Peoples Finance also argues that neither pertinent provisions of ERISA or the Internal Revenue Code prevent the wage deduction order in the instant case. National Bank of North America v. Electrical Workers Local No. 3 (1977), 93 Misc.2d 590, 400 N.Y.S. 2d 482. Deere Company responds, arguing that the provision of their pension plan restricting assignment and alienation, both voluntary and involuntary, is enforceable and valid under Illinois law.
One New York decision goes even further, however, interpreting Section 206(d) as restricting voluntary assignments and alienations only, and holding, therefore, that State-court judgment-enforcing process may issue, unimpeded by ERISA, against a judgment debtor's pension benefits without regard to the source of the underlying obligation. National Bank of North America v. International Brotherhood of Electrical Workers Local # 3, 93 Misc.2d 590, 400 N.Y.S.2d 482 (Sup.Ct., Nassau County, 1977). That decision amply supports petitioner's contention that its claim is predicated solely on State law, and places in perspective the respective positions of the parties on this motion.
Treas. Reg. ยง 1.401(a)-13(c)(1)(ii), reported in 43 Fed.Reg. 6942 (1978). Compare Cody v. Riecker, 454 F. Supp. 22 (E.D.N Y 1978) (accord) with National Bank of North America v. International Brotherhood of Elec. Wkrs., Local 3, 93 Misc.2d 590, 400 N.Y.S.2d 482 (Sup.Ct. 1977) (contra). The Internal Revenue Service's interpretation, always entitled to deference, finds support in the legislative history of ERISA. H.R.Conf.Rep. No. 93-1280, 93d Cong., 2d Sess. (1974), reprinted in [1974] U.S. Code Cong. Admin.News 5038, 5061 (for purposes of ERISA's anti-assignment or alienation provisions, "a garnishment or levy is not to be considered a voluntary assignment").
Certainly a garnishment or levy could not be thought of as a "revocable" assignment. On the other hand, Mr. Justice Wager in National Bank, etc. v. Intern. Broth., etc., 400 N.Y.S.2d 482, 486-487 (Sup.Ct.Nass.Cty. 1977), read the House Conference Report as showing an intent not to prohibit a garnishment. If a beneficiary by consenting to the entry of a judgment could in effect assign or alienate the trust funds, the purpose of the statute to protect him against his own improvidence would be thwarted.
Withdrawals would have been subject to attachment pursuant to the New York restraining order. National Bank of N. Am. v. International Bhd. of Elec.Workers Local #3, 400 N.Y.S.2d 482 (N.Y.Sup.Ct. 1977), aff'd, 419 N.Y.S.2d 127 (N.Y.App.Div.), appeal dismissed, 48 N.Y.2d 752, 397 N.E.2d 1333 (1979). See also Pulasty, supra, 136 N.J. at 356 (holding ERISA anti-alienation provision does not apply to funds in pensioner's possession); Hawxhurst, supra, 318 N.J. Super. at 86; Velis v. Kardanis, 949 F.2d 78 (3d Cir. 1991) (concluding pension benefits were includable asset of bankruptcy estate once distributed); Houck v. Houck, 181 B.R. 187, 189 (Bankr. E.D. Pa. 1995) (concluding that ERISA's anti-alienability provision does not protect pension funds once they are distributed); NCNB Fin. Servs., Inc. v. Shumate, 829 F. Supp. 178, 180 (W.D. Va. 1993) (stating funds no longer protected from alienation once in pensioner's possession), aff'd, 45 F.3d 427 (4th Cir. 1994), cert. denied, 515 U.S. 1161, 115 S. Ct. 2616, 132 L. Ed.2d 859 (1995).
Plaintiff has cited one case which permitted invasion of a pension plan qualified under ERISA to satisfy a third-party judgment creditor. This authority is National Bank of North America v. IBEW, Local No. 3 (1977), 93 Misc.2d 596, 400 N.Y.S.2d 482. The court there permitted garnishment up to 10 percent of each pension payment.
As stated in Young v Sheet Metal Workers' Int. Assn. Prod. Workers Welfare Fund ( 112 Misc.2d 692, 698): "The ERISA statute, the legislative history surrounding its enactment and '[t]he thrust of all the Federal decisions dealing with Employee Retirement Income Security Act clearly establishes Federal domination over the establishment, conduct, supervision and regulation of pension and retirement [and welfare] plans covered by the statute.' ( National Bank of North Amer. v International Brotherhood of Elec. Workers Local No. 3, 93 Misc.2d 590, 594, affd 69 A.D.2d 679 [app dsmd 48 N.Y.2d 752].) Indeed, it has been held that subdivision (a) of section 1144 of ERISA evinces Congress' intent 'to establish pension [and welfare] plan regulation as exclusively a federal concern'.
As such, the court is constrained to recall its memorandum decision dated January 9, 1981; to vacate the temporary restraining order which has continued in effect to this date; and the court hereby dismisses the complaint, pursuant to CPLR 3211 (subd [a], par 2). The ERISA statute, the legislative history surrounding its enactment and "[t]he thrust of all the Federal decisions dealing with Employee Retirement Income Security Act clearly establishes Federal domination over the establishment, conduct, supervision and regulation of pension and retirement [and welfare] plans covered by the statute." ( National Bank of North Amer. v International Brotherhood of Elec. Workers Local No. 3, 93 Misc.2d 590, 594, affd 69 A.D.2d 679.) Indeed, it has been held that subdivision (a) of section 1144 of ERISA evinces Congress' intent "to establish pension [and welfare] plan regulation as exclusively a federal concern".
Unlike other employee pension plans, restricted by the Federal Employee Retirement Income Security Act of 1974 ("ERISA") which requires that any employee pension plan must provide against assignment or alienation (US Code, tit 29, ยง 1056, subd [d], par [1]), it is contended the contributions for Mr. Winter's benefit were obtained by fraud. In National Bank of North Amer. v International Brotherhood of Elec. Workers Local No. 3 ( 93 Misc.2d 590) the court held that enforcement proceedings to satisfy a judgment by the attachment of up to 10% of the monthly union pension benefits paid to the judgment debtor are not pre-empted by ERISA. The movants for over 3 1/2 years after the issuance of the order of attachment and nearly 2 years since the trust funds were turned over to the Sheriff made no attempt to vacate or modify the attachment.
Pension funds administered by private and/or public employers, such as the Federal Government are subject to a 49-b wage deduction order. (See Cogollos v Cogollos, 93 Misc.2d 406; Matter of M.H. v J.H., 93 Misc.2d 1016; see, also, National Bank of North Amer. v International Brotherhood of Elec. Workers, 93 Misc.2d 590.) As stated in Cogollos (supra, p 408): "The court does not believe Congress intended to create a privileged sanctuary, behind which a delinquent husband or father can thumb his nose at concededly valid and outstanding support orders.