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Cypen & Cypen
August 2, 2012

Stephen H. Cypen, Esq., Editor

1.     THE ROLE OF DEFINED BENEFIT PENSIONS IN REDUCING ELDER ECONOMIC HARDSHIPS:       The predictable monthly benefits provided by defined benefit plans remain a source of security to retired households, enabling millions of Americans to stay secure and independent in old age.  The Pension Factor 2012 -- an update of a similar study conducted by National Institute on Retirement Security in 2009 -- analyzes the contribution of DB pensions to the economic security of older American households.  The study finds that DB pension income continues to play a vital role in reducing risk of poverty and material hardships among older Americans.  Rates of poverty among older Americans without DB pension income were approximately nine times greater than rates among older households with DB pension income in 2010, up from six times greater in 2006.  Older households with DB pension income also were far less likely to experience food, shelter and health care hardships.  In addition, DB pension recipient households were less reliant on means-tested cash and noncash public assistance.  While households with DB pension income generally fared better than households without pension income, DB pensions appear to have particularly improved the economic security of more vulnerable subpopulations of elder households.  The analysis suggests that common gender and racial disparities in rates of poverty, material hardships and dependence on public assistance are greatly diminished, and in some cases nearly eliminated, among households receiving DB pension income.  Even after controlling for a range of socio-demographic factors such as education, race, gender and work history, the study found that households with a pension fare better than those without.  In other words, DB pensions appear to exert an independent, positive effect on older Americans’ economic well-being, an effect the authors call the “pension factor.”  This pension factor has helped substantial numbers of older American households avoid material hardships associated with inadequate food, shelter and health care and to avoid having to rely on public assistance. More specifically, the authors estimate that in 2010, DB pension receipt among older American households was associated with: 

  • 4.7 million fewer poor and near-poor households
  • 460,000 fewer households that experienced a food insecurity hardship
  • 500,000 fewer households that experienced a shelter hardship
  • 510,000 fewer households that experienced a health care hardship
  • 1.22 million fewer households receiving means-tested public assistance

Furthermore, not counting Medicaid reimbursements for acute and long-term medical care, the study estimates that in 2010 governments spent about $7.9 Billion dollars less on public assistance to older households because of their DB pension income, representing about 6.4 percent of aggregate public assistance dollars received by all American households in 2010 from similar benefit programs.  The amount is substantial, particularly in light of the increased demand placed on resources of government safety net programs throughout the country in recent years.  More broadly, the study also found: 

  • a continued decrease in rates of DB pension income receipt likely related to more than three decades of declining DB plan participation rates among active employees. 
  • increasing fractions of older American workers will be entering retirement without the security of a DB pension in the future. 
  • older households with DB pension income generally fared better during the recent economic turmoil relative to households without such income. 
  • income from pensions may be especially important to middle income American households. 
  • lower rates of DB pension receipt are found among older persons living in the West and South relative to other regions. 
  • pensions have helped many older minority and female-headed households escape poverty. 

   Much has been written about the financial condition of pension plans and plan reform in the public sector, but little has been documented about public sector workers’ confidence, expectations and behavior with respect to retirement planning and saving.  A representative sample of state and local government employees was surveyed to examine these issues in “2012 Retirement Confidence Survey of the State and Local Government Workforce” from Center for State & Local Government Excellence and TIAA-CREF Institute.  Nineteen percent are very confident that they will have enough money for a comfortable retirement, 54 percent are somewhat confident and 26 percent are not confident.  Twenty-two percent are very confident that they will have enough money to take care of medical expenses during retirement and 49 percent are somewhat confident.  Two-thirds are not confident that Medicare will continue to provide benefits of equal value to those provided today.  Among employees who have saved for retirement, 30 percent are not confident that they are saving the right amount and 18 percent are not confident that they are investing appropriately.  Among employees who have saved for retirement, 29 percent are very confident that they will choose the best way to draw income from savings during retirement.  Nonetheless, many savers are worried that they will outlive their savings; only 14 percent are very confident that they will not outlive their savings.  Among those who expect to annuitize some of their savings, only 13 percent are very confident that they will not outlive their savings, even though this figure might be expected to approach 100 percent.  One-third think they will need to replace less than 60 percent of their pre-retirement income to live comfortably in retirement, while it is generally recommended that individuals plan to replace at least 70 percent.  Fifty-seven percent expect to work longer than they would like, with 29 percent expecting to work more than five years longer.  Seventy-two percent expect that a defined benefit pension will be a major source of their retirement income, 31 percent expect a defined contribution plan to be a major income source and 27 percent expect Social Security to be a major source.  Ninety-one percent have saved for retirement; 92 percent of them are currently saving.  Fifty-eight percent have not planned and saved for uncovered medical expenses in retirement.  Among retirement savers, one-half have not tried to determine how much they need to save for a comfortable retirement.  One-half of savers have received retirement planning advice from a professional advisor within the past three years, but they often do not follow the advice they receive.  One-third of those advised to increase the amount saved did not change their savings rate.  Eighteen percent of those receiving investment advice followed all of it. 
3.      WOMEN STILL FACE RETIREMENT SECURITY CHALLENGES:     Over the last decade, working women’s access to and participation in employer-sponsored retirement plans have improved relative to men.  Indeed, from 1998 to 2009, women surpassed men in their likelihood of working for an employer that offered a pension plan, largely because the proportion of men covered by a plan declined.  Furthermore, as employers have continued to terminate their defined benefit plans and have switched to defined contribution plans, the proportion of women who worked for employers that offered a DC plan increased. Correspondingly, women’s participation rates in DC plans increased slightly over this same period while men’s participation fell, thereby narrowing the participation difference between men and women to 1 percentage point.  At the same time, however, women contributed to their DC plans at lower levels than men.  Although the composition of income for women age 65 and over did not vary greatly over the period -- despite changes in the economy and pension system -- women continued to have less retirement income on average and live in higher rates of poverty than men in that age group.  The composition of women’s income varied only slightly, in part, because their main income sources -- Social Security and DB benefits -- were shielded from fluctuations in the market.  Women, especially widows and those age 80 and over, depended on Social Security benefits for a larger percentage of their income than men.  For example, in 2010, 16 percent of women age 65 and over depended solely on Social Security for income compared to 12 percent of men.  At the same time, the share of household income women received from earnings increased over the period, but was consistently lower than for men. Moreover, women’s median income was approximately 25 percent lower than men’s over the last decade, and the poverty rate for women in this age group was nearly two times higher than men’s in 2010.  For women approaching or in retirement, becoming divorced, widowed or unemployed had detrimental effects on their income security.  In addition, divorce and widowhood had more pronounced effects for women than for men.  For example, women’s household income, on average, fell by 41 percent with divorce, almost twice the size of the decline that men experienced.  For widowhood, women’s household income fell by 37 percent -- while men’s declined by only 22 percent.  Unemployment also had a detrimental effect on income security, though the effects were similar for women and men; household assets and income fell by 7-to 9 percent.  A range of existing policy options could address some of the income security challenges women face in retirement.  For example, some would expand existing tax incentives to save for retirement while others would improve access to annuities.  All of these options have advantages and disadvantages that would need to be evaluated prior to implementation.  For instance, increasing Social Security benefits for widows could provide additional income for women who have few options to increase their retirement savings.  However, increasing benefits would also increase costs to the Social Security program and have implications for its long-term solvency.  A new Position Paper from Retirement Advisor Council concludes that for many, target income replacement ratios should be higher than the 70-75% conventionally accepted as a rule of thumb.  The higher ratio is to account for projected cost of healthcare in retirement, and traditional financial planning concerns disruption, which experience suggests is unfounded. 
4.      MOST WORRY ABOUT OUTLIVING RETIREMENT MONEY:       More than four-out-of-five people (82 percent) are worried about their financial situation after retirement, and almost nine-in-ten people (89 percent) say it is important for them to start saving now, according to Business Wire, Inc.  A survey of more than 8,000 people from 15 countries also revealed that more than half (53 percent) of respondents believe they lack the necessary information to prepare for retirement and the financial capacity (57 percent) to invest in a private pension.  Only about one-in-six people (16 percent) is confident that their current level of savings is sufficient to cover financial needs after retirement.  While a large majority (93 percent) recognize that they will need to rely partly or wholly on their personal savings to cover their post-retirement financial needs, more than two-thirds (67 percent) do not know how much they would need to save to guarantee their standard of living in retirement.  Less than one-third (29 percent) have private investments aimed specifically at addressing their retirement needs (in addition to any employer or public pension funds from which they may benefit). 
5.      U.S. POVERTY ON TRACK TO RISE TO HIGHEST SINCE 1960s:      In case you want to know, says the ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.  Those in the know predict the official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent.  Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.  Poverty is spreading at record levels across many groups, from underemployed workers and suburban families to the poorest poor.  More discouraged workers are giving up on the job market, leaving them vulnerable as unemployment aid begins to run out.  Suburbs are seeing increases in poverty, including in such political battlegrounds as Colorado, Florida and Nevada, where voters are coping with a new norm of living hand to mouth.  Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1 percent.  That low point came after President Lyndon Johnson’s war on poverty, launched in 1964, that created Medicaid, Medicare and other social welfare programs.  Analysts estimate that some 47 million people in the U.S., or 1-in-6, were poor last year.  An increase of one-tenth of a percentage point to 15.2 percent would tie the 1983 rate, the highest since 1965.  The highest level on record was 22.4 percent in 1959, when the government began calculating poverty figures.
6.      DEFINED CONTRIBUTION PLANS WILL NOT SAVE MARYLAND TAXPAYER DOLLARS:       Sean Johnson, managing director of political and legislative affairs for the Maryland State Education Association, has responded to a recent Baltimore Suneditorial on public pensions, which he says missed the mark in several respects.  Readers should be forewarned that The Sun’s proposed solution -- a switch to defined contribution plans -- is a recipe for increased costs and decreased retirement security. Walking away from the fiscal efficiencies of defined benefit plans and closing one plan while opening another serve to drive up the state’s costs.  Moreover, moving to a defined contribution plan typically leads to a drastically decreased benefit and an increased reliance on social services by retirees, again driving up state costs.  States pursuing this swap have quickly come to wish that they had done their homework beforehand.  West Virginia froze its pension plan to move to a defined contribution plan only to encounter these very problems. The negative repercussions were so endemic that West Virginia decided to return to its pension plan.  So how can Maryland’s pension fund be further stabilized?  Last year’s significant increases to employee contributions and decreases to benefits put the fund on a quick path to a higher funded status.  The best way to accelerate the fund’s stability is to eliminate the corridor funding method, which has caused the state to underfund the pension system for years.  Leading pension experts have called for an end to the corridor method, and momentum seems to be building.  Maryland officials are exploring feasibility of getting out of corridor funding.  The writer looks forward to this conversation, which has the best shot at providing long-term stability to Maryland’s pension fund.  He hopes that this conversation focuses on solutions that address the root causes of the problem rather than ideas that would only exacerbate the challenge to provide adequate retirement security for educators and public employees. 
7.      IN STATE PENSION REFORM, DID NEW WORKERS PAY FOR PAST MISTAKES?:     A new brief from Urban Institute asks and answers that very question:  Yes.  Many reforms shift burdens to the young, particularly by making many new employees net contributors to -- rather than beneficiaries of -- these plans.  How? Essentially, states require higher levels of employee contributions, invest them in somewhat risky assets and, then, like a bank or financial intermediary, pay back many employees less in benefits than what they contributed and expected to earn on those contributions.  Traditional (so-called defined benefit) pensions, which cover nearly all full-time state employees, pay annual retirement benefits until the pensioner (or pensioner and spouse) dies, equal to some percentage of the employee’s final or highest salary times years of service.  Once employees have worked enough years and reached a certain age, they may retire and begin receiving their annuity.  If they quit before reaching the required age but have served enough years, they may receive a deferred annuity that begins at the plan’s retirement age.  Future pension benefits grow slowly early in a career, but accumulate much faster later on.  Most state plans require employees to work 10 years before qualifying for pensions.  Even after workers become eligible, their benefits are not worth much initially because they typically must wait many years to collect, and the benefit formula does not adjust for inflation or interest in the meantime.  As a result, workers hired in their twenties who leave, say, 15 years later, accumulate few retirement benefits.  Traditional plans reward work near the end of a career much more than at the beginning.  Because wages tend to grow with inflation and real economic growth, the formula rewards additional work in two ways -- by raising the percentage of salary to be paid out and increasing that measure of final or highest salary.  As this effect compounds, pension benefits grow more rapidly as years of service rise.  States set aside funds to cover future benefit payments through mandatory employee contributions, as well as payments from the state.  How much needs to be set aside depends on various factors affecting future payouts, including how long employees work for the state and how much they earn.  Expected longevity matters, because pensioners receive payments for the rest of their lives.  How much funding is required also depends crucially on what assets earn.  The higher the assumed interest rate, the fewer tax dollars the state needs to contribute to cover future obligations.  States return to employees their required contributions, usually with interest, if they separate with too few years to qualify for pensions.  Many also offer refunds to separating employees with more years of service who figure that their accumulated contributions are worth more than their deferred annuities.  However, states usually credit a lower interest rate on refunded contributions than they assume those contributions will earn for the plan.  By paying out less than it earns (or than it assumes it will earn), the state effectively hopes to make money on employee contributions in the same way as a bank or hedge fund.  The past underfunding of pension plans has shifted costs forward to current and future generations.  Eventually, someone has to pay but only three groups can be tapped:  existing employees, newer employees or taxpayers.  Many states are attempting to limit the hit on taxpayers and older current employees, leaving newer and younger employees with the burden of covering costs for which they were not responsible.  A lower assumed interest rate would mean lower burdens on younger employees but would put current taxpayers more on the hook to cover the shortfalls. 
8.      PEW CENTER RESPONDS TO SCHAITBERGER:     Pew Center for the States has responded to Harold Schaitberger's recent piece entitled 5 Myths About Public Employee Pensions (see C&C Newsletter for July 26, 2012, Item 1).  Here are the Center’s five “truths” about public employee pensions: 

  • Public pension funds face real funding challenges in a majority of states.  In the year 2010, public pension funds as a whole were only 75 percent funded.  Investment gains of 20- and 13-percent in 2009 and 2010, respectively, were not enough to overcome losses from the financial crisis, and pension funding levels continued to drop.  
  • The funding gaps have real impacts on taxpayers and states’ budgets.  The pressure on state budgets springs from policy makers’ failure to keep up with their pension fund contributions.  They have to make their full payments as recommended by their actuaries, and each year they underfund their pensions, their costs will grow. 
  • Policy makers must be responsible stewards of their pension plans.  Wall Street notwithstanding, policy makers are the ones who made promises they could not afford, did not pay for and now cannot keep.  
  • There are no simple fixes.  States with large funding gaps cannot simply cut benefits for new employees or put them in a 401(k)-style plan.  Either they will have to funnel more taxpayer dollars into the system or they will have to ask workers to contribute more or accept less in benefits.  States that have gotten into trouble by failing to keep up with required contributions, promising more than they can afford or taking investment risks will have to adjust their plans.  Pension reform needs to be fair, comprehensive and sustainable.  Real reform will require hard choices, good information and thoughtful analysis. 
  • States need to make sure retirement benefits are there for retirees and affordable for taxpayers.  Some states with well-managed pension plans can continue providing benefits as long as they are disciplined about paying the annual required contributions and do not promise additional benefits they cannot afford.  However, many states cannot continue with the status quo.  These states do not face challenges because public employees and taxpayers did anything wrong.  Public employees helped pay for their retirement with every pay stub.  Rather, policy makers in many states did not responsibly hold up their end of the bargain.  Now, they need to reduce their growing pension costs while still crafting retirement plans that will help them attract and retain talented workers.  Fortunately for the states that need reform, they have a range of options that can help achieve both. 

   U.S. workers with access to paid sick leave are 28 percent less likely than those without sick leave to suffer non-fatal work-related injuries, according to UPO Health News (Business).  Researchers at the Centers for Disease Control and Prevention’s National Institute for Occupational Safety and Health analyzed data from 2005 to 2008.  The study only considered 38,000 private sector workers because most full-time public sector workers have access to paid sick leave.  The study found workers in high-risk occupations, and industry sectors such as construction, manufacturing, agriculture, healthcare and social assistance appeared to benefit most from access to paid sick leave.  Workers in these sectors commonly experience muscle soreness, pain, sprains, strains and tears; fractures; cuts/lacerations; or more chronic injuries including herniated discs, cartilage damage and spinal cord injuries. 
10     VALUE-BASED HEALTH CARE WHITE PAPER:     International Foundation of Employee Benefit Plans has published 171 page White Paper dealing with Value-Based Health Care and Multiemployer and Public Employee Plans.  Few issues in the world of work are more frustrating than the increasing costs of health care, regardless of whether those costs are absorbed by nations, companies or individuals.  There is widespread agreement that health care by definition in the United States and throughout the world should be labeled disease care.  Whatever name is used, health care is needed in all countries because individuals get sick or injured.  In contrast, value-based health care strategies are applicable across the wellness-sickness spectrum, and include all approaches associated with acute care, disease care and health.  VBHC by definition is designed to seek the highest value relative to the quality/cost ratio and effectiveness.  This understanding is fundamental in determining the role of VBHC in health and welfare benefits offered by multiemployer and public employee plans.  It is clear that VBHC offerings are increasing in numbers and by rate of implementation.  In addition, the range of plan involvement varies widely.  Several plans are well engaged in VBHC offerings.  Some are in the middle, while others have a minimal number of offerings.  A few plans offer no programs at all.  This distribution was expected when the research needed to write the white paper was initiated.  Multiemployer and public employee plans are finding early successes in all areas of VBHC, including participating in health fairs and “know your numbers” campaigns, finding high-value and effective health care providers and encouraging participants to stay on prescriptions.  Plans that have been engaged longer are finding evidence of individuals improving biometric numbers, obtaining better follow-up on medical procedures and losing fewer work days.  Here are five of fourteen elements presented that help plans build for success: 

  • A clear vision and buy-in from trustees and administrators
  • Access to reliable and actionable data
  • Partnerships with engaged vendors
  • Communication strategy targeted to all workers
  • Successful programs early on.

Here are five of fifteen challenges to VBHC implementation: 

  • Finding effective communication strategies
  • Educating workers about health and health care
  • Identifying good vendors
  • Finding reliable data on provider quality
  • Geographical dispersion of the workforce.

Although VBHC is beginning to find wider acceptance, overall participation remains low.  High rates of participation and engagement will be necessary if this strategy is to reach its optimal level of effectiveness, another roadblock is difficulty in getting started: Interested plans must find their respective and unique strategy if they are to begin the VBHC journey successfully.  Small plans, which currently seem least likely to implement VBHC, may face unique problems, such as acquiring data.  As with most innovations, the hardest step seems to be the first one.  Regardless of where plans are now, those that have implemented VBHC initiatives -- even if it was only a very small step -- typically did so at suggestion and through the courage of one champion member.  The champion was often an administrator or trustee or even a single plan participant convincing leadership of a need.  Regardless of how VBHC is initiated in small or large multiemployer or public employee plans, it is very likely the single best strategy to achieve healthy, energetic and high-performing participants and their families, workplaces and work teams. 
     Florida Third District Court of Appeal recently decided the single issue of whether the Florida Civil Rights Act, Section 760.10, Florida Statutes, prohibits discrimination in employment on the basis of pregnancy.  Although there was no doubt as to sufficiency of the allegation that the plaintiff was discriminated against on that basis, the trial judge dismissed the complaint for failure to state a cause of action on the ground that there was no such right.  The appellate court agreed.  The Florida Civil Rights Act of 1992 prohibits discrimination in employment with respect to compensation, terms, conditions or privileges of employment, because of an individual’s race, color, religion, sex, national origin, age, handicap or marital status.  The federal Civil Rights Act of 1964, as amended, prohibits an employer from discriminating based on race, color, religion, sex or national origin.  The Pregnancy Discrimination Act of 1978 specifies that discrimination because of pregnancy is sex discrimination and violative of the law.  (The Pregnancy Discrimination Act of 1978 was Congress’s reaction to a U.S. Supreme Court decision that discrimination on the basis of pregnancy was not sex discrimination.  Florida has not similarly amended its law to include a prohibition against pregnancy-based discrimination.)  Because the Third District’s decision was in conflict with a decision of the Fourth District Court of Appeal, the Third District certified conflict, which means the case may be decided ultimately by the Florida Supreme Court.  Delva v. The Continental Group, Inc., Case Nos. 11-2964 and 11-27431 (Fla. 3d DCA, July 25, 2012). 
12.    EVEN TOM FRIEDMAN SEES IT COMING:     When you talk to Chinese officials lately, it does not take long before they express concern about America’s “rebalancing” of forces -- the prospect that we will shift more troops from the Middle East, where they are containing instability, to Asia, where they would contain China.  Thomas L. Friedman, famed New York Times columnist, says his standard reply is that China is worrying about the wrong thing.  It is not that we will shift our Marines from the Middle East to Asia; it is that we are going to shift them from the Middle East to San Diego -- because we cannot afford to be the world’s policeman much longer, and China will have to fill some of the void.  Good luck, world! It has been fun hanging with you, but we cannot pay for it anymore -- not with all of us baby boomers about to retire with no savings.  We have a new strategic doctrine coming:  “U.S. foreign policy in the age of Alzheimer’s.”  We will do what we can afford, and forget the rest.  Charities operate nursing homes, hospitals, elder-care programs, meals-on-wheels, job-training, hospices and family social services in cities across America.  And the financial challenges they are all facing today are profound -- as baby boomers are aging -- and so too are the trade-offs we will have to make between nursing homes in America and nursery schools in Afghanistan.  Unless we get some sustained economic growth, Afghanistan is going to lose.  Experts expect a doubling of the number of older adults – people over the age of 65 – by 2030, as baby boomers age.  And wait until the baby boomer cohort reaches its 80s.  Alzheimer’s Disease Research reports that roughly 5.4 million Americans of all ages had Alzheimer’s disease in 2012, and, by 2050, more than 15 million Americans could be living with the disease.  Many baby boomers are nowhere near prepared in terms of retirement savings for the kind of costs they are going to incur after they stop working, in an age in which they will be living longer, the government will have less to offer, they each will have fewer kids to care for them and social service agencies will be swamped with demands.  Indeed, a 2011 survey by the Employee Benefit Research Institute found that a sizable percentage of workers report they have virtually no savings or investments.  Among those workers polled in its retirement confidence survey, 29 percent say they have less than $1,000.  In total, more than half of workers (56 percent) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.  Maybe that amount could pay for one hospital stay and recuperation in a nursing home, or dealing with just one parent with Alzheimer’s.  Fortunately, two-thirds of baby boomer households are expected to receive some kind of inheritance over their lifetime to cushion the blow.  Also, baby boomers as a generation have been very volunteer-oriented, and they are going to need a lot of family volunteers to work with the elderly.  (Today, family informal caregivers provide about 80 percent of elder care, delivering meals to parents or aunts or driving them from place to place and managing their doctor visits and medications.)  Nursing homes, nursery schools or nursing Afghanistan -- these are the trade-offs we will have to make in this decade, unless we have a real growth spurt.  Friedman would like to see this century as an “American century,” but to paraphrase an old saying:  a foreign policy vision without a real plan to pay for it -- and manage all the trade-offs back home -- is just a hallucination.  See, even a foreign affairs columnist gets it. 
13.    BEST CITIES FOR SUCCESSFUL AGING:       Milken Institute has issued “Best Cities for Successful Aging.”  America is growing older.  Implications and costs of this extraordinary demographic shift are now upon us.  In the public arena, every day brings hand-wringing from leaders in government and business over the increasing strains on social safety nets and health-care systems.  On a personal level, we want to know where we will live, how we will take care of ourselves and whether we will enjoy meaning and dignity as we age.  How should we respond to the aging of America?  Of course, there are societal and personal challenges that may seem daunting and must be addressed.  But it is not all dire news.  Aging Americans want to remain healthy, active, engaged and contributing members of society.  They represent not only a challenge but also an opportunity -- the chance to build a better and stronger America.  Across the country, leaders are developing exciting solutions to enable successful aging.  Policymakers are driving senior-sensitive civic projects to improve aging lives.  With 80 million boomers on their way to senior status, entrepreneurs and business leaders are seeking to capitalize on the emerging opportunities presented by the massive longevity economy.  Innovation abounds -- from new approaches to wellness and health-care delivery, to senior-friendly housing and transportation systems, to encore education, career and engagement opportunities, to aging-centered technologies and social networks, to travel, entertainment and leisure.  To shine a light on the best of these programs and encourage new ones, Milken Institute is proud to present its first index, which measures, compares and ranks the performance of 359 U.S. metropolitan areas in promoting and enabling successful aging.  Here are the top five in the 100 large areas: 

  • Provo-Orem, UT
  • Madison, WI
  • Omaha-Council Bluffs, NE-IA
  • Boston-Cambridge-Quincy, MA-NH
  • New York-Northern New Jersey-Long Island, NY-NJ-PA

There are 259 small metropolitan rankings.  Here are the top five:

  • Sioux Falls, SD
  • Iowa City, IA
  • Bismarck, ND
  • Columbia, MO
  • Rochester, MN

The Institute urges readers not to confuse its sophisticated index with the many rankings and opinion polls that identify the sunniest or most inexpensive spots to live out retirement.  Up to 90 percent of older Americans want to age in place, according to a recent survey by AARP, and the Institute’s goal is to enhance their communities so they can do so with the greatest quality of life possible.  (Incidentally, on the list of 100 large metro rankings, Miami-Fort Lauderdale-Pompano Beach, FL ranks 38.) 
   New Jersey lawmakers have voted to change the state constitution, in response to a decision by the state’s Supreme Court that judges were exempt from last year’s pension reform (see C&C Newsletter for July 26, 2012, Item 12).  The New York Times reports  that the resounding bi-partisan approval by both houses of the legislature allows the measure to be put before voters this November.  If approved by the voters, the change would clarify that the legislature has authority to pass laws that take amounts from judges’ salaries to put toward their benefits.  Like other states, New Jersey has more than one pension fund, including one that is only for its judges and justices.  (At 52 percent, the judicial plan is least funded of New Jersey’s pension plans.)  Reactions ranged from Governor Christie’s statement that he backed the amendment to the New Jersey State Bar Association, which said the amendment represents a rash reaction and a dangerous intrusion by one branch of government into the independence of another, co-equal, branch of government.  We guess there is some disagreement on the subject. 
15.    MORE FORMER PLAYERS JOIN SUIT AGAINST NFL:    Former New York Jets running back Thomas Jones and former New England Patriots safety Lawyer Milloy have joined hundreds of former players suing the National Football League claiming it did not sufficiently warn or treat players for concussions.  Several lawsuits by players against the NFL have been filed and consolidated in multidistrict litigation in U.S. District Court in Philadelphia.  Jones and Milloy are among more than 70 plaintiffs in a lawsuit filed in Miami federal court.  The lawsuit claims the NFL turned a blind eye to the risk and safety of its players.  As reported in Daily Business Review, the 122-page lawsuit claims civil conspiracy, negligence and fraud among its 12 counts.  In a statement earlier this month, the NFL said it has long made player safety a priority and continues to do so. Further, any allegation that the NFL intentionally sought to mislead players has no merit. 
16.    SEC PROBES MIAMI BOND ISSUES:      Securities and Exchange Commission investigators are recommending that the SEC bring civil actions against the city of Miami related to its handling of financial disclosures on the sale of municipal bonds.  In a letter dated July 23, 2012, according to Daily Business Review, SEC said it may seek a permanent injunction, a civil penalty and an order commanding the city to comply with the commission’s previous cease-and-desist order from 2001, when an administrative law judge found the city had misled investors about its financial health during a 1995 bond issue that raised more than $100 Million.  Local governments have other headaches regarding SEC investigations, as well.  Officials of both the city of Miami and Miami-Dade County have acknowledged the SEC is investigating the bond offering that was used to finance the $634 Million Marlins Stadium in Little Havana.  It was not immediately clear how large a civil penalty the SEC might seek on the current investigation.  At least part of the investigation has focused on whether proceeds from bonds sold to fund capital improvements were instead routed to the general fund in order to balance the city’s books, which, in turn, would have made the city look financially healthy for the next round of bond investors.  The city’s response is due no later than August 6, 2012.  (According to a follow-up article in the same medium, no private class action suits are expected.  Experts say there are at least two reasons why.  One, proving losses when a company’s shares plunge is relatively easy.  It's much more difficult with municipal bonds, which do not trade on exchanges and tend to have low volumes of turnover and muted price fluctuations.  Second, municipal defaults are still a relative rarity.  Municipal bonds, in fact, are generally considered the second safest form of investment after U.S. Treasury securities.  In all likelihood, buyers of Miami’s debt are going to get the promised interest payments and return of their principal, according to original terms.) 
17.    FLORIDA SET TO HIT ONE MILLION MARK FOR WEAPONS PERMITS:      The Sun Sentinel reports that the number of Floridians packing concealed weapons is booming and within a matter of weeks should hit the one million mark, making the state the first in the nation to reach that milestone in personal firepower.  (More than California?)  Recently the state has been issuing between 10,000 and 12,000 carry permits a month.  At that rate, permits will reach the one million mark within a couple of months.  Predictably, the big-three also lead in permits:  Miami-Dade, 84,940; Broward, 74,439; and Palm Beach, 60,315.  Interestingly, the upward trend in carry permit applications started about three years ago, coinciding with election of President Barack Obama.  There always seems to be a concern when there is a change in administrations when there might be some attention placed on gun control laws, said a state spokesman.  Men, mostly middle-aged, make up 80 percent of those carrying hidden guns, or about one in 20 of Florida’s 19.3 million population.  Of Florida’s 952,000 total permit holders, the majority, 243,505, are between the ages of 51 and 65.  About 11 percent of all permit holders are from out of state.  Keep honking while I reload. 
18.    RANKING THE NATION’S WORST FRIDAY AFTERNOON COMMUTES:     If you want to avoid traffic gridlock, it Is best to steer clear of roadways on Friday afternoons.  Data compiled for Governingby traffic research firm Inrix show Friday afternoons are the worst time of the week to drive in nearly three-quarters of metro areas across the country.  For most cities with already lengthy rush-hour commutes throughout the week, time spent behind the wheel is further prolonged on Fridays.  Drivers leaving town after work account for some of the additional traffic, which is compounded by other individuals taking care of errands before the weekend.  Morning commutes aren’t as bad because motorists usually head straight to work without making stops on the way.  Areas with many workers living far outside a city can experience significant congestion when all flee the office early.  The presence of different industries within a metro area can also act to push commute delays up or down.  Here are the worst five: 

  • Los Angeles, California
  • San Francisco, California
  • Honolulu, Hawaii
  • Austin, Texas
  • Bridgeport, Connecticut (must have something to do with New York City)

Miami is number 16 and Melbourne, Florida is best, at 100. 
19.    HAVE IT YOUR WAY?:  
    Burger King can hardly be blamed for failing to see any humor in a recent post by a now-former employee.  According to Business Insurance, an unidentified Burger King employee posted a picture of himself standing in his shoes on top of two containers of shredded lettuce.  The employee apparently did not cover his tracks.  It took a blogger just minutes using GPS data embedded in the photo to locate the fast-food restaurant’s address and contact the owner.  Burger King said it was aware of a photo that shows a restaurant employee violating the company’s stringent food-handling procedures. The company said food safety is a top priority at all restaurants, and the company maintains a zero-tolerance policy against any violations, such as the one in question.  Maybe Burger King just decided to sell sole food. 
20.    GOLF WISDOMS:      The practice green is either half as fast or twice as fast as all the other greens.         
21.    PUNOGRAPHICS:    I didn’t like my beard at first.  Then it grew on me.  (How apt.)    
22.    QUOTE OF THE WEEK:   “To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment.”  Ralph Waldo Emerson
23.    ON THIS DAY IN HISTORY:  In 1943, Lt. John F. Kennedy’s PT-boat 109 sinks at Solomon Islands.        
24.    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. 
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