Court Opinion

ID: 5833242
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:30:59.224235+00
Date Added: 2024-06-11T08:43:30.984870
License: Public Domain

Rabin, J. (dissenting).
I dissent and vote to reverse the judgment and dismiss the petition.
I believe that the statutory language that "[e]ach pension *689plan shall provide that benefits provided under the plan may not be assigned or alienated” (US Code, tit 29, § 1056, subd [d], par [1]) was intended to include a prohibition of garnishment and other forms of legal process. In interpreting this section the majority has suggested that there is an intrinsic distinction between assignment and alienation on the one hand, and garnishment and other legal process on the other. The distinction is premised upon the recognition that assignments and alienations are generally voluntary transfers in which the transferor is an affirmative participant, whereas garnishments, etc., are involuntary transfers in which the transferor is a passive, if not unwilling, participant. However, this distinction ignores the common essence of transfers by assignment and transfers by garnishment, that being the element of a transfer. It is the practical consequences of a transfer of benefits away from the intended beneficiaries which the antialienation provision seeks to remedy. Whether that transfer is voluntary or involuntary in nature is of no significance.
The law has recognized that the terms "assignment” and "alienation” are broad enough to include involuntary transfers which occur by operation of law, as well as voluntary transfers. Whether involuntary transfers should be included in a general statutory proscription against assignment and alienation depends upon legislative intent (cf. United States v Aetna Cas. & Sur. Co., 338 US 366). From this perspective, it seems plain that the general antialienation provision contained in ERISA was also intended to prohibit transfers occurring by operation of law, such as garnishments.
The underlying purpose of ERISA was to redress the history of fiduciary irresponsibility and misconduct that had resulted in the frequent dilution and complete loss of expected pension benefits to many thousands of persons. Thus, the statutory focus on issues of vesting, funding and fiduciary responsibility reflects the paramount concern that the expected benefits are fully and actually available to the intended beneficiary for retirement purposes (see House Rep No. 93-807, 93d Congress, 2d Session, US Code, Cong & Admin News, 1974, p 4734). Congress intended ERISA benefits to supplement Social Security benefits (US Code, tit 29, § 1056), thereby implicitly recognizing the plight of pensioners who generally must combat inflation on fixed incomes. Certainly, an involuntary diversion of intended benefits has the same detrimental effect of diluting a pensioner’s available retirement income as does a volun*690tary transfer (Cody v Riecker, 454 F Supp 22, affd 594 F2d 314). Therefore, for the antialienation provision to be in furtherance of the legislative objective, it must apply to involuntary, as well as voluntary transfers.
The only available legislative history on this section of ERISA (US Code, tit 29, § 1056) is an interpretative comment by the Joint House and Senate Conference Committee which states in part (House Conference Rep No. 93-1280, 93d Congress, 2d Session, US Code, Cong & Admin News, 1974, p 5061): "Under the conference substitute, a plan must provide that benefits under the plan may not be assigned or alienated. However, the plan may provide that after a benefit is in pay status, there may be a voluntary revocable assignment (not to exceed 10 percent of any benefit payment) by an employee which is not for purposes of defraying the administrative costs of the plan. For purposes of this rule, a garnishment or levy is not to be considered a voluntary assignment.”
The only reasonable interpretation of this language is that the committee included the final sentence (i.e., "For purposes of this rule, a garnishment or levy is not to be considered a voluntary assignment”) in order to clarify and emphasize that garnishments, etc., were intended to be included in the general prohibition of assignments and alienations as distinguished from the language that allows a limited exception of a voluntary revocable assignment of not to exceed 10% of any benefit payment (see US Code, tit 29, § 1056, subd [d], par [2]). It is only in the sentence creating a limited exception to allow certain voluntary revocable assignments that there appears a distinction between voluntary and involuntary assignments. The more general terminology in the basic prohibition must therefore be deemed to include voluntary and involuntary transfers (see General Motors Corp. v Townsend, US Dist Ct, ED Mich, Civ No. 6-72159, Dec. 16, 1976; General Motors Corp. v Buha, US Dist Ct, AD Mich, Civ No. 7-72629, Feb. 22, 1978; Cody v Riecker, supra).
Significantly, the Internal Revenue Service has promulgated regulations which adopt the above interpretation. Thus, 26 CFR 1.401(a)-13 provides:
"(b) No assignment or alienation.
"(1) General rule. Under Section 401(a)(13), a trust will not be qualified unless the plan of which the trust is a part provides that benefits provided under the plan may not be anticipated, assigned (either at law or in equity), alienated or *691subject to attachment, garnishment, levy, execution or other legal or equitable process.”
Since the Internal Revenue Service is jointly charged with the Department of Labor with administering ERISA, the interpretation adopted by that agency is of course entitled to great weight. This is particularly so in view of the failure of the Department of Labor to promulgate any regulation on this aspect of the statute, and because the antialienation provision has rather direct tax consequences (cf. Report by the House Ways and Means Committee [on ERISA], House Rep No. 93-807, 93d Congress, 2d Session, US Code, Cong & Admin News, 1974, p 4734).
Other than the General Motors Corp. v Buha case (supra), which holds that garnishments are prohibited by the statute, there are no other cases involving enforcement of a commercial creditor’s money judgment. However, there are several cases involving enforcement of family support orders. These cases invariably (except for General Motors Corp. v Townsend, supra, which held that the antialienation clause prohibits all garnishments) allow garnishments for this limited purpose (see, e.g., Cody v Riecker, supra; American Tel. & Tel. Co. v Merry, 592 F2d 118, supra; Cogollos v Cogollos, 93 Misc 2d 406; Matter of Wanamaker v Wanamaker, 93 Misc 2d 784; Cartledge v Miller, 457 F Supp 1146). The thrust of these decisions is that enforcement of family support orders constitutes a special exception to the general antialienation provision, arising from the special status of the family support obligation and from the broad interpretation of beneficiary as including the pensioner’s family. Significantly, none of these decisions suggest that garnishments per se are not prohibited and have implicitly indicated the contrary result (i.e., that garnishments per se are prohibited). The District Court opinion in Cody v Riecker (454 F Supp 22, supra) has expressly so stated. It is noted that these cases lend no support to the majority position because garnishments have also been allowed for purposes of enforcing family support orders against Social Security and railroad retirement benefits, despite the express prohibition of such legal process in those statutes (see, e.g., Hisquierdo v Hisquierdo, 439 US 572).
Based upon the above analysis, I am persuaded that the statutory language prohibiting the assignment or alienation of pension benefits should be given its full effect, to include transfers by operation of law, as well as voluntary transfers *692(cf. United States v Aetna Cas. & Sur. Co., 338 US 366, supra). Only in this way will the congressional purpose of insuring "that the employee’s accrued benefits are actually available for retirement purposes” be fully achieved (see House Rep No. 93-807, 93d Congress, 2d Session, US Code, Cong & Admin News, 1974, p 4734; emphasis supplied).
Mollen, P. J., Suozzi and Martuscello, JJ., concur in Per Curiam opinion; Rabin, J., dissents and votes to reverse the judgment and dismiss the proceeding, with an opinion.
Judgment of the Supreme Court, Nassau County, entered January 5, 1978, affirmed, without costs or disbursements.