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Cypen & Cypen
SEPTEMBER 23, 2010

Stephen H. Cypen, Esq., Editor

1. 9 YEARS AFTER 9/11, PUBLIC SAFETY RADIO NOT READY:  The inability of most firefighters and police officers to talk to each other on the radios on September 11, 2001, at the World Trade Center—one of the most vexing problems on that day nine years ago--still has not been completely resolved.  The problem, reports the New York Times, was seen again in 2005 after Hurricanes Katrina and Rita.  Public safety officers from different jurisdictions arrived at the scene of those disasters, only to find that, unable to communicate with each other by radio, they had to resort to running handwritten notes between command centers.  Despite the $7 billion in federal grants and other spending over the last several years to improve the ability of public safety departments to talk to each other, most experts in such communication say that it will be years, if ever, before a single nationwide public safety radio system becomes a reality. Meanwhile, public safety and homeland security officials have patched together voice networks in some regions, including New York, that link commanders at various agencies.  But the focus in Washington has turned to development of the next generation of emergency communications, wireless broadband, which seeks to succeed where radio has failed.  Many of the issues that helped shape the current dysfunctional public safety radio networks threaten the creation of a uniform standard for wireless broadband communications. 

2. NEW YORK COMPTROLLER OFFERS TIPS ON HOW TO PAD PENSION:  New York state Comptroller Thomas DiNapoli has alleged overtime abuses at New York City’s Metropolitan Transportation Authority, and announced dramatic increases in state and local governments’ pension contributions. says the two issues are not unrelated.  Overtime, when excessive, can drive up pension benefits, which costs taxpayers.  Yet on the comptroller’s website, DiNapoli provides tips for government employees to pad their pensions by stockpiling vacation and sick time or working overtime and holidays.  A spokesman for DiNapoli said the office is merely informing employees of their rights.  Others see it differently: the comptroller is inviting public employees to “game” the system so they can maximize their pensions at taxpayers’ expense.  He has announced an investigation, a possible criminal investigation, yet on his webpage he points out that if the public employee works more overtime he will get a higher pension.  The comptroller is both the chief auditor of sate and local governments and the sole trustee of the state’s $124.8 billion pension fund.  Some question whether it is the comptroller’s responsibility to give retirement planning advice.  (While we do not question the comptroller’s responsibility to give retirement planning advice, we do quarrel with his saying that those who follow his advice are abusing the system.) 

3.  PENSION BUY-INS ARE A GOOD DEAL:   A reader of the Seattle Times asked whether it is a good investment to purchase “permissive time” in a government pension plan.  The reader retired in 2008, at age 60, from an agency which offered the option of buying extra years of service.  After weighing the advantages, he shifted about $116,000 from a tax-deferred account to buy five extra years of service credit toward retirement.  The multiplier at the time was 3%, which gave him an immediate additional annual income of $10,900, guaranteed for life.  The answer:  unless he had no other savings, a decision like this one is a good one, providing a 9.4% income rate from the $116,000 investment.  In the current market, a single-life annuity from a private company purchased with $116,000 would provide $619 a month, or $7,428 a year.  Another thing interesting from the piece: a link to, a free service to obtain instant annuity quotes.

4.  AMERICA’S RETIREMENT PROBLEM—SHOULD WE DITCH 401(K) PLANS?:  Over the past decades, defined benefit plans have been displaced in favor of defined contribution plans like 401(k) plans.  But the majority of Americans with access to 401(k) plans are not saving the maximum amount they can, and in many cases, are not saving at all.  Should the government play a greater, or different, role in getting Americans to save more for their retirement?  A recent “Ideas in Action” television program presented a panel discussion on 401(k) plans and related topics.  The half-hour piece features Teresa Ghilarducci, Professor of Economics at the New School for Social Research (See C & C Newsletter dated August 12, 2010, item 12); Dallas Salisbury, President and CEO of Employee Benefit Research Institute; and Alex Brill, Research Fellow at the American Enterprise Institute.  Readers can link to the piece at, where a transcript is also provided. 

5.  THE WORLD’S 300 LARGEST PENSION FUNDS:   Towers Watson has released its year-end 2009 analysis of the 300 largest pension plans in the world.  Total assets under management totaled $11.3 trillion.  Funds increased their value 8.2%, after declining 12.6% in 2008.  The top 20 funds  reached the highest level in AUM ever, but showed a poorer performance than the overall ranking—a reversal from previous years, when top 20 funds outperformed.  North America remains the largest region in terms of AUM, although its share within the ranking continues to decrease.  US pension funds in the top 300 numbered 127.  Sovereign and public sector pension funds account for more than 2/3 of total assets, with 141 funds in the top 300.  Defined benefit funds account for 71.3% of total assets, down from 74.6% in 2008.  DB asset values grew by 4.4% in 2009, compared to 23.6% asset value growth of DC and hybrids combined. 

6.  FLORIDA’S CHILD-RESTRAINT LAW MOST LENIENT IN THE COUNTRY:  It is not often a cop will tell you to ignore the law.  But when it comes to protecting their children, parents need to think twice about Florida’s child restraint law, according to  Florida Highway Patrolman are not advocating that parents ignore the entire law, just the part only requiring car seats and booster seats for children 3 and under.  That provision makes Florida’s child restraint regulations the most lenient in the nation, says the National Transportation Safety Board, which has recommended since 1996 that children be restrained in booster seats through age 8.  More than half of the states have passed laws that reflect the NTSB recommendation, but 21 states and two U.S. territories have not.  Some states (not including Florida) have laws that take into consideration weight and height of a child, but age is the universal determination.  The National Highway Traffic Safety Administration has estimated that nearly 3 out of 4 parents do not properly use child restraints, which means the child seat may not protect the way it should.  The agency has declared September 25 as “National Seat Check Saturday.”  On that date, thousands of child safety seat inspection stations will be operating throughout the country.  To find one near you, go to

7.  LAWYER JAILED ON CONTEMPT CHARGES FREED AFTER 1 ½ YEARS BEHIND BARS:  A 70-year-old attorney who was sentenced to jail “indefinitely” on contempt-of-court charges was abruptly released, after spending a year-and-a-half behind bars. reports that Richard Fine, an antitrust and taxpayer advocate attorney, had been thrown in jail last year by a state court judge for failing to answer questions about his finances and for practicing law without a license.  Fine contended that he was being targeted by the judge because of his challenges to county-funded benefits that judges receive on top of their state pay.  Rather than comply with the judge’s orders and be released from jail, Fine vowed to take his case all the way to the U.S. Supreme Court, which declined to take up his petition, meaning he could have remained in jail indefinitely as ordered.  As he left hoosegow, Fine shouted “I’m in fighting condition.  They haven’t broken me down, and they won’t break me down.”  S-T-U-B-B-O-R-N.

8.  VAST MAJORITY OF U.S. INVESTORS SUPPORT CLEAR “FIDUCIARY STANDARD” FOR FINANCIAL PROFESSIONALS:  A new industry survey reviewed by finds most investors mistakenly think that financial professionals and insurance agents are already held to fiduciary duty: 91% support an even-handed regulatory approach from SEC.  As the U.S. Securities and Exchange Commission weighs feedback on how to implement new financial reforms enacted by Congress, a major new national survey of investors shows that most US investors are confused about which financial professions are required to operate under a “fiduciary standard,” requiring the financial professional put his client’s interest ahead of his own.  At the same time, the vast majority of US investors believe that all financial professionals providing investment advice should be required to operate under such a pro-investor standard.  Chief survey findings include:

  • Nine out of ten US Investors think that a stockbroker and an investment advisor who provide the same kind of investment advisory services should have to follow the same investor protection rules.
  • Nearly all investors agree that when you receive investment advice from a financial professional, the person providing the advice should put your interest ahead of his, and should have to tell you upfront about any fees or commissions he earns and any conflicts of interest that potentially could influence that advice.
  • Nearly all US investors agree that the fiduciary requirement should extend to insurance agents selling investments.
  • At the same time, there is widespread misunderstanding about which financial professionals are held to the fiduciary standard:

    Three out of five US investors mistakenly think that insurance agents have a fiduciary duty to their clients.

    Two out of three US investors are incorrect in thinking that stockbrokers are held to a fiduciary duty.

    Three-quarters of investors are wrong in believing that financial advisors –a term used by brokerage firms to describe their salespeople—are held to a fiduciary duty.

    By contrast, three-quarters of investors think the fiduciary standard is in place for financial planners and an equal percent say the same for investment advisors.

The survey was conducted in response to concern that SEC is receiving extensive feedback from financial industry groups, but relatively little from the investing public.

9. WHITE POLICE OFFICERS STATE REVERSE DISCRIMINATION CAUSE OF ACTION: White police officers who lost out on promotions awarded instead to African-American officers who scored worse on the promotion examination stated claims under Title VII and the Civil Rights Act despite city officials’ qualified immunity defense based on a 1978 desegregation decree.  Specific language in the decree required promotions within the Police Department to be made without regard to race or color.  It is well-established that racial classifications undertaken by governmental officials are constitutionally suspect and subject to strict scrutiny.   Finch v. Peterson, Case No. 09-2676 (U.S. 7th Cir., September 10, 2010).  This summary was provided to us by Chuck Carlson.

10. DELICENSING OF PARAMETIC MAY HAVE UNCONSTITUTIONALLY DEPRIVED HIM OF REPUTATIONAL RIGHTS:  Firefighter becomes certified as paramedic, and, as required by law for him to work as such, a doctor agrees to license and supervise him.  Responding to a chest-pain call, the paramedic finds an oppositional and violent subject.  When the subject refuses to sign the release form, the paramedic, rather than provide treatment, walks out.  The doctor, accordingly, revokes the paramedic’s license, and the paramedic is relegated to firefighter duties, although at the same pay.  He sues under Section 1983, but his procedural due process claim fails.  However, he may proceed on his deprivation of liberty theory that loss of the doctor’s sponsorship precludes him from ever finding other employment in his field.  Braswell v. Shoreline Fire Department, Case No. 09-35974 (U.S. 9th Cir., September 16, 2010).  This summary was provided to us by Chuck Carlson.

11. SCHWARZENEGGER DROPS IDEA TO BORROW FROM CALPERS TO BALANCE BUDGET:  California Governor Arnold Schwarzenegger and legislative leaders from both parties have been attempting to hammer out a long-delayed budget deal, and bridge a $19 billion deficit.  The only concrete result appears to be the Governor’s taking off the table a proposal to borrow money from California Public Employees’ Retirement System to balance the budget (See C & C Newsletter for September 2, 2010, item 3).  The Governor told that “it’s just not the responsible thing to do.”  You got that right, Arnold. 

12. ALL PUNS INTENDED:  Two cannibals are eating a clown. One says to the other: "Does this taste funny to you?"

13. OXYMORON:  A yawn is a silent shout.

14. AGING JOKES: You know your getting old when happy hour is a nap.

15. FABULOUS RANDOM THOUGHTS:  What happens if you get scared half to death twice?

16. QUOTE OF THE WEEK:  “We must use time as a tool, not as a couch.”  John F. Kennedy

17. 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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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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