In re Pingel

• Decision Date: 12 August 1986
• Docket Number: Bankruptcy No. 84-03176.
• Citation: 63 BR 652
• Parties: In re Robert L. PINGEL, f/d/b/a Bob's Tire Service, Debtor.
• Court: U.S. Bankruptcy Court — Northern District of Iowa

63 B.R. 652 (1986)

In re Robert L. PINGEL, f/d/b/a Bob's Tire Service, Debtor.

Bankruptcy No. 84-03176.

United States Bankruptcy Court, N.D. Iowa.

August 12, 1986.

David Opheim, Fort Dodge, Iowa, for debtor.

Thomas Tarbox, Fort Dodge, Iowa, trustee.

ORDER ON CLAIM OF EXEMPTION

JAMES E. YACOS, Bankruptcy Judge, Sitting by Designation.

This case is before the court on the "Objection to Debtor's Claim of Exemptions" filed herein by the trustee in bankruptcy. This objection related to the debtor's claim on his B-4 Schedule to exempt under Iowa Code § 627.6(7) (dealing with "unmatured life insurance policies") an item described as a "Farm Bureau I.R.A." During the course of the further hearings on this matter it was determined that the item in question is an individual retirement annuity (hereinafter "I.R.A.") established and qualified under § 408(b)(1) of the Internal Revenue Code. At the first hearing on this matter the debtor also orally amended his claim of exemption to include Iowa Code § 627.6(9)(e) (dealing with "pension, annuity, or similar plan").

On February 28, 1986 the debtor and the trustee filed a "Stipulation In Lieu of Trial" setting forth an extensive stipulation of facts on this matter, as an alternative to a further trial hearing which had been directed by the court. The court accepts and incorporates the stipulated facts for purposes of determining this matter.

After reviewing the contentions of the debtor and the trustee, the court concludes that the legal issue is governed by this court's prior ruling in In re Lawrence, 57 B.R. 727 (Bankr.N.D.Ia.1986). The court there held that a retirement plan known as a "Keogh Plan" qualified under a separate provision of the Internal Revenue Code could be exempt under Iowa Code § 627.6(9)(e) as a "pension, annuity or similar plan or contract" notwithstanding the fact that no payments under the retirement plan were actually being received by the debtor in a retirement status at the time of the filing of the bankruptcy petition. The court followed the earlier reasoning expressed in In re Flygstad, 56 B.R. 884 (Bankr.N.D.Ia.1986).

While the present case involves an I.R.A. account rather than a Keogh Plan the trustee has not been able to point out any significant differences between these retirement plans sufficient to justify a difference result under the Iowa exemption statute. Both are self-generated individual retirement plans qualifying for special federal tax benefits to encourage individuals to provide for their own retirement needs. Both provide the same penalties for early withdrawal but do allow the individual to "get at the funds" if he is willing to pay the tax penalty. The only difference between the Keogh Plan and the I.R.A. is that the former requires a self-employment situation,...