Volume 5 Number 46 November 14, 2008
While Florida economists grapple with unprecedented fiscal challenges facing our state budget, newly elected Florida lawmakers met in Tallahassee for an important orientation session. Both newly elected and incumbent members of Florida's Legislature will learn Friday from state estimators just how deep Florida's expected budget shortfalls will run.
CFO Sink took the opportunity to reach out to lawmakers, reiterating her request for a special session in December or January to help prioritize and balance taxpayer dollars. All across Florida, families are sitting around their kitchen tables, balancing their checkbooks and planning for their family's future. By offering steady, effective leadership in a special session, Florida's Legislature can bring fiscally responsible solutions to the table in time to blunt major impacts on essential services.
Solutions discussed during second meeting of Sink’s Safeguard Our Seniors (SOS) Task Force
With seniors age 65 and older expected to soon represent 30 percent of Florida’s population coupled with an upward trend in complaints to her office about financial products such as annuities, Florida Chief Financial Officer Alex Sink challenged members of the Safeguard Our Seniors (SOS) Task Force to consider meaningful financial protections for senior investors. The task force was created to help better protect Florida seniors against financial fraud, with an immediate focus on annuity fraud.
“The number of complaints from Florida seniors about annuities has nearly quadrupled in the last three years,” said Sink, whose department has opened 474 investigations on financial fraud involving seniors, with 70 percent of cases related to annuity and life insurance transactions. “Better financial protections for our growing population of senior residents and tougher consequences for those who defraud our seniors demand our immediate attention.”
Teaming up with CFO Sink Thursday was AARP Florida representative Bentley Lipscomb, former secretary of the Florida Department of Elder Affairs.
“Over the last several decades, Florida has spent a lot of money and energy encouraging seniors to retire to ‘paradise’ here in Florida. With the current market conditions, we have an even greater responsibility to protect them from financial fraud as they look for ways to invest their hard-earned savings during retirement,” said Lipscomb, who shared information about AARP’s new “No Free Lunch” program initiative. The program recruits senior citizens to attend and report on high-pressure sales tactics for investments at free lunch and dinner seminars advertised under the guise of helping seniors learn how to grow and protect their retirement savings.
Sink and task force members also heard from Anne Ridings, a guardian with Lutheran Services, who recounted her experience with Joseph Seale, a former resident of Ft. Myers. In 2006, following the sale of Seale’s home, a life insurance agent sold three annuities with a 15-year surrender period to Seale, 85 years old at the time, that tied up all of his liquid assets. Months later, Seale was hospitalized and Ridings was appointed his guardian by the courts. Sink’s department was contacted by Ridings to get help for Seale who was about to be evicted from the nursing home because he had no funds to cover his expenses. The department was able to recover more than $256,000 for Seale, representing the original investment without penalty, which helped Seale remain in the nursing home with proper care. The agent, who made over $13,000 in commissions selling inappropriate annuities to Seale, had his license revoked by the Department.
Sink and task force members heard from Erika Dine, an elder law attorney from Sarasota, about the difficulties in prosecuting financial fraud against seniors due to advanced age and health-related concerns. Members also heard from Scott Stolz, President of Planning Corporation of America, a division of Raymond James Financial. Three years ago Raymond James set product criteria for the indexed annuities it offered. That criteria included a limit on both the length (10 years) and size (10%) of the surrender charges. According to Stolz, they have yet to receive a single client complaint on any of the $150 million in indexed annuities they have sold. Part of the problem, Stolz said, is that some indexed annuities sold within the marketplace have surrender periods as long as 20 years and as high as 20 years and 20 percent. Such contracts could not possible be deemed suitable for seniors in their late 70s and early 80s.
According to Sink, there are several solutions that appear to be consistent themes for better protecting senior investors including:
Sink said recovering funds for senior victims is typically difficult and prosecution can take up to a year or longer while the senior struggles with no access to needed funds. Last session, CFO Sink advocated for legislation to increase the penalties against criminals who commit annuity fraud, but the Legislature failed to pass the bill. Without stronger penalties, it is incredibly difficult for state attorneys to devote the resources necessary to prosecute these offenders.
The SOS Task Force is scheduled to meet again in early January in West Palm Beach. In addition to considering solutions to better protect seniors against annuity fraud, task force members will also deliberate ways to safeguard seniors against problems associated with Stranger-Owned Life Insurance (STOLIs) products and reverse mortgages.
To learn more about the SOS Task Force or what to consider when purchasing annuities, visit www.flseniors.net. Floridians who believe they may have been the victims of annuity fraud should call 1-877-MyFLCFO or log on to www.MyFloridaCFO.com to file a complaint.
Sponsored by the Department of Financial Services Division of Rehabilitation and Liquidation, the annual chili cook-off brought serious competitors to the fore, with serious judges to boot. Contestants stirred and judges tasted, with a hungry lunch-time crowd right behind. Proceeds totaling $667 will benefit the Florida State Employees' Charitable Campaign.
This year the competition became two team efforts, with the West side of the building becoming the Wild Wild West, and the East side of the building becoming team Florida. The Wild Wild West took first prize, represented by Chef Dale Levine.
The judges below left to right are Brian Taylor, owner of Finnegan's in Tallahassee and Mulligan's in Valdosta, winning chef Dale Levine, Lauren Dorsett, ABC news anchor at 5:00 , and Sandy Walker, Chili Expert.
Florida on the Line gave callers the chance to talk directly to CFO Alex Sink on the Florida Public Radio Network.
WFSU Florida On The Line - CFO Alex Sink 11-12-08
Florida on the Line is broadcast the second Wednesday of each month at 7 pm ET on public radio stations across the state.
The Florida State Fire College participated in the 15th annual Great Florida Fire School, which marked the completion of five years at South Florida Community College in Avon Park, Florida. The fire school was established by the State Fire Marshal’s office in 1993 to provide affordable training to volunteer and small fire departments within the state.
Through the great cooperation of many, including South Florida Community College, the Florida State Fire College, the Florida State Fire Marshal, the Florida State Firefighters Association, the local fire departments and the community, this year's events were deemed a great success.
The 15th annual event was held November 5-9, 2008, with participants from Escambia County all the way to the Keys again this year. A total of 10 classes were presented including the ever popular Farmmedic program new Firefighter Water Survival course, shown in the photo to the left.
Over 100 firefighters and families participated in the programs. Firefighters are trained to recognize stress in other firefighters. However, the families who see firefighters on a daily basis often do not recognize the signs of stress on the job or stress resulting from a critical incident.
On Sunday, the banner that is proudly displayed on the host college building was passed on to Indian River State College. Mike Dashosh accepted the GFFS banner on behalf of Indian River State College and said; “we are looking forward to hosting the 2009 Great Florida Fire School and showcasing our newest training facilities.”
Jerry DeJonge, who has coordinated the South Florida Community College’s involvement over the past five years, was experiencing some mixed feelings. He said, “It is always a lot of work for our staff but we have certainly made some great friends over the years and even with the work, we always enjoyed the week with the firefighters from around the state.”
The Federal Reserve Board has alerted the public to instances of questionable solicitations directed at consumers that promise access to personal loans through a nonexistent Federal Reserve lending program.
Under this fraudulent scheme, targeted individuals are told that that they can work through a broker to access a Federal Reserve program that extends sizable secured loans to consumers. Consumers are encouraged to deposit large sums of money into a bank account, under the guise of a security deposit, in order to receive the purported loan.
The Federal Reserve is advising consumers that it has no involvement in these solicitations and does not directly sponsor consumer lending programs. The matter has been referred to the appropriate authorities for action.
Consumers are strongly urged to verify the legitimacy of potential service providers before entering into a business transaction. Individuals seeking personal finance options are encouraged to do business only with reputable lenders and to shop around for the most favorable loan terms.
Consumers should always verify that you are dealing with a lender and broker that are properly licensed before using them. You may do so by calling the Florida Department of Financial Services for immediate help from consumer specialists at 1-877-MY-FL-CFO (1-877-693-5236), toll-free in Florida, and (850) 413-3030 from out-of-state.
Consumers with questions about solicitations that they suspect may be fraudulent are encouraged to contact the Federal Reserve Board Consumer Help Center - http://www.federalreserveconsumerhelp.govor by calling 1-888-851-1920.
Compound interest is adding accumulated interest earnings back to the principal balance of the account, so that interest is earned on interest. Over time, compound interest will make much more money than simple interest to help savings grow.
Compound interest, combined with regular monthly savings will escalate the impact of savings growth. This lesson is best learned early, as the payoff grows exponentially the sooner it is put into practice.
A good financial advisor can help devise a well-diversified investment strategy that will help you balance risk with methods to beat inflation and save regularly.
For state employees, the Department of Financial Services Deferred Compensation Plan is a tax-deferred "employee contribution" investment program. It is participant directed, pursuant to Internal Revenue Code section 457. Participating employees know their retirement needs, time horizons and risk tolerance, and make their own investment decisions.
Similar investment plans are available in private-sector workplaces, and savings are automatically deducted each payday. Take advantage of the power of compound interest and regular savings to build financial security.
As the holidays approach, think about giving gifts that reflect energy conservation, reduce the ecological footprint, and advocate environmental justice.
Gifts such as gardening tools, bird feeders, native trees or shrubs for a homeowner represent a lifetime of enjoyment as well as a thoughtful conservation message. Herb gardens in a large pot will bring pleasure to someone who is hospitalized or homebound.
Gourmet coffee is great for breakfast-lovers, but be sure to look for shade-grown and fair-trade coffee, indicating that the beans were grown with both ecological and equitable labor practices.
Read labels carefully, and think about the message you are sending to your loved ones when you shop during this holiday season.
To help Florida high school students learn more about saving and investing, using credit wisely, and avoiding fraud, the U.S. Department of Treasury has launched the National Financial Literacy Challenge, a 35-question online test of personal finance knowledge for high school students across the United States.
The test-taking window for the Challenge begins November 3 and continues through November 26. Teachers can sign up their students at the U.S. Treasury’s website: http://flc.treas.gov/index.htm. High school students enrolled in any subject from any U.S. high school can participate.
The Charles Schwab Foundation will award scholarships of $1,000 each to as many as 100 students who achieve a score of 100 percent on the test.* In addition, the Foundation will award $1,000 to the student’s school or organization that contributed to the student’s financial education†. The U.S. Department of the Treasury will also award medals to students scoring in the top one percent and certificates of recognition to students scoring in the top 25 percent. Winners will be announced in December.
The Challenge was developed by the Office of Financial Education, Department of the U.S. Treasury, in consultation with four prominent academicians, the National Endowment for Financial Education, Junior Achievement USA, the National Council on Economic Education and the Jump$tart Coalition for Personal Financial Literacy.
CFO Alex Sink is promoting the Financial Literacy Challenge as part of her “Be the CFO of Your Family” financial education initiative in Florida.
Open enrollment for Medicare Part D Prescription Drug Coverage is Nov. 15 - Dec. 31, 2008. Before selecting a prescription drug plan (PDP) or changing your coverage, the National Association of Insurance Commissioners (NAIC) offers this information to help you get smart about your insurance options.
In 2003, the federal government enacted a Medicare prescription drug benefit for Medicare beneficiaries. Private insurance companies sell Medicare Prescription Drug Plans (PDPs) or Medicare Advantage plans approved by Medicare. Everyone with Medicare is eligible to enroll in Medicare prescription drug coverage, regardless of income or assets, and coverage is voluntary.
Plan features might change from year to year. So, carefully examine all available plans during each annual enrollment period, because your current plan may no longer best meet your needs. Be sure to check the features of your plan, including the list of drugs covered, the premium, deductible, and cost-sharing you pay, and any coverage gap. If you are satisfied with your current plan, you do not need to do anything to keep your plan. If you take no action, you will remain in your current plan. If you enroll in or make changes to your plan during the annual enrollment period, your new coverage automatically begins Jan. 1, 2009.
Medicare Advantage plans might also make changes to important features of your plan from year to year, including the list of drugs covered, the premium you pay, deductibles and cost-sharing requirements, and provider networks. Carefully review your plan options during each open enrollment season. If you take no action, you will automatically remain in your current plan.
A Medicare prescription drug plan might provide more coverage than a Medicare supplement insurance (Medigap) policy or employer-provided prescription drug coverage that you may currently have. If Medicare considers your existing coverage to be “creditable” – meaning, coverage that is as good as the standard Medicare prescription drug coverage benefit – you are permitted to keep your current coverage without incurring future penalties. Check with your employer or Medigap plan before dropping an employer-provided prescription drug coverage or Medigap plan because you may not be able to get it back. If you do not enroll in a Medicare drug plan when you are first eligible for Medicare, and you don’t have other creditable prescription drug coverage, you may be subject to a penalty if you decide to enroll at a later time.
You can enroll in a stand-alone prescription drug plan (Medicare Part D) or you can choose a Medicare Advantage plan (Medicare Part C) that includes a drug benefit.
Compare plans and select the one that best meets your individual needs annually. Here are a few things to consider:
Beginning Oct. 1, 2008, new federal rules are in place to protect consumers against abuses in the marketing and sales of Medicare prescription drug plans and Medicare Advantage plans. According to these new rules, individuals who contact you about any type of private Medicare coverage:
Unfortunately, not everyone who contacts you about switching to a Medicare drug plan has the best intentions. To protect yourself from scam artists intent on taking advantage of your situation, here are some additional tips to avoid becoming a victim:
Beware of door-to-door sales people. Remember, agents cannot solicit business at your home without an appointment. Do not let uninvited agents into your home.
Do not give out personal information, such as Social Security numbers, bank account numbers or credit card numbers to anyone you have not verified as a licensed agent. People are not allowed to request such personal information in their marketing activities and cannot ask for payment over the Internet. They must send you a bill. Once you decide to purchase a plan and have verified that the agent is licensed, you may give the agent personal information to assist in enrollment and billing.
Verify that the plan you have chosen is an approved Medicare plan. All of the approved plans are available at www.medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227).
Federal assistance with premiums will be available to Medicare beneficiaries who meet certain income requirements. Medicare beneficiaries may seek assistance in reviewing options for coverage and obtaining financial assistance by contacting their State Health Insurance Assistance Program (SHIP). Go to the NAIC Web site (www.naic.org/state_web_map.htm) to link to your state insurance department.
For more information about your Medicare prescription drug options including an online Medicare Prescription Drug Plan Finder, go to www.medicare.gov.