Pension

[ariclp]

I have a Union sup pension "401k" That i cannot not touch unless i am 55 or out of my trade for 2 years. Money is taken from my check not taxed and put into it.. I have about 95000 in it.. Is this protected under the federal list.. If i could i would take money to pay my creditors but they will not let me.. I also live in mn. About the only asset i have is a 2005 four wheeler that i think would fall into the catch all on the fed list.

[wnguyen]

ariclp

I believe I posted the following somewhere in this forum, don't remember exactly where or when. The most recent increases as of April 2010, the following is a summary of what may be claimed by an individual petitioner under the federal list:

* $21,625 of equity in the debtor's primary residence.
* $11,525 of household goods, furnishings and appliances, provided that no single item is valued at over $550.
* The debtor's interest of up to $3,450. in one motor vehicle.
* Jewelry of a value up to $1,450.
* Tools of the trade or business of debtor having a value of up to $2,175.
* Cash value of life insurance up to $11,525.
* Professionally prescribed health aids - no dollar limit.
* Social security benefits, disability benefits, most pension benefits, and child support or alimony - no dollar limits.
* Personal injury claims having a value of up to $21,625, not including pain and suffering or "actual pecuniary loss."
* The catch-all: any other assets up to $1,150.00 in value plus up to another $10,825 of value if the homestead exemption was not fully utilized. For someone with no equity in their home, this can total $11,975.

[despritfreya]

The correct way to describe ERISA qualified retirement plans is that such plans simply are not property of the bk estate and, therefore, no exemption is required. Most debtors disclose the asset and then claim an exemption but the reality is that under 11 USC 541(b)(7), "funds withheld by an employer for payment as contributions to an employee benefit plan that is subject to title I of the Employees Retirement Income Security Act of 1974 (ERISA)" is not property of the estate.

This Code Section also excludes various other retirement plans. Your plan is a 401K plan within the meaning of ERISA and therefore does not come into the bk.

The information supplied by "wnguyen" is correct but does not apply to your situation. I believe "wnguyen" is referring to 11 USC 522(d)(10) which covers the actual monthly payment from "social security benefits, disability benefits, most pension benefits, and child support or alimony", not the actual fund the $$ sits in.

However, Congress, to be absolute clear that funds sitting in a 401K account and other types of retirement accounts are protected, and despite the fact that such funds are not assets of the estate, added 11 USC 522(d)(12) when it passed BAPCPA. This addition gives a Federal Exemption to "retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457 or 501(a) of the Internal Revenue Code of 1986".

A long winded explanation that, yes, the $$ you have sitting in your 401K is protected.

[wnguyen]

Thanks for the clarification, despritfreya.

[ariclp]

Thanks for the reply. So would my 4 wheeler fall into the catch all if it is worth 4000 dollars and i owe more on my house than it is worth..