QDRO and QILDRO
Qualified Domestic Relations Orders and Qualified Illinois Domestic Relations Order
If you or your spouse had or has interest in a retirement plan, such as a defined benefit plan (also known as pension plan) or a defined contribution plan (a 401(k) type plan) and you will be dividing that interest, you will need a special court order known as a Qualified Domestic Relations Order (“QDRO”) or, if it is an Illinois State or municipality plan (such as SURS, or TRS or Chicago Public Schools pension), a Qualified Illinois Domestic Relations Order (“QILDRO”).
Having an experienced QDRO/QILDRO lawyer is important as these Orders must be drafted carefully and contain the appropriate protections, including pre-retirement survivor annuity (in case of Participant’s death before retirement), cost-of-living adjustment provisions and other protections. Alternatively, if the Judgment for Dissolution of Marriage or Civil Union does not grant certain interests in the Plan, the Orders should not provide anything that would inappropriately reduce the Participant’s portion.
Since the wording of the Judgment controls the wording of the QDRO or QILDRO, it is important that the proper provision and formulas are used. Just using the right Illinois QDRO (QILDRO) form is not enough. As an experienced QDRO attorney, I can help. For example, the difference between “50% as of divorce” versus using the coverture formula (50% of the result of multiplying the benefit at retirement by a fraction, the numerator of which is time participating in the plan during the marriage and the denominator of which is the total time participating in the plan) could meet hundreds of dollars difference per month. I have the expertise to draft or review a draft of any QDRO or QILDRO, and can review your Judgment before entry to make sure it contains the appropriate language to protect your interests.
I have a successfully processed QDRO’s and QILDRO’s in cases in Cook, DuPage, and throughout Illinois and beyond.
QDRO’s are controlled by and must comply with federal law.
After I draft the QDRO, I submit it to the Plan Administrator for pre-approval. Once pre-approved, I motion the court for entry of the QDRO. Once entered by the Judge, I obtain a certified copy of the QDRO and provide that copy to the Plan Administrator.
If the plan is a 401(k) type plan, the Plan Administrator will implement the QDRO and divide the Participant’s (person that participated in the plan) portion per the QDRO, rolling over the Alternate Payee’s (other party) share of that portion into a new account in his/her name.
If the plan is a pension type plan (a plan that will pay a monthly benefit from time of retirement until death), the Plan Administrator will implement the QDRO and wait until the Alternate Party is eligible to receive his/her monthly benefit based on the Alternate Payee’s expected life span. Some Plan’s do not have this option, and the Alternate Payee must wait until the Participant actually retires, to receive the Alternate Payee’s full benefit.
The retirement plans requiring a QDRO to be divided can be very complicated. The terms of the QDRO are very arcane, but extremely important. The wrong wording can cause one to gain tens or hundreds of thousands of dollars more/less, or loose all interest in a retirement plan when the other party dies. Each plan and its division should be handled by an experienced attorney. Read more here.
QILDRO’s are controlled by Illinois State law and only and Illinois court can enter a QILDRO.
I draft the QILDRO, which starts with the appropriate Illinios QILDRO form, and motion the court for its entry. Note that QILDRO’s can be accompanied by an Order that further elaborates the parties’ rights. Once entered by the Judge, I obtain a certified copy of the QILDRO and provide that copy to the Plan Administrator along with the Consent to Issuance of the QILDRO which must be signed by the Plan Participant in some cases and a processing fee of $50.
The Plan Administrator will implement the QDRO and wait until the Participant applies for retirement, at which time the Plan Administrator will provide the Alternate Payee (the former spouse/partner) the retirement benefit amounts. The Alternate Payee will have to input these numbers into a QILDRO Calculation Court Order (QCCO) and have it entered by the court. A certified copy of this Order will have to be provided to the Plan Administrator to receive payments.
The retirement plans requiring a QILDRO can be very complicated. The terms of the QILDRO are very complex. It may seem simple, as you only need to check boxes on the QILDRO, but choosing wrong calculation method will determine how the monthly benefit will be calculated in the QILDRO Calculation Order. The outcome could amount to a large difference each month.
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Please call, e-mail or use the contact form below to contact me. It would also be helpful if you complete and submit the QDRO/QILDRO Questionnaire. I can review your QILDRO or QDRO, or advise you regarding each, regardless of your location.