APPEAL from the Circuit Court of Cook County; the Hon. LEONARD
GRAZIAN, Judge, presiding.
MR. PRESIDING JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT:
Christ Hospital (plaintiff) obtained a judgment for $1958.29 against Emmanuel Greenwald (defendant). Plaintiff then obtained judgment in garnishment proceedings against Milk Wagon Drivers' and Milk Dealers' Severance Retirement Fund (garnishee). The garnishee appeals.
The original judgment against defendant reflected medical and hospital services to defendant and members of his family. Thereafter defendant retired from employment and became a participant in the pension fund administered by the garnishee. Defendant received a pension of $275 per month. This stipend is the target of the garnishment proceedings.
In this court, the garnishee contends the spendthrift clause in the trust agreement prohibits garnishment of pension trust funds by a third-party creditor under the law of Illinois; and ERISA prohibits and preempts garnishment of the fund herein.
The garnishee is a trust fund subject to the Employees Retirement Income Securities Act of 1974 (ERISA) (29 U.S.C.A. § 1001 et seq. (1975)). The trust fund is a qualified pension fund under the Internal Revenue Code, section 401. The fund is thus eligible for special tax benefits available to pension funds recognized under ERISA. The trust agreement under which the garnishee operates, which governs the payment of benefits to defendant, provides this spendthrift clause:
"No benefit under the Plan shall be subject to anticipation or voluntary or involuntary alienation nor shall the interest of any person under the Plan be subject to garnishment, attachment, or other seizure or sequestration for the payment of any debts, judgments, alimony, or separate maintenance owed by said person."
This type of spendthrift clause, which is used to insulate insurance policy proceeds from third-party judgment creditors, has been held valid in Illinois. (Roth v. Kaptowsky (1946), 393 Ill. 484, 66 N.E.2d 664, aff'd on remand (1948), 401 Ill. 424.) Furthermore, in our opinion, the plaintiff's reliance upon the Illinois wage deduction act (Ill. Rev. Stat. 1977, ch. 62, par. 71 et seq.), as validating garnishment of payments from pension plans which include spendthrift clauses is inappropriate. The pension proceeds at issue in the instant case are not wages. Plaintiff must have been cognizant of this distinction when it elected to bring this proceeding under the garnishment statute applying to nonwage assets (Ill. Rev. Stat. 1977, ch. 62, pars. 33-52). We conclude the law of Illinois prohibits garnishment of the pension funds here involved.
The Congress has found and declared the policy of ERISA is "to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries * * * by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts>." 29 U.S.C.A. § 1001(b).
In keeping with these goals, ERISA specifically prohibits the garnishment of the pension fund or the pension check of a retired person. The Act provides (29 U.S.C.A. § 1056(d)(1)):
"Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated."
The Act expressly permits "voluntary and revocable assignment[s] of not to exceed 10 percent of any benefit payment * * *." (29 U.S.C.A. § ...