Opinion ID: 1803409
Heading Depth: 1
Heading Rank: 1

Heading: effect of repeal of statutory state guarantee

Text: La. R.S. 33:2165, renumbered as La. R.S. 11:2269, provided that (t)he state of Louisiana hereby guarantees benefits payable to a member of this system or a retiree or to his lawful beneficiary. Members, retirees and beneficiaries are separate categories of persons provided for differently in the FRS. See definitions in La. R.S. 11:2252. Black's Law Dictionary, p. 711 (7th Ed.1999) defines a guarantee as (t)he assurance that a contract ... will be carried out. A state guarantee is backed by the full faith and credit of the state. Vol. 9, Records of the Louisiana Constitutional Convention of 1973: Convention Transcripts, Dec. 5, 1973, comments of Delegate Aertker on page 2565 and Delegate Lowe on page 2575. Thus, a guarantee is a nominate, accessory contract of suretyship as provided for in La. C.C. art 3035, et seq. The following appears in the section entitled State Guarantee Repealed in the majority opinion: The legislature repealed former La. R.S. 33:2165 in its entirety pursuant to Acts 1991, No. 645, effective July 1, 1991. This Act repealed the state guarantee of benefits to FRS members and their beneficiaries. After the effective date of this act, the formula described in La. R.S. 11:103, applicable to public retirement systems whose benefits were not guaranteed by the state, and not the formula in La. R.S. 11:102, applicable to state guaranteed systems, was used for the calculation of the employer contribution to the retirement system. (Footnote deleted). A review of Act 645 of 1991 shows that it does not expressly state that it is intended to be retroactive. Accordingly, as a matter of statutory construction, it cannot be given retroactive effect. La. R.S. 1:2; La. C.C. art. 6; R. Lamonica and J. Jones, 20 La. Civ. Law Treatise, Legislative Law and Procedure, ง 6.4, pp. 113-125 (2004). Further, as a matter of constitutional law, an act of the legislature may not be applied retroactively if it would impair contractual obligations or disturb vested rights. Smith v. Board of Trustees of Louisiana State Employees Retirement System, 2002-2161, p. 7 (La.6/27/03), 851 So.2d 1100, 1105. It is not completely accurate to say that Act 645 of 1991 repealed the state statutory guarantee of benefits or that the FRS became a public retirement system whose benefits are not guaranteed by the state after the enactment of Act 645 of 1991. After the effective date of Act 645, the state's guarantee (suretyship) remained in full force and effect for the members, retirees and beneficiaries of the FRS who had accrued (vested) benefits prior to the effective date of the Act. Only those benefits [retirement rights] that accrued after the effective date of the Act are no longer covered by the state guarantee. The Act had no effect on the state's guarantee of benefits that accrued prior to the effective date of the act because of statutory and constitutional law. Finally, the repeal of this statutory guarantee does not control whether La. R.S. 11:102 or 11:103 applies to the FRS as asserted by the majority opinion. That issue is controlled by whether or not the FRS is a state or statewide system whose benefits are constitutionally guaranteed by La. Const. art. X, ง 29(B). See La. Const. art. X, ง 29(A), (B), (E)(2) and (E)(3) and La. R.S. 11:102 A and 11:103 A.