After court entered judgment of dissolution. Husband died. Then, wife (Jodi) filed 3rd-party complaint against Mary. Mary was husband’s wife at the time of his death. Jodi alleged that Mary was unjustly enriched because she was receiving a pension as surviving spouse of a disabled firefighter under Section 4-114 of Pension Code.
The Trial Court entered a QILDRO. It directed the Pension Fund to pay Jodi 50% of Husband’s “monthly retirement benefit”.
When a pension plan provides disability benefits as well as retirement benefits and the marital settlement agreement refers only to “retirement” benefits and is silent as to disability payments, a court may reasonably interpret the agreement in one of two ways: (1) as a grant to the ex-spouse of a portion of any benefits received under the pension plan, or (2) as limiting the ex-spouse’s interest in the pension plan to normal, age-related retirement benefits.
When a disabled ex-husband is not yet eligible for retirement pay, a marital settlement agreement entitling the ex-wife to “retirement” benefits must not be interpreted to grant her a share of her ex-husband’s disability income, because in this instance the disability pay does not substitute for retirement benefits; rather, it merely replaces the ex-husband’s income.
When an ex-husband is eligible for retirement pay but is receiving disability income instead, a marital settlement agreement providing the ex-wife a portion of “retirement” benefits can be reasonably interpreted in only one way—the petitioner should be paid the percentage of what would be the normal retirement benefits, whether respondent is paid normal retirement benefits or disability retirement benefits.
Although the Fund paid benefits to Mary as the surviving spouse of a disabled firefighter, those benefits were in substance retirement–not disability–benefits. The Court correctly found that Jodi was entitled to 50% of these payments, as per the terms of the MSA (Marital Settlement Agreement). Court’s decision to impose a constructive trust was the appropriate remedy to enforce the MSA.
In re Marriage of Shulga, 2019 IL App (1st) 182028 (September 30, 2019)
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