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The first substantive issue for decision is whether
petitioner must include in income the value of his fully vested
interest in GCI’s pension plan, which he waived in favor of GCI.
Petitioner asserts that the funds are not includable because of
his permissible “waiver” of benefits in favor of his wholly owned
corporation.
Respondent argues that petitioner must recognize taxable
income from the Plan’s distribution because petitioner had an
unconditional right to receive the benefits, and any attempted
“waiver” is invalid under the Employee Retirement Income Security
Act of 1974 (ERISA), Pub. L. 93-406, 88 Stat. 829, 29 U.S.C. sec.
1001, and the Internal Revenue Code (I.R.C.).
ERISA was enacted to establish “a comprehensive federal
scheme for the protection of pension plan participants and their
beneficiaries.” American Tel. & Tel. Co. v. Merry, 592 F.2d 118,
120 (2d Cir. 1979). ERISA was intended to assure that American
workers “may look forward with anticipation to a retirement with
financial security and dignity, and without fear that this period
of life will be lacking in the necessities to sustain them as
human beings within our society.” S. Rept. 93-127, at 13 (1974),
1974-3 C.B. (Supp.) 1, 13. To this end, ERISA requires that
plans provide that benefits may not be assigned or alienated. H.
Rept. 93-807, at 68 (1974), 1974-3 C.B. (Supp.) 236, 303. This
provision is included in both the I.R.C. and ERISA section
206(d)(1), which state that a pension plan will not be qualified
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Last modified: May 25, 2011