Cypen & Cypen   Miami
Home Attorney Profiles Clients Resource Links Newsletters navigation
825 Arthur Godfrey Road
Miami Beach, Florida 33140

Telephone 305.532.3200
Telecopier 305.535.0050

Click here for a
free subscription
to our newsletter

Cypen building

Cypen & Cypen
MAY 26, 2004

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001


A report from Cornerstone Research indicates that companies settled U.S. Securities class-action lawsuits for $2.01 Billion in 2003, compared to $2.53 Billion in 2002. The decline, first since 1995, is linked both to a decrease in the number of cases being filed and an increase in the amount of time necessary to settle cases. Last year, 85% of cases settled for less than $20 Million. The study expects settlement costs to rise because the number of security class-action suits increased by 31% from 2001 to 2002.


We have just discovered a directory of official state, county and city government websites. The State and Local Government on the Net Directory provides convenient one-stop access to websites of thousands of state agencies and city and county governments. Only pages that are controlled and managed by state and local government agencies are included. Drop-down menus allow you to view all websites in a given state or to access websites of agencies and governments across all states. Check out the 9,371 websites at


The City of Atlanta Office of Internal Auditor has released its “Financial Related Audit: Pension Division Payments to Deceased Pensioners.” In sum, the Pension Division (General Employees’ Pension Plan, Police Officers’ Pension Plan and Firefighters’ Pension Plan) made payments totaling $2.1 Million from March 2000 through June 30, 2000 to 454 pensioners identified as deceased. The overpayments continued for an average of six months after a pensioner’s reported date of death. These 454 pensioners represent 26% of the 1,767 pensioners who were reported as deceased. The Pension Division stopped payments timely for the remaining pensioners. (Payments to a deceased pensioner were considered “timely” if stopped within one payment from date of death.) The overpayments included $75,690.00 that was fraudulently diverted to a former Pension Division employee in the names of two deceased pensioners and one fictitious pensioner. The pension overpayments and fraud occurred as a result of inadequate policies and procedures for monitoring pension payments. Primarily, three internal control weaknesses led to these activities:

  • An ineffective process of identifying deceased pensioners
  • Poor segregation of duties among Pension Division staff, which included employee access to multiple major functions in the payroll system
  • Poor supervision of work performed by subordinates

To strengthen internal controls, the Auditor recommends that the Pension Division establish a policy and procedure to collect pension payments made to deceased pensioners, develop a more proactive process for identifying deceased pensioners, segregate duties so employees generally have access to only one major job function within the payroll system and more closely monitor the work of subordinates. Also, the Pension Division’s staff should follow up on returned pension payments, coordinate with the insurance division to identify pensioners for whom life insurance claims have been made, verify annually whether surviving spouses have remarried and establish procedures to ensure that documents supporting system transactions are filed promptly. Finally, the Pension Division should develop performance measures, including one of timeliness for stopping payments after a pensioner’s death, to monitor how well it is accomplishing its mission. For what it’s worth, the General Employees’ Plan accounted for 394 pensioners (87%) and $1.9 Million (91%) in overpayments. Collectively, the Police and Firefighters’ Plans accounted for only 13% of overpaid pensioners and 9% of overpayments.


An organization that is a labor organization represents professional firefighters employed by various city, municipal and other local governments (“Governmental Employers”) under Collective Bargaining Agreements between the Union and the Governmental Employers. The state maintains an eligible Section 457(b) plan, which is available to employees of the state and of any political subdivision of the state, including unionized and nonunionized public safety employees and civilians. The Union would like to offer an eligible governmental Section 457(b) plan that is available only to members of the collective bargaining units represented by the Union who are employed by the Governmental Employers. Internal Revenue Service held that the Union’s plan does not fail to be an eligible governmental plan under Section 457(b) solely because the plan is offered and administered by the Union, but only with respect to employees of the Governmental Employers that have adopted such plan. In essence, the Union is administering the plan for the Governmental Employers as a plan that is established and maintained by the Governmental Employers as the actual employers of the Union members. Rev. Rul. 2004-57.

Copyright, 1996-2004, all rights reserved.

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.

Site Directory:
Home // Attorney Profiles // Clients // Resource Links // Newsletters