Dustin McDaniel (D)

LITTLE ROCK, Ark. (Legal Newsline)-Legislation in Arkansas that would eliminate state retirement system's deferred retirement plan for certain workers might not pass legal muster, state Attorney General Dustin McDaniel said.

The Democratic attorney general was asked by state Senate Majority Whip Steve Faris, D-Central, whether the bill that would jettison the Deferred Retirement Option Plan for some categories of employees who are entitled to chose the benefit would be constitutional.

In his opinion, McDaniel said the proposal "may well survive" legal scrutiny.

"The surrounding issues are far from clear, however, and judicial clarification may be necessary to definitely resolve the matter," he wrote.

As for employees who will have met the conditions to participate but will not have elected to do so as of the time the legislation is adopted, "may well have a property interest in DROP that is protected under a general 'vested rights' analysis," he said.

"Accordingly, a proposal to eliminate DROP as to those persons would be constitutionally suspect in my opinion," McDaniel said.

Faris has said he plans to propose legislation next year that would
allow the trustees of the state retirement systems to make changes in deferred retirement option programs if the pension systems suffer significant investment losses.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at chrisrizo@legalnewsline.com.

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