MVRA Judgment Same as Tax Levy ??

[Guest halka]

While reading the thread about whether to withhold tax on a distribution in satisfaction of a tax levy, I received a demand from a U.S. Attorney that a plan distribute part of a participant's account to pay a judgment under the Mandatory Victims Resititution Act. There has been at least one (lower court) case that concluded ERISA plans are NOT exempt from MVRA liabilities. Like federal tax levies, MVRA judgments seem to be a liability to the federal government and, under the Federal Debt Collection Procedures Act and can be extracted from the ERISA Plan. However, Reg 1.401(a)-13 mentions federal judgments but really describes tax levies. Also, the exemption from the 10% penalty also seems to apply only to tax levies. Does anyone have any hands-on experience w/ MVRA judgments regarding enforceability and the 10% penalty??? Thanks

[david rigby]

The plan administrator needs legal advice.

In addition, I notice that your profile states you work for a bank. If your role here is representing the trustee, then the trustee may need separate legal advice.

Can any of our contributing attorneys out there fill in the details?