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Recent Federal Appeals Court Decision Permits the Garnishment of ERISA Plan Assets to Satisfy Federal Criminal Fines |
January 29, 2007
Previously published on February 14, 2006
The Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code (the "Code") generally prohibit the assignment or alienation of retirement plan assets prior to distribution. However, both statutes contain certain exceptions for: (i) plan loans to participants that are secured by the borrowers' account balances, (ii) qualified domestic relations orders, and (iii) certain judgments or settlements arising from a participant's crime or breach of fiduciary duty against a plan. In addition, IRS regulations permit plan assets to be used to satisfy a federal tax levy or a judgment resulting from an unpaid tax assessment.
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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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