What happens to my pension after a divorce?

A big concern for many is what happens to a pension that you may have when your divorce is finalized. People seem to think that if the pension is solely in their name (which it typically is), then their pension is theirs and they do not have to share it with their spouse when they divorce.
The Courts consider this an asset of the marriage however, and you will need to divide that with your spouse. If you both have plans, and they are of equal value, then it is likely that each of you will retain your own pensions. It is well established in Illinois that pension plans of various kinds, whether matured, vested or non-vested, contributory or noncontributory, may be treated as marital property. The classification and reimbursement principles in 750 ILCS 5/503(a) and 5/503(c) apply to pension and retirement plans. A pension that is established before the marriage, as well as its increases in value, remains nonmarital property; however, the marital estate may be entitled to reimbursement for marital contributions or for the significant personal efforts of a spouse that result in substantial appreciation. The courts have noted that an interest in a pension plan is marital property if a portion accrues during the marriage.
Illinois does not divide pensions equally however . Pensions are treated just like any other asset of the marriage. Trial courts who divide a pension equally, without considering the factors in our statute, can be overturned by the Appellate Court. In In re Marriage of Smith, the appellate court found that the trial court failed to consider the factors in Illinois Marriage and Dissolution of Marriage Act. Instead, the trial court’s finding that any income in the wife’s 401(k) earned during the marriage should be divided, half to each side as a matter of course and without considering the statutory factors, was an abuse of discretion. The appellate court remanded the case, instructing the trial court to consider the statutory factors in order to divide the wife’s 401(k) in just proportions. Equitable division of retirement assets, as with all other assets of the parties, requires consideration of the factors in §503(d) of the Act.
Deferred Compensations are also divided in a divorce. A deferred compensation benefit is earned by an employee for his or her service to an employer. As such, they are treated as earnings, and to the extent that a spouse earned those benefits during the marriage, they are considered marital property and are subject to division upon dissolution, like any other marital property.

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