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Cypen & Cypen
August 29, 2013

Stephen H. Cypen, Esq., Editor

1.  NY CUTS PENSION CONTRIBUTIONS:  As many public pension systems around the country struggle with deficits in their funding levels, at least one has taken the step of cutting contributions due from its employers.  New York State Comptroller Thomas DiNapoli, according to ai-cio, has lowered payments due from governments, school districts and local taxpayers that fill up the public pension pot for the next fiscal year.  New York State Common Retirement Fund’s strong gains over the last four years have mitigated some of the impact of the financial market collapse of 2008-2009. Strong investment performance, along with a revision in actuarial smoothing, has lowered the employer contribution rate for 2014-2015.  The average contribution rate for the Employee Retirement System will decrease by 0.8% of payroll, to 20.1%. The average contribution rate for the Police and Fire Retirement System will decrease by 1.3% of payroll, to 27.6%. The retirement system’s actuary recommended a change based on an independent actuarial review, which is performed every five years. The previous method separated assets into equities and non-equities, while the new method expects the entire fund to earn the assumed rate of return, and smoothes any unexpected gains or losses. Projections of required contributions will vary by employer, depending on factors such as retirement plans, salaries and distribution of their employees among the six retirement tiers.
2. FAST FACTS AND FIGURES ABOUT SOCIAL SECURITY:  You probably did not know that:

  • The U.S. Social Security Administration paid benefits to about to about 61.9 million people in 2012.  
  • Social Security provided at least half the income for 64% of the aged beneficiaries in 2011.  
  • Social Security benefits were awarded to about 5.7 million people in 2012.  
  • Women accounted for 55% of adult Social Security beneficiaries in 2012.  
  • The average age of disabled-worker beneficiaries was 53.2 in 2012.  
  • Eighty-six percent of SSI recipients received payments because of disability or blindness in 2012.

SSA Publication No. 13-11785 (August 13, 2013).
3. PROXY VOTING ANALYTICS REPORT:  Equilar’s 2013 Voting Analytics Report is intended to provide a broad-based analysis of voting trends at Russell 3000 companies during the most recent proxy season.  Some key findings follow: 

  • Say on Pay pass rates remain high in 2013 --  of those Russell 3000 companies that have held their 2013 annual meetings, approximately 98% have passed their Say on Pay votes. 
  • The majority of companies saw positive change, with average support levels up slightly -- 52% of companies experienced an increase in approval.  
  • Increase in company responsiveness and shareholder engagement -- The average shareholder outreach program following a failed Say on Pay vote solicited feedback from investors holding a combined 55% of the companies’ outstanding stock.  
  • A change in performance metrics was the most common adjustment following a 2012 Say on Pay failure -- more than 50% of the companies that disclosed changes following a failure in 2012 made changes to performance metrics.  
  • The majority of shareholder proposals submitted in 2013 dealt with issues relating to Board Management or Social and Environmental causes -- 318 of the 465 shareholder proposals voted on in 2013 fell into one of these two categories.  
  • Shareholder proposals addressing political contributions and lobbying remained prevalent -- 80 of the shareholder proposals submitted related to company political contributions and lobbying efforts, but only one received majority support.  
  • Board declassification and majority voting proposals received the most majority votes in 2013 -- proposals calling for annual elections of directors and the adoption of majority voting standards for director elections received the most passing votes, with 24 and 15, respectively, proposals receiving majority support.  
  • Majority voting for director elections continues to spread -- 68% of majority voting proposals voted on in 2013 received shareholder approval, and today more than 80% of the S&P 500 has adopted the majority voting standard. 

4.  THOSE OLDIES BUT GOODIES: To comprehend the aging of the public sector, look no further than your mailbox says Governing. Postal Service workers register a median age of 52 -- higher than any other industry.  (In fact, 72% of all such workers are over the age of 45!)  The only other group of employees as old work in jobs, literally, near death: funeral homes, cemeteries and crematories. While workers across all sectors are closing in on retirement age, it is in the public sector that occupations with some of the oldest workers can be found, which means that a new crop of public servants will soon need to step up and take the helm of government. Bureau of Labor Statistics data show median ages for 227 industries for its Current Population Survey. Seven of the top 20 industry classifications with the oldest workers consist primarily of public employees, such as those working in public administration executive offices, libraries and public finance. As a whole, government employees tend to be older than other segments of the labor force. The looming retirement of the vast segment of baby boomers has long occupied much attention. For years, economists and academics warned of an impending “silver tsunami.”  However, many baby boomers remain attached to their jobs. The prevailing wisdom suggests boomers put retirement plans on hold when the economy tanked, and the hit their investment portfolios took likely provided further incentive to stay employed.

5. DOES HOUSEHOLD DEBT INFLUENCE THE LABOR SUPPLY AND BENEFIT CLAIMING DECISIONS OF OLDER AMERICANS?:  As part of the 15th Annual Joint Conference of the Retirement Research Consortium, the Urban Institute has issued its preliminary report, entitled “Does Household Debt Influence the Labor Supply and Benefit Claiming Decisions of Older Americans?” Americans’ indebtedness increased dramatically from the late 1980s until just before the Great Recession. In 2007, the typical family with debt owed $70,600, up from $25,300 in 1989. By 2010, the median value of debt for families with debt was $70,700, with debt payments accounting for about 18% of their disposable income. Older families, in particular, experienced the largest increases in debt over the period. Between 1989 and 2010, the median value of their debt increased between 5 and 6 times. In contrast, the median value of debt among younger families only doubled. Indebtedness could affect older adults in two ways. On one hand, debt might compel older individuals to keep working and delay benefit claiming into their mid-sixties and beyond, so they can pay off their financial obligations. On the other hand, indebted adults who are cash-strapped and unable to service their debt because they are not working or because they are earning much less than their lifetime average, might claim their benefits as soon as they are eligible to get the necessary cash to make their loan payments. Determining which of these two opposing effects dominates and how debt influences labor supply and Social Security claiming decisions is an empirical question, the answer to which has important implications for individuals’ economic well-being in retirement.  People can begin collecting benefits as early as age 62, but early claimants receive lower monthly benefits for the rest of their lives. Thus, the decision to claim benefits early can negatively impact one’s own retirement security, and potentially one’s spouse’s. Moreover, delayed claiming confers substantial financial gains to most older adults who continue working while waiting to collect Social Security. The additional earnings from working longer can also generate income and payroll tax revenues, helping to finance Social Security and other government services. The authors believe that this paper is the first to explore the link between older adults’ indebtedness and their labor supply, and Social Security benefit receipt. With the rising level of indebtedness among older households and scheduled increases in the Social Security Age (and thus larger penalties for early claiming), understanding this relationship is especially important.
6.  FPPTA TRUSTEES SCHOOL:  Florida Public Pension Trustees Association Trustees School will take place on September 29 – October 2, 2013 at the PGA National Resort & Spa at Palm Beach Gardens, Florida. To access information please log on  All board of trustee members, and anyone interested in the administration and operation of the Chapters 112, 175 and 185 pension plans should attend trustee school.
7. FLORIDA DIVISION OF RETIREMENT ANNUAL POLICE OFFICERS’ AND FIREFIGHTERS’ PENSION TRUSTEES’ FALL CONFERENCE: The 43rd Annual Police Officers' and Firefighters' Pension Trustees Fall Conference will take place on October 22-24, 2013. You may access information and updates about the Fall Conference, including area maps, a copy of the program when completed and links to register with at the Doubletree by Hilton Hotel Orlando at Seaworld. Please continue to check the FRS website for updates regarding the program at All police officer and firefighter plan participants, board of trustee members, plan sponsors and anyone interested in the administration and operation of the Chapters 175 and 185 pension plans should take advantage of this unique, insightful and informative program.
8.  RETIRED HEALTH MESSAGE: If all is not lost, where is it?
9.  PONDERISMS:  How is it one careless match can start a forest fire, but it takes a whole box to start a campfire?
10. TODAY IN HISTORY: In 1949, USSR performs first nuclear test.
11. 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. 
12. PLEASE SHARE OUR NEWSLETTER: Our newsletter readership is not limited to the number of people who choose to enter a free subscription.  Many pension board administrators provide hard copies in their meeting agenda. Other administrators forward the newsletter electronically to trustees. In any event, please tell those you feel may be interested that they can subscribe to their own free copy of the newsletter at



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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.

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