Illinois Divorce Law...

Illinois Law - Can Pension Plans Be Divided?

Pension plans of either party may be divided.

Illinois has its own form of qualified domestic relations order, a Qualified Illinois Domestic Relations Order (QUILDRO).

The court uses one of two ways to do this. The two ways are:

• Current value. The court estimates the current value of the pension, using statistical projections. Then it awards the non-employee spouse a portion of that value in cash. This is called the "immediate offset" method.
• Actual distribution. The court decides what portion of the pension the non-employee spouse should get. Then, when the pension is actually distributed, the non-employee spouse gets that portion of each payment. This is called the "reserved jurisdiction" approach. Section 5/1-119.

Cases:

Marriage of Burkhart (1994) 205 Ill. Dec 317, 267 Ill. App.3d 761, 643 N.E.2d 268 (In this case, the appellate court determined the trial court's decision to apportion 40% of husband's military retirement pay to the wife and 60% to the husband, three years after the divorce, to be in error. The percentages for each party were calculated by dividing the number of months of the marriage by the years of military service, and dividing this in half. The court also considered the financial circumstances of the parties. However, the trial court erred in failing to properly reserve the pension issue for future deliberation and in failing to provide a proportionate division during the judgment for dissolution. The parties were married for 18 years and had two children, aged 17 and 15 at the time of divorce, whose custody was awarded to the wife. The husband was 40 years old, retired from the Navy, and had quit his trucking job at the time of the divorce while the wife was 35 years old and working as a cashier.)

Weiler (1994) 629 N.E.2d 1216 (The assets should have been valued at the date of the trial. The lower court erred by valuing them as of nine months earlier. The court should have pro-rated the contributions and earnings for the nine months after the last corporate contribution to the plan and before the trial date. In this case, the husband had a defined contribution pension. The husband had argued that some of the money accumulated in the plan after the marriage was non-marital. The husband's theory was that some of the accruals were earnings on the pre-marriage portion, and therefore were the husband's separate property. The court appeared to agree with the husband's reasoning. But the court disagreed with his method of calculation and sent the case back to the lower court for a recount. (Note: Most courts in most states would reject the husband's theory, here. Most courts say that all increases after the marriage in a defined contribution plan, including earnings on pre-marriage deposits, are marital property.) The court also found that a $4,000 contribution to the wife's IRA constituted a spousal gift, and caused that IRA to be his wife's separate property. In this case, the husband had testified that he had intended to make a gift and to give his wife total control over that money.)

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