403(b) Annunity Plans: Exempt or Not?
Published: 2005 | Author: William J. Tucker

This publication addresses whether annuity plans under section 403(b) of the IRS Code are exempt. 


The Supreme Court has held that a debtor's interest in an ERISA-qualified plan is to be excluded from the bankruptcy estate under section 541(c)(2) of the Bankruptcy Code.  The Court concluded the anti-alienation clause required for ERISA qualification constituted a restriction on transfer enforceable under applicable nonbankruptcy law within the meaning of section 541(c)(2).  Conversely, an annuity plan under section 403(b) of the IRS Code which is not subject to ERISA's anti-alienation clause and trust requirements is generally not to be exempted from the debtor's bankruptcy estate under section 541(c)(2).   In re Adams, 302 B.R. 535 (BAP 6th Cir. 2003).


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