Stephen H. Cypen, Esq., Editor
1. MARVIN CLAYTON, FRIEND TO FIREFIGHTERS AND POLICE OFFICERS, DIES IN TALLAHASSEE: Marvin Berkeley Clayton, 68, died suddenly on July 20, 2001 in Tallahassee, Florida. Services were held July 24, 2001 at Lloyd Baptist Church. Although the weather was quite stormy, an overflowing crowd spilled over to the outside of the church. A native of Capitola, Marvin was a lifelong resident of Leon and Jefferson Counties. At time of his death, Marvin was serving as a lobbyist for the Florida Professional Firefighters. For almost thirty years Marvin served as Assistant Director/Assistant Bureau Chief or Director/Bureau Chief of the Municipal Police Officers and Firefighters Pension Office and its predecessor. He is survived by his wife, two sons, a daughter, his mother and seven grandchildren. The firefighters and police officers of Florida will sorely miss Marvins keen political savvy and his ever-present smile. Goodbye, "Mr. Chipper."
2. CITY OF MIAMIS 1995 PENSION BOND ISSUE VIOLATED SECURITIES LAWS: In an Initial Decision dated June 22, 2001, Brenda P. Murray, Chief Administrative Law Judge, has found that the City of Miami, in connection with three bond issues in 1995 totaling $116.5 Million, violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Judge Murray ordered the City to cease and desist from committing such violations or any future violations. The judge found that City officials knowingly and with the intention to mislead, manipulate or defraud, falsely represented that no material changes had occurred in the financial condition of the City since issuance of the Citys 1994 financial statements, which were the most recent financial statements provided in the offering, and provided false and misleading material information in the 1994 Comprehensive Annual Financial Report and Official Statements and omitted material information that should have been conveyed. Judge Murray also found that the City, acting knowingly and with the intention to mislead, manipulate or defraud, violated the antifraud provisions of law by representing in the Official Statements that it was operating under a balanced budget for fiscal year 1995 when it knew that $222 Million in projected general fund revenues was deficient by at least $12 Million. One of the bond issues was a pension bond offering in the amount of $72 Million. Pension expenses are operating costs payable from the Citys general fund, but because it lacked funds to pay the fiscal year 1995 pension costs, the City transferred $25 Million (34.7%) of the $72 Million proceeds from the December 1995 pension bond offering to the general fund for the pension fund obligation due in fiscal year 1995. The pension bond Official Statement stated in the introduction that the bonds were being issued for the purposes of "providing for the payment of all or part of the Citys unfunded actuarial accrued and future liabilities to certain City pension funds and providing for the payment of all or part of the Citys accumulated and future compensated absence liabilities, including reimbursing the City for payments made in Fiscal Year 1995." Further, the Official Statement notes that "the City has determined to issue the 1995 Bonds and to apply a portion of the proceeds thereof to the discharge of all or part of the Unfunded Actuarial Accrued Liabilities and the future liabilities of the City to the Pension Plan with respect to the fiscal years ending September 1995 through 2008." Finding that the SECs position would impose too stringent a standard on an issuer, the judge found that the City sufficiently disclosed the use of pension bond proceeds and did not thereby violate the antifraud provisions of law because a reasonable investor would know that a portion of the pension bond proceeds would be used to pay a pension liability for the fiscal year ended September 30, 1995. In accordance with the SECs Rules of Practice, the 35-page Initial Decision will become a final decision of the SEC as to each party who has not filed a petition for review within twenty-one days, unless the SEC determines on its own initiative to review the Initial Decision. In the Matter of the City of Miami, Florida, et al, Securities and Exchange Commission Administrative Proceeding File No. 3-10022, Initial Decision Release No. 185 (June 22, 2001).
3. AGREEMENT REQUIRING ARBITRATION OF EMPLOYMENT DISCRIMINATION DISPUTE UNENFORCEABLE: Parties may agree to arbitrate statutory claims, including claims under Title VII of the Civil Rights Act of 1964 (and the Florida Civil Rights Act of 1992), so long as the agreement furnishes an adequate mechanism for vindicating the claimants statutory rights. However, when an arbitration agreement contains provisions that defeat the remedial purpose of the statute, the agreement is not enforceable. Here, the agreement specifically required the parties equally to bear the costs of arbitration. On the other hand, Title VII and the Florida Civil Rights Act provide a prevailing claimant the right to seek an award of all costs. Thus, a Florida appellate court affirmed a trial courts denial of an employers motion to compel arbitration in an employment discrimination case. Flyer Printing Company, Inc. v. Hill, 26 Fla. L. Weekly D1780 (Fla. 2d DCA, July 18, 2001).
4. POLICE OFFICERS SUICIDE NOT DEATH FROM "PERSONAL INJURY" UNDER FEDERAL BENEFITS ACT: The Public Safety Officers Benefits Act of 1976 provides a one-time cash payment of $100,000.00 to survivors of public safety officers who die in the line of duty. However, the officer (1) must have suffered a "personal injury," (2) the injury must have been suffered "in the line of duty" and (3) the death must have been "the direct and proximate result" of the personal injury. The statute prohibits payment of survivor benefits if an officer intentionally brings about his own death. Regulations define personal injury as any "traumatic" injury and exclude therefrom stress and strain. After a member of the Wellesley, Massachusetts police force fatally shot himself, his widow obtained line-of-duty death benefits from the Wellesley Retirement Board. However, the claim for benefits under the PSOBA was denied. A federal appellate court affirmed summary judgment in favor of the government, agreeing that the officer did not die as a result of a "personal injury," even though he suffered from post traumatic stress disorder that inflicted a traumatic injury upon his mind. Yanco v. United States, Case No. 00-5058 (U.S. Fed. Cir., July 24, 2001).
5. WORKERS COMP FORFEITURE STATUTE NOT RETROACTIVE: In 1998, the Florida Legislature amended Section 440.09(4), Florida Statutes, to give the judge of compensation claims authorization to deny claims if an employee has knowingly or intentionally engaged in prohibited activities under Section 440.105, Florida Statutes, for purpose of obtaining workers compensation benefits. The latter section generally prohibits a person from making or causing to be made any false, fraudulent or misleading statement in connection with obtaining any benefit or payment. Because the amendment was effective January 1, 1999, it does not apply to a claimant who suffered an injury prior to that date. Pasco County School Board v. Angle, 26 Fla. L. Weekly D1687 (Fla. 1st DCA, July 10, 2001).
6. FLORIDA SUPREME COURT AVOIDS ISSUE OF ACKER RETROACTIVITY: Answering a certified question and following its 1999 decision in Acker v. City of Clearwater, 755 So.2d 597 (Fla. 1999), (see C&C Newsletter for December, 1999, Item 1), the Supreme Court of Florida has again decided that where an employer/carrier takes a workers compensation offset under Section 440.20(15), Florida Statutes, and initially includes supplemental benefits paid under Section 440.15(1)(e)(1), Florida Statutes, the employer/carrier is not entitled to recalculate the offset amount to include increases in supplemental benefits. However, because the First District Court of Appeal did not certify the issue of whether Acker should be applied retroactively (although the Florida Department of Labor and Employment Security raised the issue in its brief), the high court declined to express an opinion on the issue because it was not considered by the judge of compensation claims and the record was devoid of evidence that would permit a meaningful review. We may be a bit confused, but didnt the First District Court of Appeal itself determine that the Florida Supreme Courts decision in Acker should be applied retroactively? (See C&C Newsletter for January, 2001, Item 18). Florida Department of Labor & Employment Security v. Boise Cascade Corporation, 26 Fla. Law Weekly S494 (Fla., July 12, 2001).
7. PUBLIC PENSION SYSTEMS - STATEMENTS OF KEY RISK AND COMMON PRACTICES TO ADDRESS THOSE RISKS: The Association of Public Pension Fund Auditors (APPFA) has issued a 31 page report entitled Public Pension Systems - Statements of Key Risks and Common Practices to Address Those Risks. The document has been officially endorsed by the National Association of State Retirement Administrators (NASRA), the National Council on Teacher Retirement (NCTR), Government Finance Officers Association (GFOA) and National Conference on Public Employee Retirement Systems (NCPERS). Public pension systems face a number of risks in undertaking necessary investment activities. Some risks, such as normal market volatility, are generally unavoidable. Some risks, such as investing in emerging markets, are knowingly assumed and are necessary to implement certain investment policies. Other risks, such as legal exposure to some forms of liability, are unnecessary and avoidable. Controlling or eliminating these risks has become a topic of great interest as well-publicized errors by investment funds have captured public and professional attention. In response, a number of organizations have discussed or promulgated risk principles, guidelines, standards and other directives for various professional organizations. Very few, however, have been specifically oriented to the public pension system community or have approached the problem from the perspective of the basic disciplines and purposes of public pension systems. The document is intended to provide general guidance for systems, or auditors of those systems, in addressing issues of risk and practices and procedures used to address those risks. In other words, the document is intended as a template for analyzing and addressing the particular risks that are faced by individual public pension systems. Accordingly, it identifies the key investment risks associated with large public pension systems in common practices to address, manage and, to the extent possible, control those risks. While common practices may be appropriate for most systems, in many instances a particular funds posture or resources might require lesser or greater actions given that funds analysis of the potential impact of a particular risk and the cost of fully addressing that risk. The document is not intended to be an exhaustive list of all risks that public pension systems may potentially encounter. It is not intended to be a comprehensive checklist of all the procedures that public pension systems should incorporate to address the identified risks. Practices listed in the document are simply common and proven approaches that may help systems assess their approach to addressing similar issues.
8. MIAMI-DADE F.D. AFFIRMATIVE ACTION PLAN UPHELD: In 1984 Miami-Dade County voluntarily instituted an affirmative action plan. Originally, the plan dealt with hiring of African-Americans, Hispanics and women by the County Fire Department. By 1990, having satisfied its hiring goals with respect to African-Americans and Hispanics, those aspects of the affirmative action plan were abolished. However, the department continued to give female applicants preferential treatment through a revised affirmative action plan, basically establishing a long-term goal of hiring 35% women. Unsuccessful male applicants for entry-level firefighter positions challenged the revised plan, contending that it violates Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the U.S. Constitution. They alleged that the stated goal is unreasonably high, because it relies upon general population figures to determine the appropriate number of women firefighters, when in actuality more refined data suggest that women are simply less interested and less physically qualified than men. The district court granted summary judgment in the Countys favor and the U.S. Court of Appeals affirmed. However, the appellate court did say: "An affirmative action plan may not go on forever. ... Simply because discrimination in the form of affirmative action may be lawful at one point in time does not mean that such discrimination may be countenanced in the future. ... The Department has now been granting preferential treatment to female applicants for nearly two decades. ... [T]here are serious questions about the ongoing validity of the plan. And we have little doubt that there is an ample supply of unsuccessful male applicants for entry-level firefighter positions with the County who may fairly bring similar challenges in the future. For these reasons, the County should evaluate closely its female hiring goals, both short-term and long-term, and proceed with a sense of urgency to accomplish fully whatever goals it believes are appropriate and legally permissible in light of the relevant facts and circumstances as they exist today. If, as the County has represented to us, it properly can eliminate its plan entirely within three or four years, it must proceed to do so." Danskine v. Miami Dade Fire Department, 14 Fla. L. Weekly Fed. C829 (11th Cir., June 12, 2001).
9. PENSION OVERPAYMENT SHOULD BE OFFSET BY CONTRIBUTION OVERPAYMENT: In a retirees action for breach of contract against a city and its pension board, the trial court ruled that the city was entitled to reimbursement for the amount it overpaid him and that the pension board was entitled to reimbursement for overpayment of pension benefits. However, the court also held that reimbursement to the board should not be offset by contributions made to the plan after the date the employee terminated. The retiree did not specifically ask for an offset, but the board in its counterclaim asked for a judgment in the amount of the excess pension benefits paid "offset by any employee contributions made...during that period." Thus, the appellate court reversed on that point and directed that the pension overpayment be reduced by the contribution overpayment. Be careful what you wish for... . Brown v. City of Jacksonville Beach, 26 Fla. L. Weekly D1583 (Fla. 1st DCA, June 21, 2001).
10. CONVICTION FOR FILING FALSE ARREST AFFIDAVIT RESULTS IN PENSION FORFEITURE: A former Miami police officer was convicted of official misconduct, a felony, for falsely reporting on an arrest affidavit that a suspect who was shot by another officer was carrying a gun at the time. In accordance with Section 112.3173, Florida Statutes, the city pension board brought pension forfeiture proceedings against the officer and determined that, because he was convicted of a specified offense under Section 112.3173(2)(e)6, Florida Statutes, forfeiture of his pension rights was warranted. Basically, that section calls for forfeiture of all benefits (other than return of employee contributions) for a public employee who commits a felony involving breach of public trust by using employment for personal gain or for the gain of another. Although the officer did not "personally" gain, his actions apparently were designed to prevent another officer from being charged with a crime. The court rejected a challenge that the statute was not authorized by Article II, Section 8(d) of the Florida Constitution, which provides that "[a]ny public officer or employee who is convicted of a felony involving a breach of public trust shall be subject to forfeiture of rights and privileges under a public retirement system or plan in such manner as may be provided by law." The court found that official misconduct is clearly a breach of the public trust, as defined in Section 112.312(3), Florida Statutes. One other quirk: appellate review of municipal pension board decisions usually is by the circuit court, sitting in its appellate capacity. Here, review was in the district court of appeal because Section 112.3173(5)(b), Florida Statutes, provides that "any order of forfeiture of retirement system rights and privileges is appealable to the district court of appeal." Jacobo v. Board of Trustees of the Miami Police Relief and Pension Fund, 26 Fla. L. Weekly D1528 (Fla. 3d DCA, June 20, 2001).
11. WHEN IS A SPOUSE NOT A SPOUSE?: A person born a male had sex reassignment surgery. Thereafter, pursuant to Wisconsin statutes, the birth certificate was amended to state that she was female. She later married a man who had a son from a previous marriage. When the husband died, the surviving spouse and the son both vied for the estate. The son contended that despite surgery, his fathers "spouse" remained a man for purposes of Kansas law, where the marriage took place. He argued that the marriage was void since Kansas prohibits marriages between persons of the same sex. Therefore, the son claimed he was the sole heir-at-law. The trial court granted summary judgment for the son, and the spouse appealed. The issues on appeal included Full Faith and Credit (failure of Kansas to give full faith and credit to the Wisconsin birth certificate), Equal Protection (denying the spouses right to marry by not recognizing her legal status as female) and waiver (husband was induced into marriage because spouse assured him that she was not marrying him for his money). The appellate court reversed and remanded, concluding that a trial court must consider and decide whether an individual was male or female at the time the individuals marriage license was issued and the individual was married, not simply what the individuals chromosomes were or were not at the moment of birth. The court recognized that transsexual issues have or will arise in situations involving penal institutions, schools, sports, employment and every other situation in which perceived gender is important. Remember, many pension plans provide for benefits to a surviving "spouse," so dont be surprised if a case involving gender change comes along in the near future. In the matter of the Estate of Marshall G. Gardiner, Case No. 85,030 (Kan. App., May 11, 2001).
12. NASD REGULATION REITERATES BEST EXECUTION OBLIGATIONS: The National Association of Securities Dealers, Inc. has issued Notice to Members 01-22 to reiterate the best execution obligations that apply to member firms when they receive, handle, route for execution or execute customer orders, and to provide guidance to members concerning a broker/dealers obligation, as articulated on numerous occasions by the Securities and Exchange Commission, regularly and rigorously to examine execution quality likely to be obtained from the different markets or market makers trading a security. The Notice also discusses how recently-adopted SEC rules concerning disclosure of order execution and routing practices will assist members in meeting their regular and rigorous examination obligations. In addition, the Notice includes a Question and Answer section that responds to many of the compliance questions that the NASD has received from its members concerning the regular and rigorous component of the duty of best execution. If you are interested, you can read all twelve pages at http://www.nasdr.com/pdf-text/0122ntm.txt.
13. FLORIDA ATTORNEY GENERAL OPINIONS:
AGO 2001-33 (May 9, 2001):
Patient records at a city-owned and operated medical clinic are confidential and may only be released upon written consent of the patient or under specific circumstances provided under Florida law (for example, in response to a subpoena from a court of competent jurisdiction). Under its duty to ensure the confidentiality of such records, the city may allow access to such records to city employees whose duties are related to the furnishing of medical services to the patient/employee.
AGO 2001-34 (May 11, 2001):
Section 112.532(1), Florida Statutes, part of the Law Enforcement Officers and Correctional Officers Bill of Rights, applies to any situation in which a law enforcement agency is conducting an internal investigation of a law enforcement officer, as defined in Section 112.531, Florida Statutes, and the officer is subject to interrogation by members of the law enforcement agency for any reason that could lead to disciplinary action, demotion or dismissal. Thus, the rights and privileges afforded by the former section would be applicable to situations in which the officer is under investigation and subject to interrogation by his agency based upon an alleged violation of the agencys rules and regulations.
AGO 2001-39 (May 30, 2001):
Operation of the Palm Beach County Fire Fighters Employees Insurance Fund in accordance with the provisions of the Employee Retirement Income Security Act of 1974, even though it is not subject to ERISA, does not exempt the Fund from complying with the provisions of Section 627.651(1), Florida Statutes, pursuant to Section 627.651(4), Florida Statutes. The latter section exempts from Florida law any plan "established or maintained" in accordance with ERISA. The Funds plan, as a governmental plan, is expressly not covered by ERISA. To conclude otherwise would leave the Funds plan unregulated by ERISA or the state, an unreasonable result.
AGO 2001-41 (June 19, 2001):
Voluntary payments to a political action committee by public employees are not special assessments that a public employer is prohibited from collecting under Section 447.303, Florida Statutes. Because Chapter 447, Florida Statutes, does not define "special assessment," the words should be given their usual and ordinary meaning. By definition, an assessment is involuntary, while the contributions in question are purely voluntary.
AGO 2001-48 (July 12, 2001):
The special law enforcement trust fund established under Sections 932.701-932.707, Florida Statutes, the Florida Contraband Forfeiture Act, may not be used to pay for the LASIK eye surgery of a law enforcement officer, since the benefit from such expenses would be primarily personal rather than for a law enforcement function.
AGO 2001-58 (August 2, 2001):
Section 48 of Chapter 01-254, Laws of Florida, which limits subsistence reimbursement under Section 112.061, Florida Statutes, does not apply to county employees. Section 112.061, Florida Statutes, sets forth the uniform travel expense law for public agencies of the state. The Legislatures intent is that travel expenses and per diem for all public officers, employees or authorized persons whose travel expenses are paid by a public agency be subject to the rates and limitations set forth in the statute, unless explicitly exempted by general law or in conflict with special or local law. The statute defines public agency to include any county, municipality or other separate unit of government created pursuant to law. During the 2001 legislative session, the Legislature enacted Chapter 01-254, Laws of Florida, to implement the 2001-2002 General Appropriations Act. For some reason, Section 48 thereof amended Section 112.061, Florida Statutes, to provide for the 2001-2002 fiscal year only, a state traveler shall not be reimbursed on a per-diem basis or receive subsistence allowance. Because the General Appropriations Act is the general appropriation act for state government and not the general funding mechanism for local governments payment of travel expenses for county personnel, the Legislatures intent was to limit subsistence reimbursement for travelers whose reimbursement is paid by the state. Although the Attorney General was asked only his opinion as to county employees, we believe his reasoning would also apply to pension board trustees.
14. NO CONSTRUCTIVE RECEIPT FOR VACATION PAY CASH-OUT: In a private letter ruling, Internal Revenue Service has concluded that giving employees an option to cash out future vacation days would not, under the constructive receipt doctrine in IRC 451, result in taxable income to employees who did not elect the cash-out option. Further, IRS concluded that for those who did elect the cash-out option, there would be no taxable income until the cash-out amounts were actually paid or otherwise made available to the employee. Income is constructively received in the year during which it is credited to a taxpayers account, set apart or otherwise made available so the taxpayer may draw on it at any time. Income is not constructively received if the taxpayers control of its receipt is subject to substantial limitations or restrictions. IRS concluded that the mere right of an employee to make an election under the cash-out program will not result in taxable income for the employee who chooses not to make such an election and an election made by an employee to cash out all or part of his vacation hours will not result in taxable income for the employee until the year in which the amounts are actually paid or otherwise made available. The private letter ruling is significant, because, as Employee Benefits Institute of America notes, "we are not aware of any IRS ruling that says, as this one does, that employees can be given a choice to cash out future vacation days prior to separation from service without causing a constructive receipt problem." PLR 200130015 (April 26, 2001), released July 27, 2001.
15. NEW YORK VARIABLE SUPPLEMENT FUND ISSUE SIMPLY WILL NOT GO AWAY: Our long-time readers know that New York City police officers and firefighters receive a Variable Supplement, funded from excess earnings and paying additional benefits to service retirees but not to disability retirees (see C&C Newsletter for September, 1996). Created in 1970, the funds have provided some retirees with annual lump sum payments in addition to regular pension checks. This year, each recipient will receive $9,000.00. So far, the city has successfully beaten back 29 lawsuits that have challenged the funds! In lawsuit number 30, several hundred retirees assert that the Variable Supplement Funds violate the Internal Revenue Code. Because the Variable Supplement Funds are statutorily defined as "nonpension benefits," plaintiffs contend that there is a violation of federal law requiring that the monies only be spent for pension purposes. Plaintiffs point is at best a technical one: the Variable Supplement Funds were given to retired police officers and firefighters when the city sought permission to invest their funds in the stock market. But, because state law forbids reduction in pension benefits and the city was unsure it wanted to provide the benefit in perpetuity, the funds were dubbed as "nonpension benefits." A lawyer for the city stated that details of the Variable Supplement Funds have been provided to IRS, which concluded that for purposes of the Internal Revenue Code the Variable Supplement Funds and the pension plan are one unitary structure.
16. HOW TO REPORT FRAUD, WASTE OR ABUSE IN FEDERAL PROGRAMS: We recently came across the following ways to report fraud, waste or abuse in federal programs:
|Snail mail||-||GAO FraudNET, 441 G Street, N.W., Washington, DC 20548|
A quick review of the web site does not indicate whether or not "rewards" are paid for successful tips.
17. STATUTORY REQUIREMENT THAT CUSTODIAN PRODUCE PUBLIC RECORDS NOT UNCONSTITUTIONAL AS APPLIED TO DILATORY CUSTODIAN: Some people take Chapter 119, Florida Statutes, the Florida Public Records Act, lightly, forgetting that there are criminal penalties for failure to comply with a request for public records. A member of the Escambia County School Board received a public records request, but did not respond for one and one-half months. It was nearly four months before she attempted to schedule a time for the requesting party to review the documents. Then, she allowed one hour for review of a 10-inch stack of documents and only two additional one-hour sessions five weeks later. In addition, the custodian did not provide all public records until after the Grand Jury got involved seven months after the initial request. Although she was convicted of a first degree misdemeanor under the statute, the trial court vacated her conviction because of a determination that Section 119.07(1)(a), Florida Statutes, was unconstitutional as applied to the custodian: vagueness makes it impossible to determine whether it prohibits the specific conduct at issue. That section requires the custodian of a public record to permit inspection and examination "at any reasonable time, under reasonable conditions." The appellate court reversed the lower court, found Section 119.07(1)(a), Florida Statutes, constitutional and reinstated the conviction. "Courts have frequently upheld the constitutionality of statutes that require certain conduct to be reasonable under particular circumstances." State of Florida v. Webb, 26 Fla. L. Weekly D989 (Fla. 1st DCA, April 10, 2001).
18. FLORIDA WHISTLE-BLOWERS ACT SHOULD BE GIVEN LIBERAL CONSTRUCTION: A recent case involved the Florida Whistle-blowers Act, Sections 112.3187-112.31895, Florida Statutes, and two competing rules of statutory construction. One rule is that laws in derogation of the common law are to be strictly construed. Another is that remedial laws should be given a liberal construction. The Whistle-blowers Act is clearly remedial in nature. When a statute is both in derogation of the common law and remedial in nature the rule of strict construction should not be applied so as to frustrate legislative intent. Thus, the statute should be construed liberally in order to give effect to the legislation. Irven v. Department of Health and Rehabilitative Services, 26 Fla. L. Weekly S253 (Fla., April 19, 2001).
19. BLSS NATIONAL COMPENSATION SURVEY: The Bureau of Labor Statistics has provided data on wages since it was established in the late 19th Century and has provided data on benefits since the early 20th Century. Now, for the first time, BLS has combined many of its compensation measures into a single, integrated, comprehensive program detailing wages, benefits and establishment practices available to American workers. Interrelated data on wage levels, benefit costs, rates of change in employer costs for compensation, benefit availability and benefit plan details will now be available from a single source -- the National Compensation Survey. All data are available at http://stats.bls.gov.
20. DID ELIMINATION OF MANDATORY RETIREMENT AFFECT FACULTY RETIREMENTS?: Until 1994, a special exemption from the 1986 Age Discrimination in Employment Act allowed colleges and universities to enforce mandatory retirement of faculty at age 70. The National Bureau of Economic Research compared faculty turnover rates of a large sample of institutions before and after the federal law change, and at a set of institutions that were covered by state laws prohibiting compulsory retirement (like in Florida). Retirement rates at institutions that enforce mandatory retirement exhibited sharp "spikes" at ages 70 and 71. About 90% of professors who were still teaching at age 70 retired within two years. After elimination of compulsory retirement, retirement rates of 70 and 71-year-olds fell to levels comparable to 69-year-olds and over one-half of 70-year-olds were still teaching two years later. These findings indicate that U.S. colleges and universities will experience a rise in the number of older faculty over the coming years. The increase is likely to be larger at private research universities, where a higher fraction of faculty has traditionally remained at work until age 70. We are still at a loss as to why tenured professors have been placed in the same category as police officers and firefighters for ADEA purposes (see C&C Newsletter for May, 1998, Pages 2-3).
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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.