How Are Pensions Split in Divorce?


All dissolution of marriage cases involve dividing your marital estate. The impact of that division may affect you for years to come. That’s why our Illinois divorce attorneys work diligently to consider every aspect of your financial profile—including pensions.

Like other marital assets, pensions will be divided during divorce and allocated to each party as determined by the court. What makes pensions slightly more complicated is that their worth accrues over time and is not a lump sum that can be neatly divided at the time of your divorce.

Are pensions divided in a divorce?

A pension may be a marital asset if it was acquired, in whole or in part, during the marriage. Similar to investments and 401(k) plans, a pension is subject to equitable distribution during divorce. The trial court considers a long list of factors and facts to determine the appropriate outcome. What a court may order in your case is very fact-specific.

A pension may be partially non-marital. This would occur when the pension holder acquires part of his or her interest prior to the marriage. For example, Spouse A works at a railroad and begins accruing an interest in their pension. Spouse A then marries Spouse B. During the marriage, Spouse A continues to accrue their interest. When the spouses divorce, they will need to determine how much of the pension is marital and how much is non-marital.

What about pensions earned before the marriage?

The first step in dividing a pension is to determine what portion is non-marital and what is marital. Non-marital assets are awarded to the owner while marital assets are divided equitably.

Pensions are most commonly divided between the marital and non-marital estates with a coverture formula, often called the “Hunt” formula. This formula allows us to determine what portion of the pension is marital and what portion is nonmarital.

The Hunt formula is the number of months in which the pension accrued during marriage divided by the total number of months in which the pension accrued (inclusive of the months during marriage).

The result of the Hunt formula is a multiplier that determines what percentage of the total pension value is marital. From there, that marital portion is divided with a qualified domestic relations order, just like a 401(k).

For example:

Let’s assume your spouse began earning a pension five years prior to your marriage. Then, the pension continued accruing funds for the duration of your 10-year marriage. At the dissolution of your marriage, two-thirds of the pension is a marital asset and will be divided equitably. For the sake of this example, let’s assume equitable distribution is 50/50.

So, two-thirds of your spouse’s pension will be divided by two, and you’ll each receive half. Ultimately, you’re going to receive one third of your spouse’s pension according to the Hunt formula because you will not receive any of the funds accrued in the first five years prior to marriage.

What is a Qualified Illinois Domestic Relations Order?

In Illinois divorces, many of our clients with pensions have worked in public service careers and their pensions are funded by the Illinois government. To ensure you receive the equitable portion of your or your spouse’s pension, you’ll need to file a Qualified Illinois Domestic Relations Order (QILDRO).

If you or your spouse receives (or will receive) a private pension, then you’ll use a Qualified Domestic Relations Order (QDRO).

In both cases, the order will instruct the pension plan to pay out accordingly and both spouses will receive payments from the pension pursuant to the order. Our attorneys at Stern Perkoski Mendez will assist you in obtaining and filing the appropriate order and sending it to your chosen pension administrator.

Alternatives to Dividing a Pension

If your spouse is particularly averse to dividing their pension, there are alternatives to an equitable division.

You and your spouse can receive offsets for the disparate values of your assets. A marital balance sheet (example here) is a good way to begin to understand how property could be divided—though you’ll eventually need to go into much more detail on your financial affidavit.

These alternatives are easier to compromise on in amicable divorces, collaborative divorces or mediation. Whichever route you choose, even if litigation is necessary, our attorneys are committed to working with you to find the best solution for you and your family, and to ensure you receive the marital assets you deserve.

Contact our Divorce and Family Law Firm

Disentangling years of joint finances is complicated, and you deserve an attorney who knows the ins and outs of Illinois pensions. Contact our divorce and family law firm for a free consultation and to be paired with an attorney who specializes in financially complex divorces. We have offices on the North Shore in Evanston and Lake Forest, downtown Chicago in the Loop, and in DuPage County. Our team will happily meet at the location most convenient for you.

Get in Touch

For a free consultation, call Stern Perkoski Mendez at (847) 868-9584 or contact us.