N001548
Sunday, January 13, 2002 2:31 PM
Comments to Interim Rules
Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue
Washington, DC 20530
Ref: Presumed Economic and Non-Economic Loss Tables
After reading the above reference explanation and tables, I hereby submit my
comments for your consideration and hopefully incorporation into any changes
that you are considering:
a.) The matrix does not appear to be correct in determining the total
compensation due a decedent?s family, example:
Category Age Income Matrix Value Non-Economic Net After Non-Economic
Loss Loss
Single / No Dependents 25 $35,000 $673,043 $250,000 $423,043
Married / No Dependents 25 $35,000 $1,296,190 $300,000 $996,190
The calculation is saying that two individuals making the same amount of
money and the same age, one?s family will receive more than twice as much
money as the single person's family, yet there is no reason given as to why.
What is the logic? What about the single person being engaged, therefore
wouldn?t that mean that the single person?s amount would increase. The
disparity is far too great without a reasonable explanation. It would appear
that the single person is being discriminated against.
b.) Other source compensation ? Based upon the explanation given in the
above reference and what has been stated in the newspaper, employer-provided
benefits would be deducted from the tables. What about employer provided
401(k) plans and profit sharing plans. These plans are in fact assets of the
decedent not the employer. Although provided by the employer, if the
employee was to have terminated the funds would have followed the employee.
Is it the intent of the government to take away assets of the employee?
c.) Present value calculation ? The factor given is 5.13% over a risk free
interest rate. I am under the assumption that investments of this type do
not allow for principal reductions, annuity payments. In fact current
annuity rates are nearer 4.5%. If this is correct you are deducting a
significant amount from the families.
d.) It has been stated that the average family will receive 1.6 million
dollars. That is the GROSS amount, not the net amount. Assume that your
estimate is correct at a GROSS amount of 1.6 million dollars, then you
subtract out social security benefits, benefits for spouses and children
under the age of 18 (government programs), pension benefits (including
employer and employee contributions to a 401(k) retirement plan, IRAs, Roth
accounts, SEP etc.), life insurance employer and employee paid for including
term and cash value, (assets of the decedent), my estimate would put the net
actual compensation paid to a family from the government to be nearer
400,000 to 600,000 or based upon the 3,000 decedents only 1,2 billion to
1.8 billion dollars a far cry to the amount being stated in the newspapers.
It would appear that your calculation maybe very conservative,
f.) The consumption factor appears to be incorrect. If one reviews the
matrix for a single person no dependents and compares it to a single person
with one dependent, the table indicates that for the same age and income a
single person with a dependent receives a large amount of money, yet based
upon the ?consumption factor? the cost to support the dependent should be
deducted leaving less money for that family, not more money for the
dependent.
g.) Did the government compare what similar airline accident insurance
suits are worth? The law, in which the settlements are determined, does NOT
state that the government should reduce for consumption factor, use present
value factors, use inflation factors for wages and clearly does not limit
the income at the top two percent. It only addresses the issue of collateral
source recovery. The public should be made aware of the differences and why
you are selecting the current method.
The law was NOT enacted for the victims, but rather for the airline industry
and a way to limit the costly legal and financial exposure that the airline
industry and others would be exposed too. Clearly the government would
rather be looked as the great hand of giving to the widow and orphans of
this very tragic event in our nation?s history, but instead, the government
is appearing to be a defender of big business and giving ?short-shrift? to
those in tears and sorrow.
Clearly, the government need not give away the store, for a bird in hand is
in fact greater than two in the bush. The government is not paying the legal
expenses for the decedent?s family. The trial lawyers? organization has
agreed not to charge the families. So the settlements can be 1/3rd lower.
Yes the law must be adhere to, unless of course, you wish to make take a
stand and tell of the unfairness in the law and what changes should be made
and why. Even if you do not want to change the law, at least you can
increase the compensation stated in the tables.
Hopefully you are looking to be fair and reasonable with those who are in
emotional and physical pain. Ask yourself one very important question. ?If
you were the one who perished, would you want your wife and children to
accept the offer being made?
I appreciate the opportunity to submit these comments and look forward in
reading your final rules.
Regards
Individual Comment
Avon, CT