SB337 Alabama 2016 Session

Summary

Primary Sponsor

Mark Slade Blackwell

Republican

Session

Regular Session 2016

Title

Trusts, qualified trusts expanded to include certain benefits of qualified pension plans, stock bonus plans, and profit sharing plans to exclude from federal bankruptcy laws, Sec. 19-3B-508 am'd.

Summary

SB337 expands qualified trusts to include certain pension-related trusts and strengthens protections for benefits from creditors and bankruptcy.

What This Bill Does

SB337 expands the definition of a qualified trust to include trusts formed as part of qualified pension plans, qualified stock bonus plans, and qualified profit-sharing plans. It keeps benefits in these qualified trusts from being assigned or seized and makes them exempt from bankruptcy and insolvency laws, with protections also applying to rights created by domestic-relations orders except when the order is a qualified domestic relations order. It adds rules for loans, distributions, and rollovers—loans secured by accrued nonforfeitable benefits are not treated as assignments; qualified rollover contributions retain protection; a 60-day hold period applies to distributions that may be rolled over, and protections continue after death if the rollover is qualified. It excludes the Employees' Retirement System of Alabama, Teachers' Retirement System of Alabama, and Judicial Retirement Fund of Alabama, and provides for its effective date on the first day of the third month after passage/approval.

Who It Affects

• Plan participants and beneficiaries: their benefits in these qualified trusts would be protected from assignment, attachment, and bankruptcy, with rules governing loans, rollovers, and domestic-relations orders.
• Creditors, lenders, and plan sponsors: their ability to reach or attach benefits would be restricted, and they would have to follow the new rules for loans, secured benefits, and rollovers.

Key Provisions

• Expands the definition of qualified trust to include trusts formed as part of qualified pension plans, qualified stock bonus plans, and qualified profit-sharing plans.
• Benefits in these qualified trusts may not be assigned or seized and are exempt from bankruptcy/insolvency laws, with protections for domestic-relations orders except when the order is a qualified domestic relations order.
• Adds rules for loans, distributions, and rollovers: loans secured by accrued nonforfeitable benefits are not treated as assignments; qualified rollover contributions retain protections; a 60-day hold period applies for certain distributions; protections continue after death if the rollover is qualified.
• Excludes the Employees' Retirement System of Alabama, Teachers' Retirement System of Alabama, and Judicial Retirement Fund of Alabama; the act becomes effective on the first day of the third month after passage/approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Trusts