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Ditto v. McCurdy5/12/1999
retirement income to employees." Its express purpose is "to provide retirement benefits for the Employees of the Company[.]" To that end, the plan provides that " PARTICIPANT shall be entitled to a normal retirement benefit consisting of an annual pension equal to 100% . . . of final average earnings less 20% of the Primary Insurance Amount of Social Security reduced by 1/20 for each year of service less than 20 years[.]" Ditto is correct that Pension Plan No. 2 provides for the payment of benefits upon the death or disability of a participant. However, the fact that benefits can be paid out upon the death or disability of a participant is incidental to the plan; as indicated previously, it cannot be disputed that Pension Plan No. 2 was designed for the sole purpose of paying retirement income to its participants. Based on the foregoing, we hold that Pension Plan No. 2 also qualifies as an employee benefit pension plan as defined in section 3(2) of ERISA.
It is well established that, " ven where Congress has not entirely displaced state regulation in a specific area, state law is preempted to the extent that it actually conflicts with federal law." Pacific Gas & Elec. Co. v. Energy Resources Conservation & Dev. Comm'n, 461 U.S. 190, 204 (1983). "Such a conflict arises when compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Id. (citations and internal quotation marks omitted). Pursuant to the exception in HRS § 651-124, which otherwise allows for the garnishment of "contributions made to a plan or arrangement within the three years before the date a debtor files for bankruptcy , whether voluntary or involuntary, or within three years before the date a civil action is initiated against the debtor," the circuit court granted Ditto's second garnishee motion. Nevertheless, as discussed supra, ERISA erects a general bar to the garnishment of pension benefits from ERISA-covered plans and, therefore, prohibits the garnishment of Pension Plan Nos. 1 and 2. Insofar as compliance with both section 206(d)(1) of ERISA and the exception to HRS § 651-124 is "a physical impossibility," Pacific Gas, 461 U.S. at 204, we hold that the exception to HRS § 651-124 is preempted to the extent that it actually conflicts with ERISA.
IV. CONCLUSION
Based on the foregoing, we reverse the circuit court's (1) August 19, 1998 order granting in part and denying in part plaintiff-appellee Janie Ditto's motion for issuance of garnishee summons after judgment and (2) September 22, 1998 garnishee order.
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