ARTICLES

Military Pensions and Divorce

Military retirement benefits are a special breed. Because federal law supersedes Illinois state law, certain congressional enactments and military regulations come into play. In 1981, the U.S. Supreme Court determined when married military personnel and their spouses should look to federal law and when to look to state law in dividing military retirement benefits.¹ Responding to the result in that case, Congress passed a law² in 1982 that allows Illinois courts to treat military retirement benefits according to state law.

Illinois courts can divide some – but not all – military retirement benefits: only the retirement benefits of certain military personnel qualify.³ In most cases, the payment of retirement benefits is not paid from the Department of Defense (DOD) directly to the non-military former spouse, but rather has to be paid from the retired military spouse to the non-military former spouse. That is, unlike all 401(k)s, and QDRO'd pension plans, the Department of Defense makes payments to the non-military former spouse only in certain circumstances. This presents a significant problem to Illinois divorce courts. Illinois judges prefer, when possible, to completely sever the financial ties between former spouses. They loathe financial relationships that link the parties long after the divorce is over. Maintaining a situation where a retired military spouse pays a share of retirement benefits to his or her former spouse for a number of years (or decades) presents plenty of opportunity for abuse – and a possible return to post-decree court (which is exactly what the judge is hoping to avoid). Consequently, in cases where the DOD will divide retirement benefits and make payments directly to each spouse,⁴ Illinois courts are likely to permit a fair division of the retirement benefit. On the other hand, in cases where the DOD will not make such a division and will instead make all payments to the retired military spouse, Illinois judges are much more likely to assign the entire retirement benefit to the retired military spouse and to give the non-military former spouse an award of property that will offset his or her share in the retirement plan.

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