Text: SF00104 Text: SF00106 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 627.6, subsection 8, Code 1999, is
1 2 amended by adding the following new paragraph:
1 3 NEW PARAGRAPH. f. All contributions to and assets in the
1 4 following list of federally authorized pension or retirement
1 5 plans, and the accumulated earnings, and market increases in
1 6 value, therefrom: simplified employee pension plans, self-
1 7 employed pension plans, Keogh plans, also known as H.R. 10
1 8 plans, individual retirement accounts, Roth individual
1 9 retirement accounts, savings incentive matched plans for
1 10 employees, and similar plans for retirement investments in the
1 11 future authorized under federal law. However, contributions
1 12 to a plan made within the twenty-four-month period prior to
1 13 the date the exemption is claimed shall not be exempt to the
1 14 extent the contributions exceed the average contributions that
1 15 had been made to the plan or plans by the debtor or the
1 16 debtor's employer or both in the five tax years ending prior
1 17 to the twenty-four-month period before the date the exemption
1 18 is claimed. The exception to the exemption in this paragraph
1 19 for contributions within the twenty-four-month period prior to
1 20 the date the exemption is claimed shall not include the
1 21 interest and any accumulation on that interest in any new
1 22 plans that are used to replace prior plans, or policies that
1 23 would have been excludable from a bankruptcy estate or that
1 24 the debtor could have claimed exempt from execution at the
1 25 time of the transfer. For purposes of this paragraph, market
1 26 increases in value shall include, but not be limited to,
1 27 dividends, stock splits, interest, and appreciation.
1 28 EXPLANATION
1 29 The purpose of this bill is to eliminate the discrimination
1 30 that currently exists in Iowa law regarding the exemption of
1 31 retirement plans. Currently, ERISA qualified plans, such as
1 32 most employer-maintained pension plans, are exempt from the
1 33 claims of creditors. However, self-employed persons using a
1 34 Keogh plan or IRA as their retirement vehicle are not
1 35 similarly protected. Likewise, those who have taken their
2 1 previously safe ERISA qualified pensions and rolled them over
2 2 into an IRA due to plan termination, retirement, job loss, or
2 3 other causes have, by such rollover, subjected their formerly
2 4 protected assets to the claims of creditors. These amendments
2 5 will eliminate such disparity and will clarify the types of
2 6 federally authorized plans which Iowans will be entitled to
2 7 claim as exempt.
2 8 This bill also eliminates the ability of debtors to utilize
2 9 this exemption as a vehicle in which to place assets on the
2 10 eve of filing bankruptcy. No exemption can be claimed for
2 11 contributions to plans made within the 24-month period in
2 12 excess of the average annual contributions that have been made
2 13 in the five previous tax years.
2 14 This bill also protects rollover contributions to IRAs by
2 15 excluding them from the contribution limit within the 24-month
2 16 period prior to claiming an exemption.
2 17 LSB 1335SS 78
2 18 jj/cf/24
Text: SF00104 Text: SF00106 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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