Court OKs Pension Garnishment for Former Louisiana Public Employees

January 9, 2009 (PLANSPONSOR.com) - The U.S. District Court for the Eastern District of Louisiana has ruled that the federal government can garnish benefits of Louisiana Sheriff's Pension and Relief Fund (LSPRF) participants.

The court decided that the Mandatory Victims Restitution Act (MVRA) preempts any state law that may limit what can be garnished or any state law pension anti-alienability provisions for those who have been found guilty or who have pleaded guilty to crimes.   Kerry DeCay and Stanford Barre pleaded guilty in criminal proceedings and along with other defendants, were ordered to pay restitution of more than $1 million under the MVRA.

Aside from rejecting the LSPRF’s argument that DeCay and Barre’s benefits could not be garnished because Louisiana state law prohibited garnishment of pension funds, the court also rejected the fund’s contention that garnishing $77,898 in employee contributions that DeCay was due would violate the state constitution’s requirement that the pension fund remain actuarially sound. The court said the same preemption analysis applies.

Finally, the LSPRF also argued that the federal Consumer Credit Protection Act (CCPA) limits the government to recovering just 25% of the monthly pension benefits that it pays to Barre, but the court pointed out that limitation applies to income, but not pension benefits.

The court allowed for garnishment of the full $2,464.72 in monthly benefits the pension fund paid to Barre.

The case is United States v. DeCay,E.D. La., No. 05-186, 1/5/09.

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