a financially secure retirement has also decreased sharply, from 41% very confident to 29%, down 12 percentage points.
  • Healthcare costs have become a big issue for retirees - among retirees who left the workforce earlier than planned, more than half (54%) say they did so because of health problems or disability. Almost half (44%) of retirees say they have spent more than expected on health care expense. More than half (54%) of retirees say they are now more concerned about their financial future than they were right after they retired, a 14 percentage-point increase from a year ago.
  • Workers may be waking up to the lack of health insurance in retirement - the survey finds that 34% of all workers now expect to have access to employer-paid health insurance in retirement, down eight percentage points from last year. Although 41% of retirees say they currently have access to health insurance through a former employer, many employers are limiting health care coverage for future retirees.
  • Retirement planning up, but still not high - less than half (47%) of workers say that they and/or their spouse have tried to calculate how much money they will need for a comfortable retirement, up from 42% measured in 2004-2006, and considerably higher than the low point of 29% recorded in 1996. As before, the 2008 survey finds that doing a retirement savings calculation is particularly effective at changing worker behavior: 44% who calculated a goal changed their investment planning, and of those almost two-thirds (59%) started saving or investing more.
  • Most savings levels are modest - The percentage (72%) of workers saying they have saved for retirement has returned to 2001-2006 levels after a slight dip in 2007 (66%). Forty-nine percent of workers report total savings and investments (not including value of their primary residence or any defined benefit plans) of less than $50,000. Twenty-two percent of workers and 28% of retirees say they have no savings of any kind!

EBRI Issue Brief #316 is available on line at


Congressional Research Service has updated its Report for Congress entitled “Military Retirement, Concurrent Receipt, and Related Major Legislative Issues.” The military retirement system includes benefits for retirement after an active or reserve military career, disability retirement and survivor benefits for eligible survivors of deceased retirees. The change to the system that has generated the most recent legislative activity involves whether some or all military retirees should be allowed to receive both military retired pay and any VA disability compensation to which they are otherwise entitled; this is referred to as “concurrent receipt.” Until 2004, the law provided that military retired pay had to be reduced by the amount of VA disability compensation. Some maintained that this was inequitable and unfair; it was defended on grounds of cost and of the need to avoid setting a precedent for concurrent receipt of numerous other federal benefits. Starting in 1999, provisions of each year’s annual defense budget authorized payments to comparatively small groups of military retirees in lieu of concurrent receipt. The program, known as the “Combat Related Special Compensation,” was enacted in 2002, and also applies to those people injured in military operations and training generally, as distinguished from those whose injuries are unrelated to military service but incurred while in service. CRSC provides for payments that are the financial equivalent of concurrent receipt. In fiscal year 2004, for the first time, the defense budget provided for concurrent receipt or its practical and financial equivalent to large numbers of military retirees. Effective January 1, 2004, the law (1) authorized the payment of CRSC to all otherwise eligible military retirees, regardless of their percentage of disability; (2) authorized the ten-year phase-in of concurrent receipt for all military retirees whose disability is 50% or greater, regardless of the origins of their disability; and (3) included (theretofore almost completely excluded) reserve retirees. The fiscal year 2005 defense budget expanded concurrent receipt eligibility by authorizing the immediate (rather than a ten-year phase-in) concurrent receipt for military retirees with 100% service-connected disability. In its first session, the 110th Congress extended the Combat Related Special Compensation Program to include those who were medically retired prior to completing 20 years of service, rather than a normal longevity retirement. These individuals are generally known as “Chapter 61" retirees. In addition, those with a 100% VA Unemployability rating were granted full concurrent receipt, retroactive to December 31, 2004. It is anticipated that the second session will continue work on these issues, in which case the CRS report will be updated. Hmmm ... let’s see. “Concurrent Receipt.” That sure sounds a lot better than “Double-Dipping,” don’t you think?


Governor Arnold Schwarzenegger has announced that he will back a proposal to open California Public Employees Retirement System to the private sector. A bill introduced into the California Assembly would allow low-and moderate-income Californians whose employers do not offer retirement savings plans to put money into the California Employees Savings Program. Employers without retirement plans could also participate. Several other states have considered similar programs, but California would be the first to implement one. (Big surprise.) The bill is motivated by low rates of retirement savings among California workers. For example, 43% of workers have jobs that do not offer retirement savings plans or pensions. Hey, if anything can be done to boost retirement savings, it is worth a try.


The Reuters/University of Michigan Survey of Consumers said its preliminary index of confidence fell to 63.2 in April, from a 69.5 in March, well below economists’ expectation and the lowest since March 1982's level of 62.0.


What is the number one reason people go to work when they are sick? It is their sense of obligation to co-workers, according to a new poll by LifeCare, Inc., provider of comprehensive specialty care services and a longtime leader in the work/life industry. In the three consecutive years that LifeCare has conducted its poll, this is the first time such response topped the list. In the last two polls, “too risky to take time off” was the leading response. Here are full results of the poll, which simply asked “When you go to work sick, what is your main reason?”:

  • Other people depend on me and I don't want to let them down - 29%
  • Too risky to take time off (office politics/culture) - 26%
  • Too busy to stay home - 15%
  • I save my sick days for childcare/eldercare emergencies - 12%
  • I save my sick days for vacation time - 8%
  • I do not work when I'm sick - 7%
  • Other - 3%

In the 2007 poll, the top three responses were: too risky to take time off (31%), too busy to stay home (23%) and I save my sick days for childcare/eldercare emergencies (18%). Interestingly, the percentage of respondents who do not go to work when they are sick has always remained at the 6% or 7% mark, woefully below the level that employers widely say they desire.


Here’s how:

  • Use positive language.
  • Be willing to do for others without measuring.
  • Be willing to help others without measuring.
  • Be an example for others to follow.
  • Ask one more question before you answer.
  • Don’t join the bashing.
  • Don’t join the pity party.
  • Don’t join the revolt.
  • Solve, rather than complain.
  • Get the third party being talked about negatively into the conversation.
  • Quit whining.

Some pretty sound advice from Little Gold Book of YES! Attitude.


Former President Bill Clinton, in one of his most memorable quotes, said “It all depends upon what your definition of ‘is’ is.” Well, according to, a case involving Allentown police officers comes down to a single word: “achieves.” At issue is calculation of service time that would qualify officers for the city’s controversial early retirement plan. Standard retirement terms require officers to serve 20 years, but the police contract that expired in December includes an early retirement option. After 16 years of service, officers may “buy” four years of time by paying four years’ worth of pension contributions into the pension fund. They are then eligible to retire or keep working and receive a $20,000 retention bonus. The question is how an officer “achieves” 16 years of service, which is the wording used in a 2006 court settlement. The police contract also allows military veterans to buy up to five years of pension time for years served in the military prior to becoming officers. The police union contends that veterans may combine these purchases, meaning they could achieve 16 years of service by working 11, then buying five years in military time. Such officers could then buy an additional four years in early retirement time, and thereupon be entitled to retire or collect the bonus. The mayor testified that the union’s interpretation is “outrageous.” However, in our view, the parties specifically used the word “achieves,” rather than “works.” Obviously, there are ways to achieve service other than work.


“Dogs come when they’re called; cats take a message and get back to you.” Mary Bly

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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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