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June, 1996

Stephen H. Cypen, Esq., Editor

WE RESPOND TO ST. PETE TIMES' ATTACKS: By now, you have probably seen the incredibly-slanted St. Petersburg Times' reports reprinted in the May 1996 Florida League of Cities publication entitled Quality Cities. Many trustees have been called upon by city officials to "explain" these reports. If you would like a copy of our reply to one of the authors, please let us know. What we said may be of help to you in defending yourself.

"ALU-O'HARA PUBLIC SAFETY ACT" BECOMES LAW: The Legislature has enacted a very important new law, entitled the "Alu-O'Hara Public Safety Act." Some highlights are as follows:

  1. The presumption enacted last year for public safety workers as to hepatitis has been amended. The written affidavit must now include that the public safety worker has not been exposed, through transfer of bodily fluids, to any person known to have hepatitis, outside the scope of employment; has not had a transfusion of blood, other than arising out of the accident or injury happening in connection with present employment, or received any blood products for the treatment of a coagulation disorder since last undergoing medical tests for hepatitis, which tests failed to indicate the presence of hepatitis; has not engaged in unsafe sexual practices or other high-risk behavior, as identified by the Centers for Disease Control or the Surgeon General, or had sexual relations with a person known to have engaged in same; or has not used intravenous drugs not prescribed by a physician.

  2. The same presumption has been amended to delete the requirement (as an alternative to prior tests which fail to indicate presence of infection) that the public safety worker "shall have banked serum for future testing, which future tests fail to reveal evidence of infection."

  3. Any employer who employs a full-time law enforcement officer or firefighter who, on or after January 1, 1995, suffers a catastrophic injury (as defined by worker's compensation law), in line of duty, shall pay the entire premium of the employer's basic group health insurance plan for the injured employee, the injured employee's spouse and for each dependent child of the injured employee until the child reaches the age of majority or until the end of the calendar year in which the child reaches the age of twenty-five if the child continues to be dependent or the child is a full-time or part-time student and is dependent. If the injured employee subsequently dies, the employer shall continue to pay such entire premium for the surviving spouse until remarriage and for the dependent children. The injury must have occurred as a result of: the law enforcement officer's response to fresh pursuit, the law enforcement officer's response to what is reasonably believed to be an emergency, or an unlawful act perpetrated by another; or the firefighter's response to what is reasonably believed to be an emergency involving the protection of life or property, or an unlawful act perpetrated by another. Health insurance benefits payable from any other source shall reduce benefits payable under the new law.

  4. Existing state-provided death benefits are not limited by the new law.

EXCELLENT ARTICLE ON PROXY VOTING: The June 1996 Employee Benefits Journal contains a very interesting article entitled "Proxy Voting and Shareholder Activism: The Emerging Issues." The article concerns Department of Labor determinations as to private plans covered by ERISA, but the advice should be equally applicable to public plans: "the fiduciary act of managing plan assets which are shares of corporate stock would include the voting of proxies appurtenant to those shares of stock." The Employee Benefits Journal is an official publication of the International Foundation of Employee Benefit Plans, Inc., P.O. Box 69, Brookfield, Wisconsin 53008-0069. Boards of Trustees which are not members of the International Foundation should seriously consider membership, which includes the Journal.

EEOC SUCCESSFULLY PURSUES ADA CASES: According to BNA Pension & Benefits Reporter, Naomi Levin, Senior EEOC Attorney, says that EEOC has been "very successful" in pursuing Americans With Disabilities Act cases involving benefits plans. Almost all of EEOC's ADA lawsuits have been settled in EEOC's favor. Those of you who have attended Ray Edmondson's FPPTA conferences may remember Naomi Levin as one of the best speakers we have ever had.

STATUTE ALLOWS CITY PAYMENT OF RETIREES' INSURANCE: Are you familiar with Section 112.0801, Florida Statutes? That statute provides, in pertinent part: "Any state agency, county, municipality, special district, community college, or district school board which provides life, health, accident, hospitalization, or annuity insurance, or all of any kinds of such 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 prior to October 1, 1987, as well as those who retire on or after such date, and their eligible dependents, the option of continuing to participate in such group insurance plan or self-insurance plan. Retirees and their eligible dependents shall be offered the same health and hospitalization insurance coverage as is offered to active employees at a premium cost of no more than the premium cost applicable to active employees. For the retired employees and their eligible dependents, the cost of any such continued participation in any type of plan or any of the costs thereof may be paid by the employer or by the retired employees. ..." Predictably, the Attorney General has found that the statute authorizes, but does not require, the employing authority to pay for such insurance. AGO 96-06.

INTERNAL INVESTIGATION OPEN TO SUPERVISORY STAFF: As you probably know, Section 112.533, Florida Statutes, exempts from disclosure under Chapter 119, Florida Statutes (Public Records Law), an active internal investigation of a law enforcement officer. Because an agency, not an individual acting alone, conducts an internal investigation, the chief of police is not precluded from discussing with his supervisory staff information obtained in carrying out such internal investigation. AGO 96-18.

CALPERS SETS AGENDA: One Hundred Billion Dollar CALPERS plans the following projects for 1996: test a centralized information center for participants and beneficiaries; hire a consultant to develop internal actuarial software so that the plan can better understand its liabilities; establish performance benchmarks for customer service, worker productivity and investments; develop a new formula to determine annual employer contributions and work to minimize fluctuations; design comprehensive personal financial planning software for its one million defined-benefit members; and survey state agencies to find out what they envision offering as future retirement benefits.

OHIO TEACHERS CHALLENGE AMENDMENTS: A group of Ohio teachers has filed a class-action suit against the state teachers retirement system, contending that certain 1994 changes violated state law. Because the plaintiffs who were vested but retired early participated in a money-purchase option, they claim that the following actuarial changes illegally reduced their benefits: (1) the interest rate used for plan benefit calculations was decreased from 7.75% to 6%, (2) assumptions of longer life spans for participants were adopted and (3) bases for cost-of-living allowances were changed. Stay tuned for further information.

REHAB ACT ALSO COVERS PERCEIVED IMPAIRMENTS: How much should your belt be tightened? As a special condition of employment, a firefighter agreed that "during his six month probationary period, he will have lost sufficient weight to go from a size 40 waist to a size 36 maximum." Although the firefighter lost enough weight during his probationary period, he was terminated for failing to maintain a 36 inch waist. The trial court dismissed his claim under the Florida Human Rights Act of 1977, Section 760.10(1)(a), Florida Statutes, determining that obesity is not a handicap covered by the Act. In reversing, the appellate court adopted the definition of handicap contained in the Rehabilitation Act of 1973 that includes not only those who are actually physically impaired but also those who are regarded by others as impaired. (Note that the Rehabilitation Act of 1973 preceded the Americans With Disabilities Act, which apparently was not in effect when the instant suit was brought.) Remember that this decision merely reverses a dismissal and returns the case for trial, and is not an adjudication on the merits in favor of the firefighter. Davidson v. Iona-McGregor Fire Protection and Rescue District, 21 Fla. L. Weekly D1243 (Fla. 2d DCA, May 24, 1996).

USERRA SUITS INCREASE: Labor Department lawsuits under the Uniformed Services Employment and Reemployment Rights Act (USERRA) have increased. Complaints involve refusals to reinstate an individual following military service, discharge because of military service and refusal to provide pension benefits for the period of military service. However, less than 20% of the cases involve state and local governments. As we predicted when USERRA was enacted, requirements that employers make up contributions to defined contribution plans could run afoul of Internal Revenue Service Code qualification provisions. Fortunately, HR3448 will amend the Internal Revenue Code to provide for tax treatment of USERRA-required contributions.

FLORIDA (AS USUAL) BEHIND THE TIMES: C'mon, Florida, wake up and smell the coffee (literally). Most public trustees are aware of the provisions of Section 112.061, Florida Statutes, limiting per diem allowance for meals to $3.00 for breakfast, $6.00 for lunch and $12.00 for dinner. According to a recent BNA survey, only 1/3 of organizations with business travelers even impose specific monetary limits on reimbursement for travel meals, a practice that is very common in the public sector. Of those businesses imposing such limits, the median per diem allowance for meals is almost $30.00.

VIRGINIA TO VOTE ON MAKING PENSIONS INDEPENDENT: In November, the people of Virginia will vote on a constitutional amendment which will make state retirement system an independent trust fund. Hopefully, the amendment will keep the retirement system out of the political arena.

THANKS, TRISH: Our thanks to Patricia Shoemaker for suggesting that our Newsletter include "headings." Again, we welcome suggestions, as well as criticisms.

Copyright, 1996-2004, 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.

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