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Cypen & Cypen
NEWSLETTER
for
MAY 20, 2003

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. FLORIDA ATTORNEY GENERAL ISSUES OPINIONS ON OPEN GOVERNMENT EXEMPTIONS, DUAL OFFICE-HOLDING AND PER DIEM:
A. AGO 2003-18 (May 5, 2003) -- Florida’s strong public policy of open government expressed in Section 119.15, Florida Statutes, and Article I, Section 24, Florida Constitution, as well as the language before the voters in 2002 for amending this constitutional provision, requires that the two-thirds majority vote apply to any attempt by the Legislature to restrict the public’s access to executive branch governmental records and meetings, whether through the initial creation of an exemption or the re-adoption of such an exemption.

B. AGO 2003-20 (May 13, 2003) -- Because Florida Law requires a representative of the School Board to serve on a local planning agency that first reviews rezoning and comprehensive plan amendments in the County, a member of the School Board may also serve in an ex officio capacity on the County Planning and Zoning Board with authority to vote on matters relating to comprehensive plan amendments and rezonings that would, if approved, increase residential density. Such a legislative ex officio designation does not violate the Constitutional Dual Office-Holding prohibition contained in Article II, Section 5(a), Florida Constitution.

C. AGO 2003-22 (May 13, 2003) -- Sheriff’s Department Officers and employees are subject to the reimbursement limits provided by Section 112.061(6), Florida Statutes, as County officers employees, even when acting under authority or direction of the Federal Government or an agency thereof.

2. ARE YOUR TIGERS EMERGING?:
At a recent pension board meeting, your editor noticed reference to an index entitled “X-Emerging Tigers.” We knew the index dealt with the Far East, but had never heard the term “Emerging Tigers.” So, we asked George Ling what it meant. After what he called “exhaustive research”-- he probably already knew the answer -- he advises that the countries of Indonesia, Malaysia, Thailand and Vietnam are the so-called Emerging Tigers. Based upon performance of Asian markets in general, the other countries must be Submerging Tigers.

3. PERSONAL BANKRUPTCIES CONTINUE TO SOAR:
A report from Associated Press indicates that the record-setting pace of new personal bankruptcies continued this year, with their number rising 7.4% in the 12 months ended March 31, 2003. As usual, most bankruptcy filings were by individuals. The data, compiled by the Administrative Office of the U.S. Courts, show that new bankruptcy filings by individuals totaled 1,573,720, a new record, up from 1,464,961 for the one year period ending March 31, 2002. While personal bankruptcy filings and total filings rose, the number of new business bankruptcies fell by 5.8%, to 37,548 from 39,845. Also, Federal Reserve data showed that the rise in credit card and other revolving debt was the smallest increase since the Fed began keeping records in 1968. Consumer borrowing rose by just 3.3% in 2002, a marked slowdown from the 6.9% increase posted the year before.

4. TOPLESS EXERCISE A FLOP FOR COP:
We just could not resist this story from Reuters. A Florida policeman resigned after a teenage girl complained that, to avoid arrest, he made her do jumping jacks while topless. The 16-year-old and a 19-year-old man were kissing in a parked car, when the officer told them they could be arrested on trespassing and lewdness charges. He asked them to suggest an alternative punishment, adding that the girl’s punishment should be “embarrassing.” She offered to do jumping jacks and push-ups, to which the officer agreed and then shined his flashlight on her while did five jumping jacks without her shirt. The teens were fully dressed when they were ordered out of the car. The officer said he was trying to scare them, and had never intended to arrest them. He did not deny making the girl do exercises but said she was fully clothed during her aerobic stint. Just another instance of our Newsletter trying to keep readers abreast of current events.

5. TRADITIONAL PENSIONS MAY BE FADING AWAY:
As millions of Americans look forward to retirement, they are expecting monthly checks based on their pay and years of service. However, companies are eliminating traditional pension plans at an alarming rate. The share of workers depending on pensions as a primary income source in retirement fell from 39% in 1975 to just 21% by the late 1990's. And companies that do continue to offer pension plans find themselves struggling to keep assets growing to meet projected obligations, following 3-plus years of falling stock prices and low interest rates. Some large companies (like General Motors) have begun making contributions in order to bring pension plans closer to fully-funded levels. But because such contributions can reduce earnings and hurt stock prices, many companies remain reluctant to address the underfunding issue. Others have simply bailed out, converting to “cash balance” plans. But even Americans who still have traditional pension plans are discovering that their employers’ pledges can mean little when hard times hit. The Pension Benefit Guaranty Corp. is supposed to serve as a backup for underfunded pension plans. Created by Congress in 1974 and financed by employer-paid insurance premiums, the PBGC’s mission is to make sure retirees receive cash benefits of up to $44,000.00 per year, even when employers default. Nevertheless, PBGC itself is facing problems: in 2002, the agency assumed control of a record 144 pension plans, running up an unheard of deficit of $3.6 Billion after exhausting its previous year’s surplus of $7.7 Billion. Yikes.

6. AN INTERESTING COINCIDENCE ABOUT THE DOW:
We just learned that May 19 has been a pretty good day for the Dow Jones Industrial Average. On May 19, 1989, the DJIA passed 2,500 for the first time. And on May 19, 1993, the Dow crossed 3,500 for the first time. Of course, on May 19, 2003, the Dow sat at about 8,500 -- not heading for any new record.

7. GET A FREE FINANCIAL PLANNING CD FROM AARP:
AARP is offering a free, interactive CD-ROM entitled “10 Steps to a Better Financial Future.” The CD is designed for the pre-retiree aged 40 to 60, with limited or no knowledge of personal financial issues. There are ten learning modules, ranging from Step One (Setting Financial Goals) to Step Ten (Plotting a Path to Financial Independence). The CD can be ordered from http://www.aarpfinancialfuture.org, for a nominal $4.50 shipping charge.

8. FORBES LISTS BEST EMPLOYERS FOR RESERVISTS:
Almost 200,000 members of the military reserves have already been called to serve in Iraq. Not only must these men and women face wartime duty, they must also put their careers on hold and worry about family finances. Although reservists are paid by the military, they often receive far less than they were earning in civilian life. Reservists’ pensions are legally protected, but beyond that, it is up to the employer, some of which are more generous than others. Each year the Reserve Officers Association publishes a survey listing the benefits paid out by some of the largest companies in America.

The following are the top ten:

1. Schering-Plough 30,000 employees
2. First Data 29,000 employees
3. W.W. Grainger 14,000 employees
4. Dow Chemical 51,000 employees
5. Bank One 74,000 employees
6. CDW Computer Centers 2,800 employees
7. Exxon Mobile 95,000 employees
8. IBM 318,000 employees
9. DTE Energy 11,000 employees
10. Union Pacific 61,000 employees

9. PILOT WILL NOT GET ALMOST ONE MILLION DOLLARS IN “INTEREST AND LOST PROFITS” ON PENSION:
A Federal Appeals Court has decided that the beneficiary of a pension plan cannot intentionally evade receipt of his benefits and then force the pension plan to pay him interest on the forgone benefits. Twomey was a Delta Airlines pilot for over 28 years. When he turned 60, which meant that FAA Regulations prohibited him from flying, Delta Airlines Pilots Pension Plan sent him a package of information regarding his retirement benefits. After several delivery attempts, the package was returned unclaimed. Twomey did not contact Delta for nine years, at which time he requested a retirement application. Delta notified Twomey that he would receive a payment of monthly benefits retroactive to his 60th birthday and that he was eligible for prospective monthly benefits. Thus, Delta sent Twomey a lump sum payment of over $1 Million and began monthly payments. However, Twomey was dissatisfied with the lump sum and wanted interest and lost profits in the additional amount of $930,000.00. The trial court found that Delta’s decision to deny the extra benefit was not arbitrary or capricious. After all, Twomey did admit that he intentionally evaded payment. On appeal, the trial court’s ruling was upheld because Delta’s decision is “plausible in light of the record as a whole.” Twomey v. Delta Airlines Pilots Pension Plan, Case Nos. 02-1968 and 02-2271 (U.S. 1st Cir., May 7, 2003).

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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