Labor and Employment Alert: Federal Garnishments of Retirement Benefits

Related Practices

Attorneys & Professionals

In 1990, Congress enacted the Federal Debt Collection and Procedures Act.  One feature of that law allows a federal court to issue a “writ of continuing garnishment” to access a convicted participant’s retirement plan benefits to satisfy a restitution order entered as part of the participant’s criminal sentencing.  Despite the fact that this law change occurred more than 27 years ago, we have noticed a sudden uptick in the number of employers who are receiving these garnishment orders and who have been surprised to find that ERISA does not preempt them.

There are a few important nuances to note:

If you get a garnishment order, it is important that you consider whether it could apply to retirement plan benefits, so that you respond appropriately.  Contact your Vorys benefits attorney if you would like more information.