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Guardians
An ICFA newsletter published semi-annually, Guardians is distributed to regional and state cemetery and funeral trade associations, federal officials, elected representatives and selected media. Each issue highlights recent ICFA activities on a variety of projects, including government relations, public service and consumer education.
Fall/Winter 2001
New Data Released on Consumer Cemetery Complaints/Inquiries
ICFA Offers Assistance in Wake of 9/11 Terrorist Attacks
ICFA Submits Comments to U.S. Dept. Of Labor on Proposed Ergonomics Regulations
ICFA Responds to NY Times Story on Prepaid Funeral Contracts
Multistate Tax Commission Adopts ICFA Model Law on Funeral Trusts
New Data Released on Consumer Cemetery Complaints/Inquiries
The Cemetery Consumer Service Council (CCSC) has announced the results of its Activity Survey Report for the year 2000. A total of 82 complaints and inquiries were processed during the year. Of that number, 76 were resolved. Nine complaints and inquiries were pending at the beginning of the year while another six remained at year's end. These figures are based on the responses provided by 22 of the 39 state and regional CCSC committees.
Among the various types of complaints and inquiries received, 31 dealt with improper cemetery maintenance, 16 with questionable sales practices, four with truth-in-lending matters and other contractual issues, 15 with cemetery rules and regulations, and another 11 with a variety of other issues, including simple inquiries into cemetery practices.
The Cemetery Consumer Service Council is now in its 22nd year of operation and continues to improve its effectiveness to assist consumers. An increasing number of calls originate as referrals from Better Business Bureaus and similar organizations. The CCSC also contacts members of Congress to advise them of the assistance and information the Council can offer their constituents.
CCSC is a non-profit organization created in 1979 and is funded by the International Cemetery and Funeral Association, the Cremation Association of North America, the Central States Cemetery Association and the Southern Cemetery Association. The sole purpose of CCSC is to assist consumers, without charge, in resolving complaints or answering inquiries regarding cemetery services or policies. Participation in the complaint resolution process is voluntary for both the consumer and the cemetery.
Industry members volunteer their time and experience to serve as CCSC representatives in their respective states. The Federal Trade Commission, the U.S. Department of Veterans Affairs, various state consumer protection agencies, and offices of attorneys general are periodically notified of CCSC activities and are among the major sources for consumer referrals. CCSC is listed in the Consumer's Resource Handbook, a U.S. government publication that is circulated to public libraries and consumer assistance agencies throughout the nation.
Complaints are handled by the state and regional committees with the national CCSC office in the Washington, D.C., area being the overall coordinator of the project and the central contact point. Complaints received by the national office are logged in and each is given a file number for tracking purposes. A copy of the complaint is then forwarded to the appropriate state representative for investigation and action. At that point, many complaints are resolved by telephone and the consumer is promptly notified of the results. It is rare for a cemetery to refuse to participate in the CCSC dispute resolution process. Where no committee exists, CCSC works with the cemetery board or similar government agency to assist the consumer.
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ICFA Offers Assistance in Wake of 9/11 Terrorist Attacks
Within hours of the September 11th terrorist attacks at the World Trade Center in New York City and the Pentagon in northern Virginia, ICFA President Gregory J. Easley, CCE, contacted the major federal and state agencies involved to offer the Association's help. Mr. Easley's faxed letter stated, "Please be advised that the resources of the International Cemetery and Funeral Association are available to assist the recovery efforts by facilitating communication with cemeteries and funeral homes throughout North America for the families of the victims of the attacks against the United States. Our thoughts and prayers are with the victims and their families, and also with the firefighters, police and rescue teams."
The ICFA also contacted the state funeral directors and cemetery trade associations in New York and Virginia to coordinate assistance efforts. Subsequently, the ICFA received a letter from New York City Mayor Rudolph Guiliani's chief of staff stating, "The Mayor asked me to thank you for your letter and especially for your thoughtful offer of assistance. Your generosity is very much appreciated during this most difficult time. You should know that your offer has been brought to the attention of the Mayor's Office of Emergency Management, the agency coordinating the recovery and cleanup efforts at the World Trade Center. Thank you again and God bless America."
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ICFA Submits Comments to U.S. Dept. Of Labor on Proposed Ergonomics Regulations
The following comments by ICFA Past President Ed Laux, CCE, were submitted by the ICFA in response to a request for public comments this past summer by the U.S. Department of Labor regarding its development of a new Ergonomics program for worker safety:
The International Cemetery and Funeral Association (ICFA) applauds the efforts of the Department of Labor to develop an Ergonomics program that is based on sound scientific research and common sense solutions to the prevention of workplace injuries. We are especially concerned that any program recognizes a cost-efficient approach in terms of compliance provisions for small businesses.
The ICFA was founded in 1887 and currently represents over 6,000 cemeteries, funeral homes, crematories and retail monument dealers primarily in the United States. The majority of our members are small businesses, including many nonprofit entities, and they would be disproportionately impacted by the requirements of any Ergonomics program. The ICFA testified in the Ergonomics hearings that were held in May 2000 and our comments were entered into the record as DC Exhibit 385. We also submitted post-hearing comments by letter to the OSHA Docket Office, No. S-777, dated June 21, 2000.
We originally expressed a number of significant concerns with the Ergonomics program that was rescinded by Act of Congress in March of this year. In developing a new "common sense" approach to reducing workplace musculoskeletal disorders (MSDs), the ICFA respectfully brings to the Department's attention the following information regarding our industry that we believe will assist OSHA in the development of a new program.
Unique Nature of the Industry: Statistically, there are at least 100,000 cemeteries in the United States and the U.S. Geological Survey estimates that this number could be as high as 200,000. Many cemeteries operate through volunteer boards of directors and one or two employees. There are also at least 22,000 funeral homes; the vast majority of cemeteries and funeral homes, approximately 87 percent, are small businesses and family-owned operations. The owners of these small businesses wear a number of hats including that of legal compliance officer for the many governmental regulations they face, both state and federal, including existing OSHA standards. We urge the Department to bear these factors in mind when developing "user friendly" regulations that can be easily understood and implemented by individuals who may have little formal training in comprehending the language of government regulations.
History of OSHA Enforcement Actions: Cemeteries and funeral homes historically have recorded low injury rates that can be confirmed by OSHA's own internal statistics. Based on my own personal experiences of over 40 years in this industry, I have found that our members have more often been fined for paperwork violations than for any injuries sustained by their workers due to an unsafe worksite. More importantly, many of the MSDs that potentially would be covered in an Ergonomics program involve activities whereby cemetery and funeral home workers use tools, power lifts and other equipment that significantly reduce the potential for injury.
For example, the mechanical backhoe has virtually eliminated the hand-digging of graves and consequential back injuries. It is also worth considering that many MSDs are allegedly the result of repetitive motion tasks throughout the workday. Cemeteries and funeral homes are unique among small businesses because of the wide spectrum of tasks performed by their workers. A constant variety of office activities and field work, often by the same worker, are performed every day and eliminates the potential for repetitive motion injuries. In my opinion, it is rare for a cemetery or funeral home worker to perform only one or two tasks that would place that person at risk of sustaining a repetitive motion-type of MSD. The ICFA urges the Department to establish a threshold rate based on actual reported injuries as a practical method of determining which businesses should be covered by an Ergonomics program in the first place.
Private Sector Incentives to Reduce MSDs: The ICFA believes that an effective approach to reducing any identified MSD hazard is to qualify the specific type of injury under the state workers compensation laws. Under this approach, the insurance industry will have strong incentives to develop prevention programs to keep the number of claims down. Businesses will likewise have every incentive to adopt such prevention programs to keep their insurance premiums at a minimum. We feel this approach creates a more positive environment for worker safety than the "carrot-and-stick" approach of threatening ruinous fines in order to obtain compliance with regulations that are subjective in terms of measuring compliance. Personally, I have heard it said that there was a small cemetery where the fines levied following an OSHA inspection exceeded the cemetery's annual revenue, although no worker had sustained injury. The ICFA strongly urges the Department to explore innovative approaches to reduce MSDs beyond the traditional punitive methods.
In closing, the ICFA appreciates this opportunity to comment on the development of a new Ergonomics program. We look forward with great interest to the report that will be published at the conclusion of the this phase of the proceedings. In the meantime, please feel free to contact us should you have any questions or wish more information. Thank you.
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ICFA Responds to NY Times Story on Prepaid Funeral Contracts
The following is the text of a letter that ICFA External Chief Operating Officer and General Counsel Robert M. Fells sent to The New York Times in response to an article critical of prepaid funeral plans:
Your August 12th story entitled "The Perils of Planning One's Own Prepaid Funeral" provided no context for the greater perils of "at-need" funeral purchasing where family members, with little or no advance planning, often grief-stricken at the death or imminent death of a loved one, are required by circumstances to make hurried decisions involving thousands of dollars. The Federal Trade Commission said it best when it documented the severely disadvantaged position of consumers when making "at-need" arrangements. These include emotional trauma, guilt, dependency and suggestibility, ignorance, and time pressure. Prearranged or "preneed" funeral plans can substantially reduce, and may eliminate, all of these factors.
The Times article missed a number of opportunities to help consumers become informed preneed shoppers. For example, if consumers are receiving unwanted phone calls from a funeral home or cemetery, they can tell the caller to place them on its "Don't Call" list that is mandated by the federal Telephone Consumer Protection Act as well as under many state telemarketing laws. These laws also establish time limits when calls can be made. The funeral services industries' own codes of ethics and model guidelines prohibit calls to hospitals, nursing homes, and hospices. Moreover, most preneed phone calls seek only to determine the level of interest in making prearrangements and whether a mutually convenient time for a meeting can be scheduled. If your readers had this type of information, they could easily detect the bad apples.
Instead, the Times story seemed intent on persuading readers to avoid making prearrangements, ignoring the usual outcome that thrusts survivors into frantic at-need decision-making. A few highly anecdotal stories were presented while the fact that over 5,500 funerals and burials are performed each day in the United States went unmentioned. A consumer advocate was quoted as saying that there are "a lot of complaints about cemeteries" without any effort on the Times' part to document or quantify this claim. Two years ago, industry critics were claiming that the U.S. General Accounting Office (GAO) investigation into funeral services sales practices would result in a scathing indictment of the profession. But when the GAO published its findings in September 1999 and found a very low number of consumer complaints, these same industry critics promptly forgot the investigation ever took place. It is unfortunate that the Times forgot about it too.
Similar to other end-of-life issues, funeral planning should be given adequate time and consideration before decisions are made. Comparison shopping for funerals, burials, and related services has never been easier thanks to the Internet and the many web sites that provide price and product information. Survey data indicates that almost 80 percent of the American public thinks prearranging one's funeral is smart, yet only about 25 percent have done anything about it.
The misguided concept, given uncritical coverage in your story, that funeral homes and cemeteries should, like children, be seen and not heard only perpetuates the emotionally-wrenching cycle of at-need funeral purchasing from generation to generation. State laws that prohibit any form of marketing prepaid funeral plans are anti-competitive and anti-consumer, even the Federal Trade Commission has said so. The public has shown a keen interest in making prearrangements; let's help them avoid the problems instead of suggesting they should forget about it. What help will industry critics be when family members must make costly decisions on the worst day of their lives?
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Multistate Tax Commission Adopts ICFA Model Law on Funeral Trusts
The Multistate Tax Commission (MTC), a professional association of tax departments from 44 states and the District of Columbia, has adopted a model law on the taxation of funeral trust income that was proposed by the ICFA. Income is generated by deposits into a trust account when consumers choose to prepay funeral merchandise and services in advance of any need. The advantages to consumers when they decide to prepay is their ability to lock-in prices at current levels and to select items without the emotional or financial pressures that affect decision-making when the death of a loved one has occurred or is imminent.
Last year, the MTC Uniformity Subcommittee on Income Tax had proposed that state income tax due on funeral trust earnings should be determined by the state of residence where each purchaser lives in instances where the trust elects to pay the tax. The ICFA pointed out the difficulties in attempting to keep track of hundreds or perhaps thousands of customers' domiciles for state taxation purposes. The model law proposed by the ICFA resolves this problem by determining the domicile as the state where the trust is located, or where a state does not require a trust, the state where the funeral home or cemetery providing the services or merchandise is located.
This issue developed when Congress passed Section 685 of the Internal Revenue Code in 1997. This new section, which was supported by the industry, permits trustees of qualified funeral trusts (QFTs) to elect to pay the federal tax on earnings. If this Sec. 685 election is made by the trustee, then the preneed purchaser is relieved from reporting and paying any federal income tax on the trust income.
However, using this election raised an issue from the viewpoint of the state income taxation of QFT income. If the trust assumes responsibility for preneed purchasers' state income tax liability, then in which state(s) is the trust income taxable? The original language developed by the MTC Subcommittee sought to impose a state income tax filing requirement for each qualified funeral trust based on the residence of the customer. This language was developed because the Subcommittee felt it was the method least susceptible to manipulation. However, the ICFA expressed its concerns with the administrative burdens this approach imposed on the industry and proposed that the state of the trust's residence should determine the state of taxation.
The MTC Subcommittee was concerned that under the ICFA approach some funeral trusts might "forum shop" and relocate to states having no income tax. For this reason, MTC Subcommittee members initially reasoned that the domicile state should be determined by the purchaser's resident state. This distinction is an important one impacting both local and national operations by potentially forcing trustees to compute trust earnings based on a customer's state of residence at the time of each installment payment. This would add a substantial administrative burden to an already complicated process.
To address this concern, the ICFA recommended that the seller providing the merchandise or services would also be considered the resident or domicile state in the event a particular state had no trust requirement. The MTC subsequently met and approved this approach on July 27th of this year. The model law will now be evaluated by the individual states to determine whether each wishes to adopt it. The ICFA proposal was developed through its Government and Legal Affairs Tax Subcommittee.
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Click here to see Spring/Summer 2002 edition.
Click here to see Spring 2001 edition
Click here to see Fall 2000 edition
Click here to see August 1999 edition
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