1. “THE
IMPACT OF THE FINANCIAL CRISIS ON WORKERS’ RETIREMENT
SECURITY”:
On October 7, 2008, the House Committee
on Education and Labor held a full committee hearing on
the impact of the financial crisis on workers’ retirement
security. The hearing examined how the current financial
crisis is impacting pension funds and workers’ directed
retirement accounts, such as 401(k) plans. According to
a recent poll by the Associated Press, more than half of
all Americans are worried that the ongoing financial crisis
will force them to postpone retirement. In his opening
statement, George Miller (D-CA), Chairman, said the emergency
rescue plan alone will not magically turn the economy around.
He is confident, however, that without it the country will
not have the chance to moved forward. Miller said the House
insisted that the plan include strong protections for taxpayers
and tough accountability, neither of which was included
in the President’s original request to Congress.
Specifically referring to the testimony of Richard Fuld,
CEO of Lehman Brothers, Miller said he “showed no
remorse for his catastrophic mismanagement of the company.
In fact, he repeatedly denied responsibility for running
the storied Lehman Brothers investment house into financial
oblivion. He refused to admit that his own reckless management
-- and his industry’s success of keeping regulators
at bay -- directly contributed to this historic financial
crisis that is costing taxpayers, shareholders, and the
nation’s current and future retirees billions of
dollars from their nest eggs. All the while, he insisted
on taking obscene multi-million dollar bonuses for his
executive teammates.” Unlike Wall Street executives,
American families do not have a golden parachute to fall
back on. It is clear that their retirement security may
be one of the greatest casualties of this financial crisis.
2. HOW WOULD YOU LIKE TO BE “COP
FOR A DAY?”:
The Baltimore Police Department has produced
a one minute video tape entitled “Cop for a Day.” Basically,
two Baltimore police officers convince a regular citizen
to suit up and be one of them. We “save lives every
day. What do you do?” The closing thought is particularly
on point: “And you thought your job was tough.” Watch
the video at http://www.baltimorepolice.org/join-the-team/media-center/cop-for-a-day.
(If the video stops and starts, let it play through once
and then play it again.)
3. DEPUTY ACCUSED OF TAKING NICKELS FROM
I-95 CRASH:
The Associated Press reports that at least
one Brevard County, Florida, deputy is being investigated
for
allegedly
gathering some of the government’s nickels that scattered
on a highway after a U.S. Treasury truck was involved in
a crash. Authorities say the armored truck rear-ended another
truck in September, sending it into a guardrail. The armored
truck overturned, killing a guard. The crash temporarily
closed part of Interstate-95 in North Brevard County, as
Secret Service crews worked to clear up the 3.7 million
nickels. Most of the $185,000 has been recovered. (Here
is a little trivia: it currently costs 7.7 cents to produce
a nickel. Even the lowly penny is a loss leader, at 1.2
cents production cost.)
4. ASSISTANT CITY ATTORNEY PROTECTED
FROM RETALIATION FOR REPRESENTATION OF CITY:
Having represented
city in
Equal Employment Opportunity Commission mediation in a
manner that displeased opposing counsel, an assistant city
attorney was terminated after that opposing counsel became
mayor. Her suit under Title VII for alleged retaliation
was successful. The mayor’s “immediate adviser
exemption” defense fails, as, among other things,
assistant city attorneys do not have a direct advisory
relationship with the mayor. The question was one of the
first impression: “whether a defense attorney representing
an alleged violator of discrimination laws during an EEOC
mediation qualifies as a protected participant under the
Title VII participation clause.” The appellate court
held that she does, as by representing the city in the
mediation, she “participated” in a proceeding
under Title VII. However, her “class of one” equal
protection claim is foreclosed by a recent decision of
the United States Supreme Court. Our colleague Chuck Carlson
gets credit for summarizing the 41-page appellate decision.
Kelley v. City of Albuquerque, Case Nos. 05-2309 and 05-2317
(U.S. 10th Cir., September 17, 2008).
5. THE FUNDING STATUS OF LOCALLY ADMINISTERED
PENSION PLANS:
The Center for State and Local Government
Excellence
has released a new Issue Brief dealing with the funding
status of locally administered pension plans. Are big
city pensions and other locally administered pension plans
in
trouble? While state-administered plans are about as
well funded as private sector plans, stories circulate
about
the perils facing Philadelphia, Omaha, Atlanta and other
cities. To answer the question about locally administered
pensions, the Center collected data on 84 plans from
38 states. The Brief describes the results of that survey,
reporting the funding status of these locally administered
plans and the extent to which their sponsors have a funding
strategy and are sticking to it. The first section describes
the sample. The second section compares the funding status
of local plans to that of state plans. The third section
reports on the factors that affect the level of funding
among localities. The main finding is that the sample
of
locally administered plans, which includes plans from
the above cities, has funding strategies that are as good
or
better than state plans, with a funding ratio of 85%
compared to a state ratio of 84%. And when it comes to
making their
Annual Required Contribution, localities have a stronger
record than states do: 69% make their ARC compared with
54% of the states.
6. MASS. HIGH COURT WILL DECIDE DISABILITY
CASE:
The Supreme Judicial Court of Massachusetts
will decide whether
a former city worker qualified for a full disability retirement
because she suffered a heart attack after being told her
job was to be eliminated. According to salemnews.com, there
are two legal questions: (1) whether Cole’s heart
attack was sustained “as a result of and while in
performance of her duties,” which would qualify her
for full accidental disability retirement benefits and
(2) whether the city is protected from having to pay benefits
because it was simply conducting a legitimate personnel
action. A trial judge ruled that Cole was entitled to the
full pension (apparently applying the “presumption” designed
for police officers and firefighters). In a rather unusual
move -- at least to us -- the Supreme Judicial Court pulled
the case from the Appeals Court, where a proper appeal
was pending. A disability pension would amount to 72% of
salary, rather than a service retirement at 60%. (Of course,
the former could yield significant tax benefits under Section
104 of the Internal Revenue Code.)
7. NEW LAW TO ENSURE DEPENDENT STUDENTS
WHO TAKE MEDICALLY NECESSARY LEAVE OF ABSENCE DO NOT LOSE
HEALTH INSURANCE
COVERAGE:
On October 9, 2008 President Bush signed
H.R.2891. Dubbed “Michelle’s Law,” the law amends
Employee Retirement Income Security Act of 1974, the Public
Health Service Act and the Internal Revenue Code to ensure
that dependent students who take a medically necessary
leave of absence do not lose health insurance coverage.
The law is effective for plan years beginning on or after
October 9, 2009. The extension of coverage applies to a
dependent child’s leave of absence from a postsecondary
educational institution on account of serious illness or
injury from which the child is suffering while covered
under a health plan that would otherwise cause the child
to lose dependent status for purposes of coverage. Coverage
continues until the earlier of (1) one year from start
of the medically necessary leave of absence or (2) the
date on which coverage would otherwise terminate under
terms of the health plan. The child must have been enrolled
as a dependent under a health plan immediately before the
medically necessary leave of absence involved. Written
certification must be provided by a treating physician
of the child. The health plan and its carrier must provide
plain-language notification describing terms of the continued
coverage now available. (We have also read reports of a
new Florida law, effective October 1, 2008, that may allow
certain children to stay on their parents’ health
insurance until age 30. However, we have been unable to
locate the actual statute. Chapter 2008-30 generally deals
with the subject matter, but we do not find the extension
to age 30 provision.)
8. GIVE THEM AN INCH AND THEY’LL
TAKE A FOOT:
A Florida county firefighter accused of
taking a crash victim’s
foot has quit after telling investigators she would use
the foot to train her cadaver dog. The firefighter trains
cadaver dogs used to locate and follow the scent of decomposing
human flesh, according to the Associated Press. An investigation
into the incident reveals that the firefighter took the
foot belonging to a car crash victim, and was storing it
in her home freezer. It is fire department policy to take
a severed body part with the patient to the hospital if
there is any chance of reattachment, otherwise the body
part goes to the medical examiner’s office. The 38-year-old
firefighter, who was hired in 1994, abruptly resigned --
probably avoiding the boot. (We know the expression is “give
them an inch and they’ll take a mile,” but
that caption obviously would not work.)
9. ON DEVELOPMENT:
From Don’t Sweat
the Small Stuff for Men: Just about every job includes
some stress, plenty
of hassles, trade-offs and things to complain about. But
most jobs have at least some really nice perks that accompany
the quirks. The question is, why do we so often zero in
on the hassles and completely take for granted the parts
of our jobs -- and lives -- that are really quite nice?
The simple truth is, life is full of trade-offs. Just as
some people pretend that everything is wonderful when it’s
not, others act as though everything is terrible when it’s
not. Put the quirks that come with the perks in perspective,
and life will seem less stressful right away. Hmmm.
10. APHORISM:
How come it takes so little
time for a child who is afraid of the dark to become
a teenager who wants
to stay out all night? 11. QUOTE OF THE WEEK:
“It’s a funny thing:
the more I practice, the luckier I get.” Arnold Palmer
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