What is a QDRO in Illinois Divorce?
By Jonathan D. Steele | Updated January 2025
What is a QDRO in Illinois Divorce?
A QDRO (Qualified Domestic Relations Order) is a court order that divides retirement plans like 401(k)s and pensions during divorce without triggering tax penalties. It directs the plan administrator to pay a portion of benefits to an ex-spouse. Illinois uses QILDROs for state pensions (IMRF, TRS, SURS, CTPF) under 40 ILCS 5/1-119. Without a QDRO, you cannot collect your share—even if the divorce decree awards it to you.
Which Retirement Accounts Need a QDRO?
| Account Type | Needs QDRO? | Notes |
|---|---|---|
| 401(k) | Yes | Most common QDRO scenario |
| 403(b) | Yes | Teachers, nonprofits, hospitals |
| Pension Plans | Yes | Defined benefit plans—complex valuation |
| 457 Plans | Yes | Government employees |
| IRA / Roth IRA | No | Use "Transfer Incident to Divorce" |
| Illinois State Pensions (IMRF, TRS, SURS) | QILDRO | Illinois-specific order (40 ILCS 5/1-119) |
| Federal/Military Pensions | Special | Different order types required |
The QDRO Process: Timeline and Steps
Attorney Drafts QDRO
Your attorney obtains the plan's model QDRO (most plans have one), drafts the order with specific provisions (lump sum vs. shared payments, survivor benefits, loan treatment), and reviews it with you.
Plan Administrator Pre-Approval
The draft QDRO is submitted to the retirement plan administrator for review. They check for technical compliance with their plan documents. Expect 2-3 rounds of revisions. This is the longest step.
Court Approval and Signature
Once the plan pre-approves, the QDRO is filed with the court. A judge signs it, making it an official court order.
Final Processing and Transfer
The signed QDRO is sent back to the plan administrator. They process it and either transfer funds to your designated account or set up separate benefit payments.
Total time: 3-6 months
Critical Warning: Don't Wait
Start the QDRO process immediately after (or during) your divorce. If you wait:
- Your ex could change jobs and roll funds into an IRA (harder to track)
- Your ex could take loans against the 401(k), reducing your share
- If your ex dies before the QDRO is entered, you may lose your share entirely
- Market gains (or losses) after divorce but before QDRO affect what you receive
How the Marital Portion is Calculated
You're only entitled to the marital portion—the value accumulated during the marriage. Here's how it's typically calculated:
Example Calculation:
401(k) balance at divorce: $300,000
401(k) balance at marriage: $50,000
Marital contribution: $300,000 - $50,000 = $250,000
Your 50% share of marital portion: $125,000
(NOT $150,000—pre-marital portion remains your ex's)
For pensions, the "coverture fraction" method is used: (months married while in plan) ÷ (total months in plan) × 50% of benefit.
QDRO vs. QILDRO: Illinois State Pensions
If your spouse has an Illinois state or local government pension, you need a QILDRO (Qualified Illinois Domestic Relations Order), not a QDRO. This applies to:
- IMRF – Illinois Municipal Retirement Fund (county/municipal employees)
- TRS – Teachers' Retirement System
- SURS – State Universities Retirement System
- CTPF – Chicago Teachers' Pension Fund
- SERS – State Employees' Retirement System
QILDROs are governed by 40 ILCS 5/1-119 and have specific requirements. Each pension system has its own forms and procedures.
Don't Lose Your Share of Retirement
QDRO mistakes can cost you tens of thousands of dollars. I'll ensure your order is drafted correctly, approved by the plan, and processed without delay.
Schedule Free ConsultationOr call (312) 726-5015
Frequently Asked Questions
How much does a QDRO cost?
Typically $1,500-$3,000 for attorney drafting and processing. Some plans charge $300-$500 review fees. DIY QDROs often get rejected, costing more in the long run.
Do I need a QDRO for an IRA?
No. IRAs are divided via "Transfer Incident to Divorce" under IRC 408(d)(6). The divorce decree specifies the split, and the custodian transfers funds directly.
What if my ex already cashed out the 401(k)?
If your ex withdrew funds after divorce but before a QDRO was entered, you may need to pursue contempt proceedings or other legal remedies. This is why timing matters.
Can I cash out my QDRO share immediately?
Yes, with a key advantage: QDRO distributions are exempt from the 10% early withdrawal penalty (though still subject to income tax). You can also roll into your own IRA tax-free.
What about survivor benefits?
Critical for pensions. If your ex dies before you start receiving benefits and you're not named as survivor beneficiary in the QDRO, you could lose everything. Address this explicitly.