Whether a divorce is settled or goes to trial, the final judgment requires considerable and careful crafting. Many divorces involve division of pension and retirement benefits of one or both spouses. The appellate court case of Marriage of Benson shows yet again the importance of having legal counsel who is experienced with divorce, retirement plans, and legal document drafting.
The Bensons’ divorce went to trial. Their 1999 divorce judgment awarded the ex-wife (Nancy) one-half of the “retirement plan” benefits of her ex-husband (David), a firefighter. In 2008 David was injured at work and began receiving disability benefits. David was eligible to retire and draw his retirement pension at that time. More than five years later, Nancy filed a petition to enforce the terms of the divorce judgment, asking that David pay part of his disability benefits to her, retroactive to when he started receiving them and in the future.
David argued the divorce judgment pertained only to his “retirement” pension and did not mention “disability” benefits. In arguing against retroactivity, David argued Nancy should have come to court and asked for an award earlier than 2013. At the time of hearing, David’s monthly benefits were $4,569.27. David received his disability benefits tax-free.
The summary plan description for the firefighter’s pension plan clearly stated benefits through the plan include both retirement and disability benefits for its participants. The firefighter’s pension plan provides for duty-related, non-duty-related, and occupational-disease disability benefits. The plan is governed by Illinois statutes such as the Illinois Pension Code, which provides a retirement pension, and alternatively a disability pension, for eligible firefighters. It was reasonable to consider David’s disability benefits as part of his retirement plan.
David correctly asserted that disability benefits under the firefighter’s pension plan are not subject to division by a Qualified Illinois Domestic Relations Order (QILDRO). Nancy countered that the divorce judgment did not require a QILDRO, but instead ordered David to pay Nancy’s share of benefits directly to her. This is called a “triangular approach,” used in the 2002 case of Marriage of Menken. The appellate court sided with Nancy on this issue as well.
The retroactive disability benefits David owed Nancy totaled over $116,000. David also had to use the triangular approach and pay Nancy more than $1,700 monthly for her current and future share of his disability benefits.
The Law Office of Christopher Haaff has worked on many divorces involving pension and retirement plans. Benson shows the importance of making sure counsel has dealt with, and can deal with, retirement plans as part of divorce. It also demonstrates a crucial aspect of preparing judgments and other papers filed with the court.