25
Cypen & Cypen  
HomeAttorney ProfilesClientsResource LinksNewsletters navigation
    
975 Arthur Godfrey Road
Suite 500
Miami Beach, Florida 33140

Telephone 305.532.3200
Telecopier 305.535.0050
info@cypen.com

Click here for a
free subscription
to our newsletter

Miami


PLEASE GIVE US YOUR FEEDBACK!   
CLICK HERE TO TAKE A BRIEF SURVEY TO HELP  IMPROVE THE CONTENT OF THIS NEWSLETTER.

1.    THE DOL TAKES ON CYBERCRIME:
The Department of Labor (DOL)’s Employee Benefits Security Administration (EBSA) has released guidance for plan sponsors, plan fiduciaries, recordkeepers and plan participants on best practices for maintaining cybersecurity, including specific tips for how to protect workers’ retirement benefits. This is the first time EBSA has issued cybersecurity guidance.
As of 2018, EBSA estimates, there were 34 million defined benefit (DB) pension plan participants and 106 million defined contribution (DC) plan participants, their combined assets being $9.3 trillion. Without sufficient protection, these participants and assets may be at risk from internal and external cybersecurity threats, the agency noted.
It also underlined that the Employee Retirement Income Security Act (ERISA) requires plan fiduciaries to take appropriate precautions to mitigate these risks.
The first piece is tips for hiring a service provider with strong cybersecurity practices and monitoring its activities.
The guidance is presented in three forms. The first piece is tips for hiring a service provider with strong cybersecurity practices and monitoring its activities. EBSA recommends asking about a provider’s security standards, practices and policies, and evaluating its track record in the industry.
The second piece of guidance lays out cybersecurity program best practices to help plan fiduciaries and recordkeepers be on top of their responsibilities to manage risks. The best practices include having a formal, well-documented cybersecurity program; conducting annual risk assessments; clearly defining roles and responsibilities; and conducting periodic cybersecurity awareness training.
Lastly, the DOL issued online security tips aimed at participants and beneficiaries who check their retirement accounts online; these are basic rules to reduce the risk of fraud, such as being wary of public WiFi and using strong, unique passwords.
“The cybersecurity guidance we issued today is an important step toward helping plan sponsors, fiduciaries and participants safeguard retirement benefits and personal information,” said Acting Assistant Secretary for Employee Benefits Security Ali Khawar. “This much-needed guidance emphasizes the importance that plan sponsors and fiduciaries must place on combatting cybercrime and gives important tips to participants and beneficiaries on remaining vigilant against emerging cyberthreats.”
In March, the Government Accountability Office (GAO) called on the DOL to issue cybersecurity guidance, saying it had failed to clarify fiduciary responsibility for mitigating cybersecurity risks and establish minimum expectations for protecting personally identifiable information (PII) and plan assets.
The GAO report examined cybersecurity administration in private-sector defined contribution retirement plans and explored how federal guidance can mitigate cybersecurity risks.
The report began by reiterating that DC plans, plan sponsors and their service providers, such as recordkeepers, third-party administrators (TPAs), custodians and payroll providers, share PII and plan asset data, and therefore increase their risks of cyberhacks.
The PII contains highly confidential plan information, including participants’ names, Social Security numbers, dates of birth, addresses and usernames/passwords, while plan asset data contains numbers for retirement and bank accounts.
The shift to remote work last year in response to the coronavirus pandemic raised concerns for plan advisers and plan sponsors about cyberattacks, as well as questions about whose responsibility it is to protect participant and plan data. In response, those in the financial advisory industry have increased their cybersecurity measures, especially as more firms have faced lawsuits. Plan sponsors have also been warned of a rise in retirement plan litigation related to cyberhacks.  Lee Barney and Amanda Umpierrez, PLANSPONSORwww.plansponsor.com, April-May 2021.

2.   HOW MUCH DOES SOCIAL SECURITY OFFSET THE MOTHERHOOD PENALTY?
The brief’s key findings are:

  • When women become mothers, their earnings often take a substantial, and permanent, hit that becomes larger with each additional child.
  • The question is, how do Social Security provisions address this motherhood penalty once women enter retirement?
  • The results show that Social Security offsets a substantial portion of the motherhood penalty, both for mothers in general and for each additional child.
  • Despite Social Security’s equalizing role, a motherhood penalty will remain in retirement without policy intervention, such as earnings credits for caregivers.

Click here to download the full brief. Matthew S. Rutledge,Alice Zulkarnain and Sara Ellen King, Center for Retirement Research at Boston College, https://crr.bc.edu, July 2021.   

3.  PUBLIC PLANS DATABASE NOW INCLUDES DC PLAN INFORMATION:

MissionSquare Research Institute (formerly the Center for State and Local Government Excellence) has announced that the Public Plans Database (PPD) has been expanded to include data from nearly 50 public sector defined contribution (DC) retirement plans.
This represents nearly $140 billion in retirement assets and 2.5 million members. Additional DC plans and data will be added on an ongoing basis, the firm notes.
The database already contains detailed information on the largest state and local defined benefit (DB) pension plans in the U.S. The public pension plan data spans fiscal years 2001 to 2020 and includes 210 DB plans (119 state-run and 91 locally-run) that account for 95% of U.S. public pension assets and members.
The PPD is updated quarterly and is free to access. It allows users to:

  • Browse key statistics on individual plans and in the aggregate;
  • Search data in real time;
  • Produce customized tables with specific variables; and
  • Download raw data for in-depth analysis.

The enhanced PPD now offers information on DC assets, membership, investment options, contributions, plan types and provisions. It includes 401(a), 457, 401(k) and cash balance plans, along with mandatory, optional, supplemental and primary DC plans.
The database is developed and maintained through the collaborative efforts of MissionSquare Research Institute, the Center for Retirement Research at Boston College (CRR), the Government Finance Officers Association (GFOA), and the National Association of State Retirement Administrators (NASRA).
“Now, users have a better picture of public sector retirement plan assets. This is increasingly important as plan sponsors continue to look at innovative approaches for increasing contributions to DC plans,” says Joshua Franzel, managing director at MissionSquare Research Institute.  PLANADVISER, www.planadviser.com, June 30, 2021.

4.   LINCOLNSHIRE POLICE FUND SUES COVID-19 VACCINE-MAKER:
Lincolnshire (Ill.) Police Pension Fund filed suit Tuesday in U.S. District Court in Baltimore against Emergent BioSolutions Inc. and various officers and directors, alleging fiduciary breaches and violations of law in the operation of the company's Bayview facility.
A U.S. Food and Drug Administration inspection in April of the facility, where the company was producing the Johnson & Johnson COVID-19 vaccine, found numerous problems and production was soon suspended.
In touting its deal to manufacture the vaccine, which sent its stock price skyrocketing, Emergent BioSolutions violated its fiduciary duties and insider trading laws, and ignored poor quality controls at the plant, which made it not ready for commercial operations, according to the lawsuit.
The filing said the Lincolnshire Police Pension Fund is a stockholder in Emergent BioSolutions, though the amount invested was not provided.
As of Nov. 9, 2020, the Lincolnshire Police Pension Fund had $27 million in assets, according to the pension fund's Nov. 10 board meeting minutes, the most recent available.
John B. Isbister, partner, and Daniel S. Katz, partner, at Tydings & Rosenberg LLP, the plaintiff's attorneys, and officials at Emergent BioSolutions, could not be immediately reached for comment.  Rob Kozlowski, Pension & Investmentswww.pionline.com, July 1, 2021.  

5.  TULSA FIRE DEPARTMENT STAFFING LEVELS ALSO HIT BY PENSION MARKET GAINS:
Similar to the Tulsa Police Department, the Tulsa Fire Department is seeing a wave of retirements as pension market gains provide the perfect timing for a potential retiree’s exit.
“Our current retirement rate is about double what it is for a normal year,” said Matt Lay, president of the International Association of Firefighters Local 176.
During a City Council committee meeting in early June, the Tulsa Fire Department reported 31 vacancies with another 30 to 35 employees expected to retire within the next 90 days.
The city’s firefighters have been working at a “very high operational tempo” among several “disruptive factors” since the historic flooding Tulsa saw in 2019, Lay said. Water rescues and clean-up morphed almost directly into COVID-19 uncertainty.
“COVID changed every aspect of our lives, but we couldn’t stop,” Lay said. “We can’t socially distance; we can’t not run to patient calls. We had a very high rate of exposure and infection among our members.”
That led to stress and worry on the home front, with firefighters unsure about what they were exposing their families to.
The pandemic also postponed an academy class, which means the department is approaching 18 months since the last one. The lack of new firefighters coupled with double the outflow of retirees makes for a department running short-staffed. That could mean firefighters pulling double shifts of 48 hours.
“That’s obviously not sustainable for the long term,” Lay said.
Firefighter Andy Little, spokesman for TFD, said the department currently has 697 firefighters out of an authorized strength of 724. Accounting for the expected retirements, the department could see closer to 90% staffing in the coming months.
Unlike the police side, the Fire Department rarely struggles with recruiting, Little said.
About 20 spots are budgeted for an August academy class, and an additional grant should fund more hires in the next six months, Little said.
The hiring process can be lengthy, but Little is hopeful that this upcoming class will help get the department back on track.  “We’re certainly not where we’d like to be,” he said.  Kelsy Schlotthauer, Tulsa Worldhttps://tulsaworld.com, July 6, 2021.

6.    ‘INFLATION IS THE SILENT KILLER,’ AS MANY RETIREES ARE FEELING THE STING:
Rising inflation is a concern for Kevin Linehan, 68, a retiree in Fitchburg, Massachusetts.
After a heart attack at age 44, Linehan left his career with the Postal Service early, opting for reduced disability retirement income.
“It wasn’t the best financial thing to do,” he said. “But at the time, it seemed like my life was more important than the job.”
Although it’s been tough to survive on a “skimpy income,” Linehan, an Air Force veteran, secured government-subsidized housing through Veterans Affairs for less than $500 per month. The rent stays relatively stable year-to-year, with annual increases depending on his income. 
Over the past several months, however, Linehan has noticed a spike in prices for necessities like food and gasoline. He has seen higher costs for grocery staples like bread and milk. There have also been steady hikes in gasoline prices, limiting his ability to travel.
“It’s like now that we’re getting over [the pandemic] everybody’s jacking prices up,” he said.
The rising food costs have been particularly troubling for Linehan, who receives monthly benefits from the Supplemental Nutrition Assistance Program, known as SNAP. While SNAP benefits grew during the pandemic, he expects it to drop back to $16 per month once the state’s Covid-19 relief runs out.
“I don’t know how much longer, [the extra benefits] are gonna last, but that’s helped me out tremendously,” he said.
The May consumer price index, measuring the cost of food, housing, gasoline, utilities and other goods, jumped by 5% from the previous year, according to the Labor Department. Food prices have increased by 2.2% over the past 12 months, and gasoline has swelled by 56.2%, recovering from pandemic dips.
While Federal Reserve officials have said these price increases are transitory, retirees like Linehan still worry about prices creeping up.
Americans’ expectations for year-ahead inflation grew to 4% in May, the seventh consecutive monthly increase, according to a report by the Federal Reserve Bank of New York.
“Inflation is the silent killer,” said certified financial planner Brad Lineberger, president of Seaside Wealth Management in Carlsbad, California. “It can erode purchasing power to the point where someone wakes up and can’t live the lifestyle they once did because they can’t afford to.”

Not a problem for all retirees

Although climbing prices have alarmed many retirees, others aren’t feeling the effects. 
“Our clients have not been greatly affected by the temporary inflation flare-ups,” said Jon Ulin, CFP and CEO of Ulin & Co. Wealth Management in Boca Raton, Florida. 
Diane Benson, 69, and Al Sapienza, 70, in Seattle are among the retirees who haven’t felt the sting of inflation. After selling their home in the suburbs of Boston, the couple moved to Seattle in 2019, eager to live near their 40-year-old son, David.
Sapienza retired early from his 25-year job with the Social Security Administration, shifting to higher education before leaving full-time work in 2015.
Benson left her career in social work in 2007, opting to spend more time with her ailing mother. Her loss of income wasn’t an issue, she said.
“We’ve never really extended ourselves beyond what we could afford,” Sapienza said. “Actually, we probably lived well below it.”
While they have noticed the uptick in prices, inflation hasn’t impacted their finances “in any real sort of way,” he said.

Cost of living adjustments

Inflation may be challenging for those living on a fixed income. However, Benson and Sapienza both receive payments from a pension and Social Security, and both with cost of living adjustments, Sapienza said.
While Social Security payment changes have historically been modest, creeping prices have bumped estimates for the 2022 Social Security cost-of-living adjustment to 5.3%, the biggest boost since 2009, according to The Senior Citizens League.
“This year, people will be seeing prices go up and their benefits will not be rising immediately to compensate, but it will rise in 2022,” said Alicia Munnell, director of the Center for Retirement Research at Boston College.
Benson and Sapienza also have untapped retirement accounts, with plans to wait until age 72 to start withdrawing the funds.
The so-called three-legged stool of retirement income -- pension, retirement accounts and Social Security -- has become less common among retirees. Only 6.8% of older Americans receive income from all three sources, according to the National Institute on Retirement Security.

How to combat inflation

While some retirees may feel anxious about surging prices, there are ways to minimize the effects, said Jeffrey Tomaneng, CFP and wealth advisor at Asset Management Resources in Hyannis, Massachusetts.
For example, he encourages clients to review their portfolios, with the possibility of shifting a percentage to more aggressive assets, he said.
Some clients’ parents are now in their 90s and running low on savings. But a little more portfolio risk 20 or 30 years ago would have improved their situation today, Tomaneng added. 
“We like to remind clients that they can’t get too conservative in their asset allocation too soon because they need stocks to help fight off inflation,” Lineberger said.

Reduce expenses

Inflation may be distressing for retirees without a nest egg, but there may be creative ways to offset the effects. They may consider relocating or exploring communal living situations with family or friends, Tomaneng said.
However, those looking to downsize and buy elsewhere may prefer to wait, depending on the market, Ulin said.
The influx of transplants and the limited number of properties have caused a 10% to 20% spike for housing in South Florida, for example. 
Of course, not everyone has the resources or desire to move away from family.
After many years in lower-cost areas, Linehan returned to Massachusetts after his wife passed away. He now lives close to his sons and four grandchildren, feeling relief that family is nearby in case of an emergency.
Despite the rising prices and SNAP benefit reductions, he feels confident he will manage to get by.  “I’m doing all right for somebody who doesn’t have a lot of income every month,” he said.  Kate Dore, CNBC, www.cnbc.com, July 4, 2021.

7.  SMART STRATEGIES TO FIGHT BACK AGAINST INFLATION:
Few economists predict we’ll return to the double-digit price increases of the late 1970s and early 1980s . But knowing some of the ways consumers coped back then -- and how things are different now -- can help you formulate a plan to deal with rising prices.
First, a primer: Inflation shrinks your purchasing power, so you need more money to buy the same goods and services. When inflation averages less than 2% , as it did from 2010 to 2020, it would take more than 35 years for prices to double. When inflation averages 5%, which was the annualized rate reported in May , prices would double in less than 15 years. That is a huge deal if you live on a fixed income or are trying to calculate how much you’ll need in retirement.
“People forget about the potential impact of inflation, since we really haven’t seen very much,” says Penelope Wang , deputy money editor for Consumer Reports.
Here are some strategies that may prove helpful.
BUY STRATEGICALLY
With persistent inflation, delaying a purchase could be costly, since the price is likely to rise in the future. With today’s inflation, that’s less clear.
Jerome Powell , chairman of the Federal Reserve, says pandemic-related shortages and bottlenecks are behind recent price spikes. He predicts inflation will ease as the nation’s economy continues to reopen.
That certainly seems to be the case for lumber prices. The cost of lumber increased more than 300% from April 2020 to May 2021, adding $36,000 to the cost of the average house, according to the National Association of Home Builders. But lumber prices have retreated substantially from those peaks as pandemic-related shortages ease. If you rushed into a remodeling project or otherwise locked in the high prices, you’re likely regretting it now.
On the other hand, you may want to stock up on meat, poultry, eggs, dairy products and fresh fruits and vegetables when those go on sale, Wang says. Buying on sale is a smart consumer move in any economy, and the Department of Agriculture recently predicted prices of those foods will continue to rise this year.
EMBRACE SUBSTITUTION
High inflation 40 years ago led to the birth of generic groceries — products with stark black-and-white labels that saved consumers money by forgoing fancy packaging. Today, you can get similar savings by substituting store brand products for name brands. Warehouse stores, such as Costco and Sam’s Club, also got their starts during that period and remain a good source for bargain hunters.
Acquiring used items instead of new is another potential way to save money. Back in the day, that meant yard sales and thrift shops. Today, we can buy used goods from Craigslist, Facebook Marketplace, Mercari and Letgo, among other sites, or there’s Facebook Buy Nothing groups, where people give their neighbors items for free.
Then again, thrift stores have benefited from lockdown clutter cleanouts. Certified financial planner Barbara O’Neill of Ocala, Florida, volunteers at a local thrift store and recently scored a large, curved monitor for her husband’s computer.
“I picked it up for $10, and then got half off for being a volunteer,” says O’Neill, author of “Flipping a Switch: Your Guide to Happiness and Financial Security in Later Life.”
LOCK IN FIXED RATES ON DEBT
The Fed has so far resisted calls to raise interest rates to slow the economy and cool inflation. If that changes, variable-rate debt could cost more. If you have an adjustable rate mortgage and good credit, for example, it could make sense to refinance into a fixed-rate loan, O’Neill says. For credit card debt, consolidating it with a personal loan could give you a fixed rate and level payments.
Also, be careful about adding any new debt. Inflation theoretically makes paying fixed-rate debt easier, since you’re paying back the loan with cheaper dollars. But new loan payments lock in a new obligation when you may need flexibility.
INFLATION ISN’T ALL BAD
Those unaccustomed to rising prices may be surprised to discover that inflation has some advantages. It’s often easier to get a raise , because employers can pass along the cost in higher prices (although that can start to feed on itself, with higher prices triggering more demands for raises).
In addition, many tax rules and government benefits are influenced by the consumer price index, the nation’s official inflation measure. Social Security benefits include cost-of-living increases, so higher inflation can mean bigger checks. The amount you can contribute to retirement funds, including IRAs and 401(k)s, is also likely to rise.“There are a lot of things that are tied to the CPI that can benefit some people and help them get a little bit higher income next year,” O’Neill says.  Liz Weston, NerdWallet, July 5, 2021.  

8.   NAVIGATING MEDICARE: HOW AND WHEN TO SIGN-UP FOR COVERAGE:
The intersection of health and wealth--it’s the foundation of a happy and successful retirement. And a major component in that equation will be your retirement healthcare coverage provided through Medicare.
While not an overly complicated benefit, initially signing up for Medicare can be an overwhelming and anxiety-inducing process.  Medicare consists of an alphabet soup of plans, coverage choices, premium levels and enrollment rules. All that said, there are a few key decisions you’ll be required to make regarding your Medicare coverage:

  • What components of Medicare should you choose to sign up for and how much can you expect to pay for the coverage?
  • What are your options if you plan to keep working beyond age 65?
  • And when will you need to enroll?
Decision #1: Which coverage option?

Rather than waiting until the last minute to begin researching your coverage options, the time to start planning is now--even if you’re still several years away from your 65th birthday. Begin by familiarizing yourself with the different parts of Medicare and what each component covers:

  • Part A: (hospital coverage) covers things like inpatient hospital stays, some home health care, skilled nursing facility care and hospice; requires no out-of-pocket annual premiums but has both annual deductibles and copays.
  • Part B: (medical coverage) covers things like doctor visits, outpatient services, X-rays and lab tests, as well as preventive screenings; carries both annual deductibles and copays and requires monthly premium payments.
  • Part C: (Medicare Advantage) this is a private ‘all-in-one’ alternative to Medicare that covers the services associated with Parts A and B (and usually Part D). On the plus side, these bundled plans tend to be more affordable, may offer broader coverage (e.g., vision, hearing and dental), and providers must be Medicare-approved. But the plans typically come with greater restrictions and most plans act as HMOs and require you to go to their network of doctors and health care providers.
  • Part D: (prescription drug coverage) this is an optional add-on prescription drug coverage that requires monthly premiums, annual deductibles, and copays. You’ll need to enroll in an approved plan and be covered under both Medicare Parts A and B (or Part C).
  • Medigap: offered by private insurers to help fill any coverage gaps in Part A and Part B such as copayments, coinsurance, deductibles, and potentially foreign travel health emergencies. There are 10 different types of Medigap plans--some cover more out of pocket costs than others.

When considering your Medicare elections, try to factor in your anticipated future healthcare needs. Do you have any pre-existing conditions or a family history of chronic disease? If so, you may want to explore more robust coverage options such as a Medigap policy.
Medicare is generally available to anyone age 65 or older (as well as to younger people with qualifying disabilities). Part A is available premium-free if you paid Medicare taxes for at least 10 years (40 quarters) of your working life. If you have fewer work credits than that, however, you’ll be required to pay a monthly premium. For 2021, the premium would be $259/month if you had between 30-39 quarterly credits, or $471/month if you have fewer than 30 quarterly credits.

High income earners may also need to factor Income Related Monthly Adjustment Amount (IRMAA) surcharges into their Medicare cost calculations. Depending on your modified adjusted gross income from two years prior and your tax filing status, you may fall into one of five income brackets that are subject to incrementally higher surcharges.
For example, a married filing jointly taxpayer had a 2019 modified adjusted gross income of $500,000. This income amount falls in IRMAA bracket 4 ($330,000 to $750,000), so their monthly Part B premium would increase from $148.50 to $475.20, and they’d also be subject to a $71 surcharge in addition to what they pay for their Part D coverage.
Any Part B IRMAA surcharges are added to your Part B premium, while Part D IRMAA surcharges are paid separately to Medicare. It is important to note that Medicare treats IRMMA payments the same as any other premium bill. If you do not pay the surcharge on time, you could potentially lose your coverage.

Decision #2: Employer plan or Medicare?

If you’re working past age 65 and covered by your employer’s health plan, you can choose to defer signing up for Medicare without incurring any penalties. In this case, you’ll be required to enroll for Part A and/or Part B during your Special Enrollment Period (SEP) which begins the month after your employment or group coverage ends (whichever comes first) and lasts for 8 months. If you choose to continue your employer health coverage under COBRA, however, it won’t delay the start of your SEP enrollment window.
Even if you’re still working and covered by an employer’s plan, you may want to enroll in Medicare Part A when you turn age 65 since it’s usually premium-free. The only real downside is that you’ll no longer be eligible to contribute any additional pre-tax dollars to your employer Health Savings Account (HSA). Generally, you should stop contributing to an HSA 6 months before you enroll in Medicare. if you decide to enroll in Medicare at 65 and stop contributing to an HSA, you can continue to use your HSA for qualified medical expenses for as long as you have funds in your HSA.  You’ll therefore already be signed up and can simply add Part B and D (or choose a Medicare Advantage plan) during your SEP to postpone paying the monthly premiums until you actually need the coverage.

Decision #3: How to meet deadlines and avoid penalties?

For most people, Medicare coverage begins the first day of the month you turn age 65. If you’ve already started receiving Social Security benefits, you’ll automatically be signed up for Medicare Part A and Part B. If you haven’t yet made a Social Security benefit claim, you’ll need to submit a Medicare application.
To avoid any coverage gaps or potentially higher premiums, if you’re not still covered by your employer plan, you must sign up during your 7-month initial enrollment period (IEP) spanning the 3 months preceding and following the month in which you turn age 65.
In addition to the 7-month IEP and the SEP 8-month enrollment period that kicks in after you leave your employer’s plan, there are other annual enrollment dates you’ll want to be aware of:

  • General Enrollment Period: those who missed their IEP and SEP can sign up during Medicare’s General Enrollment Period (January 1st to March 31st) with coverage taking effect on July 1st.
  • Open Enrollment Period: where you can join, switch, or drop a plan takes place each year from October 15th through December 7th with new coverage taking effect the following January 1st.
  • Part C Open Enrollment Period: if you’re enrolled in a Part C Medicare Advantage plan, you can change plans each year between January 1st and March 31st.

Unlike Social Security where you’re rewarded for delaying your benefits, depending on the circumstances, you could be penalized with higher monthly premiums if you fail to enroll in Medicare on time. While the penalties for Part A and Part D are small, the penalty for Part B can be substantial.

  • Part A: you may be assessed a 10% increase in your monthly premium if you don’t qualify for premium-free coverage and fail to enroll when you’re first eligible. This penalty will be assessed for twice the number of years you delay signing up. So, if you wait two years beyond your first eligibility to enroll, you’ll be required to pay the higher premiums for four years.
  • Part D: while typical small, penalties for late enrollment in a Medicare prescription plan are assessed for as long as you have coverage. The amount is calculated as 1% of the ‘National Base Premium’ ($33.06 in 2021) for the total number of months you delayed enrolling in Part D. For the same two-year (24 month) delay above, it would translate into a $7.90/month penalty [0.24 x 33.06].

Here’s where the penalties can become quite steep:

  • Part B: For failing to enroll in Part B, the penalty is 10% for each 12-month period you delay. Let’s say you turned age 65 in March of 2014 but didn’t enroll in Medicare until March of 2021 (and had no employer plan during that time). Your monthly premium will be 70% higher for as long as you have coverage.

There’s no late enrollment penalty for Part C or Medigap insurance (although you could be subject to underwriting and Medigap rates may go up dramatically if you delay signing up). Additionally, you have an opportunity to dispute any penalties and/or surcharges that are assessed by filing an appeal with the U.S. Centers for Medicare & Medicaid Services. Forms can be found on their website at www.cms.gov.
In most instances, the entire Medicare enrollment process can be completed online at www.medicare.gov. The site provides extensive information along with resources to help you select the right coverage for your circumstances. John S. Traynor, Fiduciary Trust International, www.fiduciarytrust.com, June 9, 2021.  


9.    TARGETING THE TROOPS:
While American servicemembers stand ready to defend the nation, smalltime scammers and large corporations alike have them in their sights. They follow the money -- and they know that military personnel get a steady paycheck and valuable benefits from Uncle Sam. And the eventual transition back to civilian life gives the scammers even more opportunities to target the troops.
For instance, the FTC uncovered that the University of Phoenix (UOP), a massive for-profit university, targeted servicemembers and veterans, among others, by luring them with false promises. Under a settlement reached with the company, UOP paid $50 million in cash and canceled $141 million in debts owed to the school. In another FTC enforcement action, Career Education Corporation was required to return $30 million to students after its agents recruited patriotic Americans using phony government websites like “Army.com” and “NavyEnlist.com” -- a ruse to get students in the door. These cases show that you can’t always trust slick websites, or schools that are eager to get you enrolled.
Earlier this year, Congress closed the so-called “90/10” loophole, which gave predatory schools an incentive to target veterans. But enforcers must continue to be vigilant. The FTC works closely with the Department of Veterans Affairs (VA) and refers unfair or deceptive practices to the VA as our investigations uncover them. Schools that prey on veterans should understand that they will face not only enforcement actions by the FTC but also the loss of eligibility for GI and Title IV funds.
There are tools to help veterans, servicemembers, and all kinds of students navigate the education marketplace and blow the whistle on bad actors. If you have a federal student loan and feel like a school misled you or broke the law, apply for loan forgiveness through the Department of Education’s (ED’s) Borrower Defense to Repayment procedures. If you’re getting started (or re-started), ED’s Opportunity Centers are designed to help prospective students (including people of modest means, first-generation college students, and veterans) apply for admission to college and arrange for financial aid and loans. Find one near you. Servicemembers: talk with your Personal Financial Manager to get hands-on help with your next steps. And vets can call the VA’s GI Bill Hotline to discuss questions about education benefits: 1-888-GIBILL (1-888-442-4551), or visit the VA site to learn more.
If you see deceptions like these -- during Military Consumer Month, and every month -- protect the military and veteran communities by reporting it. Use the VA’s feedback tool to file a complaint about a school and let the FTC know at ReportFraud.ftc.gov.  Samuel Levine, Acting Director, Bureau of Consumer Protection, FTC, www.ftc.gov, July 7, 2021.

10.  FOR THOSE WHO LOVE WORDS; ANIMAL ADJECTIVE - ASININE:
Asinine is commonly used to mean “foolish, unintelligent, or silly,” but its literal meaning may surprise you. It’s based on the Latin asinus, meaning “donkey” or, you know, that other word for donkey. Yes, someone who’s behaving in an asinine way is literally acting like that beast of burden, which has a reputation for being stubborn. Sorry, Eeyore!

11.    QUOTE OF THE WEEK:
"People who are crazy enough to think they can change the world are the ones who do." - Rob Siltanen  

12.    TODAY IN HISTORY:
On this day in 1693, NYC authorizes 1st police uniforms in American colonies.

13.    REMEMBER, YOU CAN NEVER OUTLIVE YOUR DEFINED RETIREMENT BENEFIT.

Copyright, 1996-2021, 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