                IN THE UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT

                      ________________________

                            No. 96-50013
                      ________________________

IN THE MATTER OF DOUGLAS A. CARMICHAEL,

                                                   Debtor-Appellant

                                versus

RANDOLPH N. OSHEROW, TRUSTEE,

                                                              Appellee

          ________________________________________________

            Appeal from the United States District Court
                  for the Western District of Texas

          _________________________________________________

                          November 13, 1996

Before DAVIS, SMITH, and WIENER, Circuit Judges.

WIENER, Circuit Judge:

     In this bankruptcy case, Debtor-Appellant Douglas Carmichael

(Debtor) appeals the decision of the district court affirming the

bankruptcy court’s order that granted Bankruptcy Trustee-Appellee

Randolph N. Osherow’s (Trustee) objection to exemption of Debtor’s

individual retirement account (IRA) from his bankruptcy estate

(estate).    The issue to be decided is whether an IRA that--as all

IRAs must--gives the owner the right to receive payments after

attaining age 59-1/2, but also allows receipt of payments prior to

attaining that age upon payment of a penalty tax, is exempt from

the bankruptcy estate under §522(d)(10)(E) of the Bankruptcy Code

(Code).     Concluding that IRAs are exempt under the applicable
provision,1 we reverse and render.2

                                      I.

                         FACTS AND PROCEEDINGS

     Debtor,   an    independent   emergency    room   physician   who   was

diagnosed in 1995 with Multiple Sclerosis and Retinitis Pigmentosa,

a degenerative eye disorder, had established an IRA in 1991 as his

primary source of retirement funds.          Provisions of the Internal

Revenue Code (IRC) permit Debtor to begin withdrawing funds from

the IRA when he attains age 59-1/2.        Typically, the IRA contains no

anti-alienation provision, so Debtor may withdraw funds before

attaining that age if he pays a statutory 10% penalty tax3 and

gives written notice to the custodian as specified in the custodial

agreement.

     In February 1995, Debtor filed for relief under Chapter 7 of

the Code, and the Trustee was appointed to administer the estate.

Debtor elected the federal exemptions and, pursuant to 11 U.S.C.

§522(d)(10)(E), listed as exempt from the estate the $16,323.49

held in his IRA.       The Trustee filed an objection to Debtor’s

exemption, and the bankruptcy court held that Debtor’s IRA was not

exempt from    the   estate   under   11   U.S.C.   §522(d)(10)(E).      The


         1
        The following analysis may not be applicable to some
specially tailored IRAs.
     2
      The finding by the bankruptcy court that the full amount of
the IRA was reasonably necessary for the support of Debtor and his
dependents was neither appealed by Trustee nor found to be clearly
erroneous by this court. Consequently, the full amount of the IRA
is exempt.
     3
      26 U.S.C. §72(q) (1994).

                                      2
district court affirmed the decision of the bankruptcy court, and

Debtor timely appealed.

                                 II.

                              ANALYSIS

A.   STANDARD   OF   REVIEW

     The exemption question presented here is purely an issue of

law, which we review de novo.4

B.   APPLICABLE LAW

     The broad language of the Code provides that the estate of the

debtor includes “all legal or equitable interests of the debtor in

property as of the commencement of the case.”5    Property initially

included in the estate may be excluded subsequently, however,

pursuant to the exemption in §522.     More specifically pertinent to

our inquiry, §522(d)(10)(E) provides as follows:

     (d) The following property may be exempted under section
     (b)(1) of this section: . . .
          (10) The debtor’s right to receive . . .
               (E) a payment under a stock bonus,
          pension, profitsharing, annuity, or similar
          plan or contract on account of illness,
          disability, death, age, or length of service,
          to the extent reasonably necessary for the
          support of the debtor and any dependent of the
          debtor, unless-
                    (i) such plan or contract was
               established by or under the auspices
               of an insider that employed the
               debtor at the time the debtor’s
               rights under such plan or contract
               arose;
                    (ii) such payment is on account
               of age or length of service; and
                    (iii) such plan or contract

     4
      Bridges v. City of Bossier, 92 F.3d 329 (5th Cir. 1996).
     5
      11 U.S.C. §541(a)(1) (1994).

                                  3
                      does not qualify under section
                      401(a), 403(a), 403(b), or 408 of
                      the Internal Revenue Code of 1986.

The focus of our inquiry, one which heretofore has not been decided

by this court, is whether an IRA qualifies for the §522(d)(10)(E)

exemption.6

C.     SIMILAR    PLAN OR CONTRACT

       To      qualify    for    the    exemption   under    §522(d)(10)(E),      the

interest in question must be “the debtor’s right to receive a

payment under a stock bonus, pension, profitsharing, annuity, or

similar plan or contract.”7               Thus it is not the plan or contract

that either is or is not exempt, but the right to receive a payment

from a plan or contract (if qualified under §522(d)(10)(E)) that

will enjoy exemption.                 An IRA is not a stock bonus, pension,

profitsharing, or annuity plan or contract; therefore, to qualify

for the exemption, an IRA must be a “similar plan or contract.”                    We

hold that for purposes of §522(d)(10)(E), an IRA is a “similar plan

or contract.”

       First, the four types of plans or contracts that are listed by

name in paragraph (d)(10)(E) as per se exempt are substitutes for

future earnings.          IRAs too are substitutes for future earnings in

that       they   are     designed      to   provide     retirement    benefits    to

individuals.             The    age    limitation   on    withdrawal    illustrates


           6
       As the instant IRA qualifies under §408 of the Internal
Revenue Code, applicability of the conjunctive three part exception
to the exemption, found in §522(d)(10)(E)(i)-(iii), is not an
issue.
       7
        11 U.S.C. §522(d)(10)(E) (1994).

                                             4
Congress’ intent to provide income to an individual in his advanced

years.    To exempt an IRA as a “similar plan or contract,” then, is

consistent with the treatment of other deferred compensation and

retirement benefits.

     Second,      subparagraph    (d)(10)(E)(iii)   specifically   denies

exemption to those “similar plans or contracts” that come within

the proscription of (d)(10)(E)(i) and (ii) and also fail to qualify

under, inter alia, IRC §408, a provision dealing exclusively with

IRAs. This express Code-section reference to IRAs in the exception

makes inescapable the conclusion that at least some--if not all--

IRAs were intended to be included in the phrase “similar plan or

contract.”     Were that not so, there would be no exempt §408 plans

or contracts from which non-§408 plans or contracts could be

exceptions.

     In other words, inasmuch as the phrase “similar plan or

contract” in subsection (iii)’s specific exception to the exemption

includes IRAs that do qualify, that exact phrase--“similar plan or

contract”--must likewise include qualifying IRAs in the general

exemption of paragraph (d)(10)(E).          “There is a presumption that

the same words used twice in the same act have the same meaning.”8

     Third, to conclude that IRAs are not exempt would be to

suggest    that     Congress     intended   to   penalize   self-employed

individuals for their choice of the form in which their retirement

assets are held.      This result would be antithetical to Congress’


    8
     In re Hall, 151 B.R. 412, 425 (Bankr. W.D. Mich. 1993)(citing
2A N. SINGER, SUTHERLAND STATUTORY CONSTRUCTION §46.05 (1992)).

                                      5
solicitude for retirement benefits for self-employed individuals.

By analogizing the treatment of IRAs to Congress’ treatment of

other retirement plans in §522(d)(10)(E), we find it more than

plausible to infer that Congress intended for IRAs to be treated

similarly for purposes of exemption.                   Indeed, to hold otherwise

would be to create a trap for the unwary in those frequent

instances in which funds from other exempt plans are “rolled over”

into IRAs when those other plans terminate or when employment

ceases.      After all, Congress has, in the overall retirement scheme

of the IRC, selected the IRA to serve as a sort of universal

conductor through which transfers must pass if they are to avoid

the rocks and shoals of inadvertent taxable events.

     Finally,         exempting   IRAs   comports        with     the    very   policy

furthered by exemptions--providing the honest debtor with a fresh

start.       More specifically, exempting IRAs furthers the policy

behind the pension exemption--protecting a debtor’s future income

stream.9     And the Code even contains a safeguard to avoid potential

abuse     when   it    limits   exemption    to    only    such       portion   of   the

otherwise exemptible payments that the bankruptcy court deems

necessary for the support of the debtor and any of his dependents.

D.   CONTROL

     We reject out of hand the Trustee’s argument that the absence

of   an      anti-alienation      provision       in    the     IRA     destroys     its

exemptibility.          This argument is grounded first in the fact of


         9
          In re Hickenbottom, 143 B.R. 931, 933 (Bankr. W.D. Wash.
1992).

                                         6
control by the debtor.         That the debtor has control over the IRA,

penalty notwithstanding, does not destroy its exemptibility.

Control is a concept applicable to the determination of whether an

asset belongs to the estate, a determination that is made before

the question of exemption is ever reached.                 Once the asset is

included in the estate, the concept of control evanesces; control

is simply irrelevant to the question of exemption.                Indeed, other

exempt assets, such as personal residences, remain in the debtor’s

control following a discharge.

     The     plain   language    of    the   subject   section    supports    the

conclusion that control by a debtor does not destroy exemptibility.

True, to be exempt, the right to receive a payment under a “similar

plan or contract” must be “on account of illness, disability,

death, age, or length of service.”10              Yet nowhere do the words

“only” or “solely” appear.            The language of the subject section

does not express a requirement that the right to receive a payment

under a      “similar   plan    or    contract”   be   conditioned   “only”    or

“solely” or “exclusively” on one of the five listed events.                  None

dispute that the list is exclusive and mandatory in that (1) the

right to receive payment under a “similar plan or contract” must be

triggered by at least one of the five events, and (2) the right to

receive the payment cannot be either totally unfettered or not

triggered by inter alia one of the five listed events.

     An      entirely    separate       question,      however,    is   whether

exemptibility is destroyed if, despite the right to receive the

     10
          11 U.S.C. §522(d)(10)(E) (1994).

                                         7
payment being triggered by one or more of the five listed events,

such right can be triggered as well by some additional event,

occurrence, or status that is not listed.          Simply stated, the

Trustee’s argument is that the presence of such an additional

factor   somehow   blocks   or   destroys   exemptibility   despite   the

presence of one of the five requisite events.         We disagree:     As

long as the right to receive a payment under a plan or contract can

be triggered by one or more of the five listed events, and is

therefore exemptible, the fact that payments can also be triggered

by some additional factor--or absence of some additional factor--

cannot destroy exemptibility.       Once one (or more) of the listed

events is found to apply, it (or they) need not be the sole

prerequisite to all rights to receive payment.        Neither need the

listed event (or events) block the right to receive payment under

some other situation.

     Additionally, the rule of ejusdem generis requires inclusion

of IRAs in the phrase “similar plan or contract” by general (if not

perfect) analogy to the four specified plans or contracts that are

per se exemptible, with or without an anti-alienation requirement.

Proof of this is found in an important feature of profitsharing

plans, one of the foursome of nominate plans or contracts which are

per se exemptible under paragraph (d)(10)(E): Profitsharing plans

contain provisions that entitle participants to receive payments on

account of one or more of the five listed triggering events, but

also permit participants to withdraw up to the entire amount upon

payment of a penalty.       No philosophical or economic distinction


                                    8
that would preclude an IRA’s exemptibility can be drawn between

relevant features of profitsharing plans and similar features of

IRAs.

     In the instant case, Debtor’s right to receive a payment from

the IRA is statutorily triggered by his attaining age 59-1/2 years;

yet surely the additional fact that he may receive payments from

the IRA at an earlier age by incurring a 10% penalty tax and

furnishing   notice       to   the   custodian   cannot   destroy   the   IRA’s

exemptibility.       Both events--attaining age 59-1/2 and paying the

penalty tax--are statutorily applicable to any IRA, even if by

inadvertence the account document should omit those provisions.

That here Debtor did not elect to include the purely optional term

of anti-alienation is of no significance whatsoever.

E.   PRESENT RIGHT   TO   RECEIVE

     Given the Trustee’s obfuscation of the issue by arguing the

question of “present payments,” it is helpful to recognize the

distinction between a debtor’s right to receive a payment presently

(the Trustee’s contention) and a debtor’s “right to receive . . .

a payment” (the plain words of the section) which includes both (1)

a debtor’s presently vested right to receive a payment in the

future and (2) a debtor’s right to receive a payment “presently,”

“currently,” or “immediately.” We decline the Trustee’s invitation

to read into the subject section of the Code a restriction to the

right to receive payments presently, to the exclusion of a present

right to receive payments in the future.              The language of the

section does not include words like “presently,” “currently,” or


                                         9
“immediately.”          Indeed, to infer such would be to exclude from

consideration all deferred compensation and retirement accounts

that have not yet ripened to current payment status.                      Again, that

which is exempt is the right to receive payments, whether future or

present, not merely the current receipt of payments.

F.   TO    THE   EXTENT REASONABLY NECESSARY

     The subject section of the Code expressly limits the exempt

right to receive payments “to the extent reasonably necessary for

the support of the debtor and any dependent of the debtor.”11

Determination        of   the   quantum     that   is      needed   for   support   is

entrusted to the sound discretion of the bankruptcy court.                          The

bankruptcy court’s authority and obligation to determine the extent

to which funds are necessary for the support of the debtor and his

dependents work as a safeguard to prevent debtors from stashing

away assets in fraud of creditors, thereby ensuring that the

proverbial shield cannot be used as a sword.

G.   NO CONFLICT WITH PRECEDENT      IN   OTHER CIRCUITS

     Our decision to hold this IRA and ones like it exemptible does

not create a circuit split, particularly not with the Third Circuit

as the Trustee urges. That circuit’s decision in In re Clark12 held

that a debtor’s Keogh or H.R. 10 retirement plan was not exempt

under the subject Code section.             But H.R. 10 plans no longer exist.

Therefore, the Clark precedent is obsolete, so no actual conflict

can be created with that decision.                  Neither does our decision

     11
          11 U.S.C. §522(d)(10)(E) (1994).
     12
          711 F.2d 21 (3d Cir. 1983).

                                            10
conflict with the Third Circuit’s        holding in Velis v. Kardanis13

which deals solely with the “to the extent reasonably necessary”

limitation in the context of a debtor who is already more than 59-

1/2 years old, and which therefore cannot be read to extend Clark

to IRAs.

                                  III.

                               CONCLUSION

     For the foregoing reasons, the district court’s decision to

affirm the bankruptcy court’s grant of Trustee’s objection to the

exemption is reversed, and judgment is rendered holding Debtor’s

IRA to be exempt.

REVERSED and RENDERED.




     13
          949 F.2d 78 (3d Cir. 1991).

                                   11
