Text: HSB00228 Text: HSB00230 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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 retirementaccounts, Roth individual retirement3 15accountsannuities 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 ortwo thousand dollarsthe 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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