Krafte, J.J.D.R.C., (temporarily assigned).
Plaintiff seeks by way of motion pursuant to N.J.S.A. 2A:17-63 to require the United Jersey Bank to turn over to the Bergen County Sheriff the sum of $5,884.51 which it is holding in an Individual Retirement Account*fn1 (hereinafter referred to as an IRA account) in the name of defendant. This relief is sought pursuant to a writ of execution. The issue this court is faced with is the ability of a spouse to levy upon the corpus (as opposed to the beneficial payments) of an IRA pension fund created pursuant to 26 U.S.C.A. § 408, to satisfy a judgment for alimony and child support arrears. Research reveals no reported case in any jurisdiction which precisely addresses this issue.
A judgment for $5,375 was entered against defendant in the Chancery Division on December 11, 1979 for arrearages in alimony and child support payments due plaintiff. On January 28, 1980 an abstract of judgment was recorded in the Superior
Court Clerk's Office pursuant to N.J.S.A. 2A:16-18 et seq. At the time of the current application no portion of the judgment has been satisfied.
Pursuant to the writ of execution issued by this court on September 29, 1980, the Bergen County Sheriff levied upon defendant's IRA account at the United Jersey Bank's Hackensack Branch in the amount of $5,884.51, which includes the amount of the judgment plus interest and costs.
It is defendant's position that to allow plaintiff to execute upon the corpus of defendant's IRA account to satisfy a judgment based on alimony and child support arrearages is in contravention of federal law. He concedes that there is an exception whereby one may levy upon the benefits flowing from said pension fund to satisfy a judgment of this nature. Western Electric v. Traphagen , 166 N.J. Super. 418 (App.Div.1979); Ward v. Ward , 164 N.J. Super. 354 (Ch.Div.1978), and Biles v. Biles , 163 N.J. Super. 49 (Ch.Div.1978). However, he objects to an extension of this exception with respect to attaching the corpus of pensions created pursuant to federal statute. Defendant contends that to allow plaintiff to execute against his IRA corpus would do "major damage" to the "clear and substantial federal interests" that allow every individual the right to establish a pension fund.
It is most important that this court examine the purpose for which the IRA statute was enacted. Initially it provides employees who are not covered at their place of employment by any other type of retirement account with the opportunity to establish such an account. A second objective is that it defers payment of taxes on higher incomes earned during early, more productive years to a later period which will, presumably, find the taxpayer retired and in a lower tax bracket. At such time as the taxpayer qualifies and elects to receive distribution from his account, the expected benefit derived will be the payment of taxes at a lower rate on the sums so received.
The Congress, in establishing the IRA accounts as part of the comprehensive Employee Retirement Income Security Act (hereinafter ERISA), provided that there was to be no alienation or assignment of benefits, 29 U.S.C.A. § 1056(d)(1).*fn2 Federal and state courts alike have confronted this problem with respect to benefits. The United States Court of Appeals for the Second Circuit, held in Cody v. Riecker , 594 F.2d 314 (1979), that enforcement of family support orders may be by garnishment of benefits regulated by ERISA.
The court in Cartledge v. Miller , 457 F. Supp. 1146 (S.D.N.Y.1978), quoted Judge (later Justice), Rutledge's comments in Schlaefer v. Schlaefer , 71 U.S.App.D.C. 350, 112 F.2d 177 (D.C.Cir.1940), in interpreting the exemption clauses in light of Congressional intent, as follows:
The usual purpose of exemptions is to relieve the person exempted from the pressure of claims hostile to his dependents' essential needs as well as his own personal ones, not to relieve him of familial obligations and destroy what may be the family's last and only security ...