Stephen H. Cypen, Esq., Editor

1. PLAN TO SHORE UP FORT WORTH’S RETIREMENT FUND UNCONSTITUTIONAL:

Part of the City of Fort Worth’s plan to fix the shortfall in its retirement fund is unconstitutional, according to an opinion from the state attorney general’s office. The Fort Worth Star-Telegram reports that the city faces a $410 Million gap between what it contributes to the pension fund and what is projected to be paid out over the next 30 years. A large part of the shortfall came from employees “spiking” their pensions by working overtime or taking promotions in their last few years before retirement, which affects pension calculations. In an effort to ameliorate the problem, city officials and pension board trustees attempted to limit increases in an employee’s base salary during the computation years. However, the Texas Constitution provides that cities cannot limit pension benefits that employees have already earned. Thus, the salary cap cannot be applied to employees who have already worked for the city long enough to be vested in the system.

2. ON THE ROAD TO FAT CITY:

Financial Week says the obesity epidemic costs U.S. private employers an estimated $45 Billion a year in medical expenditures and worker absenteeism, according to a report from the Conference Board. The report found obesity is associated with a 36% increase in health-care spending, more than results from smoking or alcoholism. Since 34% of American adults fit the definition of obesity, cutting costs associated with the condition will challenge companies for years to come. Companies are gearing up to combat obesity. The report says more than 40% of U.S. companies have obesity reduction or wellness programs and an additional 24% plan to start such programs in 2008. The programs can yield a return on investment as much as $5 for each $1 invested. But throwing money at such programs can also add to employers’ woes. Companies risk discrimination lawsuits if they are too forceful about encouraging employees to manage their weight, even if it is for their own good. And not all weight loss and obesity programs achieve results, which could leave employers stuck with a hefty bill. The report suggests that companies involve their employees in planning of any health initiatives, before programs are implemented. Good idea.

3. POSITION ON ADVISORY BOARD NOT “OFFICE” FOR PURPOSES OF DUAL OFFICE HOLDING PROHIBITION:

Article II, Section 5(a), Florida Constitution, provides that no person shall hold at the same time more than one office under the government of the state and the counties and municipalities therein, except that a notary public or military officer may hold another office, and any officer may be a member of a constitution revision commission, constitutional convention or statutory body having only advisory powers. Such constitutional provision prohibits a person from simultaneously holding more than one “office” under the state, country or municipal governments. The prohibition applies to both elected and appointed offices. The Florida Attorney General was recently asked whether service on the Brevard County Investment Committee and the Valkaria Airport Advisory Board by an elected municipal council member violates the dual office-holding prohibition in the Florida Constitution. Because the duties of both entities appear to be solely advisory, the Florida Attorney General found that service on such boards would not constitute an office for purposes of Article II, Section 5(a), Florida Constitution. (This one was a real toughie.) AGO 2008-15 (April 4, 2008).
4. FOR PURPOSES OF “SHADE MEETING,” HEALTH CARE DISTRICT IS REAL PARTY-IN-INTEREST IN LITIGATION INVOLVING HOSPITAL AS NAMED PARTY:

The Health Care District of Palm Beach County recently asked the Florida Attorney General whether its Board of Commissioners may, in accordance with Section 286.011(8), Florida Statutes, enter into closed attorney-client sessions for purpose of discussing settlement negotiations and/or strategies related to litigation expenditures on pending litigation to which Glades Hospital Holdings, Inc. is a named party, not the Health Care District of Palm Beach County. Created by special act as an independent special district to provide comprehensive planning, funding and coordination of health care services to Palm Beach County residents, the Health Care District of Palm Beach County created Glades Hospital Holdings, Inc., a Florida not-for-profit corporation. The district is the sole member of the corporation. Its corporate purpose was to further authority and responsibilities of the Health Care District of Palm Beach County. The corporation may not approve any litigation expenditures without prior approval of the District. Section 286.011(1), Florida Statutes, requires governmental boards or commissions to conduct their business at open meetings. Limited exceptions have been created by the Legislature for attorney-client discussions. Section 286.011(8), Florida Statutes, provides that any board or commission of any state agency or authority or any agency or authority of any county, municipal corporation or political subdivision, and the chief administrative or executive officer of the governmental entity, may meet in private with the entity’s attorney to discuss pending litigation to which the entity is presently a party before a court or administrative agency. Based on the relationship between the District and the corporation and the oversight exercised by the District over the corporation, the opinion requester represented to the Attorney General that the Health Care District of Palm Beach County is frequently the real party-in-interest in litigation in which Glades Hospital Holdings, Inc. is a named party. She also indicated that in litigation involving the hospital, the District frequently joins as a named plaintiff in litigation with the hospital in recognition of this relationship. Therefore, the Attorney General opined that the Board of Commissioners of the Health Care District of Palm Beach County may, in accordance with Section 286.011(8), Florida Statutes, enter into closed attorney-client sessions for purpose of receiving information from and giving notice to attorneys representing interest of Glades Hospital Holdings, Inc. and Glades General Hospital, regarding settlement negotiations or strategies related to litigation expenditures. Of course, any action to approve a settlement or litigation expenditure must be voted on in a public meeting. (Now, this question is the type that should be submitted to the Attorney General.) AGO 2008-17 (April 8, 2008).

5. EFFECTIVE RETIREMENT SAVINGS PROGRAMS: DESIGN FEATURES AND FINANCIAL EDUCATION:

An article written by persons with the Office of Retirement Policy, Office of Retirement Disability Policy, Social Security Administration, provides an overview of the literature on best practices for designing retirement savings plans and providing financial education in the workplace. These two elements are clearly important considerations for plan providers. Both must be carefully constructed to maximize effectiveness of an employer-sponsored retirement savings program in helping participants build adequate funds for when their working career ends. Without a successful plan design, financial education will not be effective, and even a well-structured plan can fail to achieve retirement savings goals without financial education. The main components of a retirement savings program include options for enrollment, investment choices, employer matching contributions and distributions during the working career and at retirement. In addition, employees must be educated about plan design and how it affects them. The core aspects of financial education are controlled by employers: the topics covered, the delivery methods used, frequency with which it is offered and its general availability. Financial education can be especially helpful to certain subgroups of the population, including minorities, women and those with low income and educational levels. The article is designed for use by both practitioners and academics seeking a broad overview of some of the significant issues that should be considered in designing a retirement savings program that counts adequacy of long-term savings among participants as a goal. The article can be accessed through Social Security Bulletin, Vol. 67, No. 3, http://www.socialsecurity.gov/policy/docs/ssb/v67n3/index.html.

6. HOW CAN ANYONE NOT BELIEVE IN THE JURY SYSTEM?:

Another funny from Plansponsor.com. As a young woman stepped out of her shower and sat down on her bed, she realized a man was standing in her closet. This man was quite strange, wearing a lacy negligee, fishnet stockings, a woman’s mini skirt, a sheer white blouse and long brown wig. Before he fled, the weirdo dropped a meth pipe in the closet, which enabled police to track him down via DNA. The man did have an explanation for his presence (and dress): he was high at the time, thought he was in the home of a woman who had invited him for a tryst and when he saw who came out of the shower, he was as stunned and shocked as she was. And the jury believed him. The story is so improbable, it probably is true.

7. WHAT YOUR BOSS IS REALLY TELLING YOU:

Men’s Health has figured out what your boss is really telling you. Here is the scoop:

“We absolutely, positively love writing this Newsletter” = Gawd this is a lot of work.

8. QUOTE OF THE WEEK:

“Three little sentences that will get you through life: 1. Cover for me. 2. Oh, good idea, boss! 3. It was like that when I got here.” Homer Simpson. (This particular quote just had to follow the above item.)