[15812]
March 27, 2003
TO: OPERATIONS MEMBERS No. 11-03
PENSION MEMBERS No. 14-03
PENSION OPERATIONS ADVISORY COMMITTEE No. 18-03
TAX MEMBERS No. 21-03
TRANSFER AGENT ADVISORY COMMITTEE No. 36-03
RE: REVISED INSTITUTE SURVEY OF IRA PROTECTION IN BANKRUPTCY
The Institute has updated its survey of the treatment of individual retirement accounts
in bankruptcy under state law. The attached survey covers the extent to which traditional and
Roth IRAs, SIMPLE accounts, and SEP-IRAs1 are protected from the claims of creditors under
state law when an individual files for bankruptcy protection. As we have noted in the past, the
law in this area continues to change frequently as a result of both legislative and judicial
activity.
Some of the more significant changes in state laws since the last survey are as follows:
(1) Colorado, Iowa, New Hampshire, New Jersey, Oklahoma, Pennsylvania, South Dakota, and
Tennessee have amended their statutes to provide specific protections for Roth IRAs; and (2)
other changes have been reflected in the entries for Arkansas, Indiana, Iowa, Kansas, Louisiana,
Maine, Mississippi, New Hampshire, Oklahoma, South Dakota, Tennessee, and Vermont. In
addition, relevant case law developments have been added in the endnote citations for each
state.
Because this information is provided in summary form and the area is one in which the law is not
settled, this survey is intended to serve as a reference guide, but not as legal advice. Further research or
consultation with legal counsel is recommended.
1 Previous surveys have also included an analysis of the protection of Education IRAs (now known as Coverdell
Education Savings Accounts) in bankruptcy. The Institute is considering a separate survey addressing the
bankruptcy status of Coverdell ESAs and education savings plans under section 529 of the Internal Revenue Code.
2
Finally, please note that Congress continues to consider significant federal bankruptcy
reform legislation. Such legislation includes language that would extend protection under the
federal bankruptcy code to IRAs and other retirement savings plans. The Institute has
supported this aspect of the legislation and will inform members if it is signed into law.
Kathy D. Ireland
Senior Associate Counsel
Note: Not all recipients receive the attachment. To obtain a copy of the attachment, please visit our members website
(http://members.ici.org) and search for memo 15812, or call the ICI Library at (202) 326-8304 and request the
attachment for memo 15812.
Attachment (in .pdf format)