Illinois Qildro Form – Fill Out and Use This PDF

Foreword

The following information is designed to assist members when their retirement benefits are being considered for possible division in divorce/legal separation proceedings. The Metropolitan Water Reclamation District Retirement Fund (“MWRDRF” or “Fund”) office handles inquiries and benefit information requests for these purposes. A QILDRO (Qualified Illinois Domestic Relations Order) is an Illinois court order that transfers part or all of a member's retirement benefits to an alternate payee.

Much of the information provided is based on the express statutory language and requirements imposed upon Illinois public retirement systems by the QILDRO statute. This legislation, with an effective date of July 1, 1999, amended the Illinois Pension Code by adding new section 1-119 [40 ILCS 5/1- 119], and by modifying portions of the Illinois Marriage and Dissolution of Marriage Act [750 ILCS 5/503]. New modifications and clarifications were added to the Illinois Pension Code 1-119 (40 ILCS 5/1-119) effective July 1, 2006. The forms and instructions enclosed in this booklet pertain to benefits that will be effective (ordered by the judge and received by this Fund) after July 1, 2006. These forms will be invalid if provided to this Fund prior to July 1, 2006.

This subject matter may be of considerable financial significance. It is strongly recommended that the member obtain competent legal and/or other expert assistance. This information is provided with the understanding that the Fund is not rendering legal, financial, or other professional advice. MWRDRF does not assume responsibility for the specific consequences resulting from application of the information in this packet to a particular member or alternate payee. Inquiries concerning a QILDRO may be directed to the MWRDRF office at (312) 751-3222.

Disclaimer

The Fund has provided the en- closed materials based on the best information

available at the time of last publication. Similarly the Fund

will provide benefit information which is accurate at the time of the request.

The Fund has no responsibility to recalculate

information previously provided, nor to inform an alternate payee regarding any statutory changes that may effect the calculation of a member’s benefit, unless the Fund is subsequently served with a subpoena for new QILDRO benefit information. Receipt of a modified QILDRO could adversely affect an alternate payee’s payment priority.

The law provides that the Fund, as a result of the existence of a QILDRO, will never be required to disburse to the member and his/her alternate payee(s) accumulated amounts greater than the amount that would have been otherwise disbursed to the member. It is the responsibility of the alternate payee and his counsel to be aware of, and in compliance with, the Illinois statutes governing QILDRO as they may be amended or reinterpreted over the life of the

QILDRO.

Within 45 days after MWRDRF receives QILDRO

MWRDRF sends notice to involved parties*** regarding validity of QILDRO. If QILDRO uses percentages, MWRDRF will provide specific benefit information. See “Benefit Information Provided by MWRDRF “, page 8 of this publication.

Within 45 days after MWRDRF receives Calculation Order

If member is retired when MWRDRF receives QILDRO

MWRDRF sends notice to involved parties*** regarding validity of Calculation Order.

If QILDRO uses percentages, MWRDRF still needs a Calculation Order to implement QILDRO. Within 45 days of receipt, MWRDRF sends notice regarding validity of QILDRO and specific benefit information. See “Benefit Information Provided by MWRDRF”, page 8 of this publication.

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 directs an Illinois public retirement system such as the Metropolitan Water Reclamation District Retirement Fund to pay an alternate payee a portion of a member’s retirement benefit, or certain refunds or lump sum death benefit if applicable. An alternate payee is typically an ex-spouse, but may be a current spouse, child, or other dependent.

The QILDRO law applies to Illinois public pension systems governed by the Illinois Pension Code, 40 ILCS 5. Illinois public pension funds may only pay benefits to a former spouse according to a QILDRO. Illinois retirement systems cannot pay a former spouse based on a member’s judgment for dissolution of marriage or marital settlement agreement. QILDROs are different from, and should not be confused with Qualified Domestic Relations Orders, or QDROs. State law does not allow public retirement systems to honor QDROs.

Division of Benefits

MWRDRF benefits may be a marital asset. Your personal attorney should advise you whether a former spouse is entitled to any of your MWRDRF benefits. The MWRDRF cannot provide legal advice.

MWRDRF may only pay benefits to a former spouse according to a QILDRO. The MWRDRF cannot pay a former spouse based on a QDRO, judgment for dissolution of marriage, or marital settlement agreement. Even if MWRDRF has a valid QILDRO on file, payment cannot be accelerated to pay a former spouse before the MWRDRF member is paid. An alternate payee will only receive payment if and when the MWRDRF member receives payment. An alternate payee will never receive more or different benefits than the MWRDRF member is eligible to receive.

The new QILDRO (effective July 1, 2006) is intended to give added flexibility by allowing the divorcing couple and their attorneys to select from a variety of methods to allocate the amount payable

to the alternate payee. The MWRDRF member and former spouse, with advice from their attorneys and financial advisors, have some questions to consider:

•To which benefits will the QILDRO apply? The possibilities are retirement benefit, partial refund, a refund of contributions, or lump sum death benefit if applicable. The QILDRO may apply to some or all of the above, depending on what is decided in the divorce.

•What method will be used to determine the alternate payee’s share? Will the QILDRO specify dollar amounts? Will the QILDRO use a percentage of the marital portion? Or will the QILDRO use a percentage as of the retirement date?

•If using the marital portion benefit calculation formula, how will it be defined?

•If the QILDRO uses percentages, who will be responsible for obtaining the Calculation Order and sending it to MWRDRF?

•Will monthly retirement payments continue until one of you dies, or will the QILDRO terminate after a specific number of payments to the alternate payee?

You and your attorney should carefully review the QILDRO law and the required forms. The new law is detailed to help you consider the necessary issues. MWRDRF will provide benefit information to help you determine how the alternate payee’s share is to be allocated. The MWRDRF will also provide general information about MWRDRF benefits, procedures, and technical form requirements as explained in this publication. However, it is up to the divorcing couple and their attorneys to decide how to complete the QILDRO and the Calculation Order, if required. Every situation is unique. The MWRDRF cannot help you make these decisions, or perform any calculations for you.