Division of benefits
TRS benefits may be a marital asset. Your personal attorney should advise you about whether a former spouse is entitled to any of your TRS benefits and the proper division of those benefits under Illinois law. TRS cannot tell you how to divide those benefits or provide legal or other advice about your divorce.
What is a QILDRO?
“QILDRO” is an acronym for Qualified Illinois Domestic Relations Order (pronounced kwil-dro). A QILDRO is a court order issued by an Illinois court that requires an Illinois public retirement system, such as TRS, to pay an alternate payee a designated portion of a TRS member’s retirement benefit, certain refunds, or lump-sum death benefit.
Even if TRS has a valid QILDRO on file, payment cannot be accelerated to pay an alternate payee before the TRS member is paid. An alternate payee will only receive payment if and when the TRS member receives payment. An alternate payee will never receive more or different benefits than the TRS member is eligible to receive.
The divorcing couple and their attorneys decide how to complete the QILDRO and Calculation Order. TRS cannot help you make these decisions, perform any calculations for you, or tell you whether the numbers in the QILDRO or Calculation Order are accurate or consistent with what was decided in the divorce.
TRS may only pay benefits to a former spouse according to a QILDRO. TRS cannot pay benefits based on a QDRO, judgment of dissolution, or marital settlement agreement.
Who is an alternate payee?
An alternate payee is typically an ex-spouse, but may be a current spouse, child, or other dependent of the member.
Whenever the term “spouse” is used in this publication, “civil union partner” also applies.
Issues to consider
The QILDRO allows several methods to allocate the alternate payee share. The divorcing couple, with advice from their attorneys and financial advisors, should consider the following:
- What will the QILDRO allocate to the alternate payee: retirement benefit, partial refund, termination refund or lump-sum retirement benefit, or lump-sum death benefit? The QILDRO may apply to any or all, depending on what is decided in the divorce.
- Which method will be used to designate the alternate payee’s share: dollar amount, percentage of the marital portion, or percentage as of the retirement date?
- Will monthly QILDRO payments continue until death, or will the QILDRO terminate after a specified number of payments?
- For percentage QILDROs, who will be responsible for obtaining the Calculation Order and sending it to TRS?
What is a Calculation Order?
The QILDRO Calculation Court Order (Calculation Order) is a court order issued by an Illinois court that tells TRS the amount of the benefit or refund to pay the alternate payee.
The Calculation Order is a separate court order from the QILDRO. TRS must receive a Calculation Order before the alternate payee may be paid. The Calculation Order may be submitted with the QILDRO, or later when the amount of the affected benefit or refund is known. This two-step process may be useful when divorce occurs before the member retires.
What benefits may be paid through a QILDRO?
An alternate payee may only receive the following:
- Retirement benefits
- Termination refund/lump-sum retirement benefit
- Certain “partial refunds”
- Lump-sum death benefit
The QILDRO may allocate portions of one, several, or all of these benefits and refunds to the alternate payee. For more information about TRS benefits, see the Tier I Member Guide or Tier II Member Guide available on the TRS website.
Tier I applies to all members who first contributed to a TRS-covered position prior to Jan. 1, 2011, or have any previous service credit with TRS or a reciprocal pension system prior to 2011, even if they left TRS or a reciprocal pension system at any time and then returned to a TRS-covered position.
Tier II applies to all members who first contributed to a position covered by TRS on or after Jan. 1, 2011 and do not have any previous service credit in a pension system that has reciprocal rights with TRS.
The QILDRO allows the alternate payee to receive a designated portion of the following partial refunds that a member may receive:
- Refund of survivor benefit contributions payable to a member before death, if the member does not have any dependent beneficiaries
- Refund of retirement contributions for service credit exceeding 34 years after July 1, 1998, if the Tier I member did not elect a 2.2 upgrade of pre-July 1, 1998 service credit
- Certain upgrade cost refunds payable to a Tier I member who elected a 2.2 upgrade of pre-July 1, 1998 service credit
- Refund of contributions for excess optional service
- Refund of an Early Retirement Option (ERO) contribution payable to a Tier I member who did not retire under the provisions of ERO
The amount an alternate payee may possibly receive from all partial refunds will never exceed what is provided in the QILDRO.
What benefits are not payable through a QILDRO?
Monthly survivor benefits, disability benefits, and health insurance cannot be reached through a QILDRO. A QILDRO does not make a former spouse eligible to participate in a TRS member’s insurance.
What is the consent requirement?
If TRS membership started before the QILDRO law took effect on July 1, 1999, the member’s signed consent form must accompany the QILDRO. The consent form is available on the TRS website along with the other QILDRO forms. The consent form must be signed by the member. No one else may sign or compel signature. There is no consent requirement if TRS membership started on or after July 1, 1999.
What about Social Security numbers?
The law requires Social Security numbers (SSNs) in QILDROs and Calculation Orders for tax reporting obligations associated with payment of benefits and refunds. TRS understands identity protection concerns and has policies and procedures in place to protect your SSN. If complete SSNs are not shown on the court order, SSNs must be provided to TRS on an accompanying Notice of Confidential Information Within Court Filing form. The SSN form is available on the TRS website along with the other QILDRO forms. The SSN form is not needed if complete SSNs are included on the face of the court order.
What about death benefits?
Death benefits are paid according to the most recent beneficiary designation on file with TRS at the time of death irrespective of what the judgment of dissolution may state. When you divorce, review your beneficiary designation on file with TRS and make any desired changes to ensure that death benefits will be paid to your intended beneficiaries. To change your beneficiary designation, you must complete and file a new beneficiary designation form with TRS. The form is available on the TRS website, http://www.trsil.org, or by calling TRS at 877-927-5877 (877-9-ASK-TRS).
The QILDRO law allows an alternate payee to receive a share of any lump-sum death benefit payable upon a TRS member’s death. However, monthly survivor benefits are never payable through a QILDRO. Here are some things to keep in mind when considering TRS death benefits in divorce:
- TRS does not provide an automatic spousal death benefit. The member’s current spouse will not receive any death benefit from TRS unless designated by the member as a beneficiary.
- The member’s former spouse will not receive any death benefit from TRS unless named by the member as a beneficiary or the QILDRO allocates a share of the lump-sum death benefit to the alternate payee.
- A former spouse is never eligible to receive monthly survivor benefits, even if named as beneficiary or alternate payee in the QILDRO. Only a lump-sum death benefit may be paid to a former spouse.
- If an ex-spouse is named on the TRS beneficiary designation form, none of the other designated dependent beneficiaries (e.g., current spouse or minor children) will be eligible to receive monthly survivor benefits. You may wish to discuss the potential impact on dependent beneficiaries with your personal attorney.
- A dependent beneficiary will have the option of a lump-sum or monthly annuity. Lump-sum death benefits payable to the QILDRO alternate payee could be reduced to $1,000 based on the option elected by a dependent beneficiary.
- A TRS member has a statutory right to name any person or entity as a beneficiary and to change the beneficiary designation at any time. TRS cannot compel or prevent the member from naming anyone they want as a beneficiary.
What about disability benefits?
TRS disability benefits are not payable to an alternate payee through a QILDRO. If a TRS member is receiving disability and transfers to an age retirement annuity, a valid QILDRO on file with TRS will be implemented once the member begins receiving age retirement annuity payments.
What about health insurance benefits?
TRS does not provide health insurance benefits. A QILDRO does not provide any insurance coverage or make an alternate payee eligible to participate in the member’s insurance.
What about past or out-of-state divorces?
Please seek advice from your personal attorney about obtaining a QILDRO based on a past divorce.
Courts in other states do not have statutory authority or jurisdiction to issue QILDROs. However, an Illinois court may be asked to enter a QILDRO based on your out-of-state divorce. Please seek advice from your personal attorney if you were divorced in a state other than Illinois and you wish to obtain a QILDRO.
TRS does not honor QDROs
TRS does not honor QDROs. QDROs are issued under the Employee Retirement Income Security Act of 1974, or ERISA, which does not apply to TRS. A QILDRO is the only way that TRS may pay a former spouse any part of your TRS benefits.