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90_SB1051
40 ILCS 5/1-118 new
Amends the General Provisions Article of the Illinois
Pension Code. Provides that if an annuitant fails to comply
with provisions of a domestic relations order requiring the
annuitant to pay a portion of his or her retirement annuity
to another party, the court may issue an order directing the
retirement system to deduct a specific dollar amount from
each retirement annuity payment and to issue a separate
payment of the amount deducted to that other party. Provides
that tax liability relating to the money paid to the
alternate payee is the responsibility of the alternate payee.
Also provides that as part of a domestic relations order
directing a person to pay a portion of a retirement annuity
to another party, the court may order the retirement system
to delay payment of a refund of retirement contributions
arising from termination of service until payment of the
refund has been approved by the court. Effective one year
after becoming law.
LRB9002139EGfg
LRB9002139EGfg
1 AN ACT to amend the Illinois Pension Code by adding
2 Section 1-118.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Pension Code is amended by
6 adding Section 1-118 as follows:
7 (40 ILCS 5/1-118 new)
8 Sec. 1-118. Enforcement of domestic relations orders.
9 (a) For the purposes of this Section:
10 "Retirement system" means a pension fund or retirement
11 system that is administered under any of Articles 2 through
12 18 of this Code.
13 "Retirement annuity" means the periodic benefit payable
14 to a retired member of a retirement system based on age or
15 service or the amounts accumulated to the credit of the
16 member for retirement purposes, including any increases in
17 the benefit that may accrue from time to time, whether or not
18 the benefit is referred to as a "retirement annuity" under
19 the applicable Article of this Code. The term does not
20 include a death or disability benefit, a benefit payable to a
21 survivor, or a refund of contributions.
22 "Annuitant" means a person receiving a retirement annuity
23 from a retirement system.
24 "Alternate payee" means a person to whom an annuitant is
25 required to pay a portion of the annuitant's retirement
26 annuity under the terms of a domestic relations order.
27 "Domestic relations order" means an order made pursuant
28 to an Illinois domestic relations law other than an order
29 relating to child support issued pursuant to Section 706.1 of
30 the Illinois Marriage and Dissolution of Marriage Act.
31 (b) If an annuitant fails to comply with provisions of a
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1 domestic relations order requiring the annuitant to pay a
2 portion of his or her retirement annuity to another party, a
3 court of competent jurisdiction in this State may issue an
4 order directing the retirement system to deduct a specific
5 dollar amount from each retirement annuity payment and to
6 issue a separate payment of the amount deducted to that other
7 party. The amount to be deducted shall not exceed 75% of the
8 gross retirement annuity while there is an arrearage due and
9 shall not exceed 50% of the gross retirement annuity when
10 there is no arrearage. The order shall apply beginning with
11 the next annuity payment payable at least 30 days after the
12 retirement system's receipt of the order and ending upon
13 termination of the retirement annuity or sooner if so ordered
14 by the court. If the order provides for a deduction in
15 excess of the amount permitted by this Section, the
16 retirement system shall deduct only the amount permitted by
17 this Section.
18 The alternate payee shall be responsible for any taxes
19 that may be due and payable as a result of the payments made
20 to the alternate payee under the order.
21 A separate order is required for each affected retirement
22 system.
23 The order to the retirement system shall be in
24 substantially the following form:
25 ORDER FOR WITHHOLDING FROM A RETIREMENT ANNUITY
26 UNDER THE ILLINOIS PENSION CODE
27 THIS CAUSE coming before the Court for the purpose of
28 issuance of an order to enforce the terms of a domestic
29 relations order issued on (date) requiring payment of a
30 portion of a retirement annuity to a named party; the Court
31 having jurisdiction over the parties and the subject matter
32 hereof; the Court finding one of the parties to be in default
33 of the domestic relations order by having failed to make
34 payment to the other party (the alternate payee) as required
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1 under the domestic relations order; and the Court being fully
2 advised; this order is entered to direct the retirement
3 system to make deductions from the retirement annuity and pay
4 the deducted amounts directly to the alternate payee:
5 IT IS HEREBY ORDERED AS FOLLOWS:
6 (1) The provisions of Section 1-118 of the Illinois
7 Pension Code are adopted by reference and made a part of this
8 order. This order is subject to the requirements of that
9 Section, including the limitations on amounts to be deducted.
10 (2) Identification of the retirement system and parties:
11 Retirement System: (name and address)
12 Annuitant: (name, mailing address, and social
13 security number)
14 Alternate payee: (name, mailing address, and social
15 security number)
16 (3) Of the annuitant's monthly retirement benefit, the
17 retirement system shall pay to the alternate payee $.... per
18 month for current obligations (and $.... per month on an
19 arrearage of $.... until the arrearage has been paid in
20 full), commencing with the next annuity payment payable at
21 least 30 days after the retirement system's receipt of this
22 order and ending upon termination of the retirement annuity
23 or upon further order of the Court.
24 (4) The alternate payee shall be responsible for any
25 taxes that may be due and payable as a result of the payments
26 made to the alternate payee under this order.
27 (5) The Court retains jurisdiction to modify this order.
28 DATE ....................
29 SIGNED ..................
30 (c) As part of a domestic relations order directing a
31 person to pay a portion of a retirement annuity to another
32 party, a court of competent jurisdiction in this State may
33 order the retirement system to delay payment of any refund of
34 retirement contributions relating to that person that results
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1 from termination of employment until payment of the refund
2 has been approved by the court.
3 (d) If a retirement system finds that it is unable to
4 comply with an order issued under this Section because it
5 cannot identify or locate one of the parties, because of an
6 error in the order, or for any other reason, it shall notify
7 the parties of the reasons for its inability to comply. The
8 retirement system shall not make any payment to the alternate
9 payee until a corrected order is received by the retirement
10 system.
11 (e) The provisions in other Articles of this Code
12 exempting annuities and other benefits from legal or judicial
13 process do not apply to orders issued under this Section.
14 Section 99. Effective date. This Act takes effect one
15 year after becoming law.