Opinion ID: 175595
Heading Depth: 2
Heading Rank: 3

Heading: Formalities of DeCay's Cash-Out

Text: Finally, the LSPRF asserts that the district court erred by allowing the United States to cash-out DeCay's contributions to his retirement account without applying for a refund. The LSPRF asserts that the garnishment order as to DeCay is either improper or incomplete because the United States did not apply for a withdrawal of DeCay's benefits. The final garnishment order issued by the district court compels the LSPRF to immediately pay to the United States of America the amount of $77,898.00, which represents the present cash-out value of DeCay's pension account with the LSPRF. The parties do not dispute that DeCay is currently entitled to cash-out his employee contributions, and the LSPRF does not suggest that DeCay's right to cash-out his contributions is in any way conditional. Instead, the LSPRF asserts that the United States must apply for a refund of DeCay's contributions because the LSPRF may be subject to future liability if the United States is not forced to execute paperwork waiving DeCay's future pension benefits. Louisiana law requires a pension beneficiary to apply for a reimbursement of his employee contributions, thereby extinguishing the employee's rights in the pension fund. See LA.REV.STAT. ANN. § 11:2175(C)(1) (1995) (stating that an eligible member may apply for and obtain a refund of the amount of his contributions by making application on the form furnished by the fund ... A refund automatically cancels all rights in the fund). The United States argues that DeCay is adequately protected from future litigation by the FDCPA, and thus its failure to abide by Louisiana law is inconsequential. Section 3206 of the FDCPA states: A person who pursuant to an execution or order issued under this chapter by a court pays or delivers to the United States ... money or other personal property in which a judgment debtor has or will have an interest, or so pays a debt such person owes the judgment debtor, is discharged from such debt to the judgment debtor to the extent of the payment or delivery. The United States thus asserts that it was not required to apply formally for a withdrawal of DeCay's employee contributions because § 3206 insulates the LSPRF from litigation and waives DeCay's rights to any future pension benefits. We conclude that LSPRF has not sufficiently established that it is currently subject to a risk of double exposure upon payment of the $77,898; [11] accordingly, the matter is not ripe for our resolution at this point.