What's happening
This bill exempts certain retirement accounts established by not-for-profit organizations from being used to satisfy money judgments in bankruptcy.
Why it matters
Expands protections for retirement accounts. By including not just corporations but also "other organizations" (such as not-for-profit organizations) and adding plans qualified under section 403 of the Internal Revenue Code, this bill broadens the types of retirement accounts shielded from creditors in bankruptcy.
Helps employees of nonprofits retain retirement savings. Many employees of charitable, educational, and other nonprofit organizations use 403(b) retirement plans; this change ensures their retirement savings are treated just as securely as those of private-sector employees with 401(k)s if they face a money judgment.
Reduces financial vulnerability during bankruptcy. By exempting these additional retirement accounts, the bill helps protect individuals' long-term financial security, making it less likely that a bankruptcy or court judgment will wipe out their retirement nest egg.
Promotes parity across employment sectors. The amendment addresses a gap in current law that could have left nonprofit sector employees at a disadvantage compared to those in the private sector, promoting fairness in bankruptcy protections.
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Who cares
Headline styles
Protect Nonprofit Accounts from Judgments
Plain English, a few words. Used as the page title.
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History
- Referred to judiciary
- Referred to judiciary
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
996
2019-2020 Regular Sessions
IN ASSEMBLY
January 14, 2019
Introduced by M. of A. L. ROSENTHAL -- read once and referred to the Committee on Judiciary
AN ACT to amend the civil practice law and rules, in relation to exempting certain accounts established by not-for-profit corporations from application to the satisfaction of money judgments for bankruptcy purposes
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 2 of subdivision (c) of section 5205 of the civil practice law and rules, as amended by chapter 141 of the laws of 2001, is amended to read as follows:
2. For purposes of this subdivision, all trusts, custodial accounts, annuities, insurance contracts, monies, assets or interests established as part of, and all payments from, either any trust or plan, which is qualified as an individual retirement account under section four hundred eight or section four hundred eight A of the United States Internal Revenue Code of 1986, as amended, a Keogh (HR-10), retirement or other plan established by a corporation or other organization, which is qualified under section 401 or 403 of the United States Internal Revenue Code of 1986, as amended, or created as a result of rollovers from such plans pursuant to sections 402 (a) (5), 403 (a) (4), 408 (d) (3) or 408A of the Internal Revenue Code of 1986, as amended, or a plan that satisfies the requirements of section 457 of the Internal Revenue Code of 1986, as amended, shall be considered a trust which has been created by or which has proceeded from a person other than the judgment debtor, even though such judgment debtor is (i) in the case of an individual retirement account plan, an individual who is the settlor of and depositor to such account plan, or (ii) a self-employed individual, or (iii) a partner of the entity sponsoring the Keogh (HR-10) plan, or (iv) a shareholder of the corporation sponsoring the retirement or other plan or (v) a participant in a section 457 plan.
§ 2. This act shall take effect immediately and shall apply to the satisfaction of judgments on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03235-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.