Illinois Matrimonial & Family Law

401(k)s, Pensions, and QDROs

by Wes Cowell; updated 23 December 2015 -- suggest a correction

A federal law, the Employee Retirement Income Security Act (ERISA), protects retirement investments in most voluntarily established, private-sector retirement plans from being garnished or seized by creditors . . . including a divorcing spouse.   That means to divide a retirement account, one must tap into the authority of the federal law.  Need Advice?  Call, leave your info, or schedule a consultation.

401(k)s:

Pensions:

Railroaad Retirement Benefits:  Under Hisquerdo and Crook, benefits under the Railroad Retirement Act cannot be divided, nor may they be consiered by the court to award an offset for their value.  In re:  Marriage of Frank, 2015 IL App (3d) 140292.

Federal benefits, including railroad pensions and Social Security payments, may not be divided directly or used as an offset in a marital property distribution. In re Marriage of Crook, 211 Ill. 2d 437, 449-50 (2004); Hisquierdo v. Hisquierdo, 439 U.S. 572, 582 (1979). Principles of federal preemption prevent state courts from considering federal pension benefits in dissolution proceedings. Crook, 211 Ill. 2d at 444. A state court order distributing a portion of the benefit to a former spouse would be contrary to congressional intent and would disrupt the national scheme and the national uniformity inherent in federal pension programs. Crook, 211 Ill. 2d at 446-47 (quoting Hisquierdo, 439 U.S. at 584). The Crook court acknowledged the "potential inequities implicated by the federal preemption protection" but stated that it was bound by federal preemption. Crook, 211 Ill. 2d at 451-52.

In re:  Marriage of Frank, 2015 IL App (3d) 140292.