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July, 2001

Stephen H. Cypen, Esq., Editor

1. PENSION REFORM ENACTED: As expected (see C&C Newsletter for May 2001, Item 12), on June 7, 2001 President Bush signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16. The following is a summary of some public sector pension plan provisions, all of which are effective after December 31, 2001:

  1. Defined Benefit Dollar Limit - currently $140,000.00 indexed for inflation in $5,000.00 increments, the limit will increase to $160,000.00 indexed for inflation in $5,000.00 increments.
  2. Defined Contribution Plan Contribution Limit - currently $35,000.00 indexed for inflation in $5,000.00 increments, the limit will increase to $40,000.00 indexed for inflation in $1,000.00 increments. The current limit of 25% of compensation will increase to 100%.
  3. Annual Qualified Plan Compensation Limit - currently $170,000.00 indexed for inflation in $10,000.00 increments, the limit will increase to $200,000.00 indexed for inflation in $5,000.00 increments.
  4. Governmental 457 Deferred Compensation Plan Maximum Contributions - annual contributions to a governmental 457 deferred comp plan, currently limited to $8,500.00, will increase to $11,000.00. The limit will increase $1,000.00 per year through 2006 (to $15,000.00), after which the limit will be indexed for inflation in increments of $500.00. The current limit of 33-1/3% of includable compensation will increase to 100%.
  5. Governmental 457 Deferred Compensation Plan Distributions - distributions under a governmental 457 deferred comp plan are taxable when paid. The minimum distribution rules are repealed, and governmental 457 deferred comp plans are subject to minimum distribution rules applicable to qualified plans.
  6. Deferred Compensation Rollover Provisions - rollover contributions from a qualified retirement plan, governmental 457 deferred comp plan or an IRA can be rolled over to any other such plan. However, qualified plans and governmental 457 deferred comp plans are not required to accept rollovers.
  7. IRA Rollover - contributory IRA accounts can be rolled over to a 401(a) plan or a governmental 457 deferred comp plan.
  8. Rollover of After-Tax Contributions Can be Rolled Over Into Another Qualified Plan or an IRA - rollovers from one qualified plan to another must be direct. A qualified plan is not permitted to accept rollovers of after-tax contributions unless the remitting plan provides separate accounting for such contributions and earnings thereon. After-tax contributions are not permitted to be rolled over from an IRA into a qualified plan or a governmental 457 deferred comp plan. A surviving spouse can roll over distributions to a qualified plan or a governmental 457 deferred comp plan in which the surviving spouse participates.
  9. Purchase of Service Credits - participants may use pre-tax contributions to a governmental 457 deferred comp plan to make trustee-to-trustee transfers to purchase permissive service credits under the plan or to repay contributions and earnings with respect to an amount previously refunded under a forfeiture of service credit under the plan.

2. ACCUSED SPY HANSSEN CUTS DEAL TO SAVE LIFE, PENSION: Former FBI agent Robert Hanssen struck a deal to plead guilty to charges of spying for the Russians, an agreement that will spare his life and save his pension (see C&C Newsletter for April 2001, Item 13). Hanssen will spend the rest of his life in prison and must repay the $1.4 million dollars he received from the Russians for espionage work spanning over 15 years. Under terms of the deal, Hanssen’s family is expected to receive what amount to survivors benefits -- typically about 60% of an agent’s full pension. For an agent with 25 years of experience, at Hanssen’s pay grade, the pension should be about $42,000.00 per year.

3. FIRED HOLLYWOOD POLICE CHIEF LOSES BREACH OF CONTRACT ACTION: After he was terminated as police chief for the City of Hollywood, Richard Witt brought an action for damages based on breach of contract and violation of the whistle-blower’s act. A jury returned a verdict favorable to the chief on both counts. On appeal, however, a Florida appellate court reversed. On the first count, a letter from the City Manager establishing guidelines for the chief’s continued employment until retirement did not amount to a valid contract. The chief testified he knew he served at the will of the City Manager, as specifically provided in the City Charter. In addition, the Charter also provides that no contract with the City is effective unless signed by the City Attorney. On the whistle-blower count, the appellate court remanded for a new trial because the lower court refused to allow the City to present evidence that termination was predicated upon grounds other than the exercise of rights protected by the statute. City of Hollywood, Florida v. Witt, 26 Fla. L. Weekly D1611 (Fla. 4th DCA, June 27, 2001).

4. URBAN POLICE JOBS LOSING THEIR APPEAL: A story in the New York Times indicates that police departments in cities across the nation are facing a personnel crisis, with the number of recruits at record lows, an increasing number of experienced officers turning down promotions and many talented senior officers declining offers to become police chiefs. Making the situation worse, in some cities a growing number of police officers are quitting for higher-paying jobs in suburban departments or private businesses. These problems have come at a time when crime is at its lowest level since the late 1960’s and police should be feeling good about themselves. But, many officers from the lowest to highest rank are questioning their occupation, tempted by higher pay in the private sector after a long economic boom and discouraged by seemingly-constant public and news media criticism about police brutality and racial profiling. The drop in applicants for police examination, the first step in becoming a police officer, is alarming: last year in Chicago about 5,000 people signed up for the exam, compared to 10,000 in 1997 and 36,000 in 1991. (Remember that only a tiny fraction of people who apply are eventually accepted, making a large applicant pool important.) And in Miami, the police department has only 883 officers, well below its authorized complement of 1,045. Sgt. John Rivera, President of the Miami-Dade County Police Benevolent Association, probably summed it up best: "This is increasingly becoming a more miserable job by the day."

5. MEANWHILE, LAPD ASKS RETIREES TO COME BACK: Facing a shrinking force, the Los Angeles Police Department is attempting to lure retirees back to work by offering to pay their salary plus their regular pension for up to one year. Struggling to deal with a high attrition rate, the LAPD has recently been forced to take dozens of officers from administration and put them on patrol. Thus, retirees would perform administrative duties and other desk work that would keep them off the streets. A union spokesman was quick to endorse the idea as a quick fix to get experienced officers for key jobs. However, he added "But this just shows that there are serious issues that need to be dealt with. Why are officers leaving and not being replaced? It’s about poor morale." To us, it sounds like an after-the-fact DROP.

6. AND WASHINGTON ENACTS "RETIRE/REHIRE" LAW: Washington Governor Gary Locke recently signed legislation that allows school districts to rehire educators after they retire for thirty days and still allows them to collect their full pensions. The legislation applies to public employees in two retirement plans -- generally, teachers and other state employees hired before 1977. Approximately 46,000 people are in that category, although not all of them are eligible for retirement. The new law allows retirees to work up to 1,500 hours per year without risking any pension benefits. A DROP by any other name is still a DROP.

7. PENNSYLVANIA BENEFIT PACKAGE IGNORES RETIREES: An editorial in the Pittsburgh Post-Gazette takes to task Pennsylvania Governor Tom Ridge and the state’s teacher unions for the recent deal that enacted the administration’s education overhaul in exchange for hefty pension increases for school employees, state workers and legislators (see C&C Newsletter for June, 2001, Item 9). Retirees are bitter because the benefit package contains no cost-of-living adjustment. The last adjustment came in 1998. The editorial urges that the legislature remove the requirement that cost-of-living increases be enacted by statute and place the issue of COLAs in the hands of the appropriate retirement board.

8. TROOPERS SEEK "UNCOMMON" PENSION: Two New Jersey State Troopers who shot at four minority men on the Jersey Turnpike are seeking disability pensions that would enable each of them to collect more than $35,000.00 in yearly benefits. The troopers claim that the incident -- in which they fired eleven bullets at four unarmed men, wounding three -- caused them to be permanently disabled by a traumatic event. The issue is complicated because the officers were charged with aggravated assault as a result of the incident. Prosecutors and defense attorneys are working on a plea agreement. Under New Jersey law, an admission of guilt would not preclude the troopers from receiving accidental disability pensions, which amount to two-thirds of final salaries. To qualify for an accident disability pension, an applicant must prove that he was "involuntarily exposed to a violent level of force or impact which is not brought into motion by [himself]" and "the source of the injury was a violent and uncontrollable power." One other incredible fact: of the 17,000 retired state police officers, only 53 are collecting accidental disability pensions!

9. EEOC TO REVIEW RETIREE HEALTH BENEFITS POLICY: In light of the U.S. Supreme Court’s allowing the Erie decision to stand (see C&C Newsletter for April, 2001, Item 4), the Equal Employment Opportunity Commission will review its policy toward retiree health care benefits. Last August, the U.S. Court of Appeals for the Third Circuit ruled that the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, applies to retirees. Thus, an employer that offers different benefits to Medicare-eligible retirees than to retirees who are not yet so eligible may violate ADEA unless it satisfies the Act’s equal benefit or equal cost standard (see C&C Newsletter for September, 2000, Item 14). Although EEOC originally revised its enforcement manual to incorporate the appellate court’s decision, it appears to have backed off that position. Now, an internal task force will study implications of the Erie decision and in the meantime EEOC will not open up any new enforcement cases.

10. MEMPHIS E.R.I.P. FALLS SHORT OF EXPECTATIONS: The Memphis City Council revised the city’s pension plan to allow elected and appointed officials to retire early and help attract top-notch job applicants. In the six months since the pension plan was amended to allow elected and appointed officials to begin collecting after only 12 years of service instead of 15, only a handful have taken advantage and retired. As a result, the city pension fund will be paying almost $2 Million more for those employees than it would have under the old plan, and the new benefit has not lured executives from the private sector to city management posts. Prior to enactment of the Early Retirement Incentive Program, the City Finance Director estimated that 35 to 40 employees might take early retirement within a five-year span. By the way, that Finance Director was the first one out the door, retiring and taking a superintendent’s position in the school system.

11. EBRI REPORTS ON TRENDS IN EARLY RETIREMENT: A Fact Sheet from Employee Benefit Research Institute reveals that the median age of retirement declined in the United States during the latter half of the 20th Century. According to the U.S. Bureau of Labor Statistics, in the period 1950-1955, the median age of retirement was 66.9 for men and 67.7 for women. By the period 1990-1995, it was 62.7 and 62.6, respectively. The median retirement age in the period 2000-2005 is projected to be 61.7 for men and 61.2 for women. Changes in defined benefit plan design had the effect of encouraging early retirement. BLS data on DB plan design in 1963 and again in 1983 showed the percentage of workers who were in a plan that permitted retirement with full benefits at age 60 or earlier increased from 8% to 47%. However, the decline in number of DB plans is significant. In 1975 there were over 103,000 private-sector DB plans. The number increased to a peak of more than 175,000 in 1983, followed by a steady decline to 59,000 in 1997. Obviously, the percentage of the work force covered by a private-sector DB has also steadily declined since 1975, from 44% to 22%. And as DB plans have declined, defined contribution plans have burgeoned. In 1975 there were 208,000 DC plans, which by 1997, had increased to 661,000 (from 18% of the work force to 46%). Given that retirement benefits under a DC plan are primarily a function of investment performance, it is difficult for an employer that sponsors a DC plan to influence its employees’ retirement age. For example, in a sustained bull market, employees may find that they have sufficient funds to retire earlier than they had originally planned, whereas stock market performance would not impact retirement wealth of defined benefit participants.

12. EBRI ALSO REPORTS STATE AND LOCAL RETIREMENT PLAN STATISTICS: In an Issue Brief, Employee Benefit Research Institute examines the universe of state and local retirement plans. It describes how these plans have developed and continue to evolve in a number of areas, including plan features, regulatory framework, governance and asset management. While these retirement programs differ in many respects from private-sector plans, the disparity in some areas has narrowed. State and local retirement plans share certain common features because of the environment in which they operate. Statutes, governance and tradition all play a role in defining what is sometimes referred to as a "public-sector culture." Despite common features, there is considerable diversity among public-sector retirement plans. Combined public-sector retirement assets (state, local and federal) made up 29% of the $11.2 Trillion U.S. retirement market in 1998. State and local plans dominate the public-sector retirement market, holding $2.7 Trillion, compared to $700 Billion held by federal plans. Over 16 million are employed by state and local jurisdictions in the United States.

13. TEACHERS OUTRAGED AT PENSION FUND FRAUD: Jefferson Parish, Louisiana teachers are more than a little concerned about money missing from their school district’s pension plan. An internal investigation showed that between $4 Million and $5 Million is missing from a pension plan that covers about 1,200 teachers. The plan’s money manager abruptly resigned in June. The school board will conduct an audit to verify how much money is actually missing. The board will also investigate how the money manager obtained his contract with the pension plan. The school superintendent vows legal action to recover the missing money.

14. WISCONSIN RULING COULD RESULT IN WAVE OF RETIREMENTS: A recent Wisconsin Supreme Court decision has public employers throughout the state bracing for a rash of retirements. In a 109 -page decision, a divided state Supreme Court upheld constitutionality of a 1999 state law that boosted pension benefits for nearly 350,000 public employees and retirees in the Wisconsin Retirement System. Although individual pension increases vary widely depending on salary and longevity, the average increase is 10.2%. Challengers of the law objected to a $200 Million credit in employer contributions (to a pension fund boosted by $4 Billion in stock market gains). As plaintiffs’ attorney said, "If the $200 million credit is allowed to stand, there is nothing standing in the way of future, larger and depleting credits to cover employer-required contributions,...pos[ing] grave danger to the future of WRS trust funds." Meanwhile, in a rather unusual move, the challengers filed a motion for reconsideration. We say "unusual" because although the vast majority of reconsideration motions are denied by all courts, last time the Wisconsin Supreme Court granted one was in 1998!

15. FLORIDA HAS WAIVED SOVEREIGN IMMUNITY FOR FLSA/EPA CLAIMS: A Broward County, Florida Circuit Judge has denied a motion to dismiss in an action filed against the sheriff pursuant to the Fair Labor Standards Act, 29 U.S.C. §216(b) and the Equal Pay Act, 29 U.S.C. §206. Section 768.28, Florida Statutes, makes clear that the Florida Legislature intended to waive sovereign immunity for claims arising under Florida’s own version of the Equal Pay Act, Section 448.07, Florida Statutes. Inasmuch as plaintiff would be able to maintain an action against the sheriff under Section 448.07, Florida Statutes, it follows that she would be able to maintain an action under the FLSA/EPA. In its ruling, the court cited two consistent Florida District Court of Appeal decisions. Maranto v. Jenne, 8 Fla. L. Weekly Supp. 445 (Fla. 17th Cir., May 7, 2001).

16. OHIO COURT REJECTS INJURED WORKER COMPENSATION LIMIT: According to a report in the Columbus (Ohio) Dispatch, the Ohio Supreme Court recently struck down a state law that barred injured employees from collecting both workers’ compensation benefits and money from civil lawsuits. The 4-3 decision, which eliminates the subrogation statute, might result in millions of dollars having to be repaid to injured workers by the Ohio Bureau of Workers’ Compensation. In essence, the decision means the Bureau can no longer recoup money from civil lawsuits for its state insurance fund. The court majority found that the law, amended in 1995, violates the state constitution’s protection against the government taking private property without just compensation and the guarantee of equal protection and remedy to injured workers.

17. RECENT FLORIDA ATTORNEY GENERAL INFORMAL LEGAL OPINIONS:

April 30, 2001:

Chapter 121, Florida Statutes, the Florida Retirement System Act, permits a member of the Florida Retirement System, subject to certain limitations, to purchase up to five years of retirement credit for periods of public employment in the state. The statute recognizes that an employer has discretion to pay all or a portion of the cost of such service. Therefore, assuming that a particular sheriff’s office has a collective bargaining agreement, personnel policy or regulation authorizing such payment, and the payment has been budgeted, the law supports payment by a sheriff of in-state service credit for an employee of that office.

May 3, 2001:

Under the Florida Contraband Forfeiture Act, trust funds may be expended upon a request by the chief of police to the governing body of the municipality, which is accompanied by a written certification that the request complies with the provisions of the statute. Ultimately, the decision of whether the expenditure is for an appropriate law enforcement purpose must be made by the city commission. The funds may only be spent following appropriation to the police department. The Chief of Lake Park, Florida had asked whether or not his department could support local nonprofit organizations that complement efforts of local law enforcement. Note that the Attorney General did not answer whether the proposed expenditures would be outside the scope of permissible uses for contraband forfeiture.

May 8, 2001:

The powers of a municipality, including its police powers, generally cease at the municipal boundaries and cannot, absent statutory authorization, be exercised outside the city’s limits. For example, although a municipal police officer outside the corporate limits of his city could not conduct a criminal investigation, he has specific statutory authority to make an arrest outside his jurisdiction if he is in "fresh pursuit."

18. FLORIDA TOBACCO BAN GOES UP IN SMOKE: As expected (see C&C Newsletter for June, 2001, Item 7), the Florida State Board of Administration, the entity responsible for investing assets of the $100 Billion Florida Retirement System, unanimously voted to drop the ban on investing in tobacco companies. Despite pleas from health advocates, Governor Jeb Bush, Comptroller Bob Milligan and Insurance Commissioner Tom Gallagher unanimously voted to make Florida the third state to abandon such a prohibition. Five other states, including California, still prohibit tobacco investments.

19. IN GRIEVANCE PROCEDURE, ARBITRATOR NOT LIMITED TO DETERMINING EXISTENCE OF "JUST CAUSE": A collective bargaining agreement provided that "any disciplinary action is subject to the grievance provisions." An Avon Park fire captain challenged his demotion, which as required by the CBA, was submitted to binding arbitration. The arbitrator found that the city had "just cause" to demote the firefighter, but that due to a number of mitigating factors, the penalty imposed was too severe. He ordered that the reduction in rank be limited to the ten months already served and that the grievant be reinstated to the rank of captain without loss of seniority. On review, the circuit court found that the arbitrator had exceeded his authority, and vacated his award. That court agreed with the city’s assertion that the arbitrator was empowered to address only whether "just cause" existed. On appeal, the district court of appeal reversed, rejecting as overly restrictive the city’s interpretation that "disciplinary action" did not encompass the disciplinary sanction imposed. The appellate court construed the phrase to include selection and severity of the discipline imposed. Simmons v. City of Avon Park, 26 Fla. L. Weekly D1384 (Fla. 2d DCA, June 1, 2001).

20. AGGRIEVED PARTY MUST PURSUE ADMINISTRATIVE REMEDIES UNDER FLORIDA CIVIL RIGHTS ACT: In a case of first impression, a Florida District Court of Appeal has held that an aggrieved party may not disregard the administrative hearing requirement in the Florida Civil Rights Act, Section 760.11, Florida Statutes, if that person receives a "no cause" determination after lapse of the 180-day period for FCHR action but before filing a lawsuit. The receipt of a "no cause" determination ends the person’s option to proceed under Section 760.11(8), Florida Statutes, and requires that the person follow Section 760.11(7), Florida Statutes, and exhaust the administrative remedy therein prior to filing a suit in a Florida court. Section 760.11(8), Florida Statutes, provides that if the Florida Commission on Human Relations fails to conciliate or determine whether there is reasonable cause on any complaint within 180 days of filing, an aggrieved person may proceed either by filing suit or requesting an administrative hearing, as if the Commission had determined that there was reasonable cause. Section 760.11(7), Florida Statutes, provides that if the FCHR determines that there is not reasonable cause, it shall dismiss the complaint and the aggrieved person may request an administrative hearing within 35 days. Woodham v. Blue Cross and Blue Shield of Florida, Inc., 26 Fla. L. Weekly D1360 (Fla. 3d DCA, May 30, 2001).

21. FLORIDA PUBLIC RECORDS LAW DOES NOT APPLY TO LEGISLATURE: Having been denied access to public records held by the Executive Director of the Commission on Capital Cases (a Legislative employee), plaintiff filed suit to seek enforcement of the disclosure provisions of Chapter 119, Florida Statutes, the Florida Public Records Law. Following a 1992 Supreme Court of Florida case, the circuit court dismissed the case with prejudice. The Supreme Court case held that the definition of "agency" -- which appears to be all encompassing -- was intended to apply only to executive branch agencies and their officers and to local governmental entities and their officers. Thus, the Florida Public Records Law also does not apply to the judiciary, which is governed by the Rules of Court. Walsh v. Maas, 8 Fla. L. Weekly Supp. 551 (Fla. 2d Cir., May 21, 2001).

22. TERMINATION REVIEW BOARD MUST MAKE WRITTEN FINDINGS OF FACT: Petitioner sought review in the circuit court of a decision of the Termination Review Board, which upheld his termination from the Palm Beach County Sheriff’s Office. The Termination Review Board failed to afford petitioner his right to due process by not making any written findings in support of its decision. It is fundamental that an absence of required findings is fatal to validity of administrative decisions even if the record discloses evidence to support proper findings. The Board’s own standard operating procedures require that it submit to the sheriff its written findings in order to give him a more meaningful opportunity to reevaluate his decision. The court reversed and remanded for the Board to make required written findings of fact. Recognizing that the Board might comprise different members, the court stated that the Board could make its findings on review of the hearing transcripts or had discretion to take additional evidence. Inwood v. Neuman, 8 Fla. L. Weekly Supp. 545 (Fla. 15th Cir., June 22, 2001).

23. IN REVIEWING EMPLOYEE’S TERMINATION, CIVIL SERVICE BOARD MAY NOT REWEIGH EVIDENCE BEFORE HEARING OFFICER: The Civil Service Board overturned a decision by a hearing officer to uphold the City Manager’s termination of an employee for intentionally interfering with an investigation of another employee. In its order, the Civil Service Board indicated that there was conflicting testimony before the hearing officer and that the weight of evidence did not support his conclusion to affirm the City Manager’s decision. The Board had authority to review the factual findings of the hearing officer, but only to determine whether such findings were supported by competent substantial evidence. Although the court recognized the difficulty for a Civil Service Board to review a hearing officer’s findings to determine whether substantial evidence exists without reweighing the evidence, it reversed the Board and quashed its order reinstating the employee. City of Riviera Beach v. General Employees Civil Service Board in and for Riviera Beach, Florida, 8 Fla. L. Weekly Supp. 544 (Fla. 15th Cir., June 22, 2001).

24. SOCIAL SECURITY COMMISSION BEGINS PRIVATIZATION EFFORT: The current Coalition to Preserve Retirement Security Newsletter indicates that President Bush’s effort to reform the Social Security program was launched in June when Co-chairman former Senator Daniel Patrick Moynihan tried to hide the true purpose of the President’s Commission to Strengthen Social Security, cautioning his fifteen fellow members not to talk of "privatizing." Moynihan is known to be a forceful advocate of compelling public employers to begin entering the Social Security program by paying taxes for all new employees. In fact, the ex-Democratic Senior Senator from New York even included mandatory coverage in legislation he introduced a few years ago. Meanwhile, CPRS reports that top financial services firms have established a coalition to promote the President’s privatization plan through advertising and other advocacy events. Experts believe that diverting just 2 percentage points of the 12.4% Social Security Tax would generate $86 Billion for private investments! Incidentally, the President’s Commission has a web site at http://www.csss.gov, which contains, among other things, a schedule of public hearings and meetings.

25. THE EFFECT OF SOCIAL SECURITY REFORM ON DISABILITY PROGRAMS: There has been little analysis of how the various Social Security reform proposals might affect the Social Security disability insurance program. A report from the Government Accounting Office assesses the potential impact of these proposals on solvency of the SSDI Trust Fund. GAO found that most disabled beneficiaries would receive higher benefits under the various reform proposals it reviewed than under a solvency scenario that maintained payroll tax rates while reducing benefits. However, most of the disabled beneficiaries GAO studied would receive lower benefits under three of the reform proposals reviewed than under a solvency scenario that maintained current-law benefits while raising payroll taxes. The proposals GAO studied treat SSDI beneficiaries similar to Old-Age and Survivor Insurance beneficiaries. But the circumstances facing disabled workers differ from those facing retired workers. The differences suggest that Social Security reform proposals should be viewed not only in light of their effects on retired workers but also explicitly for their effect on disabled beneficiaries and their families.

26. COUNSEL REPRESENTING PRIVATE PARTY AGAINST PUBLIC DEFENDANT MAY NOT ACQUIRE INFORMATION DIRECTLY: Florida Bar ethics counsel are authorized by the Board of Governors to issue informal advisory ethics opinions to members of the Bar who inquire regarding their own contemplated conduct. Advisory opinions necessarily are based on facts presented by the inquiring attorney. A Florida attorney recently asked whether it would be proper for a lawyer representing a private party against a public defendant to acquire information concerning the subject of the lawsuit from the public defendant after a lawsuit had been filed, without discovery or without notifying opposing counsel. In other words, can information concerning an essential element of plaintiff’s claim be acquired by going directly to the public defendant’s office? Communication with a represented party is covered by Rule 4-4.2 of the Rules Regulating The Florida Bar: In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, without consent of the other lawyer. In case of an organization, the rule prohibits communications with persons having a managerial responsibility on behalf of the organization or whose statement may constitute an admission on the part of the organization. The Bar has previously determined that government agencies should be treated like business organizations. Thus, absent an exception to the rule, an attorney should not communicate with anyone at the public defendant who comes within the foregoing categories, without consent of the public defendant’s attorney. The rule contains an exception if there is a statute or contract requiring notice or service directly on an adverse party, in which event the communication shall be strictly limited to that required. This question often arises in the context of Chapter 119, Florida Statutes, the Florida Public Records Act. The opinion concludes that because public document requests are not statutorily required to be served upon the public entity, such requests must be directed to the attorney for the public entity. In our judgment, this opinion would extend to pension boards, which should immediately report to counsel any such requests made involving a matter in which the board is a party.

27. A CITY COMMISSIONER RECEIVING PENSION BENEFITS NOT PROHIBITED FROM VOTING ON COLLECTIVELY-BARGAINED FOR INCREASE IN THOSE BENEFITS: Section 112.3143(3)(a), Florida Statutes, generally prohibits a public officer from voting on any measure that enures to his special private gain. The Florida Commission on Ethics has concluded that a City Commissioner is not prohibited by that section from voting on the City’s ratification of a collective bargaining agreement or on any amendments to ordinances required to effectuate changes to the retirement system necessitated by such ratification. The class of members of the retirement system who would be benefitted immediately and directly by the proposed periodic cost of living increases is sufficiently large that any gain or loss attendant to ratification would not be "special." There also do not appear to be any circumstances unique to the City Commissioner by which he would stand to gain more than other members of the system who currently receive benefits or who are in the DROP. The system currently pays retirement benefits to 60 service retirees, disability retirees and beneficiaries, including the inquiring commissioner. In addition, there are 28 members in the DROP plan and two vested terminated employees, all of whom will ultimately receive the increase. Finally, 116 active members will benefit from the proposed change when they become eligible to receive their pensions. The question was asked by Pompano Beach City Commissioner Robert (Bob) Shelley, retired firefighter and former State Legislator, who has been a staunch supporter of uniformed employees for many years.

28. HEALTH INSURANCE SUBSIDY NOT INCLUDED WITHIN WORKERS’ COMP CAP: In a case involving two questions certified to be of great public importance, the Supreme Court of Florida exercised its discretion to answer a third question the district court of appeal did not certify. Rejecting an argument that the district court of appeal erred in refusing to include claimant’s health insurance subsidy within the cap on benefits under Section 440.20(14), Florida Statutes, the court found that claimant became eligible to receive the health insurance subsidy because of his eligibility for state disability retirement. However, it is apparent that the purpose of the subsidy is to assist state retirees, regardless of disability, in paying health insurance premiums. It is not intended as a disability benefit. As such the subsidy does not constitute a benefit from a "collateral source." State of Florida and Department of Insurance, Division of Risk Management v. Herny, 26 Fla. L. Weekly S60 (Fla., February 1, 2001).

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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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