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457 plans and bankruptcy


Guest Wendy
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Hi, I am a new user to this board, and looking forward to swapping ideas.

Is anyone familiar with how bankruptcy law might impact assets in a 457 plan? The question has arisen as a result of the SBJPA, which now requires assets to be held in trust, annuity contract, or custodial account for the benefit of plan participants and their beneficiaries. I recognize that this was done as a reaction to the Orange County situation several years ago. Therefore, it would be logical to assume that the change caused assets now to be truly no longer reachable by creditors of the entity. However, does anyone who is familiar with bankruptcy law have any comments on that? Also, it is my opinion that assets of the plan are not reachable by creditors of a participant until those dollars are actually distributed. Prior to distribution, the participant has a mere expectation rather than a present interest. Does anyone have a comment on this? Thanks very much!

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Guest PeterGulia

You may want to begin with Lynn Witte's bankruptcy chapter in 457 Answer Book (Panel Publishers).

And if so, you might want to support BenefitLink by ordering it through this site.

(Disclosure: I don't make a penny from Panel or anyone else for recommending any book.)

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