Debtor Nadine F. Eilbert appeals a judgment of the Eighth Circuit Bankruptcy Appellate Panel 1 affirming an order of the United States Bankruptcy Court for the Southern District of Iowa 2 that disallowed a claimed exemption in an annuity contract. The asset at issue is a single premium variable annuity purchased by an elderly annuitant with the proceeds of her husband’s estate for the purpose of using a subsequent bankruptcy to free those proceeds from the claim of a judgment creditоr. The question is whether this asset qualifies for the exemption for “a payment under a pension, annuity, or similar plan or contract on account of ... age” in Iowa Code § 627.6(8)(e). Answering that question in the negative, we affirm.
Eilbert’s husband was killed in a July 1994 autо accident in which David Pelican was seriously injured. Mr. Eilbert left a substantial estate, $489,916 of which passed to Eil-bert outside probate. In August 1994, Pelican sued Eilbert, as joint owner of the auto, and Mr. Eilbert’s estate, seeking substantial damages. Because the Eilbеrts had only $100,000 in automobile liability insurance, Eilbert and her attorney attempted to protect her assets should the personal injury suit result in a large judgment in favor of Pelican. On October 27, 1994, the 74-year-old Eilbert purchased a $450,000 single premium variable аnnuity, electing to begin receiving annuity payments on January 1,1995. The annuity contract provides that Eilbert will receive monthly payments equal to a ten percent annual return during her lifetime, with the balance divided at her death between two of her children. In 1995, Eilbert received monthly payments totalling $46,641. The annuity achieved a sixteen percent rate of return that year and grew in value to $480,820 as of December 4, 1995, when Eil-bert filed her bankruptcy petition.
In November 1995, a state court enterеd judgment in favor of Pelican and against Eilbert and her husband’s estate in the amount of $662,502.06. Eilbert filed a Chapter 7 bankruptcy petition on December 4, claiming her $480,820 interest in the annuity as exempt under Iowa Code § 627.6(8)(e). Pelican and the Chapter 7 trusteе filed objections to this exemption. The bankruptcy court sustained the objections, the Bankruptcy Appellate Panel affirmed, and Eilbert appeals. As the second reviewing court, we apply the same standards as the Bankruptсy Appellate Panel, reviewing the bankruptcy court’s findings of fact for clear error and its conclusions of law de novo.
See In Re Gateway Pacific Corp.,
Iowa has “opted out” of the federal exemptions allowed under the Bankruptcy Code.
See
11 U.S.C. § 522(b); Iowa Code § 627.10. Therefore, Eilbert’s claim of exemption must be determined under Iowa law.
See In re Huebner,
In 1981, the Iowa General Assembly rewrote Iowa Code § 627.6, the statute that exempts specific classes of property owned by Iowa residents from execution by a judgmеnt creditor. One of the new provisions, § 627.6(9)(e), exempted
The debtor’s rights in ... [a] payment under a pension, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the *526 extent reasonably neсessary for the support of the debtor and any dependent of the debtor.
This exemption was modeled on the nearly identical federal exemption found in 11 U.S.C. § 522(d)(10)(E). Congress described that federal exemption as “exempting] certain benefits that are akin to future earnings of the debtor.” H.R. Rep. 95-595, at 362 (1978),
reprinted in
1978 U.S.C.C.A.N. 5787, 6318. When an Iowa statute is borrowed from similar federal legislation, the Iowa courts “presume our legislature intended what Congress intended.”
City of Davenport v. Public Employment Relations Bd.,
In 1986, the Iowa General Assembly amended and renumbered this exemption. The result was the statute here at issue, § 627.6(8)(e), which exempts
The debtor’s rights in ... [a] payment or a portion of a payment under a pension, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, unless the payment or a portion of the payment results from contributions to the plan or contract by the debtor within one year prior to the filing of a bankruptcy petition, which contributions are above the normal and customary contributions under the plan or contract, in which case the portion of the payment attributable to the contributions above the normal and customary rate is not exempt.
Eilbert argues her single premium variable annuity is exempt because (i) it is an “annuity,” (ii) she purchased it more than one year before bankruptcy, and (iii) she began receiving payments at age 74, “well past retirement age under any definition.” Exemption statutes are construed liberally, but for thе purpose of achieving the legislative intent, not to “extend the provisions of the legislative grant.”
Iowa Methodist Hosp. v. Long,
If annuity payments were “on account of age” merely because the debtor purchased the annuity when she was past retirement age, all persons past retirement age should move their assets into such an annuity and then file bankruptcy.... Under this scheme, no debtor past retirement age would have any assets subject tо execution, could live in a million-dollar home, have a substantial stream of income, virtually live off his creditors, and yet be judgment proof.
Bearing in mind these general principles, we agree with the Bankruptcy Appellate Panel that thе single premium variable annuity in question is not exempt under the specific language of § 627.6(8)(e) for two independent reasons.
A. The Asset Is Not a “Pension, Annuity, or Similar Plan or Contract.”
Iowa Code § 627.6(8)(e) exempts a “debtor’s rights in ... [a] payment or a portion of a payment under a pension, annuity, or similar plan or contract....” The Bankruptcy Appellate Panel held that Eil-bert’s annuity “does not fall within the category of exemptible investments enumerated in” this statute. Eilbert argues that her annuity fаlls within the plain language of the statute — any annuity, according to Eilbert, is an “annuity” for purposes of § 627.6(8)(e). We disagree.
As the Bankruptcy Appellate Panel noted, “ ‘annuity’ is a purely generic term which refers to the method of payment and not to the underlying nature of the asset.”
3
When interpreting statutory language, the Iowa courts apply recognized rules of statutory construction to give effect to legislative
*527
intent.
See Johnson v. Johnson,
A pension is a “Retirement benefit paid regularly ... based gеnerally on length of employment and amount of wages or salary,” in other words, “[d]eferred compensation for services rendered.” Black’s Law Dictionary 1134 (6th ed.1990). Because “pension” is the more specific word, it restricts the meaning оf “annuity” in § 627.6(8)(e). When dealing with a claim for exemption of an annuity payment “on account of age,” the conjunction of the two words suggests that “annuity,” like “pension,” describes a plan or contract to provide benefits in lieu of earnings after retirement, whether funded by the employer or purchased by the employee or the self-employed.
4
Likewise, the catchall provision, “similar plan or contract,” includes within the exemption other types of retirement plаns or investments that are “created to fill or supplement a wage or salary void.”
Matter of Pettit,
The payments received by Eilbert under her single premium annuity investment are not “akin to future earnings.” The payments do not replace lost income, and the annuity was not purchased with contributions over time as part of a long term retirement strategy. Instead, the annuity was purchased with non-exempt, inherited assets as a prebank-ruptcy planning measure by a prospective debtor who happened to have already reached retirement age. We agree with the Bankruptcy Appellate Panel that this investment was not a “pension, annuity, or similar plan or contract” within the meaning of § 627.6(8)(e).
Accord In re Gagne,
B. The Payments Are Not “on Account of ... Age.”
Eilbert’s claim to an exemption under § 627.6(8)(e) fails for the additional reason that her rights in the annuity payments are not “on account of [her] age.” As the Bankruptcy Appellate Panel recognized, this issue is controlled by our decision in
In re Huebner,
where we held that payments wеre not “on account of age” because the annuitant had “unfettered discretion to receive payments at any time under any of the three payment options, subject only to relatively modest penalties for withdrawals before age 59/6.”
Finally, Eilbert argues that her annuity is exempt under
Huebner
because we commented that if the debtor had “invested his savings in retirement annuities that prevented him from withdrawing funds prior to his reaching retirement age ... payments under those annuities would have been exempt under § 627.6(8)(e).”
For the foregoing reasons, the judgment of the Bankruptcy Appellate Panel is affirmed.
Notes
. The HONORABLE ROBERT J. KRESSEL, United States Bankruptcy Judge for the District of Minnesota, authored the opinion for a Panel that included the HONORABLE BARRY S. SCHERMER, United States Bankruptcy Judge for the Eastern District of Missouri, and the HONORABLE NANCY C. DREHER, United States Bankruptcy Judge for the District of Minnesotа.
. The HONORABLE RUSSELL J. HILL, Chief Judge.
. See also Black's Law Dictionary 90 (6th ed.1990) (annuity is “[a] right to receive fixed, periodic payments, either for life or for a term of years"); Webster's Third New International Dictionary 88 (1986).
. Similarly, the court in
In re Wiley,