HOW MUCH DO AMERICANS DEPEND ON SOCIAL SECURITY?:
National Center for Policy Analysis, a conservative think
has published a paper on Americans’ dependence upon
Social Security. According to the Executive Summary, Social
Security benefits over the next 75 years will exceed payroll
tax revenues by $4.6 Trillion. To close this enormous fiscal
gap, one proposal is to cut benefits of high-income workers.
Many low-income workers depend almost entirely on Social
Security for their retirement income, but it is often assumed
that high-wage workers can maintain their standard of living
without Social Security benefits due to their private pensions
and savings. Surprisingly, however, even high-wage workers
depend on Social Security for a substantial portion of
their retirement income and would significantly change
their consumption and saving behavior in the absence of
Social Security. Specifically:
- Social Security accounts for virtually all of the
discretionary consumption of households with modest preretirement
(less than $50,000 a year for couples or $25,000 for
- It is equal to about one-third of the consumption
of the highest-earning households (couples with retirement
incomes of $500,000 and singles with $250,000).
The study is based on modeling of representative households.
Living standards are measured by dollars available for
discretionary consumption after subtracting such “off
the top” expenditures as taxes, contributions to
tax-favored savings, mortgage payments, college tuition
and life insurance premiums. The model assumes that, all
things being equal, people will try to maintain their standard
of living by evening out their consumption over their remaining
lifetimes. There are two ways people can smooth their lifetime
consumption: (1) they can borrow in order to increase their
current consumption or (2) they can save in order to increase
their future spendable income. Borrowing requires them
to lower their future standard of living (as they pay back
the debt), while saving requires them to lower their current
standard of living (by cutting spending). However, there
may be difficulties for lower income people. Due to their
current obligations, they often cannot increase their retirement
savings. Also, they are limited in their ability to borrow
in order to increase their current consumption. If Social
Security were abolished tomorrow, younger households would
have many years to adjust, but only the wealthiest would
be able to spread the loss of Social Security benefits
evenly over the whole of their remaining lives. The high-earners
would reduce their consumption by about 18% for every remaining
year of life. People with less income could not adjust
fully to the loss of Social Security benefits by reduced
consumption and increased savings.
2. FLORIDA RETIREMENT SYSTEM CONTRIBUTION
RATES WILL REMAIN THE SAME THIS YEAR, INCREASE NEXT:
has enacted Chapter 2007-84, effective July 1, 2007.
The law establishes required employer retirement contribution
rates for each membership class and subclass of the Florida
Retirement System as follows:
Membership Class Percentage of Gross Percentage of Gross
Effective July 1, 2007 Effective July 1, 2008
Regular Class 8.69% 9.59%
Special Risk Class 19.76% 22.01%
Special Risk Administrative
Support Class 11.39% 11.90%
Elected Officers Class --
Legislators, Governor, Lt.
Governor, Cabinet Officers,
State Attorneys, Public
Defenders 13.32% 14.99%
Elected Officers Class --
Justices, Judges 18.40% 20.46%
Elected Officers Class --
County Elected Officers 15.37% 17.15%
Senior Management Class 11.96% 13.35%
DROP 9.80% 10.89%
As usual, the Legislature found that a proper and legitimate
state purpose is served when employees and retirees of
the state and its political subdivisions, and the dependents,
survivors and beneficiaries of such employees and retirees,
are extended the basic protections afforded by governmental
retirement systems. These persons must be provided benefits
that are fair and adequate and that are managed, administered
and funded in an actuarially sound manner, as required
by Section 14, Article X of the State Constitution, and
Part VII of Chapter 112, Florida Statutes. Therefore, the
Legislature has determined and declared that the act fulfills
an important state interest.
3. WORKERS COMPENSATION FOR FLORIDA FIRST
On June 8, 2007, Florida Governor Jeb
Bush approved Chapter 2007-87. The term “first responder” as
used in the section means a law enforcement officer, a
or an emergency medical technician or paramedic employed
by state or local government. A volunteer law enforcement
officer, firefighter or emergency medical technician or
paramedic engaged by the state or local government is also
considered a first responder. For the purpose of determining
benefits under the section as to employment-related accidents
and injuries of first responders, the following shall apply:
- An injury or disease caused by exposure to a toxic
substance is not an injury by accident arising out
of employment unless there is a preponderance of evidence
that exposure to the specific substance involved, at
the levels to which the first responder was exposed,
the injury or disease sustained by the employee.
- Any adverse result or complication caused by a smallpox
vaccination of a first responder is deemed to be an
injury by accident arising out of work performed in the
and scope of employment.
- A mental or nervous injury involving a first responder
and occurring as a manifestation of a compensable injury
must be demonstrated by clear and convincing evidence.
For a mental or nervous injury arising out of employment
unaccompanied by a physical injury involving a first
responder, only medical benefits under Section 440.13,
shall be payable for the mental or nervous injury.
However, payment of indemnity as provided in Section
Statutes, may not be made unless a physical injury
arising out of injury of the first responder accompanies
or nervous injury.
In cases involving occupational disease, both causation
and sufficient exposure to a specific harmful substance
shown to be present in the workplace to support causation
shall be proved by a preponderance of evidence. Permanent
total supplemental benefits received by a first responder
whose employer does not participate in the social security
program shall not terminate after the first responder attains
the age of 62. The term “occupational disease” means
only a disease that arises out of employment as a first
responder and is due to causes and conditions that are
characteristic of and peculiar to a particular trade, occupation,
process or employment, and excludes all ordinary diseases
of life to which the general public is exposed, unless
the incidence of the disease is substantially higher in
the particular trade, occupation, process or employment
than for the general public.
4. SOME OTHER NEW FLORIDA LAWS:
As a result
of the 2007 Session of the Florida Legislature, several
may be of interest to our readers became law:
Chapter 2007-27 (effective October 1,
2007). The law amends Section 943.13(6), Florida Statutes,
to provide that in
order to be eligible for the presumption set forth in
Section 112.18, Florida Statutes (presumption for tuberculosis,
heart disease or hypertension), while employed with an
employing agency, a law enforcement officer, correctional
officer or correctional probation officer must have successfully
passed the physical examination required by the subsection
upon entering into service as a law enforcement officer,
correctional officer or correctional probation officer
with the employing agency, which examination must have
failed to reveal any evidence of tuberculosis, heart
or hypertension. A law enforcement officer, correctional
officer or correctional probation officer may not use
a physical examination from a former employing agency
purposes of claiming the presumption set forth in Section
112.18, Florida Statutes, against the current employing
agency. This amendment closes a loophole through which
more than one correctional officer has squeezed (see
Newsletter for October 20, 2005, Item 4 and C&C Newsletter
for November 23, 2005, Item 1). The law also amends Section
943.137, Florida Statutes, to allow an agency employing
law enforcement officers, correctional officers or correctional
probation officers to establish tobacco-use standards.
Chapter 2007-32 (effective July 1, 2007).
The act amends Section 1.01(14), Florida Statutes, to
expand the term “veteran” to
include one who has served during Operation Enduring
Freedom (from October 7, 2001 to a date thereafter prescribed
presidential proclamation or by law) and Operation Iraqi
Freedom (from March 19, 2003 to a date thereafter prescribed
by presidential proclamation or by law).
Chapter 2007-42 (effective July 1, 2007).
Cited as the “Florida
Highway Patrol Sergeant Nicholas Sottile Act,” the
act amends Section 447.3075, Florida Statutes, to provide
that any state law enforcement agency that has 1,200
or more officers shall be in a bargaining unit that is
from officers in other state law enforcement agencies.
If the application of the section requires that a new
state law enforcement bargaining unit be created, a question
concerning representation is not deemed to have arisen
regarding the new unit or the existing unit.
Chapter 2007-45 (effective July 1, 2007).
The act amends Section 321.24(6), Florida Statutes, to
provide that the
director of the Florida Highway Patrol may present to
an officer who retires from the Florida Highway Patrol
after a minimum of 20 years of service one complete uniform,
including the badge worn by that officer; the officer’s
service handgun, if one was issued as part of the officer’s
equipment; and an identification card clearly marked “RETIRED.”
Chapter 2007-51 (effective July 1, 2007).
The act repeals Section 295.101, Florida Statutes, which
a veteran’s employment preference expires after a
person eligible pursuant to Section 295.07, Florida Statutes
(the general provision for veterans’ preference
in appointment and retention), has been applied and been
by the state or any agency of a political subdivision
in the state.
Chapter 2007-92 (effective July 1, 2007).
The act creates Section 112.0801(2), Florida Statutes,
to provide that “retiree” means
any officer or employee who retires under a state retirement
system or a state optional annuity or retirement program
or is placed on disability retirement and who begins receiving
retirement benefits immediately after retirement from employment.
In addition to such requirements, any officer or employee
who retires under the Public Employee Optional Retirement
Program established under Part II of Chapter 121, Florida
Statutes, shall be considered a retired officer or employee
or retiree if he (1) meets the age and service requirements
to qualify for normal retirement as set forth in Section
121.021(29), Florida Statutes, the Florida Retirement System
or (2) has attained the age specified by Section 72(t)(2)(A)(i)
of the Internal Revenue Code (59 1/2) and has 6 years of
creditable service. Section 112.0801, Florida Statutes,
has been redesignated as subsection (1) and still provides
that any state agency, county, municipality, special district,
community college or district school board that provides
life, health, accident, hospitalization or annuity insurance
for its officers and employees and their dependents upon
a group insurance plan or self-insurance plan shall allow
all former personnel who have retired, and their eligible
dependents, the option of continuing to participate in
such group insurance plan or self-insurance plan. The premium
cost cannot exceed the premium cost applicable to active
employees. Because, on its face, Section 112.0801(1), Florida
Statutes, is not limited to the Florida State Retirement
System, we assume the amendment was not an attempt so to
limit the definition of “retiree.” However,
the requirement that one begin receiving retirement benefits “immediately
after retirement from employment” could be a significant
change. Note: the identical amendment appears as part
of Chapter 2007-100, also effective July 1, 2007, but
not sure why.
Chapter 2007-93 (effective October 1,
2007). The act amends Section 112.071(2)(c)2a, Florida
Statutes (the agency investigation
exemption from the Public Records Act), to exempt a
request made by a law enforcement agency to inspect or
copy a public
record that is in the custody of another agency and
the custodian’s response to the request, and any
information that would identify whether a law enforcement
requested or received that public record. When the
criminal intelligence information or criminal investigative
is no longer active, the fact that the law enforcement
agency had requested or received that public record
becomes available to the public.
Chapter 2007-107 (effective July 1,
2007). The act creates Section 741.313, Florida Statutes,
to require an employer
to permit an employee to request and take up to 3 working
days of leave from work in any 12-month period if the
employee or a family or household member of an employee
is a victim
of domestic violence. The leave may be with or without
pay, at the employer’s discretion. The section applies
if the employee uses the leave from work to seek an injunction
for protection against domestic violence; obtain medical
care or mental health counseling, or both; obtain services
from a victim-services organization; make the employee’s
home secure from the perpetrator of the domestic violence
or seek new housing to escape the perpetrator; or seek
legal assistance in addressing issues arising from the
act of domestic violence. The section applies to an employer
who employs 50 or more employees and to an employee who
has been employed by the employer for 3 or more months.
The sole remedy for any person claiming to be aggrieved
by a violation of this section is to bring a civil suit
for damages or equitable relief, or both, in circuit
court. The person may claim as damages all wages and
that would have been due to the person up to and including
the date of the judgment had the act violating the section
not occurred, but the person may not claim wages or benefits
for a period of leave granted without pay. However, the
section does not relieve the person from the obligation
to mitigate his damages.
5. COACH WOODEN’S RULES:
Book of Lists, here are legendary basketball coach John
Rules to Live By:
- Faith, hope and charity.
- Make each day your masterpiece.
- Drink deeply from good books.
- Freedom from desire leads to inner peace.
- Failure to prepare is preparing to fail.
- Ability may get you to the top, but it takes character
to keep you there.
- Help others.
- It is better to trust and be disappointed occasionally
than to distrust and be miserable all the time.
- Almost anyone can stand adversity, but to test a
character, give him power.
OF THE WEEK
“I have no use for body guards,
but I have very specific use for two highly trained Certified
Public Accountants.” Elvis Presley