N002026
Friday, January 18, 2002 11:08 PM
Comments on September 11th Victim Compensation Fund of 2001
Interim Rule, 28 CFR
I am working closely with a family that lost their father on September 11th.
The Interim Rule still leaves significant uncertainty regarding the rules for
the compensation fund, and the potential compensation from the fund. As a
result, the objective stated by the Special Master "...that claimants be able
to enter the program - or choose not to enter the program - with an
understanding of how their claims will be treated" has not yet been achieved.
Clarifying the open issues and removing the ambiguities is critical to the
ability of claimants to make an informed decision on participation.
I have organized my comments on the Statement by the Special Master and on
the Interim Rule by the appropriate paragraph of the Interim Rule. My
comments are:
104.43 Determination of presumed economic loss for decedents. It is clear
that a formula was used to generate the presumed loss tables. However, only
partial information on the elements of the formula has been provided.
Further, the assumed location of domicile, and corresponding tax rates, has
not been identified. Also, the factors for estimating consumption have not
been defined. The result is that the potential claimant is left to guess at
a presumed amount that could vary significantly from what the fund will
calculate. Providing explicit information on the underlying formula in an
updated version of the presumed loss tables is key.
104.44 Determination of presumed non-economic losses for decedents. The
Statement by the Special Master indicates that the most rational and just
approach for non-economic losses is to base them on categories of claimants.
He further continues "The most obvious distinction is between those who died
and those who suffered physical injury but survived." That distinction is
the only one recognized by the Interim Rule. However, there are also
distinctions based on the circumstances of death for the decedents. In
particular, those trapped in the area above the floors destroyed by the plane
in WTC Tower One and below the locked Emergency Exit doors to the roof were
subjected to extraordinary suffering for an extended period of time (many
even choosing to jump from the building). These people account for a
significant portion of the overall fatalities, and would seem to constitute a
distinct category of decedents. Knowing the circumstances of their suffering
has also exacerbated the suffering of their family members.
As a further comment, the values assigned to the non-economic loss seem very
low compared to what might reasonably be expected from a successful tort
action with facts as in this case (e.g. the locked Exit doors). Since the
non-economic loss amounts are not defined by the statute, one approach might
be to simply increase them significantly, e.g. by a factor of 2 or 3 for
everyone. This would have the further benefit of reducing the spread of the
overall awards resulting from differences in income of the decedents, and
would reduce the number of claimants receiving minimal or no awards due to
collateral offsets.
104.47 Collateral Sources. While the language of the statute provides a list
of items that are to be considered offsets, the meaning of each item is not
clear. It would be most helpful if there were a clear statement of the
specific items that are to be offset, and their treatment, together with a
commitment that those items will be the only ones. Questions on the current
language include:
- Pension funds. Is this limited to employer-provided pension benefits,
or does it include 401K funds and IRAs? If 401K funds and IRAs are included,
are employee contributions and the associated appreciation deducted from the
value of the account before considering it to be an offset? If not, aren't
you basically offsetting the award with the amount in a savings account?
Considering investment assets as offsets would not seem to be consistent with
the intent of the statute.
- Payments by federal, state, or local governmentsâ?¦ At a meeting with
families on December 17, 2001 the Special Master said that Social Security
Survivor Benefits and Worker's Compensation payments would not be collateral
offsets. Please confirm that these are not included in the definition, or
if they are, how the present value is to be determined. Also, are payments
by Victim Compensation Funds included in the definition?
- Charitable donations. Subparagraph (b) (2) first says that charitable
donations are not offsets, but then goes on to say that the Special Master
may determine that they are. Which will it be?
There have been many complaints about the inclusion of life insurance as a
collateral source offset. While the statute requires it to be a collateral
source, it does not define how the offset is to be calculated. Since these
are funds that the family would normally receive upon the person's eventual
death, it would be reasonable to take the decedent's life expectancy into
account and assume that the life insurance payments would have been paid at
that time. The present value of the payments would then be used as the
offset. Premiums paid by the decedent should also be deducted from the value
of the policy. Adopting this approach would increase the probability that
families will participate in the fund, while preserving the intent of the
statute.
Thank you for your consideration of these comments.
Individual Comment
Wilton, CT