How Will the Court Divide My Pension in a Divorce?
By: M. Scott Gordon
When you are getting divorced in Chicago, the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/) requires all marital property be divided according to a theory of equitable distribution. What this means is any marital assets and debts will be divided between the couples in an equitable manner based on specific information about the marriage and each spouse’s role in the relationship. Often, pension division will come up in a Chicago divorce. Given that many individuals who are married contribute to their pensions during the marriage, at least a portion-if not all-of a pension will be classified as marital property and subject to distribution.
However, you cannot simply distribute a pension the same way you can distribute the funds in a bank account. Instead, you need to have a specific kind of legal document for dividing the pension.
QDROs and Pension Plans from Private Employers
What is a pension plan, and who provides yours? As an article in The Balance explains, a pension is “a type of retirement plan that provides monthly income in retirement.” While many employers do offer pensions, not all employers do. Typically, government organizations will offer pensions, and many larger private companies offer pensions to employees. Whether you have an Illinois government pension or a pension from a private employer will determine what you need to divide your retirement account in your divorce.
If your pension is through a private employer, then you will likely need a Qualified Domestic Relations Order, or QDRO for short. Typically, you cannot take money from a pension plan before the age of retirement without incurring a 10 percent penalty. A QDRO is a legal document allowing dividing the pension as ordered by the Court.
Government Pensions and QILDROs in Illinois
When the pension is through a government organization, then you may need a specific type of legal document that is like a QDRO. To divide State Employees’ Retirement System of Illinois (SERS) pensions (for example), you will need to get a Qualified Illinois Domestic Relations Order, or a QILDRO. Like a QDRO, the QILDRO is used to transfer SERS retirement benefits to an alternate payee in a Chicago divorce.
It is important to work with a Chicago property division lawyer when you need a QDRO or QILDRO. To get a QILDRO, a person getting divorced must obtain benefit information from SERS and provide it to the court. This needs to be done 60 days before a court date and planning for a QILDRO usually happens two or three months before a court date is set for an Illinois court to enter a QILDRO.
Contact a Lawyer in the Chicago area
Dividing pensions in an Illinois divorce can be extremely complicated. A Chicago pension division lawyer can answer your questions today. Contact Gordon & Perlut, LLC for more information about how we can assist you.