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Section 52-321a – Trust or retirement income and certain retirement, education and medical savings accounts and group annuity contracts unavailable to creditors. Exceptions for qualified domestic relations order, recovery of costs of incarceration and recovery of damages by victim of crime

May 11, 2021 | Civil Procedure, Connecticut

(a)

(1) Except as provided in subsection (b) of this section, any interest in or amounts payable to a participant or beneficiary from the following shall be exempt from the claims of all creditors of such participant or beneficiary:

(A) Any 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;
(B) any individual retirement account which is qualified under Section 408 of said internal revenue code to the extent funded, including income and appreciation, (i) as a roll-over from a qualified retirement plan, as provided in subparagraph (A) of this subdivision, pursuant to Section 402(a)(5), 403(a) or 408(d)(3) of said internal revenue code, or (ii) by annual contributions which do not exceed the maximum annual limits set forth in Section 219(b) of said internal revenue code, determined without regard to any reduction or limitation for active participants required by Section 219(g) of said internal revenue code;
(C) (i) any simple retirement account established and funded pursuant to Section 408(p) of said internal revenue code, (ii) any simple plan established and funded pursuant to Section 401(k)(11) of said internal revenue code, (iii) any Roth IRA established and funded pursuant to Section 408A of said internal revenue code, (iv) any education individual retirement account established and funded pursuant to Section 530 of said internal revenue code, (v) any account established pursuant to any qualified tuition program, as defined in Section 529(b) of the Internal Revenue Code, or (vi) any simplified employee pension established under Section 408(k) of said internal revenue code to the extent such pension is funded by annual contributions within the limits of Section 408(j) of said internal revenue code or roll-over contributions from a qualified plan, as provided in subparagraph (A) of this subdivision, pursuant to Section 402(a)(5), 403(a) or 408(d)(3) of said internal revenue code;
(D) any 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;
(E) any pension plan, annuity or insurance contract or similar arrangement not described in subparagraph (A) or (B) of this subdivision, established by federal or state statute for federal, state or municipal employees for the primary purpose of providing benefits upon retirement by reason of age, health or length of service; or
(F) any allocated or unallocated group annuity contract issued to an employer or a pension plan for the purpose of providing retirement benefits to employees or retirees of such employer under a defined benefit plan, which retirement benefits were protected under the Employee Retirement Income Security Act of 1974 or the federal Pension Benefit Guaranty Corporation prior to the effective date of the group annuity contract and which group annuity contract benefits will not be protected under the Employee Retirement Income Security Act of 1974 or the federal Pension Benefit Guaranty Corporation on and after the effective date of the group annuity contract.
(2) Any such trust, account, contract, plan or other arrangement under subdivision (1) of this subsection shall be (A) conclusively presumed to be a restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under the laws of this state, and (B) considered a trust which has been created by or which has proceeded from a person other than such participant or beneficiary, even if such participant or beneficiary is a self-employed individual, a partner of the entity sponsoring the Keogh plan or a shareholder of the corporation sponsoring the retirement plan.
(b) Nothing in this section shall impair the rights of an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. Nothing in this section or in subsection (m) of section 52-352b shall impair the rights of the state to proceed under section 52-361a to recover the costs of incarceration under section 18-85a and regulations adopted in accordance with section 18-85a from any federal, state or municipal pension, annuity or insurance contract or similar arrangement described in subdivision (5) of subsection (a) of this section, provided the rights of an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall take precedence over any such recovery. Nothing in this section or in subsection (m) of section 52-352b shall impair the rights of a victim of crime to proceed under section 52-361a to recover damages awarded by a court of competent jurisdiction from any federal, state or municipal pension, annuity or insurance contract or similar arrangement described in subdivision (5) of subsection (a) of this section when such damages are the result of a crime committed by a participant or beneficiary of such pension, annuity or insurance contract or similar arrangement, provided the rights of an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall take precedence over any such recovery.
(c) Nothing in this section shall affect the status of additions or contributions to a trust, account, contract, plan or other arrangement described in subsection (a) of this section if (1) (A) the debtor-participant or the debtor-beneficiary is a self-employed individual, partner of the entity sponsoring the Keogh plan or a one per cent or more shareholder of the corporation sponsoring the retirement plan, or in the opinion of a court of competent jurisdiction, exercises dominion and control over such proprietorship, partnership, corporation or other entity and (B) the addition or contribution is made less than ninety days before the filing of the claim on which the judgment is thereafter entered or (2) such additions or contributions are determined to be a fraudulent conveyance under applicable federal or state law.

Conn. Gen. Stat. ยง 52-321a

( P.A. 91-239, S. 2, 4; P.A. 92-215; P.A. 98-202, S. 1, 2; P.A. 00-113; P.A. 01-195, S. 61, 181; P.A. 03-19, S. 119; P.A. 04-234, S. 21; P.A. 07-166, S. 14; P.A. 15-167, S. 1.)

Amended by P.A. 15-0167, S. 1 of the Connecticut Acts of the 2015 Regular Session, eff. 10/1/2015.

Cited. 238 Conn. 778.