651-124 Pension money exempt. The right of a debtor to a pension, annuity, retirement or disability allowance, death benefit, any optional benefit, or any other right accrued or accruing under any retirement plan or arrangement described in section 401(a), 401(k), 403(a), 403(b), 408, 408A, 409 (as in effect prior to January 1, 1984), 414(d), or 414(e) of the Internal Revenue Code of 1986, as amended, or any fund created by the plan or arrangement, or any ABLE savings account established pursuant to chapter 256B, shall be exempt from attachment, execution, seizure, the operation of bankruptcy or insolvency laws under title 11 United States Code section 522(b), or under any legal process. However, this section shall not apply to:

(1) A "qualified domestic relations order" as defined in section 206(d) of the Employee Retirement Income Security Act of 1974, as amended, or in section 414(p) of the Internal Revenue Code of 1986, as amended; and

(2) Contributions made to a plan or arrangement within the three years before the date a debtor files for bankruptcy, whether voluntary or involuntary, or within three years before the date a civil action is initiated against the debtor, except for contributions to a retirement plan established by state statute if the effect would be to eliminate a state employee's retirement service credit. [L 1986, c 289, 1; am L 2004, c 34, 1; am L 2005, c 152, 2; am L 2015, c 206, 3; am L 2016, c 55, 32]

 

Case Notes

 

Section 206(d)(1) of ERISA erects a general bar to the garnishment of pension benefits from ERISA-covered plans; insofar as compliance with both section 206(d)(1) of ERISA and the exception to this section is "a physical impossibility", the exception to this section is preempted to the extent that it actually conflicts with ERISA. 90 H. 345, 978 P.2d 783 (1999).

 

 

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