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Cypen & Cypen
May 17, 2012

Stephen H. Cypen, Esq., Editor

1.     WHEN DECEDENT’S MARRIAGE TO FIRST WIFE WAS NEVER TERMINATED, NAMING SECOND “WIFE” AS BENEFICIARY NOT EFFECTIVE:    Wayne Lee was a member of the International Brotherhood of Electrical Workers, and contributed to its Pension Fund.  He married Cleta M. Lee, and the couple appear never to have divorced.  Wayne moved to another state without Cleta.  He married Lois in that state.  Wayne subsequently retired and applied for benefits from the Pension Fund.  On his pension application, Wayne identified himself as married, and named Lois as his spouse.  He selected a 50% Husband-and-Wife pension benefit, under which he deferred half of his accrued pension to be paid monthly to his spouse after he died.  Wayne and Lois both signed a statement agreeing to the date on which the annuity would commence.  Wayne also attached his marriage certificate memorializing his marriage to Lois.  On his Retired Employee’s Signature and Beneficiary Form, Wayne listed Lois as the beneficiary of any benefits which may be payable from the IBEW Pacific Coast Pension Fund as the result of his death.  After Wayne passed away, the Pension Fund began paying Lois a monthly pension.  Cleta then applied for survivor benefits from the Pension Fund, attaching her earlier marriage certificate and explaining that she and Wayne had never divorced.  The Pension Fund then filed an interpleader action in federal court, impleading both claimants to the disputed Pension Fund proceeds so that both would be bound by the district court’s ruling, after which the district court concluded that Lois was the proper beneficiary of Wayne’s pension benefits.  Reasoning that the employee’s pension plan documents supplied the exclusive basis for settling a beneficiary dispute, the court concluded that Lois was entitled to benefits because Wayne had identified Lois as both his spouse and his beneficiary.  Cleta appealed, and the court of appeals reversed because the district court incorrectly decided that there were no material factual issues and that the defendant Lois was entitled to prevail as a matter of law.  When faced with a dispute over the proper beneficiary for benefits under the Employee Retirement Income Security Act of 1974, ERISA supplies the rule of law for making that determination.  The rule requires, first and foremost, that an ERISA plan administrator pay benefits in accordance with the documents and instruments governing the plan.  Application of these rules to Wayne’s survivor benefits requires the Pension Plan to pay benefits to Wayne’s legal spouse.  The plan documents define a spouse as a person to whom a participant is legally married.  Consistent with ERISA, the documents permitted the participant and his spouse to waive joint and survivor benefits only if the spouse consented to the waiver in writing.  Hence, the Pension Plan must pay spousal benefits to Wayne’s legal spouse in order to comply with ERISA’s clear mandate that plan administrators follow plan documents to determine the designated beneficiary.  Although it appears to the appellate court that Cleta was Wayne’s surviving spouse, the district court made no express finding on that point.  The district court is in the best position to determine whether Cleta and Wayne were divorced before Wayne married Lois.  It should determine which woman was Wayne’s spouse at time of his death and then determine the proper beneficiary of Wayne’s pension benefits.  IBEWPacific Coast Pension Fund v. Lee, Case No. 10-6433 (U.S. 6th Cir., February 13, 2012).  (Not recommended for full-text publication.) 
2.      HOBSON’S CHOICE FOR PUBLIC EMPLOYEES:  RAISES OR JOB PROTECTIONS?: reports that state employees in a number of states are expecting to see their first pay bumps in years.  But for workers in Arizona and Virginia, those bonuses or salary increases may come with conditions.  As part of an overhaul of Arizona’s civil service system that was a centerpiece of Republican Governor Jan Brewer’s agenda this year, some state employees will have to make a choice between a 5 percent salary increase and the job protections they currently receive as civil servants.  Employees who choose a raise -- their first since 2008 -- will move from protected civil service to “at will” status, and lose their right to file a grievance or appeal disciplinary actions.  Brewer says that there is no reason for state employees to be treated differently than their counterparts in the private sector, who enjoy no such job protections.  Opponents argue that the change will foster political patronage and cronyism.  (No kidding.)  In Virginia, Republican Governor Robert McDonnell has proposed an amendment to the budget passed by the legislature that would give state employees a one-time 3 percent bonus only if state agencies find $69.3 Million in savings by the time the fiscal years ends on June 30.  State employees would receive a prorated amount as long as at least $23 Million is saved. 
3.      BEFORE IT’S TOO LATE:  A RETIREMENT SECURITY UPDATE FROM EBSA:    Phyllis Borzi, Assistant Secretary for the Employee Benefits Security Administration at the Department of Labor, has initiated a biweekly e-mail newsletter as a way to share tools and resources available from her agency and other reputable noncommercial organizations whose missions are to educate Americans about the importance of saving for a secure retirement and how to get there.  The alarming truth is that too few of us have saved enough for our retirement.  Millions of baby boomers are or will be retiring at the same time we see historically low levels of confidence that we will have enough money to retire comfortably.  A recent Employee Benefit Research Institute survey reports that only 14% of Americans are very confident they will have enough money to live comfortably in retirement, and 60% of workers report they have less than $25,000 in savings and investments.  We must protect the savings Americans have, even as we work to increase the number of us who are saving and how much is being saved.   The newsletter is about what you need to know before it's too late.  Secretary Borzi will present educational materials about retirement plans, notices about public events and updates about policies that protect your retirement savings.  We urge all leaders to subscribe to her newsletter by going to scrolling down to the bottom of the page.  Thank you Secretary Borzi. 
4.      WHAT RETIREES HAVE TO TELL US ABOUT THE NEW WORLD:      Retirement is changing; the question is how?  While the media are filled with dire warnings and evidence is piling up that retiring later and working during retirement are becoming more common, BlackRock decided to get the opinion of those best positioned to offer insight into the new world of retirement:  current retirees.  The good news is that retirees are generally positive about retirement and they are using their post-career years in new ways. What is more, while hurdles remain, plan sponsors and providers seem to be on the right track in helping reinvent retirement.  Retirees’ insights, combined with those of plan sponsors and current workers, revealed crucial differences between retirement expectations and reality, and help identify what all of us can do to build retirement confidence.  Here are four survey key findings: 

  • Gaps between perceptions of recently retired and current workers point the way forward for defined contribution plans. 
  • As traditional sources of secure income decline, DC plans will be challenged to increase retirement confidence and satisfaction for current participants. 
  • The more active plan sponsors are in helping participants build for retirement, the better. 
  • Engagement matters.  The more participants save, the longer they save and the better they understand the intended outcomes of their retirement plans, the greater their confidence. 

Plan sponsors are far more pessimistic about retirement preparedness than their current participants.  Fortunately, that pessimism is an expression of the strong sense of responsibility that plan sponsors feel toward their participants -- suggesting that greater clarity about how to build retirement confidence will lead to corrective action.  (We are from Missouri.) 
:    Not unexpectedly (see C&C Newsletter for December 22, 2011, Item 4and C&C Newsletter for January 12, 2012, Item 6), the United States of America has filed a civil complaint against Maricopa County, Arizona; Maricopa County Sheriff’s Office; and Sheriff Joseph M. Arpaio, as Sheriff of the County.  The complaint alleges that the Sheriff’s Office and the Sheriff have engaged and continue to engage in a pattern or practice of unlawful discriminatory police conduct directed at Latinos in Maricopa County and jail practices that unlawfully discriminate against Latino prisoners with limited English language skills.  For example, Latinos in Maricopa County are frequently stopped, detained and arrested on the basis of race, color or natural origin and Latino prisoners with limited English language skills are denied important constitutional protections.  In addition, the Sheriff’s Office and the Sheriff pursue a pattern of practice of illegal retaliation against their perceived critics by subjecting them to baseless criminal actions, unfounded civil lawsuits or meritless administrative actions.  The complaint asks that the court declare that the defendants have excluded persons from participation in, denied persons the benefit of, or subjected persons to discrimination under programs or activities receiving federal financial assistance, on the basis of race, color or natural origin, in violation of Title VI; order defendants to refrain from engaging in any of the predicate discriminatory acts forming the basis of the pattern or practice of unlawful conduct described in the complaint; and order defendants to adopt and implement policies, procedures and mechanisms to remedy the pattern or practice of unlawful conduct described in the complaint.  Read the entire 32 page complaint at  United States of Americav. Maricopa County, Arizona, Case No. 2:12-cv-00981 (DC Ariz. May 10, 2012). 
6.      HOW MUCH IS A STAY-AT-HOME MOM WORTH?: surveyed thousands of mothers who valued the number of hours spent performing their motherly duties each week.  The job description is a “hybrid,” including 20 jobs that make up the position of mom.  Median salaries for each job are benchmarked to the national median salary as reported by employers.  The final salary is calculated by weighing the salaries and hours worked in each role.  On average, stay-at-home moms juggle 94.7 hours of work.  Thus, a stay-at-home mom would be paid about $113,000.  (Last year’s data, were 96.6 hours, equaling $115,500.)  Various jobs run from housekeeper (14.8 hours a week) to CEO (3.2 hours). 
7.      HOW MUCH IS A WORKING MOM WORTH?:     On average, working moms put in 57.9 additional hours of work at home.  The part of mom’s compensation attributable to at-home work is $67,000.  (Last year’s data were 55.9 hours, equaling $63,500.)  Jobs run the gamut from cook (8.1 hours) to CEO (2.9 hours). 
8.      UNUSUAL REASONS EMPLOYEES GIVE FOR QUITTING JOBS:      A stronger economy often gives workers greater courage to change jobs, but the excuses offered for jumping ship can leave many employers perplexed.  An OfficeTeam survey reveals the wackiest reasons job seekers have given for handing in their notice. Here are some examples:  

  • Someone left because her boss lost the dog she had given him. 
  • Our employee said he was joining the circus.  
  • One person left because she lost her cell phone too many times at work. 
  • Someone quit to participate in a reality show. 
  • An employee said it was his routine to change jobs every six months.

Some individuals simply had to follow their true calling:  apple farmer, mountain climber, trombonist.  It may be hard to fault the following professionals for their honesty: 

  • I was making too much money and did not feel I was worth it.
  • I am going to live off my trust fund. 
  • Work was getting in the way of having fun. 
  • I just could not get up in the morning. 

OfficeTeam offers five tips for leaving a job on good terms: 

  • Give proper notice. Tell your boss about your departure first so he does not hear it through the grapevine.  Providing two weeks notice is standard, but if your schedule is flexible, offer to stay longer to train a replacement. 
  • Get things in order. Supply written instructions to team members on projects and make sure they have access to the tools and information needed to complete assignments.  
  • Stay positive. Take the time to say goodbye and thank you to your colleagues.  Provide your contact information and reach out to those with whom you would like to keep in touch. 
  • Do not slack off. Use your last weeks on the job to complete as much work as possible on outstanding projects.  You want to be remembered as a strong contributor to the end.  
  • Talk before you walk. Participate in an exit interview if it is offered.  Be honest with your feedback, but keep it constructive and professional, your comments and suggestions could potentially help to improve the workplace. 

Either that carpet goes, or I do. 
:     Faced with a financial crisis, the Alpine, Wyoming, Town Council recently decided to eliminate its one-man Police Department.  At the beginning of the town’s budget process, the council was facing a deficit of about $43,000.  Elimination of the department and municipal court expenses brought the budget into the positive column.  The town of 828 in northern Lincoln County has experienced a decrease in property, cigarette and gas taxes, while insurance costs have increased.  Although Alpine at one time had $500,000 in reserves, the money was spent down in recent years and now is gone.  With no police force, the town will depend on the Lincoln County Sheriff’s Department and the Wyoming Highway Patrol, according to the Casper (Wyoming) Star-Tribune.  Where is Broderick Crawford when we need him? 
10.    TEEN DRIVERS TEXT … JUST LIKE THEIR PARENTS:   When her 20-year-old son is driving and his cellphone rings or receives a text message, mother remonstrates him.  When she is driving and her phone buzzes, the mother does not always follow her own advice.  The parent as role model is not new to highway safety. In decades past, research showed that the parents who disdained seat belts or drove after drinking influenced the behavior of their teenage children to disregard those risks.  A recent survey reported by found that even though their parents may warn them against it, most of those interviewed said adult drivers send text messages “all the time.”  The new data -- released as part of an effort to combat distracted driving -- confirm prior findings.  Many teens who acknowledge the danger of smartphone use by other drivers admit they do it themselves.  Cellphone use by novice drivers has been banned in 30 states and the District of Columbia.  Nevertheless, distracted driving was cited as a possible factor by the Governors Highway Safety Association when it sounded the alarm that teen highway deaths appeared to be creeping up after years of decline.  However, there is now a growing body of research that can be expected to find its way into the arsenal of arguments used by advocates who want state legislatures to ban drivers from all forms of mobile-device use behind the wheel.  U.S. Department of Transportation and the National Transportation Safety Board are pushing for laws against texting and cellphone use while driving.  But state lawmakers have moved cautiously for fear of backlash from a population thoroughly wedded to iPhones, Androids and Blackberries.  That they pose a risk is evident to almost any observant driver, and has been catalogued in dozens of studies and surveys.  The National Safety Council estimates that a quarter of all crashes are the result of distracted driving. 
11.    FPPTA 28TH ANNUAL CONFERENCE:   The Florida Public Pension Trustees Association’s 28th Annual Conference will take place on June 24-27, 2012 at the Hilton Walt Disney in Lake Buena Vista.  The hotel is located across the street from Downtown Disney and has complimentary transportation to Disney parks.  There are a variety of restaurants within the hotel including a Disney character breakfast Sundays at Covington Mill.  A link on FPPTA’s web site,, will take you to the Hilton Walt Disney site to make your room reservations.  Sunday, June 24th the Associates Advisory Board is sponsoring the 24th Annual Associates Charitable Golf Classic held on Disney’s beautiful Magnolia Golf Course. You may access information and updates about the Conference at FPPTA’s website.  All police officer and firefighter plan participants, board of trustee members, plan sponsors and anyone interested in the administration and operation of the Chapters 175 and 185 pension plans should take advantage of this Conference. 
12.    GOLF WISDOMS:    The rake is always in the other trap.     
13.    PUNOGRAPHICS:    I changed my iPod’s name to Titanic.  It’s syncing now.        
14.    QUOTE OF THE WEEK:   “The longer we dwell on our misfortunes, the greater is their power to harm us.”  Voltaire  
15.    ON THIS DAY IN HISTORY:  In 1954, Supreme Court unanimously rules on Brown v. Topeka Board of Education, reversing 1896 “separate but equal” Plessy v. Ferguson decision. 
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. 
17.    PLEASE SHARE OUR NEWSLETTER:  Our newsletter readership is not limited to the number of people who choose to enter a free subscription.  Many pension board administrators provide hard copies in their meeting agenda.  Other administrators forward the newsletter electronically to trustees.  In any event, please tell those you feel may be interested that they can subscribe to their own free copy of the newsletter at  Thank you.


Copyright, 1996-2012, 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.

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