Court Opinion

ID: 3460812
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:27:42.987597+00
Date Added: 2024-06-11T13:56:04.688575
License: Public Domain

Dear Mr. Wiley:
We received your request for an opinion.  Specifically, you inquire as to the authority of the Lafourche Basin Levee District to provide a supplemental retirement  plan for its employees.
The Lafourche Basin Levee District is a political subdivision of the state.  The general powers of the District are found at La. R. S. 38:306.  It is our understanding, after discussing the matter further with you, that  the District is not a participant in the Louisiana State Employees' Retirement System.  The employees of the District have Social Security coverage.
The District is considering establishing a deferred compensation plan pursuant to section 457 of the Internal Revenue Code. Article 7, Section 14(B) of the Louisiana Constitution authorizes the contribution of public funds to pension and insurance programs for the benefit of public employees.  Clearly, the employees of the Lafourche Basin Levee District are public employees.  Thus, there is no constitutional prohibition to establishing such a plan for the employees of the District.
Further, La. R.S. 42:861 authorizes a political subdivision of the state to adopt a group plan which allows for  the purchase of annuities, life insurance or mutual funds which qualify for deferred federal taxation benefits as provided in section 401(a) of the Internal Revenue Code.  This statute further authorizes that the employees' contributions for such a plan may be deducted by the employer from the employees' salaries when authorized in writing by the employees to do so. Louisiana has its own deferred compensation plan found at La. R.S. 42:1301, et seq.  This plan was established for the purpose of providing supplemental retirement  income to employees and independent contractors of a Louisiana employer.  The plan is voluntary and may be used with employee contributions and an employer match as a supplemental retirement benefit, separate from, and in addition to, a primary retirement plan such as Social Security.
Thus, it is our opinion that the Lafourche Basin Levee District may participate in the Louisiana Deferred Compensation Plan or it may establish a supplemental retirement plan for its employees. We do point out, however, that the employer match for an employee whose salary is  fixed by law cannot cause the employee's total compensation to exceed the fixed salary.  We also recommend that, prior to the implementation of any plan, you review the proposed plan with the Internal Revenue Service and the Department of the Treasury, Division of Social Security.
We trust that this answers your request.  Should you have any questions or comments, please do not hesitate to contact our office.  With kindest regards,
Yours very truly,
                              RICHARD P. IEYOUB ATTORNEY GENERAL
                              BY: TINA VICARI GRANT Assistant Attorney General
RPI:TVG:jv
Mr. Joseph C. Wiley Assistant District Attorney 23rd Judicial District P.O. Drawer 279 Napoleonville, LA 70390
Date Received: Date Released:  March 10, 2000
Tina Vicari Grant Assistant Attorney General