Appeal from the Order of the Superior Court of Pennsylvania entered November 1, 1985 at No. 707 Pittsburgh 1981, vacating the Order of the Court of Common Pleas of Allegheny County, Civil Division entered June 4, 1981 at No. GD81-11344. 347 Pa. Super. Ct. 289;
Nix, C.j., and Larsen,*fn* Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Nix, C.j., filed a concurring opinion. Flaherty, J., filed a dissenting opinion joined by Zappala, J.
The issue presented for our consideration in this case is whether pension benefits are exempt from attachment by a
former wife to satisfy arrearages in support payments which payments are based upon a support agreement entered into by the wife and her former husband who is the recipient of the pension fund.
Appellant, Mary Hollman, and appellee, Wade Hollman, were married in May, 1938. They separated in March, 1967, and two years later, they entered into a written separation agreement which provided that appellee would pay appellant $300.00 per month for her support. The parties were divorced in May, 1969. Appellee paid support as agreed and continued to do so after he retired in 1975. In November of 1978, however, appellee ceased making support payments and six months later, moved to Florida and removed all of his personal assets from Pennsylvania except for his pension which is disbursed to appellee by the United States Steel and Carnegie Pension Fund in the amount of $1,661.69 per month. This pension was established under the provisions of the Employee Retirement Income Security Act of 1974, 29 U.S.C.A. §§ 1001-1461 (ERISA), and appellee's pension plan provides that benefits "shall not be subject . . . to assignment."
Appellant brought two actions to enforce the support agreement. The first, an action in assumpsit for arrearages (Hollman I), was filed in the Court of Common Pleas, Civil Division. On April 13, 1981, that court entered a default judgment against appellee in the amount of $1,800.00. Appellee's pension benefits were attached pursuant to a writ of execution. Appellee contested the attachment, filing a claim for exemption from attachment pursuant to Pa.R.Civ.P. Rule 3123.1, which claim was dismissed. Appellee appealed this dismissal to Superior Court and continued to avoid his support obligation by failing to make monthly payments.
Appellant filed a second action in equity (Hollman II) to enforce the separation agreement. The Family Division of the Court of Common Pleas of Allegheny County entered an order on February 23, 1982, directing appellee to make monthly payments pursuant to the separation agreement
and directing that judgment be entered on the $9,600.00 in arrearages that had accrued since Hollman I. A second attachment was made against appellee's pension benefits, and the trustees of the pension plan raised the issue of the statutory exemption of the pension benefits from execution and attachment. The trial court dismissed appellant's judgment of attachment with prejudice.
On appeal, the two actions were consolidated. Superior Court affirmed the order entered in Hollman II and vacated the order entered in Hollman I, stating that appellant "must be treated as an ordinary creditor." Superior Court determined that although a former husband's pension fund could be attached pursuant to an order for support, it could not be attached pursuant to a judgment based on a separation agreement. We granted appellant's petition for allowance of appeal, and we now reverse.
Superior Court determined that under the terms of our exemption statute, 42 Pa.C.S.A. § 8124(b)(1)(vii), appellee's non-assignable pension benefits are not subject to attachment or execution. Section 8124(b)(1)(vii) provides:
(b) Retirement funds and accounts. --
(1) Except as provided in paragraph (2), the following money or other property of the judgment debtor shall be exempt from attachment or execution on a judgment:
(vii) Any pension or annuity, whether by way of a gratuity or otherwise, granted or paid by any private corporation or employer to a retired employee under a plan or contract which provides ...