Text: HSB00228                          Text: HSB00230
Text: HSB00200 - HSB00299               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index



House Study Bill 229

Bill Text

PAG LIN
  1  1    Section 1.  Section 627.6, subsection 8, paragraph f,
  1  2 subparagraph (1), Code 2001, is amended by striking the
  1  3 subparagraph and inserting in lieu thereof the following:
  1  4    (1)  All transfers, in any amount, from a trust forming
  1  5 part of a stock, bonus, pension, or profit-sharing plan of an
  1  6 employer defined in section 401(a) of the Internal Revenue
  1  7 Code and of which the trust assets are exempt from taxation
  1  8 under section 501(a) of the Internal Revenue Code and covered
  1  9 by the Employee Retirement Income Security Act of 1974
  1 10 (ERISA), as codified at 29 U.S.C. 1001 et seq., to either:
  1 11    (a)  A succeeding trust authorized under federal law on or
  1 12 after the effective date of this Act.
  1 13    (b)  An individual retirement account or individual
  1 14 retirement annuity established under section 408(d)(3) of the
  1 15 Internal Revenue Code, from which the total value, including
  1 16 accumulated earnings and market increases in value, may be
  1 17 contributed to a succeeding trust authorized under federal law
  1 18 on or after the effective date of this Act.  For purposes of
  1 19 this subparagraph, transfers, in any amount, from an
  1 20 individual retirement account or individual retirement annuity
  1 21 established under section 408(d)(3) of the Internal Revenue
  1 22 Code are exempt.
  1 23    Sec. 2.  Section 627.6, subsection 8, paragraph f, Code
  1 24 2001, is amended by adding the following new subparagraphs:
  1 25    NEW SUBPARAGRAPH.  (1A)  All transfers, in any amount, from
  1 26 an eligible retirement plan to an individual retirement
  1 27 account, an individual retirement annuity, a Roth individual
  1 28 retirement account, or a Roth individual retirement annuity
  1 29 established under section 408A of the Internal Revenue Code
  1 30 shall be exempt from execution and from the claims of
  1 31 creditors.
  1 32    As used in this subparagraph, "eligible retirement plan"
  1 33 means the funds or assets in any retirement plan established
  1 34 under state or federal law that meet the following
  1 35 requirements:
  2  1    (a)  Can be transferred to an individual retirement account
  2  2 or individual retirement annuity established under sections
  2  3 408(a) and 408(b) of the Internal Revenue Code or Roth
  2  4 individual retirement accounts and Roth individual retirement
  2  5 annuities established under section 408A of the Internal
  2  6 Revenue Code.
  2  7    (b)  Are either exempt from execution under state or
  2  8 federal law or are excluded from a bankruptcy estate under 11
  2  9 U.S.C. } 541(c)(2) et seq.
  2 10    NEW SUBPARAGRAPH.  (4)  For Roth individual retirement
  2 11 accounts and Roth individual retirement annuities established
  2 12 under section 408A of the Internal Revenue Code and similar
  2 13 plans for retirement investments authorized in the future
  2 14 under federal law, the exemption for contributions shall not
  2 15 exceed, for each tax year of contributions, the actual amount
  2 16 of the contribution or the maximum amount which federal law
  2 17 allows to be contributed to such plans.  The exemption for
  2 18 accumulated earnings and market increases in value of plans
  2 19 under this subparagraph shall be limited to an amount
  2 20 determined by multiplying all of the accumulated earnings and
  2 21 market increases in value by a fraction, the numerator of
  2 22 which is the total amount of exempt contributions as
  2 23 determined by this subparagraph, and the denominator of which
  2 24 is the total of exempt and nonexempt contributions to the
  2 25 plan.
  2 26    NEW SUBPARAGRAPH.  (5)  For all contributions to plans
  2 27 described in subparagraphs (3) and (4), the maximum
  2 28 contribution in each of the two tax years preceding the claim
  2 29 of exemption in a filing of a bankruptcy shall be limited to
  2 30 the maximum deductible contribution to an individual
  2 31 retirement account established under section 408(a) of the
  2 32 Internal Revenue Code, regardless of which plan for retirement
  2 33 investment has been chosen by the debtor.
  2 34    NEW SUBPARAGRAPH.  (6)  Exempt assets transferred from any
  2 35 individual retirement account, individual retirement annuity,
  3  1 Roth individual retirement account, or Roth individual
  3  2 retirement annuity to any other individual retirement account,
  3  3 individual retirement annuity, Roth individual retirement
  3  4 annuity, or Roth individual retirement account established
  3  5 under section 408A of the Internal Revenue Code shall continue
  3  6 to be exempt regardless of the number of times transferred
  3  7 between individual retirement accounts, individual retirement
  3  8 annuities, Roth individual retirement annuities, or Roth
  3  9 individual retirement accounts.
  3 10    Sec. 3.  Section 627.6, subsection 8, paragraph f,
  3 11 subparagraph (3), Code 2001, is amended to read as follows:
  3 12    (3)  For simplified employee pension plans, self-employed
  3 13 pension plans, Keogh plans (also known as H.R. 10 plans),
  3 14 individual retirement accounts, Roth individual retirement
  3 15 accounts annuities established under section 408(b) of the
  3 16 Internal Revenue Code, savings incentive matched plans for
  3 17 employees, salary reduction simplified employee pension plans
  3 18 (also known as SARSEPs), and similar plans for retirement
  3 19 investments authorized in the future under federal law, the
  3 20 exemption for contributions shall not exceed, for each tax
  3 21 year of contributions, the actual amount of the contribution
  3 22 or two thousand dollars the maximum amount which could be
  3 23 contributed and deducted in the tax year of the contribution,
  3 24 whichever is less.  The exemption for accumulated earnings and
  3 25 market increases in value of plans under this subparagraph
  3 26 shall be limited to an amount determined by multiplying all
  3 27 the accumulated earnings and market increases in value by a
  3 28 fraction, the numerator of which is the total amount of exempt
  3 29 contributions as determined by this subparagraph, and the
  3 30 denominator of which is the total of exempt and nonexempt
  3 31 contributions to the plan.
  3 32    Sec. 4.  EFFECTIVE DATE.  This Act, being deemed of
  3 33 immediate importance, takes effect upon enactment.  
  3 34                           EXPLANATION
  3 35    This bill amends Code section 627.6, relating to the amount
  4  1 of contributions to and accumulated increases in the value of
  4  2 certain retirement plans which are exempt from the payment of
  4  3 obligations of a debtor.  The bill specifies that the amount
  4  4 of the contributions and accumulated increases in value of a
  4  5 federal Employee Retirement Income Security Act (ERISA)
  4  6 qualified retirement plan which is transferred to certain
  4  7 specified retirement plans are exempt from creditors,
  4  8 including Keogh plans, Roth individual retirement accounts and
  4  9 annuities, regular individual retirement accounts and
  4 10 annuities, simplified employee pension plans, and salary
  4 11 reduction simplified employee pension plans.
  4 12    The bill provides that an individual may change brokers
  4 13 when transferring retirement funds from one qualified
  4 14 retirement plan to another without the risk that rolling over
  4 15 the retirement funds would make the retirement funds
  4 16 nonexempt.
  4 17    The bill increases the amount of the maximum exempt
  4 18 contribution to numerous non-ERISA qualified plans to the
  4 19 maximum amount which could be contributed and deducted in the
  4 20 tax year of the contribution, whichever is less.  The bill
  4 21 also provides for a two-year look-back provision limiting the
  4 22 maximum contribution to an amount that could be contributed to
  4 23 an individual retirement account.
  4 24    The bill takes effect upon enactment.  
  4 25 LSB 1459HC 79
  4 26 rh/cls/14
     

Text: HSB00228                          Text: HSB00230
Text: HSB00200 - HSB00299               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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