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Cypen & Cypen
NEWSLETTER
for
FEBRUARY 19, 2003

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. PERSONNEL BOARD HAS AUTHORITY TO CONSTRUE CITY'S RULES:

A City of Miami Beach Personnel Rule provides that no person who holds a classified position shall engage in any other employment or pursue any other gainful occupation than that involved in his or her City duties, except as such other work shall be formally approved by a supervisor and by the City Manager. Angelo Paloumbis, a classified employee working in code enforcement, was fired for moonlighting at a night club without having received approval from either his supervisor or from the City Manager. On appeal to the Personnel Board, his termination was reversed and he was ordered reinstated. In reaching its decision, the Personnel Board interpreted the rule as requiring an actual conflict of interest between City employment and the outside employment, which had not been demonstrated. The City sought Circuit Court certiorari review of the Personnel Board’s decision. The Court agreed with the City, rejected the Personnel Board’s interpretation of the rule, quashed the Personnel Board’s decision and held that the Personnel Board is limited to determining the truth or untruth of a charge against an employee, and is thus simply a fact-finding body unable to construe the rules it enforces and mandated to accept the City’s interpretation of those rules. On further review by the Third District Court of Appeal, the Appellate Court reversed: Of necessity it is the Personnel Board’s task to apply, thus interpret, the rules and to do so in a rational fashion. Its administrative interpretation is entitled to judicial deference as long as it is within range of possible permissible interpretations. Deference is particularly given where the Board is acting in its field of expertise. Here, the rule lends itself to several interpretations, including the Personnel Board’s interpretation that the rule applies only where there is an actual employee conflict of interest. The cause was remanded to the Circuit Court for the sole purpose of determining whether there is sufficient substantial competent evidence before the Personnel Board to uphold the Personnel Board’s conclusion that there is no actual conflict of interest in Paloumbis’s double employment. Paloumbis v. City of Miami Beach, 28 Fla. L. Weekly D395a (Fla. 3d DCA, February 5, 2003).

2. BUCK SURVEY SHOWS ECONOMIC PENSION FUNDING ASSUMPTIONS FOR 2001 PLAN YEAR:

Buck Consultants, Inc. has issued its Survey on Economic Assumptions used for funding defined benefit pension plans for the 2001 Plan Year. Many of the 312 surveyed employers are Fortune 1000 companies. The survey found that the average funding interest rate reported was 8.07% (a -.09% change from 1998, the most recent previous survey). The highest concentration of plan sponsors (37%) used a funding interest rate of 8.00%. The average equivalent salary increase rate was 5.02% (down .18% from 1998). The highest concentration of plan sponsors (25%) used a salary increase rate of 5.00%. A majority of plans (66%) used the accrued benefit (unit credit) method for determining contributions, followed by the aggregate method (15.7%). And 91% of those surveyed used a calendar plan year. Remember that these data are from 2001 -- over one year ago -- and obviously do not take into consideration market performance last year.

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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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