This is an appeal from an opinion and judgment of the District Court of Alabama, 583 F.Supp. 1221, permitting third-party plaintiff (appellee) St. Paul Fire and Marine Insurance Co. to garnish funds in a pension and profit sharing plan held in the name of defendant (appellant) H. Ray Cox, by garnishee Alabama City Bank of Gadsden. Because we agree with the district court that Congress did not intend the non-alienation provision of ERISA to create a windfall for employees who engage in criminal acts at the expense of their employers, we affirm.
I. THE FACTS
On August 12, 1977, H. Ray Cox, President of the Alabama City Bank of Gadsden, was convicted of willfully and knowingly misapplying bank funds, with the intent to injure and defraud the bank in violation of 18 U.S.C.A. § 656. The bank subsequently filed with its surety, St. Paul, a proof of loss statement covering transactions handled by Cox. As part of the agreement between the insurer and the insured bank, St. Paul paid to the bank $152,000, and the bank assigned to St. Paul all rights that it had against any person or persons responsible for the losses. On June 16, 1980, St. Paul obtained a judgment against Cox for the amount of the loss incurred. Following that judgment, St. Paul instituted a garnishment proceeding against the vested interest of Cox in the pension and profit sharing plan of Alabama City Bank of Gadsden. Because a claim against the same funds had been made by another party, who stated that Cox's interest in the plan had been assigned to him as a "guarantee" for certain equipment and realty leases executed between them, the bank instituted an interpleader action in the amount of the monies payable to Cox under the pension and profit sharing plan.
The district court held that the non-alienability provisions of both ERISA (29 U.S.C.A. § 1056(d)(1)) and the pension fund in question (Article IX, Section 16) precluded the assignment of plan funds to the individual claimant. The court concluded, however, that in light of the congressional objectives embodied in ERISA and the equitable principle that a wrongdoer should not profit by his misdeeds, neither these non-alienability provisions nor the non-forfeiture provision included in ERISA (29 U.S.C.A. § 1053(a)) precluded the garnishment of plan funds by St. Paul. In accordance with this opinion, the court directed the trustee of the fund to disburse to the clerk of the court all plan funds which had accrued to Cox's account, and ordered further that future payments from the fund which may come due should be disbursed directly to St. Paul, until such time as the entire judgment, plus accrued interest, is satisfied. From that part of the opinion and order permitting garnishment of his interest in the pension plan, Cox appeals.
II. ERISA AND THE GARNISHMENT OF PENSION PLAN FUNDS
Cox argues that the same non-alienability and non-forfeiture provisions which prevent the assignment of plan funds to an individual claimant also prevent the garnishment of plan funds by St. Paul. While "[t]he federal cases have construed ERISA's provision against assignment or alienation as prohibiting garnishments generally," General Motors Corp. v. Buha, 623 F.2d 455 (6th Cir.1980),
ERISA was established to protect "the continued well-being and security of millions of employees and their dependents" by providing "minimum standards ... assuring the equitable character of [pension fund] plans and their financial soundness." 29 U.S.C.A. § 1001(a). These standards are intended to protect the employee against mismanagement or the provision of misinformation by the employer. The legislation provides no indication whatsoever that it is intended to protect the employee against the consequences of his own misdeeds. The judgment under which St. Paul, as subrogee of the bank, brings this garnishment proceeding arose from the criminal mishandling of bank funds by Cox. Cox's offense was not simply an act of disloyalty; it was a felony perpetrated against his employer.