On July 9, Missouri Gov. Jay Nixon (D) signed into law a measure that makes it illegal to transfer or assign public pension benefits. The Show-Me State is the first to enact such legislation.
The new law arose, at least in part, in response to the practice of third parties providing a cash advance — sometimes known as a pension advance — in exchange for those employees assigning or transferring part of their retirement plan benefits to the third party. In an interview with Ozarksfirst.com, Missouri State Treasurer Clint Zweifel (D) likened such advances to payday loans, but said they are even more costly since they reduce retirement savings and security. He added that those who offer such advances often target public employees; the new law makes it illegal for such transactions to take place.
The law, introduced by Rep. Tony Dugger (R-Hartville) as HB 1217, provides that the right to public employment retirement benefits cannot be transferred or assigned. In addition, the funds in an account established under a public retirement plan cannot be subject to execution, tax, attachment or garnishment, including division of benefits orders, unless expressly authorized by the law that established the plan.
Any contract or agreement a pension assignee enters into in order to evade this law through a transfer, scheme or other device is void. All sums paid to or collected by such an assignee must be returned.
The law also says that any participant in a public retirement system the state of Missouri established who is found guilty of felonies it specifies, including bribery and forgery, are not eligible to receive any benefits from the system after the law’s effective date. Such a public employee may, however, request a refund of his or her contributions to the system, including interest.
- Log in to post comments