Refunds from Pension Plans

Refunds From Pension Plans

Members of many public pensions, including TRS, IMRF, SURS, SERS, CTPF, and others, at times can have their contributions refunded. Some of the most common refunds are surviving spouse benefits after divorce. These payments protect the member’s spouse in the event that if the member dies after retirement, the spouse will receive about half of the monthly payments the member received for the spouse’s life. However, upon divorce, there is no spouse, and the member can have those payments refunded (since in the event of the member’s death, payments will cease).

What  if a Judgment for Dissolution of Marriage was entered granting the ex-spouse half of the marital portion of the member’s  interest  in IMRF or SURS, and the member applies for a refund to IMRF or SURS? Well if a QILDRO was not entered  and provided to the Plan, the Plan will pay the entire amount to the member. If the alternate payee becomes aware of an eligible refund, a QILDRO can be entered, specifying the amount of that refund to be paid to the alternate payee. This way, a QILDRO Calculation Court Order would not be necessary. If a QILDRO was entered, and it  just provided for payment of 50% of the marital portion to the alternate payee, a QILDRO Calculation Court Order will be necessary to tell the Plan how  much to pay the alternate payees. 

As always, the safest course of action is to enter a QILDRO as soon as possible after entry of the Judgment for Dissolution of Marriage (or at the same time), and provide the  TRS or whichever Plan is affected a certified copy immediately. That way, if a refund is available, the Plan will inform the alternate payee, or at the very least, will not pay the member until a QILDRO Calculation Court Order.

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