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90_SB0152
40 ILCS 5/1-118 new
Amends the General Provisions Article of the Pension Code
to provide for the issuance of Qualified Illinois Domestic
Relations Orders (QILDRO's). Provides for a former spouse
designated in a QILDRO to receive all or a specified portion
of the retirement benefit, member's refund, surviving spouse
benefit, or death benefit otherwise payable to a member or
the member's beneficiary under the Code. Specifies
conditions and procedures. Requires the member's written
consent before a QILDRO is effective against a current
member. Effective January 1, 1998.
LRB9000597EGfg
LRB9000597EGfg
1 AN ACT to amend the Illinois Pension Code by adding
2 Section 1-118.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Pension Code is amended by
6 adding Section 1-118 as follows:
7 (40 ILCS 5/1-118 new)
8 Sec. 1-118. Qualified Illinois Domestic Relations
9 Orders.
10 (a) For the purposes of this Section:
11 (1) "Alternate payee" means the spouse, former
12 spouse, child, or other dependent of a member, as
13 designated in a QILDRO.
14 (2) "Benefit", when used in a general sense without
15 specifying the type of benefit, includes any payment of
16 money by a retirement system to a member or other
17 beneficiary, including the payment of a refund of
18 contributions.
19 (3) "Death benefit" means any nonperiodic benefit
20 payable upon the death of a member to the surviving
21 spouse of the member or to the member's estate or
22 designated beneficiary, including any refund of
23 contributions following the member's death, whether or
24 not the benefit is so called under the applicable Article
25 of this Code.
26 (4) "Disability benefit" means any periodic or
27 nonperiodic benefit payable to a disabled member based on
28 occupational or nonoccupational disability or disease,
29 including any periodic or nonperiodic increases in the
30 benefit, whether or not the benefit is so called under
31 the applicable Article of this Code.
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1 (5) "Member" means any person who participates in
2 or has service credits in a retirement system, including
3 a person who is receiving or is eligible to receive a
4 retirement or disability benefit, without regard to
5 whether the person has withdrawn from service.
6 (6) "Member's refund" means a return of all or a
7 portion of a member's contributions that is elected by
8 the member (or provided by operation of law) and is
9 payable before the member's death.
10 (7) "Qualified Illinois Domestic Relations Order"
11 or "QILDRO" means an order that creates or recognizes the
12 existence of an alternate payee's right to receive all or
13 a portion of a member's accrued benefits in a retirement
14 system, is issued pursuant to this Section and Section
15 503(1) of the Illinois Marriage and Dissolution of
16 Marriage Act, and meets the requirements of this Section.
17 A QILDRO is not the same as a qualified domestic
18 relations order or QDRO issued pursuant to Section 414(p)
19 of the Internal Revenue Code of 1986. The requirements
20 of paragraphs (2) and (3) of that Section do not apply to
21 orders issued under this Section and shall not be deemed
22 a guide to the interpretation of this Section; a QILDRO
23 is intended to be a domestic relations order within the
24 meaning of paragraph (11) of that Section.
25 (8) "Regular payee" means the person to whom a
26 benefit would be payable in the absence of an effective
27 QILDRO.
28 (9) "Retirement benefit" means any periodic or
29 nonperiodic benefit payable to a retired member based on
30 age or service, or on the amounts accumulated to the
31 credit of the member for retirement purposes, including
32 any periodic or nonperiodic increases in the benefit,
33 whether or not the benefit is so called under the
34 applicable Article of this Code.
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1 (10) "Retirement system" or "system" means any
2 retirement system, pension fund, or other public employee
3 retirement benefit plan that is maintained or established
4 under any of Articles 2 through 18 of this Code.
5 (11) "Surviving spouse" means the spouse of a
6 member at the member's death or a former spouse of the
7 member who is entitled to a specific accrued benefit
8 under a QILDRO.
9 (12) "Surviving spouse benefit" means any periodic
10 benefit payable to the surviving spouse of a deceased
11 member, including any periodic or nonperiodic increases
12 in the benefit, but excluding any portion of such a
13 benefit payable on behalf of or by reason of the
14 existence of surviving children of the member, whether or
15 not the benefit is so called under the applicable Article
16 of this Code.
17 (b) (1) A court of competent jurisdiction in a
18 proceeding for declaration of invalidity of marriage, legal
19 separation, or dissolution of marriage that provides for the
20 distribution of property, or any proceeding to amend or
21 enforce such a property distribution, may order that all or
22 any part of any (i) retirement benefit, (ii) member's refund
23 payable to or on behalf of the member, (iii) death benefit
24 payable to the member's surviving spouse, estate, or
25 designated beneficiary, or (iv) a surviving spouse benefit,
26 be instead paid by the retirement system to a designated
27 alternate payee.
28 (2) An order issued under this Section provides only for
29 the diversion to an alternate payee of certain benefits
30 otherwise payable by the retirement system under the
31 provisions of this Code. In no event shall the existence of
32 a QILDRO cause the retirement system to pay any benefit, or
33 any amount of benefit, to an alternate payee that would not
34 have been payable by the system to a regular payee in the
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1 absence of the QILDRO.
2 (3) A QILDRO shall not affect the vesting, accrual or
3 amount of any benefit, nor the date or conditions upon which
4 any benefit becomes payable, nor the right of the member or
5 the member's survivors to make any election otherwise
6 authorized under this Code, except as provided in subsections
7 (j) and (k).
8 (4) A QILDRO shall not apply to nor affect the payment
9 of any disability benefit, life insurance benefit, or health
10 insurance benefit.
11 (c) (1) A QILDRO must contain the name, residence
12 address and social security number of the member and of the
13 alternate payee, and must identify the retirement system to
14 which it is directed and the court issuing the order.
15 (2) A QILDRO must specify each benefit to which it
16 applies, and it must specify the amount of the benefit to be
17 paid to the alternate payee, which in the case of a
18 nonperiodic benefit shall be expressed as a dollar amount,
19 and in the case of a periodic benefit shall be expressed as a
20 dollar amount per month.
21 (3) With respect to each benefit to which it applies, a
22 QILDRO must specify when the order will take effect. In the
23 case of a periodic benefit that is being paid at the time the
24 order is accepted, a QILDRO shall take effect immediately or
25 on a specified later date; if it takes effect immediately, it
26 shall become effective on the first benefit payment date
27 occurring at least 30 days after the order is accepted by the
28 retirement system. In the case of any other benefit, a
29 QILDRO shall take effect when the benefit becomes payable.
30 However, in no event shall a QILDRO apply to any benefit paid
31 by the retirement system before or within 30 days after the
32 order is accepted, except as provided in subsection (e). A
33 retirement system may adopt rules to prorate the amount of
34 the first and final periodic payments to an alternate payee.
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1 (4) A QILDRO must also contain any provisions required
2 under subsection (o) or (q).
3 (d) (1) An order issued under this Section shall not be
4 implemented unless a certified copy of the order has been
5 filed with the retirement system, and the system has accepted
6 the order.
7 (2) The retirement system shall examine the order and
8 either accept it or reject it within 90 days after receiving
9 the order. If the system finds that the order meets the
10 requirements of this Section, it shall accept the order and
11 promptly notify the member and the alternate payee by
12 certified mail of its acceptance of the order. If the system
13 rejects the order, the system shall promptly notify the
14 court, the member and the alternate payee by certified mail
15 of its rejection of the order. The notice of rejection shall
16 include a specific explanation of the manner in which the
17 order fails to comply with the requirements of this Section.
18 (3) The final decision to accept or reject an order
19 under this Section may be made by any authorized employee of
20 the retirement system and does not require an action by the
21 board of the retirement system or a hearing.
22 (4) Neither the retirement system, nor its board, nor
23 any of its employees shall incur any liability or be subject
24 to any sanction by the court for the rejection of an order
25 under this Section made in good faith.
26 (5) Neither the retirement system, nor its board, nor
27 any of its employees shall be liable to the member, the
28 regular payee, or any other person for any amount of a
29 benefit that is either (i) paid in good faith to an alternate
30 payee in accordance with an accepted QILDRO, or (ii) withheld
31 or not withheld under subsection (e).
32 (e) If a retirement system rejects an order that applies
33 to a benefit that is payable or being paid by the system at
34 the time the order is rejected, and if the system is able to
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1 identify the affected member and benefit and the amount of
2 the benefit payable to the alternate payee under the rejected
3 order, then the system shall withhold payment of the amount
4 of the benefit that would have been payable to the alternate
5 payee if the rejected order had instead been accepted. Such
6 withholding, however, shall not be effected in either of the
7 following situations: (i) the rejected order specifies a
8 percentage instead of a dollar amount; or (ii) the rejected
9 order relates to a member from whom a consent is required
10 under subsection (n), but no such consent has been submitted
11 to the system. Any amounts withheld shall be held by the
12 system for the alternate payee pending clarification of the
13 order by the court. If an amended order is not accepted by
14 the system within 180 days from the date of rejection of the
15 initial order, the system shall pay the benefit and the
16 amounts held to the regular payee, and the interest of the
17 alternate payee in any amounts so paid shall be extinguished.
18 Amounts held by a retirement system under this subsection
19 shall not bear interest.
20 (f) (1) Each alternate payee is responsible for
21 maintaining a current residence address on file with the
22 retirement system. The retirement system shall have no duty
23 to attempt to locate any alternate payee by any means other
24 than sending written notice to the last known address of the
25 alternate payee on file with the system.
26 (2) In the event that the system cannot locate an
27 alternate payee when a benefit becomes payable, the system
28 shall hold the amount of the benefit payable to the alternate
29 payee and make payment to the alternate payee if he or she is
30 located within the following 180 days. If the alternate
31 payee has not been located within 180 days from the date the
32 benefit becomes payable, the system shall pay the benefit and
33 the amounts held to the regular payee. If the alternate
34 payee is subsequently located, the system shall thereupon
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1 implement the QILDRO, but the interest of the alternate payee
2 in any amounts already paid to the regular payee shall be
3 extinguished. Amounts held under this subsection shall not
4 bear interest.
5 (g) (1) If the amount of a benefit that is specified in
6 a QILDRO for payment to an alternate payee exceeds the
7 actual amount of that benefit payable by the retirement
8 system, the excess shall be disregarded. The retirement
9 system shall have no liability to any alternate payee or any
10 other person for the disregarded amounts.
11 (2) In the event of multiple QILDRO's against a member,
12 the retirement system shall honor all of the QILDRO's to the
13 extent possible. However, if the total amount of a benefit
14 to be paid to alternate payees under all QILDRO's in effect
15 against the member exceeds the actual amount of that benefit
16 payable by the system, the QILDRO's shall be satisfied in the
17 order of their acceptance by the system until the amount of
18 the benefit is exhausted, and shall not be adjusted pro rata.
19 Any amounts that cannot be paid due to exhaustion of the
20 benefit shall remain unpaid, and the retirement system shall
21 have no liability to any alternate payee or any other person
22 for such amounts.
23 (3) A modification of a QILDRO shall be subject to
24 acceptance or rejection by the retirement system under
25 subsection (d) in the same manner as a new QILDRO. A
26 modification that does not increase the amount of any benefit
27 payable to the alternate payee, and does not expand the
28 QILDRO to affect any benefit not affected by the unmodified
29 QILDRO, does not affect the priority of payment under
30 subdivision (g)(2); the priority of payment of a QILDRO that
31 has been modified to increase the amount of any benefit
32 payable to the alternate payee, or to expand the QILDRO to
33 affect a benefit not affected by the unmodified QILDRO, shall
34 be based on the acceptance date of the modification of the
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1 QILDRO.
2 (h) (1) Upon the death of the alternate payee under a
3 QILDRO, the QILDRO shall expire and cease to be effective,
4 and in the absence of another QILDRO, the right to receive
5 any affected benefit shall revert to the regular payee.
6 (2) All QILDRO's relating to a member's participation in
7 a particular retirement system shall expire and cease to be
8 effective upon the issuance of a member's refund that
9 terminates the member's participation in that retirement
10 system, without regard to whether the refund was paid to the
11 member or to an alternate payee under a QILDRO. An expired
12 QILDRO shall not be automatically revived by any subsequent
13 return by the member to service under that retirement system.
14 (i) Within 45 days after receiving a subpoena from any
15 party to a proceeding for declaration of invalidity of
16 marriage, legal separation, or dissolution of marriage in
17 which a QILDRO may be issued, or after receiving a request
18 from the member, a retirement system shall issue a statement
19 of a member's accumulated contributions, accrued benefits and
20 other interests in the plan administered by the retirement
21 system, and of any relevant procedures, rules or
22 modifications to the model QILDRO form that have been adopted
23 by the retirement system. In no event shall the retirement
24 system be required to furnish to any person an actuarial
25 opinion as to the present value of the member's benefits or
26 other interests. The papers, entries, and records, or parts
27 thereof, of any retirement system may be proved by a copy
28 thereof, certified under the signature of the secretary of
29 the system or other duly appointed keeper of the records of
30 the system and the corporate seal, if any.
31 (j) In a retirement system in which a member or
32 beneficiary is required to apply to the system for payment of
33 a benefit, the required application may be made by an
34 alternate payee who is entitled to all of that benefit under
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1 an accepted QILDRO, provided that all other qualifications
2 and requirements have been met. However, the alternate payee
3 may not make the required application for a member's refund
4 or a retirement benefit if the member is in active service or
5 below the minimum age for receiving an undiscounted
6 retirement annuity in the retirement system that has accepted
7 the QILDRO or in any other retirement system in which the
8 member has creditable service and in which the member's
9 rights under the Retirement Systems Reciprocal Act would be
10 affected as a result of the alternate payee's application for
11 a member's refund or retirement benefit.
12 (k) (1) So long as there is an accepted QILDRO relating
13 to a member's retirement benefit, the affected member may not
14 elect a form of payment that has the effect of diminishing
15 the amount of the payment to which any alternate payee is
16 entitled, unless the alternate payee has consented to the
17 election in writing and this consent has been filed with the
18 retirement system.
19 (2) If a member attempts to make an election prohibited
20 under subdivision (k)(1), the retirement system shall reject
21 the election and advise the member of the need to obtain the
22 alternate payee's consent.
23 (3) If a retirement system discovers that it has
24 mistakenly allowed an election prohibited under subdivision
25 (k)(1), it shall thereupon disallow that election and
26 recalculate any benefits affected thereby. If the system
27 determines that an amount paid to a regular payee should have
28 been paid to an alternate payee, the system shall, if
29 possible, recoup the amounts as provided in subsection (l) of
30 this Section.
31 (l) In the event that a regular payee or an alternate
32 payee is overpaid, the retirement system shall recoup the
33 amounts by deducting the overpayment from future payments and
34 making payment to the other payee. The system may make
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1 deductions for recoupment over a period of time in the same
2 manner as is provided by law or regulation for the recoupment
3 of other amounts incorrectly disbursed by the system in
4 instances not involving a QILDRO. The retirement system
5 shall incur no liability to either the alternate payee or the
6 regular payee as a result of any payment made in good faith,
7 regardless of whether the system is able to accomplish
8 recoupment.
9 (m) (1) A retirement system that has, before the
10 effective date of this Section, received and implemented a
11 domestic relations order that directs payment of a benefit to
12 a person other than the regular payee may continue to
13 implement that order, and shall not be liable to the regular
14 payee for any amounts paid in good faith to that other person
15 in accordance with the order.
16 (2) A domestic relations order directing payment of a
17 benefit to a person other than the regular payee that was
18 issued by a court but not implemented by a retirement system
19 prior to the effective date of this Section shall be void.
20 However, a person who is the beneficiary or alternate payee
21 of a domestic relations order that is rendered void under
22 this subsection may petition the court that issued the order
23 for an amended order that complies with this Section.
24 (n) (1) In accordance with Article 13, Section 5 of the
25 Illinois Constitution, which prohibits the impairment or
26 diminishment of benefits granted under this Code, a QILDRO
27 issued against a member of a retirement system established
28 under an Article of this Code that exempts the payment of
29 benefits or refunds from attachment, garnishment, judgment or
30 other legal process shall not be effective without the
31 written consent of the member if the member began
32 participating in the retirement system on or before the
33 effective date of this Section. That consent must specify
34 the retirement system, the court case number, and the names
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1 and social security numbers of the member and the alternate
2 payee. The consent must accompany the QILDRO when it is
3 filed with the retirement system, and must be in
4 substantially the following form:
5 CONSENT TO ISSUANCE OF QILDRO
6 Court Case Number: ....................
7 Member's Social Security Number: ........................
8 Alternate payee's Social Security Number: ...............
9 I, (name), a member of the (retirement system), hereby
10 consent to the issuance of a Qualified Illinois Domestic
11 Relations Order. I understand that under the Order, certain
12 benefits that would otherwise be payable to me, or to my
13 surviving spouse or estate, will instead be payable to (name
14 of alternate payee). I also understand that my right to
15 elect certain forms of payment of my retirement benefit or
16 member's refund may be limited as a result of the Order.
17 DATED:.......................
18 SIGNED:......................
19 (2) A member's consent to the issuance of a QILDRO shall
20 be irrevocable, and shall apply to any QILDRO that pertains
21 to the alternate payee and retirement system named in the
22 consent.
23 (o) An order issued under this Section may be rejected
24 by a retirement system if it is not substantially in the
25 following form (omitting any provisions that are not
26 applicable):
27 QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER
28 THIS CAUSE coming before the Court for the purpose of the
29 entry of a Qualified Illinois Domestic Relations Order under
30 the provisions of Section 1-118 of the Illinois Pension Code,
31 the Court having jurisdiction over the parties and the
32 subject matter hereof; the Court finding that one of the
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1 parties to this proceeding is a member of a retirement system
2 subject to Section 1-118 of the Illinois Pension Code, this
3 Order is entered to implement a division of that party's
4 interest in the retirement system; and the Court being fully
5 advised;
6 IT IS HEREBY ORDERED AS FOLLOWS:
7 (1) The definitions and other provisions of Section
8 1-118 of the Illinois Pension Code are adopted by reference
9 and made a part of this Order.
10 (2) Identification of Retirement System and parties:
11 Retirement System: (name and address)
12 Member: (name, residence address and social security
13 number)
14 Alternate payee: (name, residence address and social
15 security number)
16 (3) The Retirement System shall pay the indicated
17 amounts of the following specified benefits to the alternate
18 payee under the following terms and conditions:
19 (i) Of the member's retirement benefit, the
20 Retirement System shall pay to the alternate payee
21 $...... per month, beginning (if the benefit is already
22 being paid, either immediately or on a specified later
23 date; otherwise, on the date the retirement benefit
24 commences), and ending upon the termination of the
25 retirement benefit or the death of the alternate payee,
26 whichever occurs first.
27 (ii) Of any death benefit payable upon the death of
28 the member, the Retirement System shall pay to the
29 alternate payee $...... when the death benefit becomes
30 payable.
31 (iii) Of any member's refund that becomes payable,
32 the Retirement System shall pay to the alternate payee
33 $...... when the member's refund becomes payable.
34 (iv) Of any surviving spouse benefit that becomes
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1 payable upon the death of the member, the Retirement
2 System shall pay to the alternate payee $...... per month
3 when the benefit becomes payable.
4 (4) In accordance with subsection (k) of Section 1-118
5 of the Illinois Pension Code, so long as this QILDRO is in
6 effect, the member may not elect a form of payment of the
7 retirement benefit that has the effect of diminishing the
8 amount of the payment to which the alternate payee is
9 entitled, unless the alternate payee has consented to the
10 election in writing and this consent has been filed with the
11 retirement system.
12 (5) If the member began participating in the Retirement
13 System before the effective date of this Section, this Order
14 shall not take effect unless accompanied by the written
15 consent of the member as required under subsection (n) of
16 Section 1-118 of the Illinois Pension Code.
17 (6) The Court retains jurisdiction to modify this Order
18 to conform it to the requirements imposed by Section 1-118 of
19 the Illinois Pension Code and any rules adopted by the
20 Retirement System under that Section.
21 (7) The Court reserves jurisdiction to modify this
22 Order.
23 DATED:.......................
24 SIGNED:......................
25 (p) (1) The Administrative Review Law and the rules
26 adopted pursuant thereto shall apply to and govern all
27 proceedings for the judicial review of final administrative
28 decisions of a board of trustees of a retirement system with
29 respect to the administration of an accepted QILDRO.
30 (2) A court in Illinois that has issued a QILDRO shall
31 retain jurisdiction of all issues relating to the acceptance,
32 rejection, or modification of the QILDRO. The Administrative
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1 Review Law and the rules adopted pursuant thereto shall
2 govern and apply to all proceedings for judicial review of
3 final administrative decisions of the board of trustees of
4 the retirement system concerning the acceptance or rejection
5 of a QILDRO issued by a court outside the State of Illinois.
6 (3) The term "administrative decision" is defined as in
7 Section 3-101 of the Code of Civil Procedure. The venue for
8 review under the Administrative Review Law shall be the same
9 as is provided by law for judicial review of other
10 administrative decisions of the retirement system.
11 (q) (1) Each retirement system may adopt any procedures
12 or rules that it deems necessary or useful for the
13 implementation of this Section.
14 (2) Each retirement system may by rule modify the model
15 QILDRO form provided in subsection (o) or require that
16 additional information be included in QILDRO's presented to
17 the system, as may be necessary to meet the needs of the
18 retirement system.
19 Section 99. Effective date. This Act takes effect
20 January 1, 1998.