2006 Code of Virginia § 34-34 - Certain retirement benefits exempt

34-34. Certain retirement benefits exempt.

A. For the purposes of this section:

"Alternate payee" shall have the same meaning as provided under 206 ofthe Employee Retirement Income Security Act of 1974 (ERISA). In the case of aretirement plan that is not subject to ERISA, the term "alternate payee"means an individual who has an interest in a retirement plan pursuant to ajudgment, decree, or order, including approval of a property settlementagreement, that would be described in 206 (d) (3) (B) of ERISA if theretirement plan were subject to ERISA.

"Annual benefit" means an amount payable as an annuity for the lifetime ofthe individual who claims the exemption provided under this section, assumingthat annuity payments will commence upon the individual's attainment of agesixty-five or, if the individual attained age sixty-five on or before theexemption provided under this section is claimed, the individual's age on thedate that the exemption is claimed.

"Retirement plan" means a plan, account, or arrangement that is intended tosatisfy the requirements of United States Internal Revenue Code 401, 403(a), 403 (b), 408, 408 A, 409 (as in effect prior to repeal by United StatesP.L. 98-369), or 457. Whether a plan, account, or arrangement is intendedto satisfy the requirements of one of the foregoing provisions shall bedetermined based on all of the relevant facts and circumstances including,but not limited to, the issuance of a favorable determination letter by theUnited States Internal Revenue Service, reports or returns filed with UnitedStates or state agencies, and communications from the plan sponsor toparticipants.

B. The interest of an individual under a retirement plan shall be exempt fromcreditor process to the extent provided under this section. The exemptionprovided by this section shall be available whether such individual has aninterest in the retirement plan as a participant, beneficiary, contingentannuitant, alternate payee, or otherwise.

C. The exemption provided under subsection B shall not apply to the extentthat the interest of the individual in the retirement plan would provide anannual benefit in excess of $25,000. If an individual has an interest in morethan one retirement plan, the limitation of this subsection C shall beapplied as if all such retirement plans constituted a single plan. The amountrequired to provide an annual benefit of $25,000 shall be determined underthe following table:

AttainedAgeCostof$1
WhenExemptionofAnnual
ClaimedBenefit
160.1482
170.1603
180.1734
190.1875
200.2028
210.2193
220.2371
230.2564
240.2773
250.2998
260.3241
270.3505
280.3789
290.4096
300.4429
310.4789
320.5178
330.5598
340.6054
350.6546
360.7080
370.7658
380.8284
390.8963
400.9699
411.0497
421.1363
431.2304
441.3326
451.4436
461.5645
471.6960
481.8394
491.9958
502.1665
512.3530
522.5571
532.7808
543.0260
553.2954
563.5915
573.9175
584.2771
594.6748
605.1150
615.6035
626.1472
636.7538
647.4330
658.1958
667.9989
677.8007
687.6009
697.3985
707.1924
716.9830
726.7706
736.5556
746.3393
756.1222
765.9054
775.6897
785.4763
795.2638
805.0529
814.8447
824.6403
834.4395
844.2415
854.0456
863.8522
873.6616
883.4742
893.2904
903.1106
912.9354
922.7653
932.6011
942.4415
952.2867
962.1367
971.9935
981.8558
991.7214
1001.5972
1011.4755
1021.3478
1031.2690
1041.1738
1051.0679
1060.7517
1070.0000
1080.0000
1090.0000
1100.0000

For example, the amount required to provide an annual benefit of $25,000 toan individual who attained age 60 at the time the exemption provided by thissection is claimed is $127,875 ($25,000 times 5.1150).

D. The exemption provided under subsection B shall not apply to amountscontributed to a retirement plan during the fiscal year of the retirementplan that includes the date on which the individual claims the exemption andfor the two preceding fiscal years of the retirement plan other than amountsthat were exempt from creditor process immediately prior to being contributedto the retirement plan. The exemption provided under subsection B shall notapply to the earnings on contributions described in this subsection.

E. The exemption provided under subsection B shall not apply to claims madeagainst an individual by the alternate payee of such individual or to claimsmade against such individual by the Commonwealth in administrative actionspursuant to Chapter 19 ( 63.2-1900 et seq.) of Title 63.2 or any courtprocess to enforce a child or child and spousal support obligation.

F. If two individuals who are married or were married are entitled to claimthe exemption provided under subsection B of an interest under the sameretirement plan or plans and such individuals are jointly subject to creditorprocess as to the same debt or obligation and the debt or obligation aroseduring the marriage, then the exemption provided under subsection B as tosuch debts or obligations shall not exceed, in the aggregate, the amount thatwould provide an annual benefit of $25,000. The maximum amount that may beexempted shall be allocated among such persons in the same proportion astheir respective interests in the retirement plan or plans.

G. The exemption provided under this section must be claimed within the timelimits prescribed by 34-17.

H. A retirement plan established pursuant to 408 and 408 A of the InternalRevenue Code is exempt to the same extent as that permitted under federal lawfor a qualified plan established pursuant to 401 of the Internal RevenueCode.

However, an individual who claims an exemption under federal law for anyretirement plan established pursuant to 401, 403 (a), 403 (b), 409 or 457 of the Internal Revenue Code shall not be entitled to claim the exemptionunder this subsection for a retirement plan established pursuant to 408 or408 A of the Internal Revenue Code.

(1990, c. 425; 1992, c. 716; 1996, c. 330; 1999, cc. 766, 796; 2005, c. 284.)