ORDER
This matter is before the court on appeal from the bankruptcy court’s order of February 28, 1984, denying the Trustee’s request for turnover to the bankruptcy estate of the retirement benefits contributed by debtor Grace Eilene Jones to her employer’s pension plan. The issue on appeal is whether the bankruptcy court erred in holding that the debtor’s contributions to her employer’s plan were not property of her bankruptcy estate pursuant to 11 U.S.C. § 541(a)(1). Having examined the record and having heard the respective positions of the parties, the court will affirm the bankruptcy court’s order of February 28, 1984, as modified herein by this court.
Discussion
This adversary proceeding came before the bankruptcy court for decision on stipulated facts. The debtor Grace Eilene Jones was a participant in her employer’s pension plan when debtor and her husband filed their. petition in bankruptcy on July 21, 1982. 1 The plan consists of contributions by both employer and employee. Under the terms of the plan, debtor was required to contribute a fixed percentage of her salary to the plan. Those required contributions were made with after tax dollars. Debtor’s required plan contributions exceed the amount of $3,347.00. Debtor could withdraw from participation in the pension plan, however, no amounts contributed to the pension plan can be withdrawn so long as debtor remains employed by General Electric. Payments from the plan to its participants occur only when the participant’s employment is terminated, the participant retires, the participant dies, or the participant becomes disabled. The plan has an anti-alienation clause which forbids participants from transferring their interest to another and forbids creditors of participants or beneficiaries from reaching the assets of the plan. The plan qualifies for tax benefits under the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA). The Trustee seeks turnover only of that portion of the plan which was contributed by the debtor with after tax dollars.
In concluding that the contributions of the debtor to the plan were not property of the bankruptcy estate, the bankruptcy court erroneously relied upon pre-1978 bankruptcy law. Prior to the Bankruptcy Code, passed in 1978, only property which was not exempt passed to the trustee in bankruptcy. Bankruptcy Act § 70(a)(5). The determination of whether, under the Bankruptcy Act, a particular asset was exempt, was based on the nature of the asset, focusing on whether the asset related to the debtor’s past or the debtor’s future.
E.g., Kokoszka v. Belford,
Section 541(a)(1) provides that a bankruptcy “estate is comprised of ... except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interest of the debtor in property as of the commencement of the case.”
2
Section 541(c)(2) provides that “a restriction on the transfer of a beneficial interest of the debt- or in a trust that is enforceable under applicable nonbankruptcy law is enforceable in a case under this title.” 11 U.S.C. § 541(c)(2). Section 541(a)(1) dramatically expanded the scope and reach of the bankruptcy estate.
United States v. Whiting Pools, Inc.,
It is clear that Congress intended that the scope of property interests included in the bankruptcy estate under § 541(a)(1) be broad, while the scope of the exclusions from the bankruptcy estate be narrow. Having examined the legislative history of § 541(c)(2) and having examined other courts’ considerations of § 541(c)(2), this court concludes that the exclusion contained in § 541(c)(2) should be narrowly drawn. Section 541(c)(2) is an exception designed to apply to spendthrift trusts.
Accord In re Graham,
The controversy arises under § 541(c)(2) when courts confront the issue of whether ERISA-qualified plans which impose restrictions on the transfer of beneficial interests of debtors in a trust fit within the terms of § 541(c)(2).
Compare In re Holt,
The State of Indiana specifically provides that an interest in an employee benefit plan is property. I.C. 32-3-2-1.
Cf. In re Sheridan,
This court concludes that the exception of § 541(c)(2) is met only by reference to applicable state nonbankruptcy law because to do otherwise would appear to be . contrary to the legislative history and would appear to render meaningless the federal exemption provided under § 522(d)(10)(E).
Compare Kelley,
The State of Indiana recognizes spendthrift trusts by statute and case law. I.C. 30-4-3-2;
Locke v. Barbour,
Turning to an examination of the plan before this court for review, it is clear that there is an anti-alienation clause in the employer’s plan. The question of whether the debtor is the settlor of this plan is a closer question. However, this court de-' dines to hold that, because an employer requires contributions to be made by its employees in order that the employee can receive employer contributions, such a requirement causes an employee to be considered a settlor of his employer’s plan as a matter of law. Such a holding would be against public policy. It is clear that in ERISA-qualified plans which are set up by employers to assist in aiding its workers to secure a means of support when its workers are no longer able to work, it is the employer who is the settlor of the trust, not the employee. Where an ERISA-qualified plan set up by an employer requires an employee to make contributions to the plan as part of the employee’s participation, the *1007 employee cannot be considered a settlor as that term is traditionally used in the area of spendthrift trusts. The court specifically limits this holding to contributions of employees which are required by the employer establishing the trust.
Determining that in this case, the debtor is not a settlor of her employer’s plan does not end the inquiry. The key issue is the extent of dominion and control the debtor possesses over the corpus. This issue effectively translates to one word: access. An examination of withdrawal provisions of this plan, as stipulated by the parties, reveals that the debtor has no access to her portion of the trust corpus at this time. The plan specifically provides that, even if a participant discontinues participation in the plan, no withdrawals of contributions previously made can be effected. The only way a participant in this plan may gain access to any portion of the plan is to retire, be terminated, become disabled, or die. Debtor’s portion of her employer’s plan is not available to this debtor for current use. The employer’s plan functions as a spendthrift trust. It fits the traditional definition as defined by the State of Indiana. Debtor is entitled to claim a § 541(c)(2) exception.
Cf. Berndt,
In order for an ERISA-qualified plan to meet the § 541(c)(2) exception, the debtor-beneficiary cannot possess any present access to her interest in the plan at the time bankruptcy is filed. The determination of whether a debtor-beneficiary possesses access to an ERISA-qualified plan that would preclude the debtor’s use of the § 541(c)(2) exception must be made on a case by case basis. Although the actual requirements of particular plans may vary from case to case, the court concludes that the prime requirement a plan must possess to fit within the § 541(c)(2) exception (assuming, of course, that the plan contains an anti-alienation clause and the settlor is not a beneficiary) is that the participant/beneficiary cannot possess any means, when bankruptcy is filed and the bankruptcy estate is thus created, along with the trustee’s powers, by which the participant could gain access to the funds presently. Such a requirement would appear to include generally the inability to receive any payments from the plan, once a participant, unless one is terminated, retires, becomes disabled, or dies. The foregoing factors are, by no means, exclusive.
Accordingly, on the basis of the foregoing, the court hereby AFFIRMS the bankruptcy court’s order of February 28, 1984 and VACATES that portion of the bankruptcy court’s order which is inconsistent with this opinion.
Notes
. The operative date for determining what property the bankruptcy estate contains and the trustee controls to effect resolution of bankruptcy is the date of filing. The trustee has duties under the Code only with respect to property of the estate as defined in 11 U.S.C. § 541. 11 U.S.C. § 704. Commencement of a case, which creates an estate under § 541(a), is defined as the filing with the bankruptcy court of a bankruptcy petition. 11 U.S.C. §§ 301, 302, 303. The Trustee does not dispute that his right to property for this bankruptcy estate is created by the filing of bankruptcy and determined as of the date of debtors’ filing. As required by the Code, the court will evaluate debtors' interest in this plan as of the date of debtors' filing-of bankruptcy.
. Section 541(b) is not applicable or relevant to the facts of this case.
. The constitutionality of allowing a state to opt out has been upheld.
Matter of Sullivan,