Compliance November 22, 2006

Court Determines Annuities not Excludable in Bankruptcy

November 22, 2006 (PLANSPONSOR.com) - The US District Court for the Western District of Pennsylvania has ruled that an individual's pension in the form of an annuity under section 403(b) of the Internal Revenue Code is not excludable as assets in bankruptcy.
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In reversing a bankruptcy court’s findings that Linda Plonski’s 403(b) qualified annuity pension was excludable as income in her bankruptcy filing, the court relied on a US Supreme Court ruling which said Section 541 of the Bankruptcy Code allows debtors to “exclude property of the estate in a plan or trust.” While the bankruptcy court had relied on previous cases that interpreted “plan or trust” to mean that a pension plan that was not a trust was excludable, the trustee for the Plonskis’ bankruptcy case argued that the bankruptcy statute requires a trust for assets to be excludable.

The district court also noted that another similar case for which the bankruptcy court issued the same finding was later reversed on appeal, applying a previous 3 rd Circuit decision which, in part, required an individual retirement account (IRA) to constitute a trust. The district court said there was nothing in the 3 rd Circuit’s reasoning that implied its standards for applying Section 541 should be restricted to an IRA.

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In conclusion, the district court said the bankruptcy court failed to apply appropriate law to the case.

The case is Skiba v. Plonski, W.D. Pa., No. 05-150Erie, 10/31/06.

Opinions November 21, 2006

IMHO: Thanks Giving

Like many of you perhaps, I suddenly realized this past week that this week is Thanksgiving.
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For me, 2006 has been an extraordinary year on fronts both personal and professional:  turning 50 , the  death of my father , my 20 th wedding anniversary, sending our first kid off to college, #2 turning 16,  PLANSPONSOR’s first industry conference , a new  adviser magazine …oh, and a little piece of legislation called the  Pension Protection Act .  

Still, last weekend as I was preparing to pick my mother up at the airport for her first Thanksgiving visit with us in the northeast – and looking ahead to picking up my eldest at college today – I’m struck by just how much there is to be thankful for.  

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First and foremost, I’m thankful for a loving and patient family – who must all too frequently endure the intrusions of my career-long passion for this field into our daily lives.  

I’m thankful for the home I have found at PLANSPONSOR , and the warmth with which its loyal readers have embraced me, as well as the many who have “discovered” us during the past seven years.  I’m thankful for all of you who have supported – and I hope benefited from – our various programs and communications throughout the year.

I’m thankful for the ability to make a positive contribution to the efforts of plan sponsors, advisers, and others who share my passion for the important work we do in helping provide for the retirement security of others.   I’m thankful that so many gifted professionals have committed themselves to being part of the solution to these issues.    

I’m also thankful for having found – so early in my working life – an area about which I could care so deeply, and which provides so much fulfillment, personally and professionally.

Finally, I’m thankful for the protections our democratic form of government affords us all; for the courage and selflessness of those, past and present, who have been willing to make the ultimate sacrifice to preserve those freedoms; and for the grace of a benevolent God in giving us all so much for which to be thankful at this special time of year.

Thank you !

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