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How Are Retirement Accounts and Pensions Handled in an Illinois Prenup (ERISA Spousal Consent)? - Caesar & Bender, LLP · BSPE Legal Marketing Podcast

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  How Are Retirement Accounts and Pensions Handled in an Illinois Prenup (ERISA Spousal Consent)?
• 0:05
  Your retirement account may be one of the most valuable things you own, and a prenuptial agreement in Illinois can directly shape what happens to it if your marriage ends.
• 0:14
  Under 750 ILCS 10/4(a)(1), Illinois couples can use a prenup to address their rights in 401(k) plans, IRAs, pensions, and other retirement assets before they ever say "I do." Because retirement benefits earned during a marriage are presumed to be marital property under 750 ILCS 5/503, a valid prenup can specify a very different outcome for contributions, growth, and employer benefits.
• 0:43
  However, federal law adds a critical layer of complexity for private employer plans through the Employee Retirement Income Security Act, commonly known as ERISA.
• 0:52
  Under 29 U.S.C. 1055, covered plans must provide survivor benefits to a participant's spouse unless those rights are properly waived in writing after the marriage has already taken place.
• 1:04
  A prenup is signed before the wedding, which means it cannot legally satisfy ERISA's spousal consent requirements on its own, no matter how clearly the agreement is written.
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  Federal courts confirmed this principle in Hurwitz v. Sher, 982 F.2d 778, where the court held that a fiancée is not a spouse for purposes of the federal waiver rules, leaving the surviving spouse entitled to full plan benefits.
• 1:31
  Narrator: ERISA distinguishes between two key protections: the Qualified Joint and Survivor Annuity, which continues payments to a spouse after the participant's death, and the Qualified Preretirement Survivor Annuity, which protects a spouse if the participant dies before retirement begins.
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  Narrator: Waiving one of these protections does not waive the other, and each requires its own separate written consent witnessed by a plan representative or notary public after marriage.
• 1:57
  Narrator: Illinois public pensions operate under an entirely different framework because governmental plans like IMRF, SERS, TRS, and Chicago municipal funds fall outside ERISA entirely under 29 U.S.C. 1003(b)(1).
• 2:13
  Narrator: When an Illinois public pension is divided in a divorce, the court issues a Qualified Illinois Domestic Relations Order, or QILDRO, under 40 ILCS 5/1-119, directing the retirement system to pay a specified portion to the alternate payee.
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  Narrator: For pension members who began participating in an Illinois public retirement system before July 1, 1999, the QILDRO cannot take effect without the member's own written consent, which a prenup can require but never legally replace.
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  Narrator: An experienced attorney can help ensure your prenuptial agreement clearly addresses ownership, future contributions, beneficiary designations, and the treatment of retirement benefits under both state and federal law.
• 2:54
  Narrator: A knowledgeable lawyer can also help you understand what additional steps — like post-marriage spousal consent forms — will be necessary to make your retirement plan waivers fully enforceable.
• 3:04
  Narrator: Contact Caesar & Bender, LLP, located at 150 N Michigan Ave #2130, Chicago, IL 60601, United States, by calling 312, 236, 1500 to schedule a consultation about how retirement assets should be addressed in your prenuptial agreement.