Can a LOPFI member hold the system to a 2010 service-credit purchase price after a representative verbally said it would not change?

Plain-English summary

State Representative Bruce Cozart asked about a police officer who received purchase amounts for LOPFI service credit in 2010, allegedly with an understanding that the amounts would never change. He asked whether later statutory changes to the actuarial calculation violated the ex post facto clauses and whether a LOPFI representative's verbal assurance created a binding contract.

Attorney General Leslie Rutledge said the first question rested on a mistaken premise. Act 1455 of 1999 had already required the purchase amount to be the actuarial equivalent of the credit's value, calculated at the time of purchase. The opinion says there was no relevant change after 2010. It also notes that ex post facto concerns arise with criminal sanctions, citing Garrett v. State and Taylor v. The Governor.

The AG answered the verbal-contract question no. She could not determine whether the representative actually made the alleged statement, but said any such advice would be unauthorized in light of the statutory requirement. The opinion says a representative's past conduct could not impose a contractual obligation on LOPFI contrary to the statute and actuarial soundness.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What this means for you

LOPFI members

If you received verbal advice that a service-credit purchase amount would stay the same, this opinion says the advice cannot bind LOPFI to a price contrary to the calculation required when the purchase occurs. The AG did not decide whether the alleged advice in this case was actually given.

Pension administrators

For the service-credit purchase described in this opinion, the statute requires the system's actuary to determine the amount as of the time of purchase. The AG found that this requirement had been in place since 1999 and that the claimed verbal assurance could not override it.

Common questions

Q: Did Arkansas add the relevant actuarial calculation after 2010?
A: No. The AG said Act 1455 of 1999 had already added the requirement that the amount be calculated as of the purchase date.

Q: Did the AG decide that a LOPFI representative made the alleged promise?
A: No. She said she could not act as a factfinder, then answered the legal question on the assumption that the verbal advice had been given.

Q: Can that verbal advice create a contract for the old amount?
A: The AG said no. Any such advice would be unauthorized because the statute requires an actuarial calculation at the time of purchase.

Q: What did the opinion say about ex post facto law?
A: The AG said the asserted post-2010 statutory change had not occurred. She added that ex post facto concerns arise only when criminal sanctions come into play.

Background and statutory framework

Act 1455 of 1999 added a condition for purchasing credited LOPFI service for prior service covered by a local pension fund. The member must contribute the actuarial equivalent of the credited service's value, determined by the system actuary as of the purchase date. The AG relied on that requirement to reject the claimed verbal contract.

Citations and references

Statutes: Ark. Code Ann. § 24-10-506; Act 1455 of 1999.

Cases: Garrett v. State, 347 Ark. 860, 864, 69 S.W.3d 844, 846 (2002); Taylor v. The Governor, 1 Ark. 21 (1837).

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2016-054
June 17, 2016
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE

The Honorable Bruce Cozart
State Representative
420 Rock Creek Road
Hot Springs National Park, AR 71913

Dear Representative Cozart:

This is in response to your request for my opinion regarding Ark. Code Ann. § 24-10-506, which addresses the purchase of credited service by active members of the Arkansas Local Police and Fire Retirement System (LOPFI).

As background for your specific questions, you refer to a law enforcement officer who "was given purchase amounts to buy the service credit in 2010 per Ark. Code Ann. § 24-10-506, with the understanding that the purchase amounts would never change." You then ask:

1. Do legislative changes made to Ark. Code Ann. § 24-10-506 after 2010, that create changes in actuarial calculations violate the ex post facto clauses of the U.S. Constitution and the Arkansas Constitution?
2. Does a LOPFI representative, who verbally advises a LOPFI member [that] the purchase amounts for buying Other Service Credit will remain the same (under law at the time in 2010), create a legal contract with the member?

RESPONSE

Question 1 - Do legislative changes made to Ark. Code Ann. § 24-10-506 after 2010, that create changes in actuarial calculations violate the ex post facto clauses of the U.S. Constitution and the Arkansas Constitution?

This question appears to be based on a mistaken assumption that the actuarial calculations required by Ark. Code Ann. § 24-10-506 were not part of the statute in 2010. In fact, this change came about in 1999. Act 1455 of 1999 added the following requirement to the other conditions that must be met in order for a member to purchase credited service in LOPFI for prior service covered by a local pension fund:

Provided that the member contributes to the system an amount that is the actuarial equivalent of the value of the credited service to be purchased. This actuarial equivalent would be as of the time of the purchase of credited service and would be determined by the actuary to the system.

Contrary to the premise of your first question, therefore, there were no changes to section 24-10-506 after 2010 in connection with the requisite actuarial calculations. It is consequently unnecessary to respond further to this question.

It may nevertheless be helpful to note, generally, that ex post facto concerns are only raised when criminal sanctions come into play. See Garrett v. State, 347 Ark. 860, 864, 69 S.W.3d 844, 846 (2002) ("In general, 'An ex post facto law declares an offense to be punishable in a manner that it was not punishable at the time it was committed, and relates exclusively to criminal proceedings.' Taylor v. The Governor, 1 Ark. 21 (1837).").

Question 2 - Does a LOPFI representative, who verbally advises a LOPFI member [that] the purchase amounts for buying Other Service Credit will remain the same (under law at the time in 2010), create a legal contract with the member?

Because I cannot act as a factfinder in issuing opinions, I cannot test this question's assumption that a LOPFI representative so verbally advised a member. I can opine, nevertheless, that the answer is "no" because any such verbal advice by a LOPFI representative (even if actually given) must be deemed unauthorized, given the clear requirement under section 24-10-506(a)(3) (beginning in 1999, as discussed above) that the purchase amount be actuarially determined "as of the time of the purchase of credited service." This requirement is dictated by prior case law and principles of actuarial soundness. I do not believe the past conduct of a LOPFI representative could impose any contractual obligation on the system that is counter to section 24-10-506(a)(3), and that might prevent the system from remaining actuarially sound.

Sincerely,
LESLIE RUTLEDGE
Attorney General