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Is a government plan protected from creditors similar to private sector plans?


katieinny
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I dont understand the Q. State laws protect retirement benefits of pubic employees from creditors. Fed bankruptcy law protects benefits under qualified plans and 457 plans. Federal military benefits are protected under federal law. Active duty military personnel are protected from debt collection by federal legislation (used to be called Soldiers and Sailors Relief Act which was recently updated). Is the question related to a retirement plan benefit or to general creditor's claims?

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miitary benefits are protected from creditors under fed law. Under bankruptcy law military retirement benefits are regarded as wages because retirees can be called back to active duty.

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As a general rule retirement benefits are protected from most attaching/garnishing, exceptions being divorce settlements, child support, alimony and taxes.

The Defense Finance and Accounting Service handles claims and should have published guidelines regarding what else they will accept. Check thier website also and see this:

http://www.dod.mil/dfas/money/garnish/commqa.htm

General Creditors can attach/garnish active pay if the debt is incurred while on active duty. Your problem is not that the debt was incurred while on active duty but whether you can collect from retirement benefits rather than active pay. Still read this:

http://www.armytimes.com/story.php?f=1-292243-912723.php

If the debt was incurred while on active duty, it is possible to still get DFAS to attach/garnish retirement benefits. It seems to be a case by case determination.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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There really is no such thing as "not likely to be called back into active duty". It is an is or is not situation.

Since it depends on some facts and circumstances (including when and how the debt was incurred) and possibly whether his check is VA or not etc, I suggest that you run the facts etc through the DFAS system for a definitive answer as to whether or not they would accept a garnishment etc.

There might also be state law implications, so I would also see what obtains there.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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