Exempts retirement accounts established by not-for-profit corporations from application to the satisfaction of money judgments for bankruptcy purposes.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1817
SPONSOR: Rosenthal L TITLE OF BILL:
An act to amend the civil practice law and rules, in relation to exempt-
ing certain accounts established by not-for-profit corporations from
application to the satisfaction of money judgments for bankruptcy
purposes
PURPOSE:
This bill protects from bankruptcy judgments, retirement accounts and
savings established by not-for-profit corporations.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends paragraph 2 of subdivision (c) of section 5205 of the
civil practice law and rules.
Section two sets forth the effective date.
JUSTIFICATION:
New York State law currently exempts, from bankruptcy judgments, retire-
ment accounts that are established by corporations. However, there is
currently no law that protects retirement savings which have been estab-
lished by not-for-profit corporations and this bill seeks to redress
exactly this omission. Considering that those who work for not-for-pro-
fits usually begin with smaller salaries, they require as much if not
more, protection than anyone else. Discriminating, even if inadvertent-
ly, against those who work for a not-for-profit, establishes a priority
that is inconsistent with the culture of New York.
LEGISLATIVE HISTORY:
2019-20: A.996 - Referred to Judiciary 2017-18: A.4378 - Referred to
Judiciary 2015-16: A.850 -Referred to Judiciary 2013-14: A.847-A -
Referred to Judiciary 2011-12: A.10770 - Referred to Judiciary
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
This bill shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
1817
2021-2022 Regular Sessions
IN ASSEMBLY
January 11, 2021
___________
Introduced by M. of A. L. ROSENTHAL -- read once and referred to the
Committee on Judiciary
AN ACT to amend the civil practice law and rules, in relation to exempt-
ing certain accounts established by not-for-profit corporations from
application to the satisfaction of money judgments for bankruptcy
purposes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 2 of subdivision (c) of section 5205 of the civil
2 practice law and rules, as amended by chapter 141 of the laws of 2001,
3 is amended to read as follows:
4 2. For purposes of this subdivision, all trusts, custodial accounts,
5 annuities, insurance contracts, monies, assets or interests established
6 as part of, and all payments from, either any trust or plan, which is
7 qualified as an individual retirement account under section four hundred
8 eight or section four hundred eight A of the United States Internal
9 Revenue Code of 1986, as amended, a Keogh (HR-10), retirement or other
10 plan established by a corporation or other organization, which is quali-
11 fied under section 401 or 403 of the United States Internal Revenue Code
12 of 1986, as amended, or created as a result of rollovers from such plans
13 pursuant to sections 402 (a) (5), 403 (a) (4), 408 (d) (3) or 408A of
14 the Internal Revenue Code of 1986, as amended, or a plan that satisfies
15 the requirements of section 457 of the Internal Revenue Code of 1986, as
16 amended, shall be considered a trust which has been created by or which
17 has proceeded from a person other than the judgment debtor, even though
18 such judgment debtor is (i) in the case of an individual retirement
19 account plan, an individual who is the settlor of and depositor to such
20 account plan, or (ii) a self-employed individual, or (iii) a partner of
21 the entity sponsoring the Keogh (HR-10) plan, or (iv) a shareholder of
22 the corporation sponsoring the retirement or other plan or (v) a partic-
23 ipant in a section 457 plan.
24 § 2. This act shall take effect immediately and shall apply to the
25 satisfaction of judgments on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01003-01-1
