Governor Dannel Malloy signed Public Act 15-167 into law, bringing additional
protections to retirees’ assets from creditor claims.
the text of the law, any annuity contract to which employee defined benefit (DB) plan assets are
transferred and lose protections of the Employee Retirement Income Security Act
(ERISA) and insurance by the Pension Benefit Guaranty Corporation (PBGC) will
be considered a trust protected from claims of creditors.
a statement, the advocacy group ProtectSeniors.org said the expanded protections come “at a time when
more and more U.S. companies have been offloading their pension obligations to
investors, primarily U.S. based insurers.”
protections in the law are extended to other retirement accounts, including:
trust, custodial account, annuity or insurance contract established as part of
a Keogh plan or a retirement plan established by a corporation which is
qualified under Section 401, 403, 404 or 409 of the Internal Revenue Code of
1986, or any subsequent corresponding internal revenue code of the United
States, as from time to time amended;”
contributed to or rolled into “any individual retirement account [IRA] which is
qualified under Section 408 of said internal revenue code to the extent funded,
including income and appreciation;” and
medical savings account established under Section 220 of said internal revenue
code, to the extent such account is funded by annual deductible contributions
or a roll-over from any other medical savings account as provided in Section
220(f)(5) of said internal revenue code.”
PBGC has expressed concern about the loss of protections for assets involved in a pension risk transfer,
and the Pension Rights Center has called for a moratorium on such actions.
Legislation was also
introduced in the New York State Senate and Assembly that would provide protections and new disclosures for retirees whose pension assets and accrued benefits are
sold or transferred by former employers.