View full news feed

 

Not April Fool’s: DOI Flip-Flops On Tier 2 Firefighters’ Reciprocity

April 6th, 2016

Last quarter we wrote an article regarding a, December 22, 2015, DOI Opinion issued by Deputy Director Mary Jane Adkins. As you may remember, DOI had opined tier 2 firefighters who exercise reciprocity would be considered tier 1 because the reciprocity section of the Pension Code does not provide for a tier 2 benefit.  However, apparently after some prodding, the DOI changed its mind.

On February 11, 2016, Deputy Director Adkins wrote “a follow up to our advisor opinion issued on December 22, 2015.” The DOI clarified, “the letter issued on December 22, 2015, does not accurately reflect the Division’s interpretation of the law and opinion in this matter; the letter is now withdrawn and superseded by this advisory opinion.” That is the legalese way of writing, “and this time, we mean it…”

In its second opinion on the subject, DOI concludes tier 2 firefighters, even if they exercise reciprocity, will remain tier 2 firefighters regardless of they engaged in reciprocity. DOI reaches this position despite there being no tier 2 provision in the reciprocity section of Article 4. DOI explains its latest theory for this change of heart in its, February 11, 2016, opinion.

This time, the DOI explains, firefighters (who are hired after January 1, 2011) who exercise reciprocity are not tier 1 firefighters because the General Assembly used the term “notwithstanding any provision of this Article” at the beginning of the Section describing regular retirement benefits. The DOI asserts after a “plain reading” of the statute, “it clear that 4-109.3 would only provide the appropriate benefit for a firefighter as provided for by their ‘tier’ status and would not provide ‘tier 1’ type benefits to those firefighters who would otherwise receive ‘tier 2’ benefits.” The DOI also concludes the retirement portion of the Pension Code “unambiguously” changes the separate and distinct reciprocity section of the Pension Code. On March 15, 2016, the DOI stuck to its, February 11, 2016, interpretation of the impact of reciprocity on firefighters’ tier 2 status.

All three opinions were issued by the Deputy Director of the Public Pension Division of DOI, Mary Jane Adkins. Apparently, the DOI’s “plain reading” of an “unambiguous” statutory provision proved less “clear” during the 2015 holiday season when it issued a formal opinion expressing an opinion that is diametrically opposite of its current position. Even with a “plain reading” of the “unambiguously” “clear” language of the DOI’s opinions, some readers are left wondering why did the DOI change its position? The manner by which this change of position came about is a matter of public record and will be explored further.

 

DOI Issues Advisory Opinion on Corporate Bond Downgrades

April 6th, 2016

Article 3 and 4 Pension Funds are allowed to invest in corporate bonds managed through an investment advisor if all of the following requirements are met:

“(1)     The bonds must be rated as investment grade by one of the 2 largest rating services at the time of purchase.

(2)       If subsequently downgraded below investment grade, the bonds must be liquidated from the portfolio within 90 days after being downgraded by the manager.”

40 ILCS 5/1-113.2(14)

Recently, we have seen more than one fund face a situation where one of its corporate bonds is downgraded below investment grade by Moody’s but not S&P.  RDK asked the DOI to weigh in on the effect of a downgrade by only one of the two largest rating agencies.  In response, the DOI has advised its interpretation of the above statute requires the Fund to liquidate the downgraded bond.

Specifically, the DOI opined the fund must liquidate the downgraded bond “even if another rating agency has not (yet) downgraded the bond.”  The DOI went on to state, “When read in its entirety, it is clear Section 1-113.2(14) intends that an article 3 or 4 (sic) is not permitted to hold a corporate bond rated below investment grade.”

Finally, the DOI opined that investment managers/advisors serve in a fiduciary capacity to the fund and must therefore liquate the downgraded bonds immediately even while acknowledging the Statue allows 90 days to liquidate thereby “avoiding a fire sale” in the words of the opinion.  “To do otherwise would be contrary to their fiduciary responsibilities of care, skill, prudence and diligence under the circumstances then prevailing that a prudent man would use.”

While a formal written opinion was requested, due to time constraints the above opinion was issued via email correspondence.  A request has been made to memorialize the DOI opinion in a formal opinion and we will continue to provide any updates as they become available.

 

Reference Guide for Police & Fire Pension Benefits

April 6th, 2016

Daniel Ryan is a Certified Employee Benefit Specialist, former municipal finance director and union benefit administrator who has also served as a police and fire pension trustee.  He recently published “Retirement Income For Illinois Fire And Police” as a guide on the benefits available from Illinois public safety pensions.  The book also tackles funding issues with public pension plans, assumptions used in administering the plan, changes in benefits structures, and other hot pension topics.  The book is available on Amazon and would serve as a valuable guide for any public safety officer looking to expand their knowledge of matters facing public pension systems and beneficiaries in Illinois.

 

Longevity Buyout Not Part of Pensionable Salary

April 6th, 2016

Village of Chicago Ridge v. Chicago Ridge Firefighters’ Pension Bd. of Trustees, 2016 IL App (1st) 152089

In a recent holding, the First District Appellate Court found that, when not included as part of a municipal appropriations ordinance, a longevity bonus granted by the terms of a CBA should not be included as part of pensionable salary.

The case arose out of the retirement application of Chicago Ridge firefighter David Bricker.  Pursuant to the terms of the CBA, Bricker was entitled to a 20% increase in his salary on his last day worked if he retired on his 25th anniversary and was 50 years old or over.  The Pension Board included this bonus as longevity pay based in part on a DOI advisory opinion.  As a result, the Pension Board found Bricker’s salary for pension purposes was $110,277.61 as opposed to $95,155.78.

The Village took administrative review of the Pension Board’s decision arguing the 20% longevity bonus should not have been included as part of Bricker’s salary.  In analyzing this claim, the Appellate Court noted Section 4-118.1 of the Pension Code defines salary as “the annual salary, including longevity, as established by the municipality appropriation ordinance”.  Section 4402.30 of the Administrative Code also makes reference to the municipal appropriations ordinance in defining salary for pension purposes.  Based on the statutory language, the Appellate Court found the calculation of salary used to determine pensionable salary must be approved or established through an appropriation ordinance of the municipality.  In this case, that did not happen with respect to Bricker’s 20% longevity increase.

The Pension Board agreed the 20% buyout was not approved through a municipal appropriations ordinance however, it argued the CBA which included the 20% buyout was approved by resolution of the village board thereby making the 20% increase pensionable.  The Court found that Village approval of the CBA was insufficient to constitute salary as approved through an appropriations ordinance.  Specifically, the Court found, “An appropriation involves the setting apart from public revenue a certain sum of money for a specific object….Where an act is required to be done by appropriations ordinance, anything less, such as a resolution or referendum, is not sufficient.”

Because the Court found the specific language of the Pension Code and Administrative Code to be clear and unambiguous in defining pensionable salary as that which is approved through an appropriations ordinance, the Court reversed the decision of the Pension Board and remanded the case to make a determination of pensionable salary without the 20% buyout.

 

Officer Receiving Line of Duty Disability Not Entitled to PSEBA Benefits

April 6th, 2016

Vaughn  v. City of Carbondale, 2016 IL 119181

            This case was originally reported in our October 2015 newsletter, following the Fifth District Appellate Court’s ruling.  As you may recall, Officer Jeffery Vaughn suffered a head injury while reaching into his squad car for his police radio to respond to a request from dispatch.  Based on this injury, Vaughn applied for line of duty disability pension benefits.  The pension board denied Vaughn’s application and he appealed.  In an unrelated appeal, the Appellate Court affirmed the reversal of the pension board’s denial and ordered Vaughn be granted a line of duty disability pension.  Based on his receipt of a line of duty disability pension, Vaughn requested the City of Carbondale (“City”) provide him with benefits under PSEBA.  The City provided Vaughn and his wife with health insurance, without objection.   In 2012, the pension board directed Vaughn to submit to an annual examination to determine continuing eligibility for his line of duty disability pension benefits.  The examining doctor determined Vaughn was no longer disabled and the pension board issued a decision terminating Vaughn’s disability pension benefits.  The Appellate Court reversed the pension board decision because Vaughn had not been given due notice and an opportunity to be heard.

            The Appellate Court determined, based on its decision to reinstate his line of duty disability pension benefits, Vaughn had suffered a “catastrophic injury” as required under PSEBA and continued to be eligible for health insurance coverage under PSEBA.  The Appellate Court found Vaughn’s work-related injury “occurred as a result of his response to what he reasonably believed was an emergency.”  2015 IL App (5th) 140122, ¶12.  The Appellate Court included extensive discussion of the definition and application of the requirement of the injury occurring in response to an “emergency.”  The Appellate Court found the undisputed facts demonstrated Vaughn had met the requirements for “catastrophic injury” occurred in responding to an “emergency.”  The City filed a Petition for Leave to Appeal to the Illinois Supreme Court, which was granted.

             The Illinois Supreme Court reversed the Appellate Court and held, “the facts of this case do not fit within the emergency situation set forth in section 10(b).”  2016 IL 119181, ¶42.  The Supreme Court specifically found responding to a call from dispatch does not equate to an event “reasonably believed to be an emergency.”  See 820 ILCS 320/10.  The Supreme Court noted, “That a call from dispatch could evolve into an emergency situation for purposes of Section 10(b) of the Act does not mean that every call from dispatch is an emergency situation until proven otherwise.  Answering a call from dispatch is not an unforeseen circumstance.”  Id.  The Court found telling the lack of facts to established any imminent danger to person or property which required an urgent response to the call from dispatch.

In finding Vaughn was not entitled to a permanent injunction, which would have enjoined the City from terminating his benefits under PSEBA, the Court noted Vaughn “was not eligible for insurance benefits under section 10 of the Act in the first place.”  2016 IL 119181, ¶47.  Therefore, the City was not prohibited from terminating benefits it was never statutorily obligated to provide.

 Finally, the Supreme Court found that equitable estoppel did not prevent the City from terminating Vaughn’s benefits under PSEBA.  The Court noted Vaughn had options available for continuing health insurance under either COBRA or the Affordable Care Act, and therefore was not detrimentally affected by the Court’s ruling.  “The fact that plaintiff now will have to pay some or all of his health insurance premiums does not constitute a detrimental change in position for purposes of equitable estoppel, let alone rise to the level of fraud or injustice.”  2016 IL 119181, ¶50.  The end result is Vaughn’s benefits under PSEBA can be terminated, because his injury was not found to meet the requirements of Section 10 of the statute.

 

“Reasonable Access” to Online Records Under FOIA

April 6th, 2016

Garlick v. Naperville Township, 2016 IL App (2d) 150381-U

In a recent Rule 23 Opinion, the Second District Appellate Court has for the first time, interpreted the recently enacted portion of the FOIA pertaining to records that may be found online.

With a change effective in December 2014, the FOIA provides “a public body is not required to copy a public record that is published on the public body’s website.  The public body shall notify the requestor that the public record is available online and direct the requestor to the website where the record can be reasonably accessed.”  5 ILCS 140/8.5

Pursuant to the FOIA, Garlick requested Naperville Township provide him property details and assessment data for the entire township including a database in the format maintained by the township and all other subdirectory material on each parcel.  The township denied his request under Section 8.5 and directed the requestor to the township’s website which allowed a user to individually query each parcel by PIN number or address.  Users are unable to query more than one parcel at a time.

Based on this response, the requestor filed a lawsuit in DuPage County alleging the township violated the FOIA because compiling the amount of data he was requesting one property at a time was not feasible.  The township responded that because the information was available online, it was not required to produce any material in response to the request.  Rather, under Section 8.5 all the public body is required to do is point the requestor to the website where they can find the requested information.

The trial court agreed with the township and granted its motion to dismiss.  The Appellate Court reversed.  While the Appellate Court did not per se disapprove of the township’s response, it found the case resolves around the requirement the record “be reasonably accessed”.  The Court found whether the requested data can be reasonably accessed is a question of fact more properly the subject of a summary judgment motion or trial.  As such, the trial court erred in dismissing the complaint at the pleading stage.  Since the requestor’s complaint pleads the response of the township does not provide reasonable access, the case should be allowed to go forward to develop facts on access to the data.

Since this is a case of first impression and an unpublished opinion, public bodies should be wary going forward in denial of FOIA requests under Section 8.5 inasmuch as clear rules on how to apply this new portion of the FOIA have yet to be developed.

 

Supreme Court Throws Out Chicago Pension Reform Again

April 6th, 2016

Jones v. Municipal Employees’ Annuity & Benefit Fund of Chicago, 2016 IL 119618

The Illinois Supreme Court has thrown out the legislatively enacted pension reformed aimed at two Chicago pension funds.  The matter before the Court was whether Public Act 98-641 (Act), designed to address Chicago’s pension issues with respect to Chicago’s Municipal Employees’ Annuity and Benefit Fund (MEABF) and Laborers’ Annuity and Benefit Fund (LABF) violated the pension protection clause of the Illinois Constitution.  The Court’s decision noted (1) that both MEABF and LABF are projected by many to be insolvent in the next several years and (2) that the Act was a result of negotiations between the City and 28 of the 31 unions representing City employees in those two funds.   Nevertheless, the Court ruled that the Act violated the pension protection clause of the Illinois Constitution.  The 5-0 opinion affirmed the circuit court of Cook County’s decision declaring the Act unconstitutional and unenforceable in its entirety.

 Prior to the Act, participants in both retirement systems contributed 8.5% of their salaries toward their pensions.  Among other benefits, both systems provided for 3% compounded automatic annual increases (AAI) beginning after members completed one full year of retirement.  The City funded the retirement systems primarily from property tax proceeds based on a multiple of employee contributions.  The fixed tax multiplier established in the pension code was not sufficient to meet the projected benefit payments required of the MEABF and LABF. With respect to the fiscal health of the funds, Justice Theis wrote, “It was undisputed that if the funds remained on the same trajectory, they would continue to pay out more in benefits than they received in contributions and investment returns, leading to a path of insolvency.”

 To address the fiscal conditions of the MEABF and LABF, the Act increased the 8.5% employee contribution by .5% each year beginning in 2015 until their contribution reached 11% of their salary.  The Act also reduced the automatic annual increases (AAI) from 3% compounded to 3% or half the Consumer Price Index, delayed the time when a retiree would first become eligible for an AAI and eliminated the AAI altogether in specific years.  Under the Act, the City’s funding requirement was increased annually leading to actuarially based funding beginning in 2021 to bring the fund to a 90% funded ratio in 2055.  To ensure payment of the statutory funding, the Funds were given the authority to certify delinquent amounts to be withheld and deposited into the Funds from the State Comptroller and also initiate a mandamus proceeding with the court to order a reasonable payment schedule. The new statutory funding enforcement mechanisms were significant in light of the City’s argument that under Article 22, of the Pension Code, the debts of the pension funds were not to be deemed a debt of the City.  Therefore, the new funding mechanism conferred a net benefit to participants by saving them from insolvency.

 The Court ruled the City’s net benefit argument was inconsistent with the Illinois Constitution which mandates members of the Funds have “a legally enforceable right to receive the benefits they have been promised, not merely to receive whatever happens to remain in the Funds.”  The Court reiterated “the clause was intended to force the funding of the pensions indirectly, by putting the state and municipal governments on notice that they were responsible for those benefits.” McNamee v. State, 173 Ill. 2d 433 (1996)

 As to the City’s argument the Act represented a bargained for exchange with 28 out of 31 unions, the Court said, “nothing prohibits an employee from knowingly and voluntarily agreeing to modify pension benefits from an employer in exchange for valid consideration from the employer.” Kraus v. Bd. of Trustees of the Police Pension Fund, 72 Ill. App.3d 833, 849 (1979).  However, even taking the facts as presented by the City as true, the Court held members of the Funds did not bargain away their constitutional rights in the process.  The Court concluded the unions were not acting as agents in the collective bargaining process but as an advocacy group due to the fact that the individual members have done nothing that could be said to have assented to the new terms provided for in the Act.

 In conclusion, the Court ruled that given the failure of the City’s net benefit argument combined with the resulting diminishment not resulting from valid collective bargaining, the reduced automatic annual increases (AAI) and increased employee contributions required by the Act amounted to a diminishment or impairment of benefits in violation of the pension protection Clause in Article XIII, Section 5 of the Illinois Constitution.  The Court therefore held the Act unconstitutional in its entirety.

 

Update on Pension Consolidation Proposals

April 6th, 2016

Following the Lt. Governor’s task force report on local government consolidation reported in our last newsletter, in February Senate Bill 3317 was proposed by lame duck State Senator Dan Duffy.  The Bill proposes the consolidation of Article 3 and 4 Pension Fund investments into the Illinois State Board of Investment.  It also reduces the amount of training required of pension board trustees, changes all pension fund fiscal years to begin May 1, doubles the annual compliance fee paid by pension funds and authorizes the Department of Insurance to impose fines of up to $2,000 per day for noncompliance with certain provisions relating to transfer of investment assets.

You may recall from prior newsletters, the Department of Insurance and task force recommendations to consolidate were not based on any ascertainable standard and contradict the findings of the COGFA report on the effect of pension fund consolidation.  At the time of this writing, the Bill has been assigned to committee but has not been scheduled for any hearings and no other action has been taken.  Of course, given the significant changes the Bill proposes, we will continue to keep a close eye on its status.

 

QILDRO Processing Tips

January 14th, 2016

A “Qualified Illinois Domestic Relations Order” (QILDRO) is a creature of statue by which pension benefits are divided during a divorce proceeding.  While the QILDRO must meet certain requirements to be valid, the Pension Fund’s role is largely limited to processing, approval, and implementation of the QILDRO.

The first step in the process is for a QILDRO to be reviewed and approved by counsel for the Pension Fund.  Typically, the QILDRO is then entered in Court by the divorcing parties.  Usually, the QILDRO awards the “alternate payee” a percentage of the pension benefits of the member.  In that case, a QILDRO “Calculation Order” must then be entered by the Court and served on the Pension Fund in order to make payment to the alternate payee.  Of course, no payment are made to the alternate payee until the member begins receiving benefits.

Pension Funds should be aware of certain deadlines set by statute.  For example, within 45 days of receiving a QILDRO, the fund must provide to the parties specific information enumerated by the statute needed for the completion of the Calculation Order.  In addition, for a member who is not retired at the time the QILDRO is entered, the Pension Fund must provide updated calculation order information within 45 days of the member’s subsequent retirement.  Pension Funds should keep this requirement in mind when approving retirement benefits.

 

Lt. Governor Releases “Report” on Pension Consolidation

January 14th, 2016

 

Lt. Governor Sanguinetti recently released her task force report on local government consolidation and sent it to Governor Rauner.  Charged with the task of studying issues of local government consolidation and unfunded mandates, the 400 plus page report lists detailed proposals considered by the task force and adopts recommendations based on some of those proposals.

Interestingly, in the survey of local governments conducted by the task force, Illinois municipalities reported public pensions as their most burdensome mandate.  However, asked the same question Illinois Fire Protection Districts identified pensions as only the eight most burdensome mandate.

Of particular note to pension funds, the task force recommends merging all downstate and suburban public safety pension funds into one single investment authority.  As you may recall, this follows a similar DOI recommendation reported in last quarter’s newsletter.  Without citing any specific data, the task force found managing pension benefits at the local level increases management fees and results in less public oversight and reduced investment returns.  The task force recommended consolidation of the assets of Article 3 and 4 pension funds into an IMRF type investment authority whereby each community’s pension funds obligations will be segregated to be unique to that community.

The task force also recommends giving local government the ability to opt-out of pension plans for new employees, create 401(k) style retirement plans for non-public safety employees, create defined contribution/defined benefit plans for public safety employees, and give employees investment control of their 401(k) style contributions.

Also recommended by the task force are proposals to allow consolidation or dissolving local governmental entities by referendum, adoption of the federal definition for catastrophic under PSEBA, and giving local governments the opportunity to exempt themselves from State unfunded mandates under certain circumstances.

While not adopted as recommendations by the task force, a number of pension “reform” plans were also considered.  We will continue to closely monitor any proposed legislation resulting from the task force report.

 

Appellate Court Affirms Police Pension Board Denial of Line of Duty Benefits for Physical Fitness Testing Injury.

January 14th, 2016

Swoboda v. Bd. of Trustees of the Village of Sugar Grove Police Pension Fund, 2015 IL App (2nd) 150265

 

The Second District Appellate Court recently issued a decision, which affirmed the Circuit Court’s affirmance of the pension board’s determination to deny line of duty benefits to an officer who suffered a disabling injury during physical fitness testing.

 

The Board of Trustees of the Village of Sugar Grove Police Pension Fund of (“Board”) reached a decision to deny the application for line of duty benefits of Officer Thomas Swobota who suffered a disabling injury to his shoulder during physical fitness testing.  Swobota was attempting to bench press approximately 200 pounds when he injured his shoulder.  The department physical fitness testing only required officers to bench press 75% of their body weight, up to a maximum of 175 pounds, or do 30 push-ups consecutively.

 

The Pension Board determined, Swoboda was not injured performing an “act of duty,” as defined by Section 5/5-113 of the Pension Code.  The Appellate Court confirmed an act of duty requires an officer to be performing an act which involves either a “special risk” or be “imposed by statute, ordinance, or police regulation.”  The Pension Board made no finding as to whether the physical fitness testing was “an act imposed by statute, ordinance, or police regulation.”  Instead, the Pension Board found the bench press exercise did not constitute  a special risk no ordinarily assumed by a citizen in the ordinary walks of life.

 

The Appellate Court agreed with the Pension Board’s finding the many civilians in all walks of life routinely exercise and lift weights for work or personal reasons.  The Appellate Court noted, “Citizens in ordinary walks of life engage in weightlifting.  Whether they do so occupationally or recreationally is of no moment.  The risk of sustaining a weightlifting injury is not a ‘special risk.’”

 

Reimer Dobrovolny & Karlson represented the pension board in this matter.

 

Court Clarifies “35 Day Rule” for Administrative Review Cases

January 14th, 2016

Grimm v. Calica, 2015 IL App (2nd) 140820

 

The Second District Appellate Court has issued a decision, which provides direction as to appropriate notice of a written decision by a public body, which triggers the 35-day period for seeking administrative review.

 

Following a finding evidence supported an indication of child-abuse findings relating the plaintiff, the plaintiff sought an expungement of that finding.  The Department of Children and Family Services (“Department”) conducted an administrative hearing.  Following the hearing the administrative law judge made a written recommendation to the Department against expungement.  The Department then issued a written decision in accordance with the recommendation of the administrative law judge.

 

The decision was issued on Department letterhead, in the form of a letter, addressed to the attorney representing the plaintiffs, dated July 30, 2013.  The plaintiff filed a complaint seeking administrative review on September 4, 2013, the 36th day.  The Department filed a motion to dismiss the complaint for administrative review, as untimely filed.  The letter contained language stating, “you may seek judicial review under the provisions of the Administrative Review Law…within 35 days of the date this decision was served on you.”

 

In response, plaintiff argued mailing the decision to her attorney was not adequate service, and that she did not receive the decision until August 12 or 13, 2013.  Plaintiff also argued the phrase “within 35 days of the date this decision was served on you,” was confusing.  Following arguments, the circuit court agreed with plaintiff and denied the motion, “in the interests of justice.”

 

On appeal, plaintiff argued the notice received was too confusing and misleading to satisfy due-process requirements.  The Appellate Court agreed, stating “the notice provided by the documents was not well calculated to appraise plaintiff that her 35 days to file an administrative-review complaint began to run on July 30, 2013.  Given the ease with which the Department could have made the notice more informative.”  Specifically, the Appellate Court noted, “Nothing in what the Department sent showed a date of mailing.  The letter decision was in the conventional format of a business letter, the date appears as  nothing more than the date of the letter…Thus the date on the letter did not appear to be a mailing date.”

 

The Appellate Court affirmed the denial of the motion to dismiss, finding the Department did not afford the plaintiff due process.  The Appellate Court noted, “Given that the Department could remove all necessary confusion by a change as simple as stating the mailing date and stating that the mailing date was the service date, the Department’s notice was unreasonably confusing and was not in a format that would be chosen by someone genuinely trying to convey the time limit for filing an administrative-review complaint.”

 

 

DOI Finds Firefighter Reciprocity Grants Tier 1 Status

January 14th, 2016

In a recent opinion, the Department of Insurance has advised firefighters exercising their reciprocity option under Section 4-109.3 of the Pension Code should be granted tier 1 retirement benefits even in cases where they were previously only eligible for tier 2 benefits.

Section 4-109.3 of the Pension Code gives firefighters who have service with at least two funds the ability to receive retirement benefits.  Generally speaking, in order to qualify a firefighter must be at least 50 years old at the time of retirement, have at least 20 years of combined service, have at least one year of service with all prior funds, and have at least three years of service with the final fund.  Other detailed requirements must be met but will not be discussed here.

In its opinion, the DOI succinctly concludes because the date a firefighter first came under Article 4 does not impact the benefits provided under 4-109.3, any firefighter who exercises their ability to receive benefits under that Section is entitled to tier 1 benefits.  In short, in the DOI’s opinion, even tier 2 firefighters are entitled to tier 1 benefits if retiring under Section 4-109.3 of the Pension Code.

 

Changes in DOI Audit Procedure

January 14th, 2016

Many changes in leadership at the Department of Insurance have brought about changes in the manner by which the Department interacts with Article 3 and 4 Pension Funds during an audit.  In the past, the Department approached the audit procedure in a cooperative manner and worked with Pension Funds to address any issues found during the audit process.  This approach now appears to be a thing of the past.

The procedure now followed by the Department allows Pension Boards 14 days to respond to a “Draft Report of Examination” by agreeing or disagreeing with the auditors findings.  The Department will consider extensions of time to respond.  As you can imagine, extensions are frequently needed given the truncated timetable provided by the Department and the need to call a public meeting to discussing the findings.

Following the draft report of examination, the Department will issue a final report of examination.  The Pension Board will have 30 from receipt of the final report to request a hearing before the Department to contest any of the findings.  No extensions will be granted nor will other written responses be considered.

If no hearing is requested, the Report is considered final and will be filed with the Department after 30 days have passed.  A “Director’s Order” will then be issued by the Department directing the fund to take action within 14 business days to correct any items identified as non-complaint during the audit.

Inasmuch as these new procedures were adopted only recently and without any notice to the Funds, it remains to be seen whether the Department will employ new or more frequent enforcement mechanisms in post-audit proceedings.  However, we will continue to keep a close eye on these substantive changes to the DOI audit procedure.

 

 

CADILLAC TAX PUSHED BACK TO 2020

January 14th, 2016

On December 18, 2015, President Obama signed the Consolidated Appropriations Act (“CAA”). This legislation, in part, pushes back the Cadillac tax by two years to 2020.  It also deems the Cadillac tax deductible.

 

As a reminder the Affordable Care Act (“ACA”) imposes an “excise tax on high cost employer-sponsored health coverage”. This so-called “Cadillac tax” imposes a 40 percent tax on the “excess benefit” of “employer-sponsored coverage”, including governmental plans. The Cadillac tax is triggered when coverage becomes “excess”. The coverage is “excess” when the total premium is more than $10,200 (for single coverage) and $27,500 (for more than single coverage). These figures are increased each year.

 

In addition, the Cadillac tax is now tax deductible for health insurers.  Prior to the CAA, insurance companies reimbursed by employers for the Cadillac tax would have such reimbursements taxed as income.  Meaning, in some circumstances the Cadillac tax would cost the employer even more than the 40% tax due to the additional income tax applied to reimbursements.

 

Appellate Court Voids Transfer of Service to IMRF

January 14th, 2016

Village of Oak Brook v. Sheahan,  2015 IL App (2d) 140810

Prior to becoming police chief in Oak Brook, Thomas Sheahan was a police officer in Deerfield and worked for the City of Chicago.  As he prepared to retire from Oak Brook, he sought to transfer his Article 3 time from Deerfield and his MEABF time from Chicago in order to increase the service time for his IMRF pension from Oak Brook.

 

Pursuant to special legislation opening a narrow window of time to transfer between MEABF and IMRF, MEABF transferred his contributions to IMRF.  IMRF informed Sheahan he was required to transfer the remaining $23,237.23 to IMRF in order to receive his service credit.  He did not

contribute any additional funds.

 

Mr. Sheahan had taken a refund of his contributions

from the Deerfield Police Department.  Deerfield informed him the cost to repurchase his service was $101,895.60.

 

Sheahan retired from Oak Brook on April 29, 2011.  On May 3, 2011, he delivered a certified check to Deerfield to repurchase his service credit.  IMRF deposited the check and credited Sheahan with his Deerfield service.

 

The Village of Oak Brook filed suit seeking to void the transfers into IMRF.  The appellate court found the transfer from Deerfield to IMRF was void because only an active member can transfer service to IMRF.  Payment must have been received by IMRF while the member remained active.  Despite the rule adopted by IMRF allowing for a final payment to be made after termination of service, the court found the statutory language controlled and mandated transfer prior to termination of IMRF service.  Because Sheahan had retired prior to completing the Deerfield transfer, it was void.

 

The appellate court also voided the MEABF transfer to IMRF.  The court found the special legislation passed allowing this transfer required payment in full for the service credits.  While Sheahan argued he should be entitled to partial credit based on the amount transferred to IMRF from MEABF, the court found the entire amount (including the employee contributions required) must have been paid to transfer any service credit.  Because Sheahan did not add the additional amount, no time could be transferred from MEABF to IMRF.

 

Having voided both transfers of service to IMRF, the court ordered IMRF to return the monies at issue to their respective origins and reinstate the service credits with Deerfield and MEABF.

 

Illinois Department of Insurance Takes Political Stance on Consolidation

January 14th, 2016

At the beginning of October, the normally apolitical Department of Insurance, Public Pension Division, released its “Biennial Report.”  This normally benign report carried a declaration directly from the Governor.  On page 20 of the report, the DOI made “recommendations for legislative and administrative correction that the Division deems necessary for the next biennial period.”

 

DOI’s top “recommendation” it deemed “necessary” to implement targets downstate police and fire pension systems.  Without support or justification, “the Division recommends that the investment assets of the downstate police and fire pension funds be consolidated in order to increase the rate of return on the funds’ assets.”  Further ignoring empirical studies, the DOI claims, “Upon consolidation of investment assets, the funds may witness significant decrease in investment management fees, and experience opportunities to access a broader array of asset classes.”

 

Oddly, the DOI makes no mention of the two (2) widely recognized and most comprehensive studies relating to consolidation of downstate police and fire funds’ investment assets.  The non-partisan Commission on Government Forecasting and Accountability (“COGFA”) concluded none of the claimed benefits would be realized by the DOI and

Governor Rauner’s proposal.  In fact, COGFA

concluded a plan where “pension funds would be mandated to invest in state-created commingled funds – would never achieve a cost savings over a 30-year period.”  COGFA’s report further explained even if consolidation of investment assets was accomplished with “no problems”, “it would take 11 years to break even and begin realizing any cost savings in excess of transition costs.”  Meaning, the investment fees paid during, and other costs associated with the transition will be immediately and definitely realized.  At the same time, any savings are speculative and dependent on market volatility.  COGFA’s study concluded, “costs savings would never surpass transition costs over a 30 year period, making that structure completely unviable.”  COGFA is not alone in reaching such conclusions after performing a comprehensive cost/benefit analysis of consolidation.

 

On December 30, 2014, the Anderson Economic Group (“AEG”) made similar conclusions relating to investment of downstate police and fire pension

assets.  In that study, AEG found on average,

downstate police and fire pension systems outperformed the benchmark on returns.  AEG concluded, “Poor management of investments does not appear to contribute to police and fire pension shortfalls in Illinois.”

 

Plainly, the DOI made a politically fueled attempt to justify seizing control of locally controlled police and fire pension systems.  This attempted power grab is not made lightly, accidentally, or without knowledge to the contrary.  It is made without any sort of meaningful support.  Please contact your state representative and senator to tell them how you feel about the DOI’s “recommendation” for what is “needed.”

 

Chicago Pension Reform Thrown Out, Supreme Court to Review

January 14th, 2016

Jones v. Municipal Employees’ Annuity and Benefit Fund of Chicago, Cook Co. Case No. 14 CH 20027

In 2014 the legislature enacted pension “reform” legislation aimed at addressing the underfunding of Chicago’s city workers pension systems.  That legislation reduced the annual increases for retirees, increased employer and employee contributions, and provided beneficiaries a mechanism by which to seek judicial review of pension underfunding by the city.  Individuals affected by the legislation as well as some labor unions filed suit contending the legislation was an unconstitutional diminishment of pension benefits.

Attempting to distinguish the legislation from recent Illinois Supreme Court decisions, the City argued the legislation did not amount to a diminishment but rather provided a “net benefit” to the members.  This argument was based on the City’s perception the legislation provided a road for the pension funds to become financially viable on a long term basis.  In addition, the City argued the legislation was a “bargained-for exchange for consideration” thereby satisfying the Pension Protection Clause.  The City pointed to a footnote in the recent Supreme Court decision suggesting benefits may be altered when additional benefits are added.  It noted in argument several City unions approved of the pension plan and of the legislation.

The Circuit Court first found the legislation clearly constituted a diminishment of pension benefits.  The Court found the City’s argument the legislation constitutes a “net benefit” because it included enforceable obligations directly contrary to the Illinois Supreme Court holding in In re Pension Reform Litigation.  It noted the legislation at issue in that case contained similar enforcement mechanisms.  However, the Supreme Court found that legislation unconstitutional as a diminishment of pension benefits.  The Circuit Court here followed the same reasoning noting, “Quite simply, the constitution removed diminishing benefits as a means of attaining pension stability.”

As to the City’s argument the legislation passed Constitutional muster as a “bargained for exchange”, the Court noted the City presented no authority for its proposed broad reading of the Pension Protection Clause.  Moreover, it noted those unions voicing support of the legislation were acting outside the scope of collective bargaining, did not have the authority to bind their members, and in some cases did not even take any formal vote expressing memberships’ support or opposition of the plan.  It also noted none of them purported to have the authority to find the retirees.

In short, the Circuit Court found the legislation a clear diminishment of pension benefits and therefore unconstitutional for the same reasons expressed in recent Illinois Supreme Court precedent.

The Illinois Supreme Court has accepted direct appeal of this case and scheduled oral arguments for November.

 

Appellate Court Confirms Termination of Benefits of Officer Convicted of a Felony While Receiving Disability Pension

January 14th, 2016

Majid v. Retirement Bd. of the Policemen’s Annuity and Benefit Fund of the City of Chicago, 2015 IL App (1st) 132182

The First District Appellate Court recently issued a decision, which affirmed the pension board’s determination to terminate disability benefits of an officer convicted of a felony.

 

The Retirement Board of the Policemen’s Annuity and Benefit Fund of the City of Chicago (“Board”) reached a decision to terminate the disability benefits of Officer Nail Majid following his conviction on charges arising out of impersonating a Drug Enforcement Agency agent and possession of an unregistered firearm in Ohio.  Majid served as a Chicago police officer for four years before he was injured and awarded a line of duty disability pension.  Majid ultimately pleaded guilty and was convicted of possession of an unregistered firearm, and was sentenced to three (3) years’ probation.

 

Upon learning of the conviction, the Board suspended Majid’s disability benefits and gave notice of a hearing on the matter.  Following the hearing, at which Majid testified he had been convicted of a felony, the Board issued a written order denying Majid’s application for reinstatement of disability benefits, pursuant to 40 ILCS 5/5-227.  The Board found there were only two issues to be determined: (1) whether Majid was convicted of a felony; and (2) whether he was receiving a disability benefit at the time of his indictment and conviction.

 

Section 5-227 of the Pension Code states in relevant part in the second paragraph: “None of the benefits provided for in this article shall be paid to any person who is convicted of any felony while in receipt of disability benefits.”  40 ILCS 5/5-227.  “The unambiguous language of the second paragraph of section 5-227 required that the officer receive disability benefits at the time of his felony conviction before his benefits could be forfeited.”  2015 IL App (1st) 132182, ¶25.

In appealing, Majid argued there must be a nexus between the felony committed and service as a police officer.  The Appellate Court disagreed, holding the court “will not ‘read in’” the nexus requirement that would render the second paragraph of Section 5-227 superfluous.”  2015 IL App (1st) 132182, ¶24.  The Court unequivocally stated, nowhere in analyzing this section, “did we state or imply that the nexus requirement applied to forfeiture of benefits under the second paragraph of section 5-227.”  Id. at ¶26.

 

The Appellate Court also found there were no violation of Majid’s procedural due process rights in the Board’s determining his disability benefits should be terminated.  Majid claimed he did not receive a “meaningful” hearing.  The Court

disagreed, noting Majid was given the opportunity and did indeed testify at the hearing, that he had been convicted of a felony while he was receiving a disability benefit.  “Those were the only two elements require for the termination of his disability benefit…Majid’s argument that he did not receive a meaningful hearing was not supported by the record.”  Id. at ¶35, 41.

 

The Appellate Court also found Majid’s claim the decision violated his equal protection rights to be baseless.  Majid claimed a violation of equal protection for the legislature to not require any nexus between the felony and police service to terminate disability pension benefits while requiring a nexus to terminate retirement pension benefits.  The Appellate Court held it was not a violation of equal protection for the legislature to treat police officers convicted of a felony while receiving disability pension benefits differently from those officers who receive retirement benefits and are convicted of a felony.

 

Illinois Supreme Court Strikes Down Pension Reform… Again…

January 14th, 2016

In re Pension Reform Litigation, 2015 IL 118585

In a unanimous and strongly worded opinion, the Illinois Supreme Court struck down P.A. 98-599 (formerly Senate Bill 1) commonly referred to as the “pension reform legislation.”

 

As you may recall, P.A. 98-599 instituted a series of reductions in benefits to members of the five State pension funds.  That legislation was aimed at reducing annuity benefits for Tier 1 participants by delaying the age at which members could retire, capping the maximum pensionable salary, and significantly reducing annual COLA increases.

 

After the Supreme Court affirmed the absolute protection against diminishment of pension benefits under Article XIII Section 5 of the Illinois Constitution (the Pension Protection Provision) in Kanerva v. Weems 2014 IL 115811 last summer, the State advanced the argument in defense of P.A. 98-599 the State’s “reserved sovereign powers” (police powers) allow the Legislature to circumvent the mandate of the Constitution in the interest of the greater public good.

 

After a lengthy recitation of the history of past pension reform efforts and the legislative intent in adopting the Pension Protection Clause in the Illinois Constitution of 1970, the Supreme Court first found the legislation resulted in a clear diminishment of pension benefits in violation of the Pension Protection Clause.  It repeated its holding in Kanerva, “that the clause means precisely what is says: ‘if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired’”.  It further noted the amount of the members pension benefit depends on when the member first began making contributions to the retirement system and while that benefit could be increased, it cannot be diminished.  In re Pension Reform Litigation, ¶¶5, 45.

 

The Court then addressed the State’s argument it’s police powers allowed it to suspend the Pension Protection Clause.  In finding the State’s argument unpersuasive, the Court gave a lengthy recitation of the historical inability of the General Assembly to adequately fund the State pension systems.  It noted, “There is no dispute that employees have paid their full share as required by law at all times relevant to this litigation.  That has not been the case with respect to the contributions owed by the General Assembly.”  Id., ¶10.  Specifically, the Court cited the recent SEC admonishment of State funding of the pension systems “as bearing no relation to actuarial calculation.”  Id.,17.  It then proceeded to debunk the State’s argument the systems’ underfunding was due to the Great Recession by noting several states bordering Illinois have significantly higher funding ratios than Illinois.  Id., footnote 6.

 

Having found fault with the State’s given reasons for the cause of the pension crisis, the Court then proceeded to dismantle the legal justification offered by the State for the use of its police powers.  The Court noted the contract clause cases cited by the State did not involve the Pension Protection Clause.  Rather, those cases arose under the contract clauses of the Illinois and United States Constitutions.  While that line of authority does recognize limited exceptions, those are allowable only if the impairment is reasonable and necessary to serve an important public purpose.  Based on decades of warnings of underfunding, the Court found the current “crisis” entirely foreseeable.  “The General Assembly may find itself in crisis, but it is a crisis which other public pension funds managed to avoid and, as reflected in the SEC order, it is a crisis for which the General Assembly itself is largely responsible.”  Id., ¶66.

 

The Court also observed several less drastic alternatives the State considered and could have adopted instead of P.A. 98-599.  For example, it found adopting a new amortization schedule for unfunded liability and seeking additional tax revenue less drastic means of addressing the pension funding issue.  Id., ¶67.  These alternatives were acknowledged by the legislature in debate over passage of the bill.  In short, the Court ultimately held the State could not justify the impairment of pensions by the contract clause or police powers.

 

In rejecting this argument, the Court noted that adoption of the State’s argument that a crisis of its own making justifies suspension of the Pension Protection Clause would allow the legislature to circumvent this protection whenever it sees fit by creating an economic hardship in meeting its pension obligations.

 

In holding P.A. 98-599 unconstitutional in its entirety, the Court closed by stating, “Obligating the government to control itself is what we are called upon to do today.  The Constitution of Illinois and the precedent of our court admit of only one conclusion:  the annuity reduction provisions of Public Act 98-599 enacted by the legislature and signed into law by the Governor violate article XIII, section 5’s express prohibition against diminishment of the benefits of membership in public retirement systems.”  Id., ¶89.

 

Together with the Supreme Court’s decision last year in Kanerva, this decision makes very clear any legislation seeking to address the pension deficit using a reduction in benefits faces a very high hurdle.  Recognizing this concern, Governor Rauner was forced to admit his plan for reform moving existing members to a 401k style plan faced significant legal hurdles.

 

As the Supreme Court has sent the legislature back to the drawing board, we will continue to monitor legislative action in the arena of pension reform.

 

PSEBA Emergency Response is A Factual Question Precluding Summary Judgment

January 14th, 2016

Bremer v. City of Rockford, 2015 IL App (2d) 130920

In order to qualify for PSEBA benefits, a covered employee must have sustained a “catastrophic injury” as a result from “response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act.”  See 820 ILCS 320/10.  It has long been the law that a pension board’s award of a duty disability benefit meets the PSEBA requirement for a “catastrophic injury.”  See Krohe v. City of Bloomington, 204 Ill.2d 392 (2003).  However, whether the award of an occupational disease disability under Section 4-110.1 of the Pension Code is also synonymous with a “catastrophic injury” under PSEBA remained an unanswered question.

 

In Bremer, the Pension Board granted Rockford firefighter William Bremer an occupational disease disability benefit pursuant to Section 4-110.1 of the Pension Code.  The Pension Board found his heart condition resulted from service in the fire department due to exposure to chemicals and toxins while fighting fires, very heavy exertion during emergency calls including lifting of people and equipment and overhaul of fire scenes.  After the pension board granted his application for occupational disease disability benefits, he applied for PSEBA benefits.  The City denied Bremer’s application arguing his occupational disease benefit did not constitute a “catastrophic injury” within the meaning of PSEBA.

 

The Second District Appellate Court first found the grant of the occupational disease disability by the pension board satisfied the “catastrophic injury” element of PSEBA.  Recognizing settled case law finding “catastrophic injury” under PSEBA synonymous with grant of a line of duty disability under Section 4-110 of the Pension Code, the Court noted no meaningful distinction between a line of duty pension benefit due to cumulative acts of duty and an occupational disease disability.  As such, the Appellate Court found as a matter of law that Bremer’s occupational disease disability benefit is synonymous with a “catastrophic injury” under PSEBA.

 

Having concluded Bremer satisfied the first requirement of PSEBA in suffering a “catastrophic injury.” the Court next turned to the issue of whether the injury occurred as the result of a response to what is reasonably believed to be an emergency.  The firefighter argued he is eligible for benefits because his heart condition resulted from the cumulative effects of his responses to emergencies.  In support thereof, he submitted transcripts and evidence from the pension board hearing indicating the pension board’s findings of specific acts of service that contributed to his disability.  Because the pension board was required only to find whether Bremer’s heart condition resulted from service as a firefighter (as opposed to any specific acts of duty), the Appellate Court found the trial court erred in relying on those materials to reach the factual conclusion his disability resulted from response to an emergency.  Opining that the question of whether an emergency exists is a factually intensive inquiry that varies from one situation to the next, the Appellate Court held a question of fact existed as to whether Bremer’s heart condition resulted from his response to an emergency.  It remanded the case for further factual proceedings on that issue.

 

Finally, Bremer’s complaint sought attorney’s fees pursuant to the Wage Actions Act.  On this matter, the Appellate Court found because Bremer was no longer an employee of the City, the relief he sought in the form of PSEBA benefits could not be considered wages under the Act.  As a result, the Court held he could not seek attorney’s fees from the City.

 

Judge Finds City of Harvey Owes Police Pension Fund More Than $7.3 Million

January 14th, 2016

Board of Trustees of the Harvey Police Pension Fund v. Village of Harvey, Circuit Court of Cook County, Case No. 06 CH 15468 (Apr. 3, 2015)

Reimer Dobrovolny & Karlson LLC represents the Harvey Police Pension Board. On April 3, 2015, after years of litigation, Cook County Judge Kathleen Pantle found, the Pension Board is “entitled to a judgment in the amount of $7,334,181.88” against the City of Harvey. In 2006, the Pension Board sued the City due to its chronic underfunding of the Police Pension Fund and the City not turning over money levied in the name of the Pension Fund. The parties entered into a settlement agreement in February of 2008.

In pertinent part, the parties’ agreement states, “Commencing with the fiscal year 2006/2007, and continuing thereafter, the City shall annually levy a tax upon all taxable property of the City, as required in §5/3-125 of the Illinois Pension Code.” Nonetheless, the City failed to levy an annual tax sufficient to properly fund the Pension Fund. The City and the Pension Fund then mutually agreed a jointly selected actuarial firm would calculate the amount owed by the City. Once the actuary determined the amount owed, the City attempted to abandon the agreement.

This time, the City claimed it was not required to fund the Pension Fund until 2040. The Court found this claim unpersuasive. It explained, “Under the plain language of the Agreement, the City was to make payments for past amounts owed and agreed to make actuarial determined payments to the Pension Fund every year. It is undisputed that the City has not done so.” The Court then determined the City owes the Pension Fund $7,334,181.88.  RDK attorneys represent the Police Pension Fund and continue to seek proper funding for its client. The City says it will appeal. We will continue to provide updates regarding this important case.

 

Change in RFP’s for Investment Professionals

January 14th, 2016

A change in the disclosures required of investment professionals with pension board contracts became effective January 1, 2015.  Under the new statute, before a Pension Board awards a contract for investment services, the investment advisor or consultant must first disclose a number of enumerated figures pertaining to the advisor or consultants hiring of minorities, females, and persons with disabilities.  Since the change only applies to contracts entered into after January 1, 2015, we have revised our draft RFP’s to address statutory change.

 

Appellate Defines Requirements for Approving Pensions

January 14th, 2016

Balderman v. Board of Trustees of Police Pension Fund of the Vil. Of Chicago Ridge, 2015 IL App (1st) 140482

In a recent opinion, the First District Appellate Court issued a decision, which makes clear the requirements for pension board to properly approve a retirement or disability pension.  The Appellate Court affirmed the trial court’s finding that the pension board had not rendered a final administrative decision regarding a pension application and, therefore, retained jurisdiction to convene a hearing to consider the salary of the applicant.

Both Balderman, the chief of police, and Kapelinski, the deputy chief of police, had a “buyout” provision in their contract that included a 20% raise in salary on their last day of employment.  Kapelinski also served as a trustee on the pension board.

 

On April 28, 2010, Balderman submitted a line-of-duty disability pension application.  The same day, without conducting any investigation, the pension board considered Balderman’s disability pension application.  Over the pension board president’s reservations, the pension board voted 5-0 on Kapelinski’s motion to approve Balderman’s disability pension.  The same day of the hearing, Kapelinski, acting as pension board secretary, signed a document acknowledging Balderman’s salary to include the 20% raise, for purposes of determining the monthly pension amount.  The Board did not consider or vote to approve Balderman’s pension or salary.  Following the hearing, a written “Finding and Decision” was distributed to and then signed by all of the pension board members.  The Finding and Decision was never presented at an open meeting of the pension board and did not include any determination regarding Balderman’s salary attached to rank for purposes of his pension.

 

On May 6, 2010, Kapelinski applied to the pension board for a regular retirement pension, effective May 29, 2010.  Even though he had been awarded a disability pension on April 28, 2010, Balderman signed Kapelinski’s retirement application on May 6, certifying creditable service.  The pension board never voted to approve Kapelinski’s retirement pension application, pensionable salary, or the total amount of pension.  Nevertheless, the necessary Village representatives approved the calculations for both Kapelinski’s and Balderman’s pensions.  The Illinois Department of Insurance issued an advisory opinion that the 20% increases in salary should be included in the pension calculations.

 

On October 21, 2010, the pension board served notice to Balderman and Kapelinski of a hearing to investigate and/or determine final salary amounts for pension purposes.  Both Balderman and Kapelinski filed a complaint for declaratory and injunctive relief seeking to prevent the pension board from taking any action to alter their pensions.  The pension board maintained no final order for payment was ever approved by a majority vote.

 

In finding the pension board retained jurisdiction, because it had not issued a final administrative decision, the Appellate Court noted, “It is elementary that a final decision of an administrative agency must be in writing…the written decision must be prepared and provided to each board member at or before the time the board votes to take final action on the application.”  Balderman, 2015 IL App (1st) 140482 ¶31.  The Appellate Court found the pension board had taken “no action whatsoever with respect to Kapelinski’s application.”

 

The Appellate Court further found the irregularities in the handling of Balderman’s application indicated there had been no valid final administrative decision.  Specifically, the Appellate Court noted it was a violation of the Open Meetings Act to consider Balderman’s disability pension application on the same day it was first presented to the pension board.  In addition, the pension board never voted to approve the amount of Balderman’s pension.  The Appellate Court rejected all of the plaintiffs’ arguments, which attempted to find validity in improper determinations regarding their pensions.  The Appellate Court affirmed the circuit court’s judgment dismissing Balderman and Kapelinski’s complaint for declaratory relief.

 

This case provides both a cautionary tale and outlines the steps necessary for pension boards to properly and fully consider, vote, and issue decisions regarding both disability and retirement pension applications.

 

LEADS Not Subject to FOIA

January 14th, 2016

Better Government Assoc. v. Zaruba, 2014 IL App (2d) 140071

The Second District Appellate Court has recently confirmed LEADS data held by local law enforcement agencies is not subject to the FOIA.  In this case, the BGA submitted a FOIA request to the DuPage County Sherriff seeking records disclosing the vehicles and persons who were subjects of LEADS inquiries conducted by Patrick Zaruba, the teenage son of Sheriff John Zaruba.

In response to the request, the Sherriff argued he could not provide the information requested because it constituted LEADS data prohibited from disclosure by agreement with the Illinois State Police and the regulations of the Illinois Administrative Code.  The BGA argued the request did not seek LEADS data inasmuch as it was seeking data inputted to LEADS through searches not data provided by LEADS and the withholding of the information would result in the inability to identify abuses of the LEADS system.

The Appellate Court affirmed the Sherriff’s denial of access to the requested information based on Section 7(1)(a) of the FOIA which exempts from disclosure “information specifically prohibited from disclosure by federal or State law or rules and regulation implementing federal or State law.”  See 5 ILCS 140/7(1)(a).  The Court found the Illinois State Police considered the inputted queries LEADS data not subject to disclosure.  It further discredited the BGA’s argument regarding identifying abuses of the LEADS system in reasoning the State Police audits LEADS and administers sanctions addressing noncompliance with LEADS policies.

 

Pension Cuts Declared Unconstitutional

November 21st, 2014

On November 21, 2014, a Sangamon County Judge held Public Act 98-0599 violates Article XIII, Section 5 of the Illinois Constitution. The Court concluded, the Act is “unconstitutional and void in its entirety…” In late 2013 the Illinois General Assembly enacted a law increasing the minimum retirement age and cutting annual cost of living increases of current employees. Defending the law, the Attorney General argued the State’s police powers and Illinois’ financial “emergency” trumped the “Pension Protection Clause” of the Illinois Constitution. The Court rejected that argument.

The Court wrote, “on its face, the Act impairs and diminishes the benefits of membership in State retirement systems in multiple ways…”  Continuing, the Court explained, “Illinois Courts have consistently held over time that the Illinois Pension Clause’s protection against the diminishment and impairment of pension benefits is absolute and without exception.” The Court further declared, “the State of Illinois made a constitutionally protected promise to its employees concerning their pension benefits.”

A copy of the decision can be downloaded here: 11212014pensionruling

Undoubtedly, the State will appeal the Circuit Court Judge’s ruling. It is likely this matter will be appealed directly to the Supreme Court of the State of Illinois. Our firm will continue to follow this monumental pension case.

 

Reimer Dobrovolny & Karlson Address Underfunding at IPPFA Conference

October 7th, 2014

On October 2, 2014, Rick Reimer and Keith Karlson addressed underfunding of police and fire pension systems in Illinois.  The presentation occurred at the Illinois Public Pension Fund Association’s Annual Training Conference.

 

Supreme Court to Again Weigh in on Retiree Healthcare

October 6th, 2014

As a follow up to a case reported in the April edition of Legal and Legislative Update, the Illinois Supreme Court has accepted review of Matthews v. CTA et al. 2014 IL App (1st) 1123348.  That case involved retired CTA employees who filed suit to contest the diminishment of their healthcare benefits by legislation passed in 2008 as an unconstitutional diminishment of their pension benefits.  The Appellate Court found the union contract vested the retirees healthcare benefits and therefore did not address the Constitutional issue.  It noted the Kanerva case pending before the Illinois Supreme Court at the time and remanded the matter to the trial court with instructions to await the Illinois Supreme Court’s determination.  In contrast to the Kanerva case dealing with state retiree healthcare benefits, the Matthews case involved health care benefits vesting under the collective bargaining agreement.  It will be interesting to see how the Illinois Supreme Court treats the difference between contracted for healthcare benefits compared to statutorily granted benefits.

 

Appellate Court Affirms Village’s Denial of PSEBA Benefits

October 6th, 2014

Whited v. Village of Hoffman Estates,  2014 IL App (1st) 131662-U

In a recent unpublished opinion, the First District Appellate Court affirmed the Village of Hoffman Estates decision denying health insurance benefits under the Public Safety Employee Benefits Act (“PSEBA”).  Specifically, that Court determined the municipality’s finding was not against the manifest weight of the evidence because the record showed the plaintiff did not suffer a catastrophic injury while responding to an emergency.

Plaintiff Deborah Whited claimed she suffered a catastrophic injury on April 24, 2010.  The record showed Whited had been employed with the Village since October 1989.  On March 12, 2004, she sustained an injury to her right knee during a mandatory police training session.  Between 2004 and 2010, she underwent three arthroscopic knee surgeries.  In 2011, plaintiff applied for and was awarded a line-of-duty disability pension based on the March 2004 injury.  Subsequent to the granting of her disability pension, plaintiff asked the Village to determine whether she was eligible for PSEBA benefits.

Section 10 of PSEBA provides, in part, that a full-time law enforcement officer is eligible to receive health insurance benefits if two conditions are met.  First, the officer must have suffered a
catastrophic injury in the line of duty.  Second, the injury must have occurred as the result of the officer’s response to fresh pursuit, or the officer’s response to what is reasonably believed to be an emergency, an unlawful act by another, or during the investigation of a criminal act.  Both requirements must be satisfied for an officer to be eligible for benefits.

At a hearing on the issue, plaintiff testified that on April 24, 2010, she felt her knee buckle while descending stairs at the police station, on the way to a domestic call.  Even though she was in pain, she continued to the call, where he knee gave out again.  Three days later, a doctor placed her on light duty, where she remained until 2011.  Plaintiff further testified she was entitled to benefits as a result of both the March 2004 and April 2010 injuries.

After a thorough review of the record, the Appellate Court found the Village’s determination that plaintiff was not injured in April 2010 as not against the manifest weight of the evidence.  Plaintiff’s disability pension, awarded in 2011, was based on the 2004 injury and made no reference whatsoever to an April 2010 injury.  The

Court noted that if such an injury had occurred, it would have been included in her disability pension application.  In addition, the Court found that, as the trier of fact, the hearing officer is charged with determining credibility of witnesses at the hearing.  Judgment of the Circuit Court of Cook County affirmed.

 

Municipality Obligated to Pay for Officer’s PSEBA Benefits

October 6th, 2014

Village of Vernon Hills v. Heelan, 2014 IL App (2d) 130823

The Second District Appellate Court has affirmed a decision that the village continues to be obligated to pay for benefits under to the Public Safety Employee Benefits Act (“PSEBA”) for a police officer following the award of a line-of-duty disability pension.  The Village of Vernon Hills filed a complaint against Officer Heelan, seeking a ruling by the Circuit Court that the village was not obligated to pay for health insurance premiums under PSEBA for the officer and his family after the pension board awarded the officer a line-of-duty disability pension.

The Board of Trustees of the Vernon Hills Police Pension Board awarded Heelan a line-of-duty disability pension.  The Village’s complaint sought declaratory judgment that it was not obligated under Section 10 of PSEBA to pay for the health insurance premiums for Heelan, his wife, and their two children.  Heelan filed a counterclaim seeking declaratory judgment that the Village was obligated to pay for the health insurance premiums.  Heelan was awarded a line-of-duty disability pension following two hip replacement surgeries, which were necessary following his fall on some ice when responding to a panic alarm call.

In its complaint, the Village alleged that Heelan had not suffered a catastrophic injury, and that the injury had not resulted from his response to what he reasonably believed was an emergency (the requirements for the Village to pay Heelan’s health insurance premiums, under §10(b) of PSEBA).  The Village argues that a factual distinction existed between Heelan’s injury and the facts in Krohe v. City of Bloomington, (204 Ill.2d 392 (2003)), which held that an injury resulting in a line-of-duty disability pension is synonymous with a catastrophic injury.

Prior to the bench trial, Heelan filed a Motion in Limine, seeking to bar the Village from presenting an evidence or testimony on the issue of whether he had suffered a catastrophic injury under §10(a) of PSEBA.  The Circuit Court granted the motion, finding that the Village was collaterally barred from arguing that Heelan had not suffered a catastrophic injury.  Following the bench trial, the Circuit Court ruled in favor of Heelan and entered declaratory judgment that the Village was obligated under PSEBA to pay for the health insurance premiums for Heelan and his family.

Heelan also sought sanctions against the Village for filing its complaint, which acknowledged Heelan had received a line-of-duty disability pension and that he was entitled to PSEBA benefits.  The Circuit Court found in favor of the Village, holding that the Village did not act to harass Heelan and that it had not act in bad faith in bringing the complaint, which was done in an effort to bring change to the law.

The Appellate Court, in its review, noted PSEBA does not provide a definition for “catastrophic injury,” and stated that the Illinois Supreme Court has held the term “catastrophic injury” to be synonymous with an injury resulting in a line-of-duty disability under the Illinois Pension Code.  On Appeal, the Village argued “much confusion” resulted from the Supreme Court’s decision in Krohe.  The Appellate Court disagreed, finding Krohe had unequivocally resolved the question.  The Appellate Court found Krohe, Richter v. Village of Oak Brook, (2011 IL App (2d) 100114), and Nowak v. City of Country Club Hills, (2011 IL 111838), to be controlling case law, which left no ambiguity regarding the applicable definition of “catastrophic injury.”

The Appellate Court further found that the Village’s complaint and arguments were an improper collateral attack on the findings of the pension board in granting Heelan’s application for a line-of-duty disability pension.  Because the Village did not challenge the pension board’s statutory authority to render its decision, the Village’s complaint was held to be an improper collateral attack on the pension board’s decision.  In so holding, the Appellate Court determined that the Village’s due process rights had not been violated by the Circuit Court prohibiting the Village from presenting any evidence related to the nature, extent, and causes of Heelan’s injuries.  Accordingly, all evidence related to Heelan’s injuries was irrelevant.

The Appellate Court also affirmed the Circuit Court’s ruling that the Village had filed its complaint in an effort to change existing law (PSEBA) and did not act in bad faith.

 

Pension Credit Statute Does Not Apply Retroactively

October 6th, 2014

White v. Retirement Bd. of the Policemen’s Annuity and Benefit Fund of the City of Chicago, 2014 IL App (1st) 132315

In a recent decision, the First District Appellate Court affirmed the circuit court’s reversal of a pension board’s refusal to approve pension credit for prior service periods.   The officer applied for pension credit under Sections 5/5-214(b) and 5/5-214(c) of the Pension Code for two (2) prior service periods.  The officer was seeking credit for  time spent employed as a legal investigator with the City of Chicago’s Corporation Counsel’s office and as a police aide with the City of Chicago Police Department.  The officer originally applied for the credits in February 2010.  At the initial hearing, the officer was cautioned that she may want to hire an attorney.  An attorney filed an appearance on behalf of the officer in February 2012, and a hearing was conducted in March 2012.

Prior to the continued hearing date, Section 5-214(b) of the Pension Code was amended (effective January 5, 2012).  Section 5-214(c) remained unchanged. The following language was appended to the end of Section 5-214(b):

“…provided that, in each of these cases and for all periods specified in this item (b), including those beginning before the effective date of this amendatory Act of the 97th General Assembly, the police officer is on leave and continues to remain in sworn status, subject to the professional standards of the public employer or those terms established in statute.”

At the hearing, the officer provided testimony regarding the duties she performed as a police aide with the police department.  Her duties included assisting citizens and conducting investigations.  All of the officer’s investigations occurred within the police station.  The pension board voted to deny the officer’s claims for pension credits for both the period as a legal investigator with the Corporation Counsel and as a police aide with the police department.  The pension board stated that it was required to follow the law in existence at the time of the hearing.  The pension board also decided that the investigative work performed by the officer as a police aide was not the type of investigative work contemplated by §5-214(c).

After reviewing the statutory language, the Appellate Court determined that §5-214(b) was not expressly intended to be applied retroactively.  The Appellate Court further found the amendment was substantive in nature, as it limited certain pension credits available.  Therefore, the pension board’s retroactive application of the statutory amendment was improper.  The Appellate Court held that the pension board should have made its determination based on application of the 2010 version of §5-214(b).  The Appellate Court further found that the evidence and testimony presented related to the investigative work performed by the officer as a police aide demonstrated that the officer had indeed performed investigative work within the meaning on §5-214(c).   The Appellate Court held that the officer had done more than simply passing along information to other officers.  The pension board was found to have improperly applied the definition of “investigative work” under §5-214(c), and that the pension board’s ruling was clearly erroneous.  The Appellate Court confirmed that the officer had presented sufficient evidence to meet the requirements under §5-214(c) to receive pension credits for her time employed as a police aide.

In confirming the circuit court’s reversal of the pension board’s denial of the officer’s claim for pension credits, the Appellate Court remanded the matter to the pension board for a determination of the appropriate pension credits to be granted to the officer in accordance with §§5-214(b) and (c).

 

Public Comment Under the Open Meetings Act

October 6th, 2014

As many of you know, the Open Meetings Act was recently amended to allow for public comment at public meetings.  In many public meetings, it has been custom and practice for the speaker to identify themselves by name and address prior to making comments.  This was the case in one suburb when a speaker refused to give her home address prior to addressing the village board.  The Mayor insisted the rules of the board required her address and interrupted her comments to the board.  Eventually, the speaker was allowed to address the board without stating her address.

In analyzing the complaint brought by the speaker, the Attorney General noted the amendment to the Open Meetings Act does allow public bodies to create rules and regulations for the public comment portions of public meetings.  See 5 ILCS 120/2.06(g).  However, those rules and regulations are subject to reasonable “time, place, and manner” restrictions as has been interpret by a vast body of case law on government regulation of speech.  The AG then noted the village ordinance regulating public comment at board meetings does not require a member of the public to state his or her home address prior to addressing the board.

Nevertheless, since many public bodies followed a similar practice, the PAC addressed the issue to provide clarity.  The PAC found a requirement that a speaker provide their home address prior to addressing a public body at an open meeting exceeded the rule making authority of the Open Meetings Act.  The PAC found such a requirement serves little purpose and has the potential to significantly limit public participation at meetings.

 

COGFA Publishes Results from PSEBA Study

October 6th, 2014

The Illinois Commission on Governmental Forecasting and Accountability (COGFA) has published an independent study of Public Safety Employee Benefits Act (PSEBA), the statute that grants special health insurance to public safety employees who are catastrophically injured in the line of duty.  The study examined the cost and participation trends associated with employees eligible for lifetime health insurance benefits provided for under PSEBA.

COGFA relied on survey results from both 126 individual units of government and 456 individual PSEBA recipients.  Results from the study include certain demographics: the largest group of PSEBA recipients are an average age of 54, with the majority of recipients between 40 and 60 years of age.  Over 40% of PSEBA recipients received the benefit due to an injury to their back or spine.

Revealed in the study is that 37% of PSEBA recipients are employed, while 155 of the 452 individuals indicated they have insurance available through their employer, their spouse’s employer, or both.  The COGFA report also detailed the costs involved for the employers that provide benefits to PSEBA recipients.

In the published results, COGFA pointed out that certain data was unable to be collected and/or analyzed.  The statutorily-required form sent to individuals and employers did not answer certain questions regarding health insurance plans.  As a result, in part, COGFA was unable to make a determination as to the associated costs and benefit levels of health insurance provided to PSEBA recipients and their spouses from a current employer, as set forth in subsection C of Public Act 98-0561.  In addition, the City of Chicago, which accounts for over 1/3 of Illinois residents, did not submit the information requested within the allotted timeframe of the study.

 

Appellate Court Affirms Pension Board Denial of Line-of-Duty Disability

October 6th, 2014

Shafer v. Lake in the Hills Pension Bd., 2014 IL App (2d) 131002-U

In a recent Rule 23 opinion, the Second District Appellate Court affirmed the pension board’s denial of Officer Shafer’s line-of-duty disability pension claim.  The police department required physical fitness testing of its officers, as was specified in the collective bargaining agreement.  All of the tests are pass/fail and an officer would pass if they achieved a result in the 40th percentile on the first attempt.  For the bench press, officers were not required to attempt more than the minimum weight necessary to achieve the 40th percentile.  However, officers could attempt greater weights to qualify to earn additional compensatory time.

Shafer passed the bench press test by lifting the minimum weight.  Shafer was then asked if he wanted to attempt the 80th percentile weight.  While attempting the 80th percentile weight, Shafer suffered a torn rotator cuff.  The pension board found that Shafer was disabled, but that the injury did not occur in performance of an act of duty.  The pension board awarded a non-duty disability pension, even though Shafer had applied for a line-of-duty disability pension only.

The Appellate Court noted that both police officers and ordinary citizens perform bench presses, and both are at risk of injury while performing the exercise.  Shafer argued that he had performed the exercise at a special risk, because he was injured during a mandatory physical fitness test.  The Appellate Court held that Shafer was under no duty to perform the physical test that resulted in his injury – attempting to lift the 80th percentile weight.  However, Shafer was under no duty to attempt a weight greater than the 40th percentile weight after he had successfully completed the exercise.

The Appellate Court disagreed with Shafer’s argument that he was exercising discretion in the performance of his duty in attempting the greater weight.  Shafer was exercising personal discretion only, not discretion with respect to the manner in which to perform his duty, in deciding to try to earn additional compensatory time by attempting the 80th percentile weight.  Reimer Dobrovolny & Karlson represented the pension board in this matter and is pleased with the Appellate Court’s affirmation of the pension board’s decision.  Shafer is currently seeking appeal, as a right, to the Illinois Supreme Court.

 

Appellate Court Reinstates Pension Board Denial of Line-of-Duty Disability

October 6th, 2014

 

Beckwith v. Bd. of Trustees of the Hickory Hills Police Pension Fund,                        2014 IL App (1st) 132542-U

In a recent Rule 23 opinion, the First District Appellate Court has reinstated a pension board decision denying a line of duty claim by a police officer.  The officer responded to a call for a domestic disturbance at an apartment complex.  After speaking with subjects at their apartment door but making no arrests, the officer left the apartment to return to his squad car.  He lost his footing descending the stairs.  Another officer behind him grabbed his vest to prevent him from falling down the stairs.  As a result, the officer injured his back and had to undergo surgery.

The pension board denied the officer’s request for a line of duty disability benefit but granted him a non-duty disability.  The pension board conducted a “special risk” analysis to determine whether the officer was entitled to a line of duty disability.  In short, in order for a police officer to be eligible for a line-of-duty disability, he must be engaged in some act of police duty inherently involving special risk not assumed by a citizen in the ordinary walks of life.   The pension board reasoned that, based on the evidence presented at the hearing, the call had terminated and the officer was not engaged in any act of police duty inherently involving special risk at the time of his injury.

On administrative review, the Circuit Court of Cook County reversed and granted the officer a line-of-duty pension.  The First District Appellate Court re-instated the decision of the pension board.  It found the pension board correctly determined the response to the domestic disturbance had ended.  The court pointed out the well establish principle that simply being on duty and in uniform is not sufficient for a duty disability.  Based on the evidence, the Appellate Court concluded the pension board correctly concluded, the officer was not engaged in any “special risk” activity when he was injured on the stairway.

 

Supreme Court Finds AG Cannot Challenge Pension Board Decision on Jon Burge

October 6th, 2014

People ex rel. Madigan v. Burge, 2014 IL 115635

In a follow up to a case featured in our January 2013 newsletter, the Illinois Supreme Court has overturned an Appellate Court decision and thrown out a lawsuit filed by the Attorney General seeking to stop pension payment to former Chicago Police Commander Jon Burge.

As you may recall, in 2010 Burge was convicted in Federal Court of perjury in connection with a civil suit alleging he was aware of a pattern of torture and abuse conducted by officers under his supervision.  Following his convictions, the Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago held a hearing to determine whether Burge’s felony convictions should result in termination of his police pension.  On the issue of whether Burge’s convictions arose out of or were connected with his police employment, the Board deadlocked 4-4.  The Board issued a written administrative decision confirming the motion to divest Burge failed and he would continue to receive a pension benefit.

In response, the Attorney General filed a lawsuit pursuant to Section 1-115 of the Pension Code alleging payment to Burge would violate the Pension Code.  The Circuit Court dismissed the lawsuit finding it did not have jurisdiction to hear the Attorney General’s complaint.   The Appellate Court reversed and remanded the case for a hearing on the merits of whether Burge’s conviction qualified as a duty related felony.

In a 4-3 decision, the Illinois Supreme Court found the circuit court correctly found it lacked jurisdiction to hear the Attorney General’s lawsuit.   At issue were two conflicting provisions of the Pension Code.  Section 1-115 gives the Attorney General the authority to bring a civil action to enjoin any act which violates any provision of the Pension Code.  Conversely, Section 5-189 of the Pension Code gives the Chicago Police Pension Board “exclusive original jurisdiction” in any matter relating to or affecting the fund.  In reversing the decision of the appellate court, the Supreme Court reasoned because Section 5-189 governed any action related to the fund, it was more specific than the general provisions of Section 1-115 referring to “any” violation of the Pension Code.  Because the Court found Section 1-115 did not grant the Attorney General an original right of action in this case, it found the only method of review of the Pension Board’s decision was through the Administrative Review Law.  Because the Attorney General’s complaint did not seek administrative review of the Pension Board decision, the circuit court correctly concluded it did not have jurisdiction to hear the Attorney General’s complaint.

The Supreme Court next addressed the effect of the 4-4 tie vote at the pension board proceedings.  It noted that Burge has been receiving pension benefits since 1997 when the board approved his benefits by majority vote.  Since the vote to terminate his benefits failed to garner a majority, the decision granting him benefits passed in 1997 remains in effect.

The Court concluded by noting the limited nature of its opinion pertaining only to the issue of who has authority to adjudicate the termination of Burge’s retirement benefits.  It did not reach or pass judgment on the issue of whether Burge’s convictions qualify as duty related felonies mandating termination of his pension.

 

No Survival in Action for Accrued Widow’s Benefits

October 6th, 2014

Hooker v. Retirement Bd. of the Fireman’s Annuity & Benefit Fund of Chicago,         2014 IL App (1st) 131568

In a follow up to a case featured in our July 2012 and January 2014 newsletters, the ongoing saga of the widows annuity benefit of Elaine Hooker continues to play out in the Illinois appellate courts.

As you may recall, Chicago Firefighter Michael Hooker suffered a debilitating injuring in the line of duty in 1988.  He died in 2000.  The Board awarded Mrs. Hooker the minimum widow’s annuity but she appealed for a line-of-duty death benefit and prevailed.  While her appeal in that case was pending, the Legislature amended the Code to include duty availability pay (“DAP”) as part of pensionable salary.  That led to a second lawsuit.  As reported in our January newsletter, the Illinois Supreme Court ruled DAP should not be included in the calculation of Mrs. Hooker’s annuity.  See Hooker v. Retirement Bd. of the Firemen’s Annuity and Benefit Fund of Chicago, 2013 IL 114811.

Mrs. Hooker died in 2010.  While her case was still pending before the Illinois Supreme Court, her heirs filed another lawsuit seeking a retroactive increase in her widow’s annuity.  In this case, the heirs argued Mrs. Hooker’s annuity should be retroactively increased and paid to her heirs due to an increase in salaries effectuated by a February 2011 CBA.

After finding the court lacked jurisdiction to address the plaintiffs through administrative review because he did not file his suit within 35 days of issuance of a determination letter from the pension board, the court addressed the narrow issue of whether the estate of an annuity recipient could bring an action against the board.  The court concluded such an action does not survive the death of the annuity recipient.  In short, any cause of action to make retroactive payments to Mrs. Hooker’s annuity benefit died with her.

 

Case Clarifies Eligibility for PSEBA for Hearing Loss

October 6th, 2014

Pedersen v. Village of Hoffman Estates and James H. Norris, Village Manager,        2014 IL App (1st) 123402

The First District Appellate Court reversed a decision denying benefits under to the Public Safety Employee Benefits Act (“PSEBA”) to a firefighter.  Following Defendants Village of Hoffman Estates and Village Manager James H. Norris’ decision denying Firefighter Alan R. Pedersen’s claim for continuing health coverage benefits, plaintiff filed a multi-count Complaint in Circuit Court.  In part, the Complaint alleged an administrative review of the denial of benefits pursuant to Section 10 of PSEBA.  The Circuit Court affirmed the Defendant’s decision denying benefits.

Prior to when his Village employment, Pedersen worked at O’Hare Airport in an area requiring him to wear protective hearing equipment.  He was then hired in 1976 by the Village as a firefighter and EMT.  Following an annual physical which noted a “shift” in his hearing, Pedersen was fitted with bilateral hearing aids.  As a result, he was placed on light duty in June 2003, but was able to return to full duty three months later with a medical release.  On June 22, 2004, Pedersen responded to a call of a tanker truck fire on the toll road.  After the fire was extinguished and Pedersen cleaned up the scene, a coworker accidentally activated a fire engine’s siren.  Pedersen was approximately two feet from the front of the engine at the time, and he later described the event as though his ears were going to “blow up and were bleeding.”  Pederson ripped out his hearing aid and broke it in the process.  The next day Pedersen visited his audiologist due to pain in his ears.  Another doctor later released Pedersen to full duty, after noting no change from a 2003 hearing test.

Pedersen worked as a firefighter until February 2005 when he went to the wrong location of an automobile fire because he misheard information.  Also, he had trouble hearing pre-alert tones because he slept without his hearing aids, and he could not always hear the whistle on air packs.  As a result, Pedersen was informed by the fire chief that he would no longer be working as a full-time firefighter.  He received benefits under the Public Employee Disability Act, and later applied, and was granted, a line of duty disability benefit from the Hoffman Estates Firefighters’ Pension Fund.  The Board found “that the incident of June 22, 2004, in response to an emergency, caused firefighter Pedersen to become disabled relative to his hearing loss.”

Section 10 of PSEBA, in part, requires employers of firefighters to pay health insurance premiums for a firefighter, spouse, and dependent children if the firefighter suffers a catastrophic injury.  Eligibility is triggered when that firefighter is injured as a result of a “response to what is reasonably believed to be an emergency.”  However, on May 27, 2008, the Village denied Pedersen’s claim for health benefits, finding that medical evidence suggested his disability was due to cumulative effects of exposure to noise over time, in both emergency and nonemergency situations, on and off duty.  In addition, hearing officer Norris found the June 22, 2004 incident did not cause or aggravate Pedersen’s preexisting hearing loss.

In evaluating the claim, the Circuit Court cited Gaffney v. Board of Trustees of the Orland Fire Protection District, 2012 IL 110012.  In that case, the Illinois Supreme Court held that in order to be entitled to benefits under section 10(b) of PSEBA, “the injury must occur in response to what is reasonably believed to be an unforeseen circumstance involving imminent danger to a person or property requiring an urgent response.”  Gaffney, 2012 IL 110012, ¶64.  Here, the Circuit Court said this was not in response to an emergency, that the accidental sounding of the siren was unforeseen, and it did not involve imminent danger to persons or property requiring an urgent response by Pedersen.

The Appellate Court, in its review, noted that the Illinois Supreme Court has held the term “catastrophic injury” to be synonymous with an injury resulting in a line-of-duty disability under the Illinois Pension Code.  Since there was no issue that he suffered a catastrophic injury, the issue turned to whether the injury resulted from what Pedersen reasonably believed to be an emergency.  Again looking to Gaffney, the court noted that an event or incident which is not initially an emergency may become an emergency as the circumstances change.  The court found Pedersen’s testimony regarding the scene of the tanker truck fire on the toll road to be consistent with a response reasonably believed to be an emergency under PSEBA; the emergency was ongoing and the scene remained dangerous.  As such, the Appellate Court reversed the Defendants’ decision to deny benefits as clearly erroneous.

 

Pension Funds Dealt Blow in Funding Case

October 6th, 2014

Board of Trustees of the Riverdale Police Pension Fund vs. Village of Riverdale,      2014 IL App (1st) 130416

The First District Appellate Court issued its opinion on June 27, 2014.  This case may have a far reaching impact on the duty of a municipality to properly fund police (and fire) pension funds.

The Riverdale Police Pension Fund (“Pension Board”) filed a declaratory judgment action, alleging the Village of Riverdale breached its statutory funding obligation under §3-125 and §3-127 of the Pension Code by failing to levy the appropriate amount of taxes from 2000 through 2010.  The Pension Board requested the court enter an order declaring that  Riverdale’s tax levy contributions were insufficient and require the Village to contribute an amount required by §3-125 and §3-127 of the Illinois  Pension Code. At the same time, the Pension Board sought to compel the Village to turn over all pension contributions levied on behalf of the Fund, that were in the Village’s possession.  In making its levy requests, the Pension Fund relied upon actuarial valuations by the DOI.  The DOI’s recommended levy was forwarded to the Village.  At the end of fiscal year 2005, the Village owed the sum of approximately $615,408.

During discovery, the Village admitted there were certain funds owed to the Pension Fund, as a result of an “accounting practices” oversight, which had been placed in the Village’s pooled account and used for “general operations.”  In its response to the Pension Board’s request to admit facts, the Village conceded that from 2003 to 2010, it did not follow the DOI’s recommended levy and did not retain its own actuary to determine the appropriate amounts pursuant to §3-125 of the Pension Code.  In reality, the Village levied an arbitrarily determined amount, which was not based upon any actuarial valuation.  The Pension Board filed a partial motion for summary judgment as to liability, arguing it was entitled to summary judgment were it was undisputed that there were funds owed to the Pension Fund due to the Village’s failure to remit those property taxes levied by the Village and not transferred to the Pension Fund, and its failure to comply with the tax levy recommendations issued by the DOI.

Relying on McNamee v. State of Illinois, 173 Ill.2d 433 (1996), the Village argued that summary judgment was not proper because the Pension Code did not require the Pension Fund to be funded. The Circuit Court denied the Pension Board’s partial Motion for Summary Judgment without explaining its basis for doing so, and provided the Village with an opportunity to file affirmative defenses.  The Village filed an affirmative defense – the Pension Code does not require the pension fund to be funded.  At the close of discovery, the Village filed a motion for summary judgment, arguing it was not liable pursuant to McNamee, because the Pension Board did not allege any pension fund participant had been denied benefits due to the alleged underfunding and there was no evidence showing benefits had been impaired.  In its motion, the Village included deposition testimony from its expert witness, in which that expert testified there was no measurable actuarial damage caused to the pension fund as a result of the alleged underfunding.  The expert further testified the Pension Fund did not default on benefit payments as a result of the alleged underfunding.  Further, the Village argued the Pension Board failed to provide any evidence showing the Pension Fund was on the verge of default. The Pension Board responded to the Village’s Motion, alleging there were contested issues of material fact.  The Pension Board cited testimony from its witnesses, establishing the Village had a net pension obligation of over one million dollars due to the Village’s failure to submit pension contributions in the annual required amount.

On January 14, 2013, the Circuit Court granted the Village’s Motion for Summary Judgment.  In its opinion, the Circuit Court noted that the Village admitted it did not follow the DOI’s actuarial recommendations for the years 2003 through 2010.  The court further determined that McNamee, was factually distinguishable, “because it did not address the issues in this case, to wit: whether the Pension Board had a vested contractual right to the pension funding level in the Riverdale Police Pension Fund.”  The trial court noted that this was a case of first impression, and went on to analyze Illinois cases dealing with statutory funding under the Pension Protection Clause contained in Article XIII, Section 5 of the Illinois Constitution.  The trial court concluded, based on the plain and ordinary language of the Statute, “the legislature could not have intended to remove all discretion from the municipality in the determining the amount of tax levies and contributions to the pension fund in any particular year.”  Accordingly, the court granted the Village’s Motion for Summary Judgment.  An appeal followed.

According to the Appellate Court, the issue before the Court was “whether the plain language of the Pension Code created a contractual obligation under which the Village was required to remit funds to the pension fund in concert with that reported as necessary by the Pension Board?”  The court engaged in a detailed analysis of various Illinois Supreme Court cases, including the McNamee, Lindberg, and Sklodowski cases.  The court concluded Sections 3-125 and 3-127 of the Pension Code have not been interpreted by the courts to require the levying of taxes in strict concert with the funding recommended by the Village Board.  Further, the court recognized the Illinois Supreme Court has consistently held that a beneficiary is entitled to receive pension benefits, but the reserve portion of the “annual requirement” is not a fixed entitlement. Unfortunately, the Court concluded the Pension Board did not satisfy its burden of citing specific language of the Pension Code that demonstrated a legislative intent to establish a contractual right to funding.  In the Court’s opinion, its conclusion was further supported by the Legislature’s enactment of Public Act 98-599, which provided as of July 1, 2014, the four state pension systems with the express right to file suit if the State does not maintain the funding levels called for by Public Act 98-599.  The Court viewed the Legislature’s action provided evidence that the Pension Code does not provide “an implied right” to enforce funding levels.  Recognizing the McNamee Court established a cause of action need not wait until benefits are actually diminished, the Court held, in this case, the Pension Board did not provide evidence that the Riverdale Police Pension Fund was on the “verge of default or imminent bankruptcy.”  The Court noted the Pension Board failed to establish any beneficiary had been denied benefits.

Summarizing its opinion, the Court held the statutes provide the Village with discretion in implementing the funding recommendations certified by the pension board, and where no evidence was provided that the pension fund was at risk of denying benefits, the Village was entitled to summary judgment as a matter of law.  The Court explained: “Simply stated, the Statutes do not provide a cause of action for underfunding, so long as there is no allegation or proof the fund at issue is on the verge of default or imminent bankruptcy.”

However, there was some good news.  The Pension Board did allege the Village had improperly retained property taxes levied on behalf of the pension fund, but not paid to the Pension Fund, as required under Section 22-403 of the Pension Code.  To the extent the Village collected money on behalf of the Pension Fund, the Appellate Court reversed the portion of the Circuit Court’s Order denying the Pension Board’s Motion for Summary Judgment.  The Court remanded the matter back for determination as to the amount of property taxes collected by the Village that was owed to the Pension Fund.

This is obviously a troubling case for all downstate pension funds.  No doubt some municipalities will view this decision as a green light to shirk their responsibility to annually fund its police and fire pension funds.  Hopefully, the Illinois Supreme Court will review this case, if a Petition for Leave to Appeal is filed and granted.  In the meantime, pension funds may need to wait for the enforcement provision contained in Sections 3-125 and 4-118 of the Pension Code take effect in fiscal year 2016.  Unless, of course, the legislature in its infinite wisdom repeal the enforcement provisions.  Our attorneys will continue to monitor this important case.

 

IPPFA PENSION UPDATE

April 24th, 2014

Whether you are police officer or firefighter in northern, central, or southern Illinois you and your pension are under attack.  Municipal leaders throughout Illinois are banding together to influence the Illinois legislators to change the police and fire pension system to reduce the benefits they supply.

Each pension fund is asked to remain alert to what is being said by municipal officials publicly in the media and at meetings regarding your funding levels, rates of return and sustainability.  Pension funds should respond in the media and at public meetings to dispel any misconceptions and inaccuracies when released by the municipal groups.  Even if your municipality has not made any public comments, if they participated or joined in groups to reduce your benefits you should respond.

The municipal groups have failed to say that police and firefighters are not eligible for Social Security and their pensions are their only retirement security.  Unlike the municipal administrators and other employees that receive an IMRF pension and Social Security.  They also don’t mention that they have no qualms about making sure their own pension fund is 100% funded each year but complain when all we want is the same thing and blame the police and fire funds for cutbacks and layoffs.

The IPPFA as part of the Public Safety Coalition will do its part dispel the myths being spread by the municipal groups but this is a statewide issue and each board has to take the initiative to respond on local level.  The IPPFA has available on its website www.ippfa.org a media toolkit to assist pension funds in responding to these inaccurate claims made by some municipal leaders.  There are sample letters and press releases in the toolkit.

Sincerly,

James McNamee, President

IPPFA

 

Illinois Supreme Court to Hear Retiree Health Care Case

April 12th, 2013

The Illinois Supreme Court has granted leave to appeal a decision by a Circuit Court Judge in Sangamon County allowing the Legislature to impose costs of retiree health care on retirees.  After the briefs are filed, the Court will probably hear argument in September.  R&K’s pension attorneys will continue to monitor this important case.

http://www.chicagotribune.com/news/politics/sns-rt-us-usa-illinois-courtbre93a168-20130411,0,7259393.story

 

 

What Do Faith-Based Organizations Say About Collective Bargaining?

March 18th, 2013

A Chicago based worker-rights organization, Interfaith Worker Justice (“IWJ”), has summarized religious organizations’ attitudes toward workers’ rights.  It seems most religious institutions support workers having the right to collectively bargain. Please review a copy of IWJ’s summary by clicking the link below.

Faith Based Bargaining

 

SEC Begins Cease & Desist Proceedings Against State of Illinois for Underfunding Pension

March 13th, 2013

On March 11, 2013, the Securities and Exchange Commission began cease-and-desist proceedings against the State of Illinois.  R&K’s Attorneys will continue to monitor this developing story. Below is a link to the SEC’s filing:

SEC vs State IL

 

7th Circuit Reinstates Claims Against Orland Hills by Whistleblowing Cop

March 13th, 2013

On March 11, 2013, the 7th Circuit Court of Appeals ruled in favor of terminated Orland Hills part-time Police Officer David Kristofek. The Village of Orland Hills is alleged to have terminated Kristofek after he reported politically motivated corruption to the FBI.  Kristofek claims, he went to the FBI after being ordered by a superior officer to destroy evidence and release a prisoner. Kristofek asserts he was told that the motorist was politically connected.

The complaint claims Orland Hills’ Police Chief terminated Kristofek once he learned of the officer going  to the FBI.  Kristofek then filed suit claiming a violation of the First Amendment, the Illinois Constitution, and the Illinois Whistleblower Act.  The trial court dismissed Kristofek’s complaint, finding that he did not allege that he spoke on a matter of public concern.  Kristofek appealed.  After briefing the matter, the 7th Circuit Court of Appeals heard argument and ruled in Kristofek’s favor.

This case was successfully argues by Reimer Dobrovolny & Karlson LLC partner, Keith A. Karlson, and Chicago attorney, Jerome F. Marconi.

Below is a link to the recording of the oral argument and the decision of the Court:

Kristofek v. Orland Hills Opinion                       Kristofek v. Orland Hills Oral Argument

 

 

DOI Cites City of Harvey for Not Properly Funding Pension Funds

March 13th, 2013

On February 20, 2013, the Illinois Department of Insurance (“DOI”) issued a Notice of non compliance to the City of Harvey, pursuant to the provisions of 40 ILCS, §5/1A-113 of the Illinois Pension Code. The DOI concluded the City failed to properly fund its Police and Fire Pension Funds as required by the Pension Code.  In the Notice of non compliance, the DOI alleges the City of Harvey failed to make the required municipal contributions from 2007 through 2012. The DOI found the City of Harvey owes the Police and Fire Pension Funds at least $10,043,072.00. The effect of the City’s failure to fund the Harvey Police Pension Fund, has left the Harvey Police Pension Fund 65% funded, and the Harvey Firefighters’ Pension Fund only 40.5% funded.

The Notice of non compliance requires the City to provide the DOI with written evidence of any remedial action it takes to the DOI concerning the funding issue. Within thirty (30) days from the date of the Notice of non compliance. In the event that the City fails to provide such written evidence, the DOI may issue administrative orders requiring the City to appear and show cause for its non compliance.

The statutory authority, which enables the DOI to issue a Notice of Non Compliance and assessment of potential penalties lies in a little utilized provision of the Pension Code, §5/1A-113(d). After a hearing, the DOI can order the City to comply. In the event that the City fails to comply within a prescribed time period, the DOI is empowered to assess a civil penalty of up to $2,000.00 against the City, for each instance of non compliance. In the event that the penalties are not paid within thirty (30) days of the assessment, the DOI can refer this matter to the Illinois Attorney General or the Cook County States Attorney to file a civil action on behalf of the People of the State of Illinois.

Police and Fire Pension Fund Trustees should welcome the DOI’s actions and hope that this trend continues. The DOI’s actions may be a powerful new tool in the fight with Municipalities that have blatantly ignored the requirement to properly fund their Police and Fire Pension Funds. What, if any, impact the DOI’s actions will have on these municipalities remains to be seen. Reimer Dobrovolny & Karlson’s attorneys will continue to monitor this important development. Updates regarding this case will be posted on Reimer Dobrovolny & Karlson’s website www.rdklaborlaw.com

 

Governor Orders Flags at Half-Staff to Honor Fallen Firefighter

March 8th, 2013

On March 8, 2013, Governor Quinn Ordered flags flown at half-staff to honor Firefighter Christopher Brown.  Flags should be flown at half-staff from sunrise on March 9, 2013 through sunset on March 11, 2013.

Brown, a Hudson Valley Fire Protection District Firefighter, was killed in the line of duty on the evening of March 5, 2013. Firefighter Brown was 39 years old and leaves behind a wife and two children (ages 8 and12).

Reimer Dobrovolny & Karlson’s thoughts and prayers are with Firefighter Brown’s family and co-workers.  A link to a copy of the Governor’s proclomation is provided below.

FirefighterChrisBrownproclamation

 

R&K and MAP Win Reinstatement for Lisle Officer

February 18th, 2013

The Grievant is a Lisle Police Officer and member of Metropolitan Alliance of Police, Chapter #87. The officer had a glowing work history and had never been disciplined. After suffering a work injury (an ankle fracture), the Village placed the officer on “light duty” on Tuesday-Saturday from 3 p.m. – 11 p.m.

The Village’s doctor took the officer off of light duty so she could concentrate on physical therapy.  During the time she was not working light duty, the officer went on vacation.  The Police Department’s command staff was upset when it saw Facebook photos of the officer apparently “enjoying her summer” while not working light duty.

In its investigation, the Village learned the officer returned to work on schedule created by the Village’s own doctor.  None of the activities she engaged in caused or aggravated her injury.  Undaunted, the Village still elected to terminate the officer. The Village of Lisle terminated the officer based on allegations of untruthfulness, feigning a work injury, and commission of an unstated crime.

The Arbitrator held that each of these allegations were not supported by evidence and ordered the officer reinstated.  Specifically, he noted the officer was never charged with or convicted of a crime.  With regard to faking an injury, the Arbitrator found, “the Grievant suffered a legitimate and fairly serious injury, and then closely followed the instructions of the doctor and the therapists selected by the Village.” The Arbitrator also held, “there is no evidence that the Grievant was dishonest, either in her dealings with the medical personnel or in her dealings with the Village.”  On February 17, 2013, Arbitrator Daniel Nielsen concluded, “The Village did not have just cause to terminate the Grievant…”  The Arbitrator held, “The appropriate remedy is to reinstate her to her former position, and to make her whole for her losses by reason of the termination.”

Reimer and Karlson LLC represented the officer and the Union throughout her discipline and arbitration. We congratulate the officer and Union on this important victory. The officer looks forward to returning work and continuing to serve the community.

Below is a copy of Arbitrator Nielsen’s award.

Lisle-MAP-Award

 

We Are One Illinois Publishes New Fact Sheet re: Senate Bill 1

February 8th, 2013

Senate President John Cullerton’s proposed legislation (Senate Bill 1) seeks wholesale cuts to existing pension benefits.  In response, on February 8, 2013, the We Are One Illinois coalition published a Fact Sheet regarding Senate Bill 1.  Please review the fact sheet, a link to which is provided below:

http://www.ieanea.org/media/2013/01/SB-1-fact-sheet.pdf

Reimer Dobrovolny & Karlson LLC will continue to monitor this important legislation and will provide updates as information becomes available.

 

 

The Latest Pension News from WE ARE ONE ILLINOIS

February 8th, 2013

Friends,

Here’s the latest in pension news for early February.

In a recent speech to the City Club of Chicago, Senate President John Cullerton made clear that he intends to move pension legislation “as quickly as possible.” The Chicago Sun-Times reports he hopes to have the full Senate vote by late February. To fulfill this threat, President Cullerton has introduced Senate Bill 1.

SB 1 combines two pension-cutting bills into one. Affecting the pension systems for teachers, university employees, state employees and legislators, it splits the unfair, unconstitutional benefit cuts offered last legislative session into two parts – Part A and Part B. Part A would unilaterally cut retirees’ cost-of-living adjustments (COLAs). COLAs would be frozen until 2017, delayed until age 67, and capped at very low levels. The COLA caps alone effectively reduce the value of the pension benefit by around one-third over 20 years of retirement, leaving seniors unable to keep pace with inflation.

If Part A is found unconstitutional, then Part B goes into effect. Part B would force workers and retirees to make a no-win “choice” – either “choose” to cut your COLA by one-third over twenty years, or “choose” to lose access to health care in retirement and freeze your pensionable salary.

The coalition believes both Part A and Part B of SB 1 would be found unconstitutional . Unfortunately, even if litigation was successful, it means the legislature would have kicked the can down the road, further weakening the state’s budget and the pension systems.

In downgrading Illinois’ bond rating, Standard and Poor’s warned about exactly this scenario, where legal challenges could lead to “several years” of budget uncertainty.

Given this threat, it is important that you e-mail your legislator and urge them to vote NO on any bill – including Senate Bill 1 – that has not been agreed to by the We Are One Illinois coalition. With some 40 new senators and representatives now in office, we have to make our voices heard. You can view our standard message – and personalize it – by clicking here to e-mail your legislator.

You can also contact committee members considering SB 1 by clicking here to view the Senate Executive Committee roster. By clicking on a member’s name, you will find his or her Springfield and district office phone number.

Be prepared for further requests for your activism in the days to come, depending on how and when the legislature acts.

Even as the fight over SB 1 looms ahead of us, our coalition continues to try to create a structured process toward building consensus around a fair and constitutional piece of legislation. We have been planning and organizing a Pension Summit with the governor and legislative leaders to renew these efforts. However, longtime House Speaker Michael J. Madigan rejected our invitation. Even so, Illinois AFL-CIO President Michael T. Carrigan responded constructively, continuing to try to find a collaborative way forward. You can read Carrigan’s response by clicking here.

All the while, Illinois voters are on our side. Read the latest results of our poll by clicking here, which shows the public opposes pension cuts, supports our coalition’s plan, and backs our call for a summit.

Thank you for your past support and current vigilance. We will keep you informed as developments occur. Check our Facebook page for more frequent updates.

- We Are One Illinois

 

Due Process Not Violated by Having a 3-Member Pension Board Hear a Disability Claim

February 8th, 2013

Buckner v. University Park Police Pension Fund, 2013 IL App (3d) 120231 (Feb. 1, 2013)

        The Third District Appellate Court of Illinois affirmed the decision of the University Park Police Pension Fund to deny a line of duty disability pension and award a non-duty disability pension.

Plaintiff Gwendolyn Buckner, a University Park Police Officer, injured her back falling down stairs while evacuating a burning building.  After lumbar fusion surgery, she returned to duty almost a year later, in March 2002.  By December 2002, she was released back to work with no restrictions. Four years later, in 2006, Buckner sustained back injuries in an automobile accident when she was driving home after work.  She was driving home in a department-issued, unmarked squad car.  She had the vehicle as a result of being on-call at all times, and was not responding to a call or on patrol when the accident occurred.  After a second back surgery in 2007, she was rendered physically unable to perform her job.

Filing an application for line-of-duty disability pension benefits, Buckner amended her application on its face to include a non-duty disability pension.  Two independent medical exams certified Buckner as disabled, and both cited the 2006 accident as a contributing factor.  Another independent medical exam found Buckner not disabled, and in fact able to perform unrestricted duty.  In October 2010, a three-member (out of five) Pension Board awarded a non-duty disability after denying her line of duty claim.  The Pension Board found that a disability was established, but that it did not result from or aggravated by the performance of an act of duty.  The trial court affirmed the Board’s decision, and Buckner decided to appeal.

In its ruling, the Appellate Court addressed two issues: first, whether the Board erred in denying a line of duty disability pension; and second, that her due process rights were violated in the Board’s proceedings.

The court decided the first concern after citing the special risk requirement found in the definition of an “act of duty” from the Pension Code and as applied by the courts.  In fact, as the court pointed out, an officer does not qualify for a line of duty disability for merely being on duty – yet, the inquiry must focus on the capacity in which the officer was acting at the time of the injury.  Also, an on-duty injury need only be “a causative factor” in an injury, not the sole cause.  The Court found that driving home after her shift ended did not constitute an act of duty involving a special risk; therefore, the Board’s denial of a line of duty pension request was affirmed.  As part of Buckner’s assertion, she also claimed the 2001 injury while on duty as a causative factor of her disability.  The Court rejected this as well, pointing out Buckner returned to full duty in March 2002.

Buckner also claimed the Board violated her due process rights by proceeding with only three board members.  Buckner argued the Board lacked 2 of its 5 required members.  Therefore, a unanimous decision by the remaining 3 members to award her a line of duty disability pension was required, as is mandated by the Open Meetings Act.  The court found this claim unconvincing.  The court held Buckner forfeited the issue after failing to challenge the makeup of the Board at the hearing.  Additionally, she failed to file a complaint under the Open Meetings Act, which requires complaints of violations must be filed within 60 days.  Regardless, the Court found, a quorum was necessary to approve or deny a disability pension request, and a quorum of three Board members was present.

 

R&K Attorney Richard J. Reimer Selected to Teach for Illinois Law Enforcement Training & Standards Board

January 10th, 2013

In addition to his many other responsibilities and speaking engagements, Reimer Dobrovolny & Karlson LLC partner, Richard J. Reimer, now teaches for the Illinois Law Enforcement Training and Standards Board Executive Institute.  On December 6, 2012, Reimer taught “Discipline, Internal Discipline, and Labor Relations.”  Rick enjoyed the experience and looks forward to more teaching engagements in the future.

 

R&K Attorney Keith Karlson Argues to Protect Police Officers’ First Amendment Rights

January 10th, 2013

On January 9, 2013, Reimer Dobrovolny & Karlson LLC partner, Keith A. Karlson, orally argued before the 7th Circuit Court of Appeals in favor of terminated Orland Hills part-time Police Officer David Kristofek. The Village of Orland Hills is alleged to have terminated Kristofek after he reported politically motivated corruption to the FBI.  Kristofek claims, he went to the FBI after being ordered by a superior officer to destroy evidence and release a prisoner. Kristofek asserts he was told that the motorist was politically connected.

The complaint claims Orland Hills’ Police Chief terminated Kristofek once he learned of the officer going  to the FBI.  Kristofek then filed suit claiming a violation of the First Amendment, the Illinois Constitution, and the Illinois Whistleblower Act.  Kristofek is represented by Keith Karlson and Chicago attorney Jerry Marconi.  The trial court dismissed Kristofek’s complaint, finding that he did not allege that he spoke on a matter of public concern.  Kristofek appealed.  After briefing the matter, the 7th Circuit Court of Appeals heard argument.  Below is a link to the recording of the oral argument:

Kristofek v. Orland Hills Oral Argument

 

Pension “Reform” Bill All But Dead

January 8th, 2013

Crain’s Chicago Business reporter, Greg Hinz reports:

Steve Brown, the spokesman for House Speaker Michael Madigan, tells me that “sponsors of the bill” have determined that the votes are not there to pass it, and it will not be called for a vote. Mr. Brown adds that the speaker spoke with the governor shortly before his press conference today, and said any vote now would be strictly “symbolic.”

http://www.chicagobusiness.com/article/20130108/BLOGS02/130109828/quinn-asks-for-pension-action-but-bill-seems-dead
 

Illinois’ Unions Slam Latest Pension Proposal

January 7th, 2013

Crain’s Chicago Business reports that Illinois’ Labor Unions are unhappy with the most recent proposed pension “fix”.  At this time, it appears that firefighters’ and police officers’ pensions are not effected by the latest proposed legislation. However, that can change. The Springfield Journal Register published some of the details of the proposed legislation.  http://www.sj-r.com/breaking/x65624360/Illinois-House-speaker-eases-pension-reform-stance?zc_p=1

Reimer Dobrovolny & Karlson’s attorneys are monitoring this legislation and will continue to update its clients regarding any relevant pension changes. We are making more frequent updates regarding this legislation via our Twitter account: @ReimerKarlson.

A link to the Crain’s article is below:

http://www.chicagobusiness.com/article/20130107/NEWS02/130109881?template=mobile

 

PENSION TRUSTEE TRAINING REQUIREMENTS MAY BE CHANGED

December 26th, 2012

On December 4, 2012, the Illinois Senate added Senate Amendment #3 to House Bill 4666.  If passed by the Illinois House of Representatives, Senate Amendment #3 would give a greater period of time in which to complete the training requirements annunciated in 40 ILCS 5/1-109.3 and 5/1-113.18.  Currently downstate fire and police pension fund trustees are required to complete 32 hours of training in their first year of service and 16 hours of training each year thereafter.  If Senate Amendment #3 becomes law, elected and appointed trustees would be required to complete 32 hours of training in their first 2 years of service and 8 hours every two years thereafter.  As of December 26, 2012, HB 4666 (including Senate Amendment #3) was still pending in the House.  Reimer Dobrovolny & Karlson LLC’s attorneys are monitoring this legislation and will provide an update as information becomes available.

 

Remembering Illinois’ First Responders Who Made the Ultimate Sacrifice in 2012

December 7th, 2012

Reimer and Karlson LLC remembers and appreciates the sacrifice made by Illinois’ first responders who made the ultimate sacrifice in 2012. Especially during the holidays, please keep these heroes’ families, friends, and coworkers in your thoughts and prayers:

  • Huntley F.P.D. Captain John C. Winkelman
  • Chicago Captain Herbert T. Johnson
  • Chicago Firefighter Walter Patmon Jr.
  • Sante Fe F.P.D. Firefighter Timothy Jansen
  • Illinois State Trooper Kyle Deatherage
  • Cook County Correctional Officer Nikkii Bostic-Jones

To Illinois’ firefighters, police officers, and correctional officers, we wish you safe and happy holidays. Thank you for your steadfast courage, sacrifice, and diligence.

 

Termination of Disability Pension Benefits Requires Evidence of Recovery

December 5th, 2012

            The above headline may seem self-evident when considering annual evaluations of disability pension beneficiaries but things are not always as clear as they seem.  In a recent First District Appellate Court case, a firefighter receiving a disability pension benefit was sent for his annual disability evaluation.  After evaluation, the physician rendered the opinion that the firefighter was not disabled and furthermore, that he had never suffered from a disability.  Asked to elaborate on his opinion, the doctor made clear that his opinion was not that the disability recipient had recovered from his disability but rather that he was never disabled in the first place.

            Based upon this report, the Pension Board held a hearing and issued a decision terminating the plaintiff’s disability pension.  The Appellate Court held that in order to terminate a disability pension, the Pension Code requires that there must be some evidence of recovery from disability to justify termination.  In this case, there was no evidence of “recovery” because the examining physician’s position was that the pensioner had no disability from which to recover.  The Court reasoned that by terminating the firefighter’s pension on this basis, the Pension Board was in essence revisiting their original determination to award the pension.  Such an action is not allowed by the Pension Code.  While a dissenting opinion was filed, ultimately the Appellate Court ruled that because the Pension Board presented no proof that the firefighter had recovered from his disability, he remains entitled to his disability pension benefits.

Whether this matter will proceed to the Supreme Court of Illinois remains to be seen.  Our attorneys will continue to monitor this case and will provide updates regarding any developments.

 Hoffman v. Orland Firefighters’ Pension Board et al., 2012 IL. App. (1 st) 112120

 

Appellate Court Allows Attorney General Complaint Against Pension Board in Burge Case

December 5th, 2012

           The First District Appellate Court has overturned a Circuit Court decision that dismissed Attorney General Lisa Madigan’s lawsuit against Jon Burge and the Policemen’s Annuity & Benefit Fund of Chicago.  The Attorney General’s Complaint seeks to stop pension payments to Jon Burge on the basis of his felony convictions for perjury and the action of the Fund’s Trustees in voting 4 to 4 to cease payments to Burge.

            The Pension Board previously voted to a 4 to 4 tie on the issue of whether Burge’s conviction arose out of or was connected with his employment as a Chicago police officer.  The Board concluded that the tie vote meant that Burge would continue to receive his pension benefits.  A majority of the Appellate Court disagreed finding that the Pension Code requires that no benefit shall be paid without a vote of the majority of the members of the Pension Board.  The majority concluded that the Pension Board’s determination that a tie vote resulted in the continuation of Burge’s benefits was error and therefore voidable.  Justice Garcia filed a specially concurring opinion in which he expressed his disagreement with the majority that the 4 to 4 tie vote resulted in the loss of Burge’s pension benefits.

            The Court also addressed the standing of the Attorney General to bring this Complaint against the Pension Board.  The Court acknowledged that Section 1-115(b) of the Pension Code authorizes the Attorney General, or a participant, beneficiary or fiduciary to bring a civil action to enjoin any act that violates the Pension Code.  The Pension Board argued that their decision was reviewable only under Administrative Review Law and that the Attorney General had filed their Complaint more than 35 days after the final decision and order of the Pension Board thereby barring the Complaint.  The Appellate Court disagreed with the Pension Board and found that Section 1-115(b) granted the circuit court concurrent jurisdiction with the Pension Board to hear the case.  The case was remanded to the circuit court for further proceedings on the issue of whether Burge’s felony convictions arise out of his police employment for the purposes of forfeiting his pension.

Our attorneys will continue to monitor this case and provide updates as they occur.

People ex rel. Madigan v. Burge et al., 2012 IL. App. (1st) 112842

 

Lawsuit Seeks to Derail HJRCA 49

October 30th, 2012

In anticipation of the looming House Joint Resolution Constitutional Amendment 49 (“HJRCA 49”) on the November 6th ballot, a lawsuit has been filed with the Sixth Judicial District Circuit Court in Champaign County attempting to render the ballot’s notice language unconstitutional and nullify the election results.

Titled Bambenek et al. v. The Illinois State Board of Elections, a group of Plaintiffs are suing as legal voters who have standing under the Election Code.  The Plaintiffs’ Complaint bypasses the Illinois State Board of Elections by bringing this before the Court, citing the State Board of Elections inability to rule on the constitutionality of a statute.

The suit seeks have the ballot deemed unconstitutional for several reasons. Plaintiffs claim the ballot is confusing and contains misleading language in the notice of the ballot. The suit further asserts the notice does not conform to Illinois statutory requirements.  Citing Illinois cases, Plaintiffs’ argue if a ballot “deviates in a matter of substance from the form prescribed by statute, the election is void.”

Plaintiff’s next argument claims that the Amendment is not fully explained.  They point out that the proposed Amendment clocks in at around 3,700 characters in five paragraphs, but is shortened to just one sentence on the ballot.  By comparison, the entire Bill of Rights is approximately 7,200 characters.  The one sentence description, as argued, is not enough to apprise a voter of what the Amendment actually does.

In addition from asking the Court to find the notice language unconstitutional, the Plaintiffs ask the Court to bar the State Board of Elections from certifying the vote count for the Constitutional Amendment, essentially nullifying the election results.

Reimer Dobrovolny & Karlson LLC is closely monitoring this case and will provide updates as the case develops.

 

FOIA Caselaw Update: Fees and Fines

October 17th, 2012

Two recent appellate court decisions have clarified fee provisions of the FOIA.  One matter dealt with what fees a public body may charge in complying with a FOIA request while the second addressed whether a party is entitled to an award of attorney’s fees and the imposition of civil fines upon non-complainant public bodies.

Electronic vs. Paper Record Fees

In Sage Information Services v. Humm 2012 IL App (5th) 110580, the Plaintiff submitted a FOIA request to the Franklin County Assessor requesting an electronic copy of the real property assessment record for the entire county.  The assessor replied that a fee of $1,609.40 would be required representing $0.05 for each parcel in the county as provided in the Property Tax Code.

In ruling that the requested information must be provided for the actual cost of reproduction pursuant to the FOIA, the Fifth District Appellate Court found that the FOIA as amended in 2010 differentiates between fees for electronic and paper records.  Therefore, any statute setting forth a different fee schedule must specifically deal with the type of record requested.  Because the Property Tax Code only provides for additional fees in producing paper records, it was not applicable to the Plaintiff’s request for electronic records.  Notably, the opposite conclusion was reached under the previous version of the FOIA by the Second District Appellate Court in Sage Information Services v. King, 910 N.E.2d 1180 (2nd Dist. 2009).

The second recent FOIA case dealt with the assessment of attorney’s fees for prevailing FOIA requestors and the assessment of civil penalties upon non-compliant public bodies.

Awards of Attorney’s Fees and Civil Penalties

In Rock River Times v. Rockford Public School Dist. 205, 2012 IL App (2d) 110879, the Plaintiff newspaper filed a FOIA request seeking a copy of a letter written by a school principal in response to a reprimand by the superintendent.  The school district asserted two FOIA exemptions but was subsequently informed by the Public Access Counselor (PAC) that the proposed exemptions did not apply. The district’s attorney then became involved and asserted a third exemption to production under the FOIA.  The newspaper filed suit seeking to compel release of the letter.  Shortly after the filing of the lawsuit, the school district released the letter.  The newspaper then sought the imposition of a civil fine and recovery of their attorney’s fees from the school district.

Addressing the attorney’s fees issue, the Second District Appellate Court noted that the FOIA as amended in 2010 changed the language related to recovering attorney’s fees.  While the previous version provided that the court may award attorney’s fees if the plaintiff substantially prevails, it was amended to state that the court shall award attorney’s fees to a person seeking public records who prevails.  See 5 ILCS 140/11.  The Court held that in order for a party to prevail and be awarded attorney’s fees under the new FOIA, that party must have obtained “court ordered relief”.  In this case, because the school district released the letter prior to the Court ordering any relief, the newspaper was not a prevailing party and was not entitled to an award of attorney’s fees.

Pursuant to Section 11(j) of the FOIA, the trial court imposed a $2,500 fine on the school district for willful and intentional failure to comply with the FOIA stemming from their continued assertion of new exemptions subsequent to the PAC’s finding that the initial exemptions did not apply.  The Appellate Court held that this finding by the trial court was to be reviewed under the “manifest weight of the evidence” standard and found the imposition of the fine to be supported by the evidence.  This illustrates the important of involving counsel at the earliest stage of a potential denial of a FOIA request.

 

 

IPPFA Urges You to Vote NO on HJRCA 49

October 9th, 2012

The Illinois Public Pension Fund Association (“IPPFA”) is urging its members to VOTE NO on HJRCA 49, the proposed Amendment to the Illinois Constitution contained on this November’s ballot. Among other criticisms, this proposed amendment has been criticized for crippling collective bargaining rights, complicating social security concerns related to Tier II employees, and causing unnecessary litigation due to ambiguous drafting.  Below is a link to a set of facts relevant to HJRCA 49.

HJRCA 49 Fact Sheet

 

Court Clarifies Standard for Indiana Line of Duty Disability Pensions

October 9th, 2012

On October 9, 2012, the Court of Appeals of Indiana decided Indiana Public Employee Retirement Fund v. Firefighter Paul Bryson.

Firefighter Bryson injured his back while engaging in “bailout drills.”  His supervisor testified that Bryson after moving a large ladder he “then just buckled. . . . just like a wounded animal. He just collapsed[.]” All parties agreed that Bryson was injured that day.  The parties also agreed that Bryson, like many firefighters and police officers, had prior back problems.

In light of Bryson’s pre-existing back problems, PERF’s Administrative Law Judge (“ALJ”) held Bryson was not entitled to a line-of-duty (Class 1) disability pension. The statute requires a firefighter’s (or police officer’s) disability be “the direct result” of an injury suffered while on duty. In an opinion unique to any area of Indiana law, the ALJ interpreted “the direct result” to mean “the sole and independent cause of the impairment.”  In light of this unique interpretation of law, the ALJ granted Firefighter Bryson a Class 2 disability pension.  Bryson challenged this decision in the Marion County Superior Court.

The Superior Court reversed PERF’s ALJ’s decision, finding that his interpretation of the statute was incorrect.  PERF then appealed the trial court’s decision to the Court of Appeals of Indiana.  In a 2-1 split decision the Court of Appeals panel found in favor of Firefighter Bryson. The Appellate Court criticized the ALJ’s interpretation.  The Court writes, “In application, this would necessitate that the fund member was perfectly healthy and without any pre-existing conditions, at least in relation to the part of the body impacted by an on-duty injury, in order to qualify as Class 1. We do not think that an impairment being the “direct result” of a personal injury sustained while on duty requires this exclusivity.”

Explaining its decision and announcing the standard to guide future disability determinations, the Appellate Court held:

“We conclude that a fund member who was able to perform his job duties before an on-duty injury despite having a pre-existing condition or health issue that preceded the on-duty injury, and who becomes unable to perform his job duties only after sustaining an on-duty injury, has an impairment that is the “direct result” of the physical injury or injuries sustained while on duty. This is so even if the on-duty injury created an impairment by exacerbating a pre-existing condition, so long as the pre-existing condition did not previously prevent the fund member from performing his or her job duties.”

This is excellent news for Indiana’s firefighters and police officers. However, this case is likely to be appealed to the Indiana Supreme Court.  Reimer Dobrovolny & Karlson LLC partner Keith A. Karlson represented the Professional Fire Fighters’ Union of Indiana (“PFFUI”) in this case.  PFFUI filed appeared as amicus curiae before the Court of Appeals.  We are pleased by this result and will continue to monitor this case for further developments.

Below is a link to the Court’s published opinion.

Bryson v. PERF – Appellate Decision

 

Pension Benefits “Reform” Update: Proposed Amendment to the Illinois Constitution

October 8th, 2012

A proposed amendment to the Illinois Constitution will be on the November 6th ballot.  The ballot question will simply ask the voter to vote yes or no “For the proposed addition of Section 5.1 to article XIII of the Illinois Constitution.”  But what does adding Section 5.1 to the Illinois Constitution entail?

Ostensibly, the proposed amendment will require a 3/5 supermajority vote of the General Assembly to pass any bill that provides for a “benefit increase” under any pension or retirement system of the State, unit of local government, or school district.  It also requires a 2/3 vote to override a gubernatorial veto of any bill containing a “benefit increase”.   However, closer inspection of the lengthy text of the purpose amendment reveals additional changes.

First, new language added as proposed Section 5.1(d) states that nothing in this section shall prevent the passage of any law that further restricts the ability to provide a “benefit increase”.  This potentially conflicts with existing Constitutional protections for pension benefits already found in Section 5 which provides that pension benefits “shall not be diminished or impaired”.  Some have interpreted this new language to be a back door giving the legislature the ability to decrease existing pension benefits.

Secondly, it is important to note that the 3/5 supermajority requirement applies to local government agencies (including pension boards) not just benefit increases initiated at the State level.  At the local level, this proposed requirement would apply to both “emolument increases” and “beneficial determination” actions.

Critics of the proposed amendment argue that it is confusing and ambiguous, has the potential to be applied to the detriment of existing benefits, will result in extensive litigation over its application and does nothing to address the real financial problems facing pensions in Illinois.  Proponents state that the amendment will foster a more bipartisan approach to pension reform due to the supermajority requirement needed and will prevent “sweetheart” pension packages for well-connected individuals as seen in the past.

The proposed amendment will appear on the November 6th ballot and will become law if approved by three-fifths of those voting on the question or a majority of those voting in the election.

Below is a fact sheet regarding HJRCA 49:

HJRCA 49 Fact Sheet

 

DOI Says Funds of $10 Million+ May Go to 65% in Equities

October 1st, 2012

            In a recent advisory opinion from the Illinois Department of Insurance, the issue of whether Article 3 and 4 pension funds with assets in excess of $10 million may invest up to 65% in equities was addressed.

            Per 40 ILCS 5/1-113.4a, Police and Fire pension funds meeting the $10 million or greater asset requirement may invest up to 55% in equity, as authorized under that statute.  Separately, 40 ILCS 5/1-113.2(13) allows up to 10% of a police or fire pension fund’s net assets to be invested in separate accounts managed by life insurance companies, authorized to transact business in Illinois, and mutual funds meeting the requirements of §113.2(13), which are comprised of diversified portfolios of “common or preferred stocks, bonds, or money market instruments.”

            The Public Pension Division’s opinion interprets the language of §1-113.4a, allowing 55% in equities in the investment vehicles as specified in §1-113.4a, §1-113.4, and §1-113.3, to be in addition to the up to 10% of assets provided for under §1-113.2(13), provided those investments meet the requirements as authorized under that section.  The DOI further feels that the legislature’s intent in §1-113.4a was to include the up to 10% found under §1-113.2(13) as an aggregate part of the 55% total authorization in certain equity type investments, not in addition to it.  As a result, future legislation may be proposed in an attempt to clarify the issue.

Of course, while the 65% equity allocation may be permissible, it may not be a prudent investment for pension boards.  Information conveyed through this summary should not be construed as legal or investment advice.  Consult an attorney or investment professional with questions.  DOI advisory opinions are not legal opinions.

 

DOI Levy Reports Will Alter Assumed Rate of Return

October 1st, 2012

The Department of Insurance has announced that they will resume production of suggested tax levy reports effective September 24, 2012.  You may recall that the DOI suspended this function for fiscal year 2011 in order to come into compliance with Public Act 96-1495 which made significant changes to the manner in which actuarial calculations are performed under the Statute.  Notably, the minimum employer contribution will now be calculated using the projected unit credit cost method.

In addition, the process to comply with P.A. 96-1495 includes an update to the actuarial assumptions used in producing the recommended tax levies.  Significantly, the DOI has assumed new rates of return for police and firefighter pension funds.  The new rate of return assumptions are as follows:

Fund Net Asset Value                                      Assumed Rate of Return

Under $2.5 million                                                 5%

$2.5 million – $5 million                                         6%

$5 million – $10 million                                          6.5%

Over $10 million                                                    6.75%

The DOI states that these updated actuarial assumptions will most likely result in higher annual employer contribution requirements.

The DOI reports that Article 3 and Article 4 funds with annual statements that have been filed and accepted by the DOI by October 12, 2012, will have a suggested levy produced and available no later than November 30, 2012.  Recall also that these funds have the option of utilizing the DOI recommended levy or retaining an independent enrolled actuary to determine the recommended levy.

 

Updates to the Open Meetings Act

October 1st, 2012

Two important changes to the Open Meetings Act will be effective January 1, 2013.  Public Act 97-0827 amends 5 ILCS 120/2.02 by adding new subsection (c) which deals with agenda specificity and posting requirements.

Agenda Specificity

The first change will require public bodies to “set forth the general subject matter of any resolution or ordinance that will be the subject of final action at the meeting.”  5 ILCS 120/2.02(c).  This codifies the existing case law which provides that agenda items must be “germane” to the action taken for a special meeting and must provide sufficient advance notice to the public of the action to be taken at a regular meeting.  Recall that generic agenda items such as “New Business” without additional descriptors will not be deemed sufficient under the existing case law or amended Statute.  See In re Foxfield Subdivision, 396 Ill.App.3d 989 (2nd  Dist. 2009) and Rice v. Bd. of Trustees of Adams County, 326 Ill.App3d 1120 (4th Dist. 2002).

New Agenda/Notice Posting Requirements

The second amendment will require an agenda to be “continuously available” to the public for the 48 hour period prior to a meeting.  Posting the notice and agenda on a website that is maintained by the public body satisfies this requirement.  However, failure to have the notice continuously available for 48 hours due to action outside the control of the public body will not invalidate any meeting or action taken at the meeting.  5 ILCS 120/2.02(c).

At present, there is no requirement that a notice and agenda be “continuously available” for the 48 hour period prior to the meeting.  This was the case in In re Foxfield Subdivision where the agenda was on display for 48 hours prior to the meeting but was located on an interior bulletin board at village hall only visible to the general public during business hours.  This amendment will now require a notice/agenda to be continuously available to the general public for 48 hours prior to the meeting.

 

R&K Pension News: Illinois Constitutional Amendment 49

October 1st, 2012

For those of you that are following the cry for pension reform, pay careful attention to House Joint Resolution Constitutional Amendment 49 (“HJRCA 49”). On the November 6, 2012 ballot, Illinois voters will be asked to pass HJRCA 49, which will further limit the ability of the Illinois legislature to increase public employees pension benefits. HJRCA 49 seeks to add a new section to the general provisions of the Illinois Constitution that will require a 3/5 majority vote of each Chamber of the General Assembly in order to increase any benefits to a public employee pension or retirement system.

At the November 6, 2012 election, voters will be asked to vote “YES or NO” to the follow ballot question: “For the proposed addition of § 5.1 to Article XIII of the Illinois Constitution. Three fifths of those voting on the question or a majority voting in the election must vote “YES” in order for the amendment to become effective on January 9, 2013.

Opponents of HJRCA 49 argue that the question is ambiguous and confusing, and that it is yet the latest in the series of attacks on public employee retirement systems. It will do nothing to address the State’s financial crisis and it will impair the ability of public employees to make any further beneficial changes to their pension or retirement systems.

While passage of HJRCA 49 will not repeal Article XIII, §5 of the Illinois Constitution, it will no doubt seriously curtail public employees ability to pass legislation seeking to increase or enhance provisions of their respective retirement or pension systems.

 

R&K Pension News: Michigan Trial Court Strikes Down Pension Law as Unconstitutional

September 30th, 2012

On September 28, 2012, a State Court Judge struck down Michigan’s mandate for State employees to make pension contributions equaling 4% of their salary.  In 2011, Michigan’s Legislature enacted Public Act 264. The Act required State employees to choose between having their benefits frozen (and joining a defined contribution plan) or contributing 4% of their salary toward the pension fund.  Friday’s ruling found the Act infringed on the constitutionally guaranteed powers of Michigan’s Civil Service Commission to determine the “rates of compensation” of State employees.

The Court explained:

“The Court will not belabor what is clearly the latest attempt by Michigan’s Legislature to delve into the realm of decision-making power held by the Commission.  Ample authority exists to support Plaintiff’s position that the Legislature can neither regulate the conditions of employment in the classified service nor fix rates of compensation.  A similar attempt was at issue in AFSCME Council 25 v State Employees Ret Sys, 294 Mich App 1 (2011), Iv denied 490 Mich 935 (2011), where the Court of Appeals affirmed the Court of Claims’ ruling that a statute (MCL 38.35) requiring a three percent employee compensation contribution to finance retiree health care was unconstitutional.”

The State is expected to appeal this case. The public safety pension and labor attorneys at Reimer Dobrovolny & Karlson LLC are monitoring and will provide updates regarding this developing matter.

 

Richard J. Reimer Featured Speaker at IPPFA Pension Conference

September 27th, 2012

Reimer Dobrovolny & Karlson LLC’s Managing Member and IPPFA General Counsel, Richard J. Reimer, will be speaking to the more than 1,200 attendees of the Illinois Public Pension Fund Association’s Midwest Pension Conference in Lake Geneva, Wisconsin.  Rick will be addressing a variety of legal matters impacting Illinois’ Police and Fire Pension Funds. He will also discuss trends Reimer Dobrovolny & Karlson’s attorneys have noticed developing based upon their experience with more than 150 Illinois Police and Fire Pension Board clients. The IPPFA conference runs from October 2-5, 2012.  Mr. Reimer will be celebrating his 25th anniversary as IPPFA’s General Counsel.

 

Summer 2012 Legal & Legislative Update

September 27th, 2012

Volume 10, Issue 3                                                                                                                                       July 2012

Legal and Legislative Update

Recent Court Decision

Pension Boards May Be Subject to Class Action Liability; Watch for ‘Systematic Miscalculation’

 Hooker v. Retirement Board of the Firemen’s Annuity & Benefit Fund of Chicago,

2012 ILApp. 111625 (1st Dist.).

In May, Illinois’ First District Appellate Court considered a case involving benefits for surviving spouses collecting under Article 6 (Chicago Fire) of the Illinois Pension Code.  This is the case’s second trip to the appellate court and, based on the way the decision came out, we may have not heard the last of this case.

In 1988, Chicago Firefighter Michael Hooker suffered a debilitating injury in the line of duty.  Firefighter Hooker died in 2000.  The Board then awarded Mrs. Hooker the minimum “widow’s” annuity.  Mrs. Hooker challenged the Board’s decision, arguing she was entitled to line-of-duty death benefits.  The trial court agreed.  The Board appealed, but the appellate court sided with Mrs. Hooker and against the Board.  See Hooker v. Retirement Bd. of the Firemen’s Annuity & Benefit Fund of Chicago, 391 Ill.App.3d 129 (2009)(referred herein as “Hooker I”).

In 2004, while Hooker I was pending, the Illinois State Legislature passed P.A. 93-654.  This act amended the code to include “duty availability pay” (“DAP”) as part of the pensionable salary of some employees, including the late Firefighter Hooker.  The Board refused to include DAP into Mrs. Hooker’s benefit.  In light of that consideration, Mrs. Hooker returned to the Circuit Court of Cook County. This time, Mrs. Hooker filed a class action lawsuit on behalf of all similarly situated surviving spouses. The Board argued the surviving spouses were not entitled to have DAP increase the amount of her pension because the late Mr. Hooker had never been paid DAP.  The circuit court agreed with the Board and refused to certify the class.  Mrs. Hooker appealed.

The appellate court reversed the trial court’s decision.  In rejecting the Board’s argument, the court explained:

“We agree with the Board that for any calculation based on the salaries [firefighters] received, the Board should not include duty availability pay in the calculation. However, the legislature expressly chose to make the [surviving spouse] annuity in section 6-140 depend on the ‘current annual salary attached to the classified position to which the fireman was certified at the time of his death,’ and not on the salary the fireman received.”

In light of this analysis, the court concluded Mrs. Hooker’s pension should include DAP.

 

The appellate court also held the trial court erred by refusing to certify a class.  The trial court and the Board believed the administrative review law, under which all pension board decisions are able to be challenged, were not subject to a class action
lawsuit.  However, the appellate court held, “The Administrative Review Law does not preclude a class action to correct the Board’s systematic miscalculation of the annuities owed class members.”  The court further explained, “a class action should serve as an efficient means of resolving the issue.”

 

Mrs. Hooker died on September 20, 2010, while the appeal was pending.  The court refused to determine whether the Board was required to pay Mrs. Hooker’s estate the sum owed.  The court instructed the trial court to deal with this matter.

While this case solely deals with Article 6 of the Pension Code, it provides some insight as to how pension statutes are construed by the courts. Moreover, it gives some traction to the argument that when pensions are miscalculated due to a “systematic miscalculation” they may be subject to review and correction.  At the same time, this case shows when pension boards make errors they may be subject to class action liability.

The Military and Your Pension Fund: A Quick Look at USERRA and Illinois Law

With the combat operations in Iraq having come to an end just seven months ago, and the campaign in Afghanistan set to return home 23,000 servicemembers during the summer of 2012, local Police and Fire Departments will undoubtedly see employees soon returning from military absences.

The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) is federal law that establishes guidelines for employers to follow with respect to servicemembers returning to their non-military employment.  In doing such, it outlines parameters which focus to protect job rights and benefits of veterans.  USERRA applies to all employers, regardless of size.  Its goal is to return employees to their jobs, as if they had never left.

USERRA only applies to employees who meet certain criteria, among them: proper notice must have been given prior to deployment; the total service period is not to exceed five years; the servicemember must have been released under honorable or general conditions; and the individual must report back to their job within a specified timeframe.  A few of the protections forwarded by USERRA includes return to employment without loss of seniority (including pension credit), status, or pay rate.

Section 4318 (Employee Pension Benefit Plans) of USERRA specifies that a person who makes contributions to a pension plan shall make those payments beginning with the date of reemployment, with a duration of three times the military service period, not to exceed five years.

Though, USERRA is careful not to step on any toes in the legal sense; the law specifically allows other Federal law, as well as State and local law, municipal ordinance, or contract – to grant greater benefits to military members.  Title 20 of the Code of Federal Regulations further enumerates that USERRA establishes a floor for reemployment rights and benefits of servicemembers.  As a result, it is common for other laws to provide greater rights and benefits than is found under USERRA.

For example, Illinois state pension law provides that a police officer is entitled to creditable service for military time, provided that “upon applying for a permanent pension”, the police officer pays any contributions into the fund the amount that officer would have paid during military service, with the total amount of such creditable service not to exceed 5 years.  (See 40 ILCS 5/3-110).  Illinois pension law for firefighters contains identical “upon applying for a permanent pension” language, as well as the 5 year maximum limitation.  (See 40 ILCS 5/4-108).  These Illinois laws afford greater benefits to a military servicemember by allowing that servicemember to repay contributions to a pension fund up until the time they apply for a pension benefit – a potentially much longer period than the three times the military service period as defined under USERRA.

Another Illinois specific law is the Local Government Employees Benefits Continuation Act.  It provides for any employee of a unit of local government to continue to receive the same regular compensation, plus health insurance and other benefits, minus the amount of base pay for military service, for the duration of the active military service.  This includes employers continuing pension contributions on behalf of those employees to their pension fund – based on the servicemember’s full pay – even though the employer is only paying the differential.  Local government employers only need not comply if 20% or more of their employees are mobilized.  As with USERRA, if any other agreement or policy affords more benefits, that generosity controls.

These laws, and others, were established to protect those who return to civilian employment after giving their time while serving in the military.  When appropriate, it is crucial that servicemembers are given the benefits to which they are entitled.

 The foregoing article was a brief overview of some of the laws affecting returning servicemembers and their pensions.  It is not comprehensive and not intended to give legal advice.  For legal or fact specific situations, contact an attorney with questions.

RJR Attorney News

  • Richard Reimer was a speaker at the April 27, 2012 Illinois Professional Firefighters’ Associates Spring Seminar, speaking on the Illinois Freedom of Information Act and Legal Updates.

 

 

 

Spring 2012 Legal & Legislative Update

September 27th, 2012

Recent Court Decisions

Final Means Final – Even if COLA Increases Are Not Permitted for Surviving Spouse Pensions

Sola v. The Roselle Police Pension Board

–N.E.2d–, 2012 IL App (2d) 100608.

Hopefully this will be the final chapter in the lengthy saga for surviving spouse Jeannette Sola, wife of a deceased police officer. The saga began in 1993 when the Pension Board awarded Sola 3% cost of living increases (COLA) on her surviving spouse benefits. In 2001, Sola was informed by the Village of Roselle that her pension benefits for 2002 would not increase beyond the 2001 level, as a result of the Village’s receipt of a Department of Insurance Advisory Opinion, that surviving spouses were not entitled to a COLA. Sola filed a Complaint for Declaratory Judgment Relief with the Circuit Court, alleging the Pension Board was without the jurisdiction to conduct a hearing, because it did not file timely review of its original decision awarding cost of living increases to Sola, within the thirty-five (35) day time period, provided for under Administrative Review Law (ARL). The Trial Court permanently enjoined the Board in conducting a hearing. The Village filed an appeal. On appeal, the Appellate Court held that the Board had no jurisdiction as its decision was final beyond the thirty-five (35) day time period, required under ARL. The Appellate Court did not address the issue of whether the Illinois Pension Code allowed COLA increases for surviving spouses. Sola v. Roselle Police Pension Board 342 Ill. App. 3d 227 (2d Dist. 2003). This case became known as “Sola 1”.
            In The Roselle Police Pension Board v. The Village of Roselle, 232 Ill.2d 546, 905 N.E. 2d 831 (2009), the Illinois Supreme Court finally resolved the issue, holding that Article III of the Illinois Pension Code does not permit COLA increases for surviving spouses pensions. Thus the background for “Sola 2”.At the urging of the Village, in November of 2009, the Pension Board notified Sola that it would be conducting a hearing to determine whether the Illinois Supreme Court’s decision in Roselle prohibited the Board from awarding Sola the COLA increases in the future. After considering arguments and pleadings, the Pension Board found that it had no jurisdiction to modify Sola’s pension benefits and that it would continue to award increases until ordered by a court to do otherwise.

On January 13, 2010, the Village filed a complaint seeking Certiorari, Mandamus, and Administrative Review of the Board’s decision that it lacked jurisdiction to modify Sola’s benefits. On January 21, 2010 the Village filed a separate proceeding, a Motion to Dissolve or Vacate the Permanent Injunction issued by the Trial Court in Sola 1.  The Trial Court denied the Village’s Motion to Vacate the Permanent Injunction, finding that the Board had no jurisdiction to modify Sola’s pension benefits. Shortly thereafter, another court granted the Board and Sola’s Motion to Dismiss the Village’s Complaint for Administrative Review, Certiorari and Mandamus, adopting the Pension Board and Sola’s arguments that all claims must be dismissed as they were precluded on the grounds of res judicata and collateral estoppel. The Village filed timely Notices of Appeal of both proceedings, which were consolidated for purposes of Appeal.

On Appeal, the Appellate Court first addressed the Trial Court’s denial of the Village’s Motion to Dissolve or Vacate the Permanent Injunction issued in 2002 (Appeal No. 2-10-0608). The Village contended that the Illinois Supreme Court’s decision in Roselle; (1) bar Sola from receiving COLA increases; (2) COLA increases to Sola were a “systemic miscalculation” and fell outside the definition of ARL; (3) a recent amendment to the Pension Code mandates annual administrative review of cost of living awards, (referring to §5/3-141.1 of the Illinois Pension Code, mandating the treasurer to certify information used in calculating pension benefits).  With respect to the Village’s argument that the Illinois Supreme Court’s decision in Roselle definitely determined that surviving spouses were not entitled to COLA increases, as the Court correctly noted, the Illinois Supreme Court in Roselle, did not mandate a finding that the Board now has jurisdiction to review Sola’s COLA increases as Roselle never addressed the jurisdictional issue and it did not specifically overrule Sola 1. The Court also rejected the Village’s argument that the Pension Board’s awarding of COLA increases to Sola was a “systemic miscalculation”, because Sola’s benefits involved only one calculation, not a pattern of erroneous calculations. Finally, with respect to the recent Pension Code amendments contained in §5/3-141.1 of the Illinois Pension Code, the Court found that there was nothing in the Pension Code amendments indicating that the Legislature intended it to rewrite the ARL to enlarge a Pension Board’s jurisdiction to allow yearly review of benefits previously awarded.

Ultimately the Court held that the Village failed to show there had been a change in law or fact warranting a modification of the initial injunction and the Pension Board remained without jurisdiction to revisit the COLA award to Sola. Since the Trial Court did not abuse its discretion, the Trial Court’s denial of the Village’s Motion to Dissolve or Vacate the Injunction was affirmed.

The Appellate Court next turned to the Trial Court’s dismissal of the Village’s Complaint for Administrative Review, Certiorari and Mandamus (Appeal No. 2-10-1107). On Appeal, the Village asserted that the Trial Court erred entering the injunction in 2003, as a result of the law in effect at that time, and that the merits of whether the Board was improperly awarding Sola COLA increases was never addressed. The Appellate Court acknowledged that the Village was correct that when the injunction was entered, it was entered in the law in effect at the time (prior to the Supreme Court’s decision in Roselle); however, the Trial Court did rely upon ARL, which has not changed and limits the Pension Board’s authority to review its final administrative decisions. According to the Court, the Board had no power to ignore the Trial Court’s injunction, which is affirmed by the Appellate Court in 2003 (Sola 1).

Affirming the Trial Court’s dismissal of the Village’s Complaint for Administrative Review, Certiorari and Mandamus, the Court applied two (2) legal doctrines, res judicata and collateral estoppel, both of which applied to administrative decisions. The doctrine of res judicata provides that, final judgment entered by a court of competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies, and it constitutes an absolute bar to a subsequent action involving the same claim, demand, or cause of action. For the doctrine of res judicata to apply, three requirements must be met (1) a final judgment of the merits is rendered by a court of competent jurisdiction; (2) an identity of causes of action; and (3) an identity of parties of their privies.

The doctrine of collateral estoppel has a more limited preclusive effect and may be applied when: (1) the issue decided in the prior adjudications is identical with the issue in the current cause of action; (2) there was a final judgment on the merits in the prior adjudication; and (3) the party against whom   collateral estoppel is asserted was party to, or in privity with, a party in the prior adjudication. The Court found that this case fell squarely within both doctrines, because there was a final judgment on the merits rendered by the Court in Sola 1 (where the Court held the Board lacks jurisdiction to modify Sola’s pension benefits); the subject matter of Sola 1 is identical to the subject matter of this claim and the parties are identical to the parties in Sola 1. The Court declined to address issues raised by the Village as to whether the Pension Board owed a fiduciary duty to the participants and beneficiaries and found no basis in law to reconsider the Court’s previous holding in Sola 1.

Accordingly, Sola will continue to receive COLA increases, without interruption by the Board. This case illustrates that once a Pension Board makes a “final administrative decision” concerning benefits, the Pension Board and other Parties’ ability to modify that decision is extremely limited.

 Court Reverses Pension Board Decision Based on Officer Credibility

 Mingus v. Board of Trustees of the Police Pension Fund of Peoria

2011 IL App (3d) 110098, 961 N.E.2d 1285.

This case involves Appellate review of a Pension Board’s determination to deny a Police Officer a line of duty disability pension. The Plaintiff, John Mingus, was a thirty-two year veteran of the Peoria Police Department. On December 8, 2006, while on patrol in full uniform in a marked squad car, the Officer encountered a vehicle that had slid off the road due to hazardous conditions. With the assistance of two citizens, the Officer pushed the vehicle out of the snow bank and back onto the road way, in an attempt to get the vehicle out of the location as soon as possible due to the safety hazard. While pushing the vehicle, the Officer felt an immediate pain and pop in his groin area, which was later determined to be a hernia.  Following attempts to correct the hernia, the Officer eventually filed for line of duty disability benefits.

At the hearing before the Pension Board, there was no dispute that the Officer was disabled. Rather the issue at the hearing appeared to be the specific facts of the incident. The Pension Board concluded that there were discrepancies in the Officer’s testimony concerning the action he took. At the hearing, the majority of the questions directed towards the Officer were why he did not take a different course of action, such as calling a tow truck; why he didn’t ticket the driver of the vehicle; and why he allowed two civilians to assist him, if the situation posed a safety hazard as he claimed.

At the conclusion of the hearing, the Pension Board specifically found that the Officer’s testimony was not credible regarding the safety hazard or the need for immediate action, and that it appeared the Officer had skewed his testimony in attempt to support his claim. The Pension Board denied the Officer’s request for a line of duty disability pension, but awarded him a non duty disability pension. The Officer filed a Complaint for Administrative Review and the Trial Court affirmed the Board ruling. An Appeal followed.

On Appeal, the Court applied the “manifest weight of the evidence” standard. Following the Illinois Supreme Court’s holding in Marconi (citation omitted), the Court held that the determination of whether an Officer is entitled to a line of duty disability pension is a question of fact. Under the manifest weight standard, a pension board’s determination will only be reversed if there is no competent evidence in the record to support that determination, and it must be clearly evident from the record that the Board should have reached an opposite conclusion. The Court then went on to review the “special risk” requirements set forth in various cases including the Illinois Supreme Court’s decision in Johnson v. Retirement Board of the Policeman’s Annuity and Benefit Fund (citation omitted).

What is and what is not an “act of police duty” has been fertile ground for litigation in Illinois Courts. The Courts have defined “act of police duty” as any act of police duty involving special risk, not ordinarily assumed by a citizen, in the ordinary walks of life, imposed on a policeman by the statutes of this State or by the ordinance or police regulations of the City, in which this article is in effect or by special assignment, or any act of heroism performed in the City, having for its direct purpose to saving of life or property of a person other than a policeman. The term “special risk” does not encompass only inherently dangerous activities. Applying the manifest weight of the evidence standard, the Court held that the Pension Board erred in denying the Officer a line of duty disability pension.

According to the Court, the undisputed facts show that the time of the injury, the Officer was on duty, in full uniform and in a squad car patrolling the roads. During that patrol, the Officer came across a young driver who had skidded off the road in an icy area, and went into a ditch. The front of the drivers vehicle remained on the portion of the paved road way. Unlike an ordinary citizen, the Officer here was required to stop and attend to the situation. The Court further held that, the Board apparently lost sight of the fact that the Officer was required to stop and assist the motorist and instead focused on the alternatives available to the Officer to address the situation after he had stopped to assist. Although credibility determinations by a Board will often be relevant to an issue in a case, the Board’s finding in this case, that the Officer’s testimony was not credible as to the need for immediate action for safety reason, went to an issue that was not material. The Court held that it did not matter whether the Officer was incorrect or even incredible in his assessment of the situation and decision that immediate action was necessary. Rather, what was necessary for the Court’s determination was that, as a Police Officer, Mingus was required to stop and assist the motorist. Everything that occurred after that point was merely a matter of the Officer exercising his discretion in how best to handle the situation.

Accordingly, the Appellate Court reversed the Trial Court’s ruling and remanded the case back to the Pension Board with directions to award Officer Mingus a line of duty disability pension. This case illustrates that, when a Pension Board denies a disability pension based upon credibility determinations of a Police Officer, those credibility determinations must be material to the elements that an Officer is required to establish in order to obtain eligibility for a line of duty disability pension, pursuant to §5/3-114.1 of the Illinois Pension Code. v

 Pension Board Given Latitude with “Manifest Weight” Standard

 Goodman v. Morton Grove Police Pension Board

 –N.E.2d–, 2012 IL App (1st) 111480.

This case involves a Police Officer seeking a line of duty disability/non duty disability, as a result of an injury to his left knee, which allegedly occurred while conducting a traffic stop.

The Plaintiff, Morton Grove Police Officer Jason Goodman was employed as a Police Officer since May 1998. Prior to being appointed to the Morton Grove Police Department, the Officer injured the same knee while in the Army, which required arthroscopic surgery in 1995. He was awarded a partial disability pension of 10% from the Army in August of 2007 and was later honorably discharged in 1998. The Officer apparently did not have any issues with respect to his left knee until the injury which occurred on August 22, 2006.

While making a traffic stop on August 22, 2006, he sustained an injury to his left knee when he exited his squad car, stepped in a crevice in the pavement, and his knee gave out. The Officer was taken to the hospital. Ultimately, the Officer had surgery to repair a rupture of the anterior cruciate ligament and degenerative changes in the medial compartment.  He completed physical therapy and returned to full duty, but continued to experience pain and decreased range of motion.  He had problems running, using stairs, squatting or stooping, and other activities requiring him to bend his knee.

The Officer had a second surgical procedure – a microfracture surgery. He also underwent another course of physical therapy, but continued to have the same problems. The Officer’s treating physicians recommended a third surgical procedure, which the Officer declined.  His treating physician concluded that he had reached maximum medical improvement and concluded that the Officer was unable to return to duty as a police officer. Since there was no light duty position available, the Officer filed an application for disability benefits.

The Pension Board apparently attempted to obtain records from the Veterans Administration Hospital concerning the Officer’s previous injury and medical treatment. These attempts were unsuccessful. Ultimately, the Pension Board had the Officer evaluated by three (3) physicians selected by the Pension Board as required under §5/3-115 of the Illinois Pension Code; Dr. Michael Jacker, Dr. David Raab, and Dr. Chadwick Podromos. Dr. Jacker concluded that, the Officer had sustained a work related injury and that his outlook for recovery in return to employment as police officer was “guarded” even with surgery.  Dr. Jacker recommended a Functional Capacity Evaluation (FCE). Dr. Raab concluded that the Officer was “likely disabled” due to the October 22nd knee injury, not his injury or surgery from 1995. Dr. Raab further concluded that the Officer should be “functional” with regard to his ability to return to duty, but also recommended an FCE to determine his ability to work as a police officer. Dr. Podromos concluded that the Officer’s persistent pain was likely due to the femoral condyle articular cartilage lesions. Dr. Podromos concluded that the Officer was disabled and could not perform full unrestricted police duties.

Following the three independent medical examinations by the three Pension Board physicians, the Officer underwent a FCE. The FCE resulted in a comprehensive report, finding that the Officer was compliant and passed 35 of 37 reliability criteria. Citing the job description “Police Officer 1” from the Dictionary of Occupational Title (DOT), the evaluator concluded that the Officer should be able to continue to perform his duties as police officer, with certain limitations on lifting and carrying.

Following the FCE, Dr. Raab was provided with a copy of the FCE and asked for an addendum to his initial evaluation. Based upon the FCE, which Dr. Raab found to be valid, Dr. Raab concluded that the Officer could perform at the medium physical demand level. Since a police officer is classified as “medium duty” under DOT regulations, Dr. Raab agreed that the Officer could perform full duty as a police officer. The other two (2) Pension Board physicians, Dr. Jacker and Dr. Podromos, apparently did not review the results of the FCE. Following a hearing, the Pension Board issued its written decision and order, denying the Officer’s disability application in its entirety. The Board challenged the Officer’s credibility. The Board elected to place greater weight on Dr. Raab’s medical report and his review of the FCE. The Board did not issue a decision on the issue of “causation” (i.e. whether the disability was “duty related”).

As a result, the Officer filed a Complaint for Administrative Review. The Trial Court remanded the matter to the Board for hearing on the issue of causation. The Board issued an Order indicating that, if the Trial Court Order were affirmed on review, the Officer’s disability resulted from an “act of police duty”. Subsequently, the Trial Court entered an Order, reversing the Pension Board’s decision as against the manifest weight of the evidence. The Board appealed.

On Appeal, the Court applied the manifest weight standard (see previous case). According to the Court, there was no issue that the Officer sustained an injury from the performance of act of duty, or that he suffered continued issues from the injuries. The sole issue was whether the injury rendered the Officer disabled for service in the Police Department. The Court first addressed the Officer’s challenges that the Board was biased against him. The Court rejected that argument, finding that the Officer did not present any evidence that his disability application was adjudged prior to the hearing, other than his citing of the Board’s discussion of his credibility and the fact that it ultimately ruled against him. However, the Court found that, whether the Officer lacked credibility was not a determination necessary to resolve this case.

The Court found that there was competent evidence in the record to support the Pension Board’s determination that the Officer was not disabled, and capable of performing full and unrestricted police duty. The Court found that Dr. Raab’s medical opinion, based upon his review of the FCE and full review of all documents, was sufficient. The Court was not persuaded by the Officer’s argument that, the FCE was deficient for failure to gauge his ability to run and for following the DOT job description, rather than a job description furnished by the Police Department or Village. The Court was also not persuaded by the Officer’s arguments that the other two (2) Pension Board doctors had not reviewed the FCE. Accordingly, the judgment of the Trial Court was reversed.

Once again, this case illustrates the “manifest weight standard”. However, this raises the question as to whether all of the Pension Board physicians should be provided with all records in order to eliminate any argument that certain doctors where not provided with the identical information.

 Court Says Ex-Spouse’s Apportionment of Pension under QDRO is Final

 In re Marriage of Kehoe and Farkas

 –N.E.2d–, 2012 IL App (1st) 110644.

This case involves a Police Officer in dispute with his ex-wife concerning disposition of marital pension assets. (Hard to believe, isn’t it?)

Frank Farkaas was married to the petitioner Loretta L. Kehoe for six (6) years while he was employed as a Schiller Park Police Officer. In 1988, a judgment for dissolution of marriage was entered, with a Marital Settlement Agreement and Qualified Domestic Relations Order (QDRO) incorporated into the judgment.  As part of the Agreement, the Parties agreed that the ex spouse would be entitled to one half of the value of the Officer’s pension from the date of his employment as a Police Officer with the Village of Schiller Park, to the date of separation of the Parties, which was August 31, 1985. The QDRO was to take effect upon the Officer’s retirement. The Officer apparently thought that was the end of it and moved on.

The Officer retired effective November 17, 2009.  The Schiller Park Police Pension Board contacted the ex-spouse and informed her that because of the change in Illinois Law, Illinois Police Pension Funds will only pay benefits pursuant to a Court entered Qualified Illinois Domestic Relations Order (QILDRO), and that the Board was not required to honor a QDRO. The Officer’s ex-spouse sent him a QILDRO consent form, which he refused to sign. The ex-spouse then filed a Motion for Entry of a QILDRO, setting forth a formula which calculated the ex-spouse’s benefits by dividing the Officer’s Pension as of the date the pension went into pay status, as opposed to the date set forth in the judgment and initial QDRO. The Officer objected to her method of calculation of the pension arguing that the ex-spouse was only entitled to one half of the value of the pension from the date of marriage to the date of dissolution.

The Trial Court entered a written Order denying the ex-spouse’s Motion for Entry of QILDRO and ordered the Officer to pay the pension as per the original QDRO, 50% of the date of his pension as of the date of separation. The ex-spouse filed a Motion to Reconsider, which was denied. An Appeal followed.

On Appeal the ex-spouse made a number of arguments. The Court found that it was entitled to interpret the terms of the Marital Settlement Agreement in the same manner as a contract. In other words, the Court’s objective was to give purpose and intent to the original Marital Settlement Agreement, at the time they entered into the Agreement, which should be given a fair and reasonable interpretation based upon all the language and provisions of that Marital Settlement Agreement and QDRO. Of significance was the specific detail language of the original Marital Settlement Agreement and QDRO, which the Court found was not silent as to the method in which the pension would be divided and the formula for determining pension apportionment at the time of dissolution of marriage. In essence, what the ex-spouse sought to do was to change the methodology previously agreed upon in the Marital Settlement Agreement and QDRO, by increasing her entitlement to allow the ex-spouse to receive benefits from the entire growth and value of the Officer’s pension from the date of dissolution to the date of the Officer’s retirement.

Fortunately for the now retired Officer, the Court soundly rejected the ex-spouse’s arguments. §5/1-119 of the Illinois Pension Code, which went into effect July 1, 1999, contained specific statutory provisions per allowing an alternate payee of a voided QDRO, to petition the Court for an amended Order such as a QILDRO, which can comply with the new statutory provisions. However, that provision does not permit the ex-spouse another opportunity to formulate a method of apportionment, which would entitle her to greater share of the pension benefits that was originally agreed to in the Parties’ Settlement Agreement and QDRO. Accordingly, the Court affirmed the Trial Court’s finding that the ex-spouse was not entitled to more pension benefits than she originally agreed to in the original Marital Settlement Agreement and QDRO. However, the case was remanded to the Trial Court for entry of an appropriate QLDRO, spelling out the terms of the original Settlement Agreement and initial QDRO. Justice Garcia dissenting.

What apparently saved the day here was, the detailed and specific provisions of the Marital Settlement Agreement and QDRO, which prohibited the ex-spouse from revisiting this issue, once the QLDRO provisions went into effect.

 

Florida Trial Court Rejects Florida Legislature’s Attempts to Reduce Pensions

 Williams, et al. v. Scott, et al.

Case No. 2011 CA 1584, Circuit Court of Leon County Florida; Judge Fulford, Judge presiding; issued March 6, 2012.

 While not an Illinois case, this case is interesting for those of you who are following the nationwide pension “jihad.” This is a Florida Trial Court case granting summary judgment in favor of members and participants of the Florida Retirement System (FRS), challenging the provisions of Senate Bill 2100 that mandate a deduction of 3% from the gross compensation of employees in FRS to serve as contributions towards the employers retirement benefits under the plan, and to eliminate Cost of Living Adjustments (COLA) for service credits earned after July 1, 2011. The case discussed herein is the Trial Court’s granting of a Motion for Summary Judgment (meaning since there are no contested issues of fact, plaintiffs are entitled to judgment as a matter of law, and there was no trial) in favor of the Plaintiffs, and an Appeal will no doubt follow.

In 1974, the Florida legislature changed the FRS to a mandatory, non contributory pension system. At the same time the legislature added a provision to the Florida statutes, which provides as follows:

“The rights of members of the retirement system established by this chapter shall not be impaired by virtue of the conversion of the Florida retirement system to an employee non contributory system. As of the effective date of this act, the rights of members of the retirement system established by this chapter are declared to be of a contractual nature, entered into between the member and state, and such rights shall be legally enforceable as valid contractual rights and shall not be abridged in any way.”

Does this sound familiar? This statutory provision is similar, but not identical, to the provision of Article 13, §5 of the Illinois Constitution, which protects membership in Illinois Public Pension systems. Anyway, throughout the thirty-seven (37) years since the adoption of that provision by the Florida legislature, FRS remained a non contributory system and also provided retirees annual COLA increases throughout their retirement.

In 2011 the Florida legislature, when faced with a budget short fall turned to the employees of FRS, and passed Senate Bill 2100 effective July 1, 2011. Most of the changes applied only to employees enrolled in FRS after the Bill’s effective date. However, Senate Bill 2100 had two significant changes to FRS: to employees who were FRS members prior to July 1, 2011; 1) the mandatory 3% employee contribution and 2) the elimination of COLA increases.  Senate Bill 2100 significantly decreases the amount employers must contribute to FRS for the benefit of their employees by more than half for nearly every membership class.

The Plaintiffs challenged the legality of Senate Bill 2100 on a number of theories. First that the changes to FRS violated the contractual rights conferred upon them by the above referenced Florida statutory provision, and thus constituted impairment of contract in violation of the Florida Constitution. In addition, the Plaintiffs also asserted that the changes constituted taking in violation of Article X, § 6 of the Florida Constitution and that the changes violate their rights to engage in collective bargaining protected by Article I, § 6 of the Florida Constitution.

The trial court first addressed the “impairment of contract claim.”  The changes at issue in this case constituted a complete change in the plan from a non-contributory to a contributory plan, and the elimination of COLA adjustments, were held to be qualitative changes to the plan, not changes to the individual components of future accruals within the plan.  The Court held that the above-referenced Florida provision cannot be read to allow the Legislature to redefine established unconditional contractual rights.  Such a reading would render the express contract created by the above-referenced statutory provision “wholly illusory,” said the Court.  While the Legislature is capable of making prospective alterations to benefits, neither that statutory provision, nor case law, authorizes the Legislature to change the fundamental nature of the plan itself.   In addition, the Court held that the plaintiffs’ claim did not end with an impairment inquiry.  For an impairment of a contract to be unconstitutional, it must also be “substantial.”  In this case, the unrebuted evidence presented by the Plaintiffs’ demonstrated that the costs of the changes to the individual plaintiffs’ ranged from $12,445.81 to $329,683.56, over the span of their working years and retirement if they received no further salary raises.  In addition, the elimination of future COLA increases alone would result in a 4% to 24% reduction in the plaintiffs’ total retirement income.  The Court held the “cost” impact was “substantial” as a matter of law.

The final step of the impairment analysis was a determination by the Court whether the impairment was both reasonable and necessary to serve an important public purpose.  In order for the State to justify impairment of its contractual obligations, it must demonstrate a “compelling state interest.”

The Court found the fact that the State faced a significant budget shortfall alone was insufficient.  The undisputed record contained evidence that there were other reasonable alternatives which existed to preserve the State’s contract with FRS members.  The Court held that the State could reduce its financial obligations whenever it wanted to spend money for what it regarded as an important public purpose, the contract clause would provide no protection at all.

The Court also soundly rejected the “takings claim” and “collective bargaining claim” asserted by the plaintiffs.  Summary Judgment was entered on behalf of plaintiffs, and the defendant’s Motion for Summary Judgment was denied.  The Court struck down that portion of Senate Bill 2100 imposing a three percent (3%) mandatory employee contribution and eliminating the COLA increases for future service, as unconstitutional, as applied to FRS members who were members prior to July 1, 2011, and the State was permanently enjoined from implementing those provisions of Senate Bill 2100 as to those Plaintiffs.  (Stay tuned!)

 Illinois Supreme Court Clarifies Eligibility for PSEBA Benefits During Training

 Gaffney v. The Board of Trustees of the Orland Fire Protection District, et al. and Lemmenes v. The Orland Fire Protection District, et al.

2012 IL 11012.

Both Michael Gaffney and Brian Lemmenes were injured during two separate training exercises while working full and unrestricted duties as Orland Park Firefighters.  Both firefighters were awarded line-of-duty disability pensions as a result of those injuries.  Subsequent to the granting of line-of-duty disability pension benefits, both firefighters sought statutory benefits in the form of “continuing health coverage” under the Public Safety Employee Benefits Act (“PSEBA”), which requires employers of full-time firefighters to pay health insurance premiums for the firefighter and his or her spouse and dependent children if the firefighter suffers a catastrophic injury as a result of a response to what is reasonably believed to be an emergency.  In the lower courts, Gaffney was denied the PSEBA benefits and Lemmenes was granted the PSEBA benefits.

Gaffney had injured his shoulder in 2005 during a training exercise in which he was required to participate. It was a live-fire exercise, but he knew that it was a training exercise. There was no dispute that he had sustained a “catastrophic injury” which ended his career.  His crew responded with the engine’s lights and siren activated. The hose which Gaffney and his crew were advancing became entangled while his crew was advancing from the second floor to the third floor with “no visibility” through smoke and obstacles. Gaffney followed the hose back to where it was entangled in a loveseat. He moved the loveseat by flipping it backward, injuring his shoulder. Gaffney asserted his catastrophic injury occurred while he was responding to what he reasonably believed to be an emergency, i.e., the unforeseen event when the hose became entangled in the loveseat and he was required to go back and untangle it.  On the contrary, Lemmenes was required to participate in a training exercise which took place in 2002. It did not involve a live fire, but was a simulation in which there was no smoke, but participants’ headgear was “blacked out” so they could not see. They were instructed to “respond as if it were an actual emergency.” In a purported mission to rescue someone who was trapped in a burning building, Lemmenes injured his knee when attempting to pull the victim out.  There was no issue as to whether or not something was foreseeable in this circumstance.

After his denial of PSEBA benefits, Gaffney filed a circuit court complaint seeking a declaratory judgment that he was entitled to the benefits. The circuit court found that training exercises were not covered and, therefore, that Gaffney could not reasonably have believed there was an emergency. It agreed with the Board’s denial of benefits, and the appellate court affirmed the denial of PSEBA benefits.    For Lemmenes, after initial refusal of his request for benefits, Lemmenes sought a declaratory judgment in the circuit court, and was awarded a summary judgment, which the appellate court affirmed granting the PSEBA benefits.

The Illinois Supreme Court reviewed the precedential law on which the appellate court had relied upon as a standard for the meaning of the undefined statutory term “emergency.”  This had previously been defined as “that which is urgent and calls for immediate action.” The Illinois Supreme Court ultimately agreed with this, but added an additional element to the definition of “emergency” — the element of unforeseeability.

The Supreme Court ruled that in the case of a firefighter, whose job is responding to situations involving imminent danger to persons or property, the word “emergency” means an “unforeseen circumstance that involves imminent danger to persons or property and that requires an urgent response,” i.e., the hose that became tangled in the Gaffney case.  The Court also held that an unforeseen circumstance calling for urgent and immediate action can arise in a training exercise (like Gaffney), and it noted that the General Assembly had not chosen to exclude training exercises from the coverage of the benefit statute. Therefore, the circuit court’s and appellate court’s judgment rejecting benefit eligibility was reversed as to Gaffney, and granting benefit eligibility was reversed as to Lemmenes where there was no issue of whether or not there were foreseeable circumstances that were urgent and required immediate action. v

Illinois Supreme Court Clarifies When PSEBA Benefits Become Payable

 Nowak v. City of Country Club Hills

2011 IL 111838.

In Nowak, the Plaintiff, Don Nowak, worked as a full-time law enforcement officer for the City of Country Club Hills (the City).  On August 21, 2005, plaintiff was injured in the line of duty while attempting to make an arrest. He never returned to work as a police officer. For 12 months following the date of his injury, plaintiff received 100% of his salary, as required by section 1(b) of the Public Employee Disability Act (PEDA). For a short time thereafter, he continued to receive his full salary and benefits through a combination of accrued sick and vacation time, two weeks’ light duty, and temporary total disability payments under the Workers’ Compensation Act.  During the 12 months that plaintiff received his full salary under PEDA, the City continued to deduct 20% of the applicable health insurance premiums from his paycheck pursuant to the then in place collective bargaining agreement between the parties.  After plaintiff’s PEDA benefits expired, plaintiff continued to participate in the City’s health insurance plan and continued to pay 20% of the applicable health insurance premiums to the City on a monthly basis.

In February 2008, plaintiff applied for disability benefits. On October 14, 2008, the City’s police pension board (the Board) awarded plaintiff a line-of-duty disability pension under the Illinois Pension Code, effective September 1, 2006. The City immediately began paying 100% of plaintiff’s health insurance premiums, as required by section 10(a) of the Public Safety Employee Benefits Act (PSEBA).  Following the Board’s decision, plaintiff requested reimbursement from the City for the health insurance premium contributions he had paid since the date of his injury. The City refused plaintiff’s request. Nowak then filed a civil complaint seeking reimbursement of those contributions. The parties submitted a stipulation of facts and filed cross-motions for summary judgment. The circuit court denied plaintiff’s motion and entered summary judgment in favor of the City.  Plaintiff appealed, and the appellate court reversed and held in favor of Nowak.

On appeal, the Illinois Supreme Court ruled that an injured police officer’s employer does not become statutorily obligated to pay the entire health insurance premium for him and his family until it is determined that he will never return to work because of permanent disability caused by a catastrophic injury, i.e., when he is awarded a line-of-duty disability pension.  Therefore, the employer is obligated to pay for PSEBA benefits retroactive to the date the line-of-duty disability pension was awarded by the Pension Board, not the date the officer was actually injured.  Therefore, the Illinois Supreme Court reversed the appellate court and upheld the circuit court’s decision which denied Nowak’s claim.  The municipality is only obligated to begin paying once the Pension Board determines that the Plaintiff is catastrophically disabled, i.e., when the Board grants a line of duty disability pension.

It is important to note in Nowak that the granting of a line of duty disability pension benefit is only the first prong under PSEBA benefits.  In Nowak, the City accepted the PSEBA claim immediately and began to pay out benefits, the only question was when the obligation to pay benefits attached.  Normally, under PSEBA, a claimant must be found to be “catastrophically injured” and also satisfy the second prong in that the claimant must meet one of four possible requirements. The body of the Statute is below:

In order for the law enforcement, correctional or correctional probation officer, firefighter, spouse, or dependent children to be eligible for insurance coverage under this Act, the injury or death must have occurred as the result of the officer’s response to fresh pursuit, the officer or firefighter’s response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act. Nothing in this Section shall be construed to limit health insurance coverage or pension benefits for which the officer, firefighter, spouse, or dependent children may otherwise be eligible. 820 ILCS 320/10(b). v

RJR Attorney News

 

  • Richard J. Reimer has been included in the roster of Illinois Super Lawyers since 2008, recognized by his peers for excellence in employment and labor law, and listed in the “Top Attorneys in Illinois” by Chicago Magazine, February 2012.
  • Keith A. Karlson attended the International Association of Firefighters (IAFF) Attorneys’ Conference in Hollywood Beach, Florida on February 17-19, 2012.
  • Keith A. Karlson received the William Hart Amicus Volunteer Award from the Illinois Trial Lawyers Association on June 10, 2011.
 

A Substantive Explanation of Garrity Rights

September 27th, 2012

Balancing Public Employers’ Power to Investigate with Employees’ Right to Remain Silent

Each year, hundreds, if not thousands, of police officers and firefighters are internally investigated by their municipal employers. These interactions implicate various statutory and bargained for protections. At the same time, when the government questions its employees certain protections afforded by the U.S. Constitution become relevant.

For those who represent unions, employees, and employers, these protections are commonly referred to as “Garrity rights.”  Predictably, Garrity rights were born from a case – namely Garrity v. New Jersey. The other seminal U.S. Supreme Court case regarding public employees’ right to remain silent is Gardner v. Broderick. Per Garrity, statements made by public employees, when compelled to answer questions during their employer’s internal investigation under the threat of termination, are not able to be used in subsequent criminal proceedings.  The converse is true too.  Per Gardner, a public employer is not empowered to condition future employment on a public employee’s waiver of her/his privilege against self-incrimination.

            The 7th Circuit, in Atwell v. Lisle Park District also helped define the contours of the protections annunciated in Garrity and Gardner. In Atwell, a public employee was told to meet with the employer’s attorney to be questioned. The employee’s attorney informed the park district, because his client was asserting her Fifth Amendment privilege, she would not attend the meeting. The employee was terminated. The 7th Circuit upheld the termination. The court explained that an employee’s assertion of her Fifth Amendment privilege was premature. Put plainly, employees cannot refuse to meet with their employer and must wait until they are asked a question before they can choose to remain silent.

In 1987, the Appellate Court of Illinois decided People v. Bynum.  In Bynum, an on-duty Illinois State trooper was convicted of “failing to reduce speed to avoid an accident.” The trooper was driving an unmarked squad car that collided with a bicyclist. After the accident occurred, the trooper was directed by a supervisor to complete a report and participate in an investigatory interview. The trooper knew he was required to follow all orders and that failure to complete the report or answer questions could result in discipline. The Illinois Appellate Court held an “overt threat” of dismissal was necessary to have Garrity protection arise. The court explained the mere possibility of termination was not sufficient to create a coerced statement. As such, the court held the trooper’s conviction should stand.

            On April 1, 2010, the Fourth District of the Appellate Court of Illinois decided People v. Smith. In Smith, before being questioned by their employer (the Peoria Police Department) three Peoria police officers were issued “Garrity warnings.” The warnings stated they were ordered to answer all questions “as a condition of employment. In view of this possible job forfeiture, I have no alternative but to abide by this order.” The warnings also promised the statements would only be used for internal purposes and could not be used in a criminal case. After the warning, the officers answered all of their employer’s questions. As part of the criminal case, the local State’s attorney sought copies of the internal officer’s internal statements. The court quashed the subpoena, concluding, “we find that the ‘Garrity Warnings’ standing alone are sufficient to support the application of Garrity immunity.”

There are some clear practical maxims that, if followed, protects a firefighter’s or police officer’s Fifth Amendment rights and protects the integrity of the employer’s internal investigation: 1) an employee questioned by his or her employer, when feasible should avail themselves of union or legal representation; 2) the employee should attend all meetings (s)he is ordered to attend; 3) before asking any questions, the employer should issue a “Garrity warning” crafted by their attorney; 4) when appropriate, the employee should refuse to answer questions based upon his Fifth Amendment privilege until threatened with termination (thereby immunizing him/her); and 5) an employee’s answers to questions need to be truthful.  This is an admittedly simplified analysis of a relatively complex and changing area of law.  However, both the employer and employee are best served by having legal counsel familiar with Garrity and its progeny advise them during the internal investigative process.

 

New Legal and Legislative Updates

July 11th, 2011

Legal and Legislative Update

CASES

  1. Lindemulder v. Board of Trustees of the Naperville Firefighters Pension Fund, 946 N.E.2d 940, 349 Ill.Dec. 444 (Second Dist 2011) . Without expressly saying so, the Second District Appellate Court clarified that the heart/lung provisions of §4-110.1 of the Illinois Pension Code does not create a rebuttable presumption for firefighters seeking occupational disease disability pensions under the heart/lung provisions of §4-110.1.

    The Applicant in Lindemulder sought a line of duty, and in the alternative, an occupational disease disability pension as a result of chronic obstructive pulmonary disease (“COPD”). The Applicantargued that various occupational exposures over the course of his career caused his COPD, including exposure to diesel fumes, and possibly mold in one of the fire stations where he worked.

    The Applicant was examined by three physicians selected by the Board. All three physicians concluded that the Applicant was disabled, but opined that the disability was the result of his tobacco use. The doctors submitted written reports and testified concerning their opinions and conclusions. All three physicians concluded, because of his cigarette smoking, the Applicant would have the same condition regardless of his employment as a firefighter.

    In light of the doctors’ opinions, the Pension Board denied the Applicant’s request for line of duty and occupational disease disability benefits, but awarded him a non-duty disability pension. On administrative review, the Circuit Court affirmed the Pension Board’sdecision. The Applicant appealed. The Appellate Court first addressed the line of duty claim, applying the manifest weight of the evidence standard. The Court found all physicians concluded that cigarette smoking, rather than plaintiff’s alleged occupational exposure, caused his disability. Moreover, one physician concluded that Applicant’s alleged aggravation of his COPD by exposure to fire smoke and diesel fumes caused a deminimis aggravation of this COPD, which the Applicant alleged was sufficient to prove his case. The Court rejected the claim that a deminimis aggravation, i.e., a transient one with no permanent effect, was sufficient to entitle him to a line of duty disabilitypension. Finally, the Court concluded that the Applicant’s assertions about his exposure to fire smoke and diesel fumes were mostly “unproven.” The Appellate Court affirmed the Pension Board’s denial of the Applicant’s request for a line of duty disability pension.Lindemulder is the first reported Illinois Appellate Court decision that addresses the standard for proving eligibility for an occupational disease pension under the heart/lung provisions of §4-110.1 of the Illinois Pension Code. The Applicant’s theory was that the following language used by the legislature was sufficient to entitle the firefighter to an occupational disease disability pension:

    “service in the fire department requires firefighters in times of stress and danger to perform unusual tasks; that firefighters are subject to exposure to extreme heat or extreme cold in certain seasons while performing their duties; that they are required to work in the midst of and are subject to heavy smoke fumes, and carcinogenic, poisonous, toxic or chemical gases from fires; and that these conditions exist and arise out of or in the course of employment.”

    According to the Appellate Court, the Applicant in this case was simply seeking to bootstrap those legislative findings into proof of causation. The Court rejected this argument because the legislature specifically provided that a firefighter subject to those conditions must prove that his or her disability “resulted from service as a firefighter.”

    Prior to this case, many had assumed that a firefighter seeking a disability under the heart/lung provisions of §4-110.1 simply had to establish that they suffered a disease of the heart and lung, etc., that they were disabled, and that they had more than five years of creditable service. This case rejects that assumption. While not specifically stating so, the Court essentially held that there is no rebuttable presumption contained in the heart/lung provisions of §4-110.1 of the Pension Code. This does not mean that firefighters will not be able to obtain an occupational disease disability pension under §4-110.1. Instead, it requires pension boards to evaluate applications based upon the facts of each specific case. However, it must be noted, there is a rebuttable presumption in favor of firefighters contained in the cancer portion of §4-110.1 of the Pension Code.

  2. Filskov v. Board of Trustees of the Northlake Police Pension Fund, 946 N.E.2d 1095, 349 Ill.Dec. 599 (First Dist. 2011). In Filskov, an officer was on duty and in uniform as a member of the Northlake Police Department assigned to an unmarked police vehicle along with two other officers assigned to a gang suppression unit. After finishing up either an arrest or a report at the Police Department, the three officers left the building to return to the unmarked squad car, but had yet to resume patrol. They were not acting in response to a call for service. The officer was standing outside the open door of the squad car, another officer inadvertently put the car in drive and drove over the officer’s foot. As a result of the injuries to his foot, the officer applied to the pension board seeking line of duty disability benefits, or in the alternative, non duty disability benefits. Following a hearing, the pension board issued its written decision and order, denying the line of duty disability application, but granting the non-duty disability claim. The pension board found that “the performance of a act of duty” did not cause or contribute to the officer’s disability under the pension code. The pension board concluded that there was no “special risk” as required under case law.

    On administrative review, the Circuit Court reversed, awarding the Applicant a line of duty disability pension. The Pension Board appealed. The Appellate Court concluded that the case was a mixed question of law and fact involving an examination of the legal effect of a given set of facts, and applied the “clearly erroneous standard.” The clearly erroneous standard means that an administrative agency’s decision will be deemed “clearly erroneous” only where the reviewing court, on the entire record, is left with a definite and firm conviction that a mistake has been committed. The court went on to review various Illinois Supreme and Appellate Court decisions involving determination of what constitutes a line of duty disability pension within the meaning of §3-114.1 of the Illinois Pension Code.

    The majority distinguished those cases in which police officers were awarded line of duty disability pensions, from this case. The court concluded the board was not clearly erroneous because the incident in question, entering the vehicle, did not involve “special risk not assumed by a citizen in ordinary walks of life.” According to the officer’s own testimony, he was not responding to a call, he had yet to resume patrol duties, but rather was attempting to enter the rear seat of a car that was still in the police station parking lot. He was standing outside the car moving items off the seat when the incident occurred. The court concluded that the officer was engaged in an ordinary risk that all citizens assume when they enter a vehicle or move items off the seats of vehicles. Further, according to the majority, the capacity in which he was acting was that of a passenger entering a motor vehicle, not that of a police officer.

    Accordingly, the majority affirmed the decision of the pension board. Justice Cunningham dissented, concluding that the various cases cited supported the finding that the officer was performing an act of police duty and that the board and majority focused on the fact that the officer was not facing a specific danger at the precise moment of injury. A petition for leave to appeal has been filed with the Illinois Supreme Court.

LEGISLATION

  1. The Illinois Civil Union Act

    On January 31, 2011, Governor Quinn signed Public Act 961513, 750 ILCS §75/1 et seq., effective June 1, 2011. The Civil Union Act now permits a marriage between persons of the same sex, creating a relationship which is substantially similar to marriage. Parties over the age of 18 can obtain “civil union certification” in a manner substantially similar to a common law marriage. Officers or firefighters who enter into a “civil union” obtain the status of spouse, “entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of Illinois to spouses….”

    In the opinion of the authors, police officers and firefighters who enter into a valid civil union, will be entitled to the same legal status as spouses for purposes of surviving spouse/survivor benefits. Civilly united couples will also have the ability to obtain a Qualified Illinois Domestic Relations Order (“QILDRO”), in the event of dissolution of the civil union. We will be following the developing law and keep you apprised. In the interim, should your pension board receive any inquiries concerning civil unions, we suggest that the pension board obtain a certified copy of the civil union certificate and place that on file in the officer or firefighter’s pension board file in the event of a death and/or dissolution of that civil union.

  2. House Bill 1872 – Permits Transfer of Creditable Service from Article V Fund to Article III Fund

    The Illinois Legislature passed House Bill 1872, creating new provisions for Article III (5/3-110.11) and Article V (5/5-237.5) This Bill was sent to Governor Quinn on June 15, 2011. Governor Quinn will have sixty (60) days to either veto the bill or it will become law. This bill creates a very short sixty (60) day window period after the effective date of the Act, and allows officers to transfer up to ten (10) years of creditable service from an Article V (Chicago Police Pension Fund) to an Article III Pension Fund (Downstate Police). An officer seeking to transfer from Article V to Article III can reinstate previous service with Article V by paying the Chicago Police Pension Fund the amount of refund plus interest at an actuarial assumed rate of six percent (6%) compounded annually from the date of refund to the date of repayment.

    Upon receipt of the repayment and written application, the Chicago Police Pension Fund shall pay to the Article III fund the following amounts.

    1. The amounts credited to the officer through employee contributions, plus accumulated interest; plus
    2. The amount representing municipality contributions, equal to the amount determined under item 1); plus
    3. Any interest paid to the Chicago Fund in order to reinstate credits and creditable service.

    The officer will be required to pay the Article III Fund an amount determined by the board equal to:

    1. The difference between the amount of the employee and employer contributions transferred to the Fund under §5/5-237.5 and the amounts that would have been contributed had such contributions been made at the rates applicable to an employee under Article III, and
    2. Interest at the actuarially assumed rate compounded annually from the date of service to the date of payment.

    Once again, the Legislature did not provide pension boards with much guidance on how to effectuate the transfer. We suggest that any pension boards that have officers who wish to transfer creditable service from their time as a Chicago Police Officer be advised to contact the Chicago Retirement Board as well as their own board to begin the transfer process, in light of the limited sixty (60) day application period. We anticipate that the Illinois Department of Insurance will be preparing either administrative rules and regulations or providing further information by way of its Siren newsletter.

Please do not hesitate to contact any of us should you have any questions concerning these cases and/or legislation.

PDF Version

 

Legislature Enacts Sweeping Pension Changes to Police and Fire Pension Funds

December 10th, 2010

Dear Clients and Friends:

On December 2, 2010, the Illinois General Assembly passed Senate Bill 3538, with House Amendment #3, enacting sweeping changes to Article III and Article IV of the Pension Code. Based upon our initial review, it appears that none of the changes contained in this legislation impact current members‟ benefits. Those benefits are vested and guaranteed under Article XIII, Section 5 of the Illinois Constitution. The new benefit structure created by SB 3538 only applies to police officers and firefighters hired on or after January 1, 2011.

Remember this Bill is not yet law. The Bill has yet to be signed by the Governor. After review, the Governor‟s office has the power to suggest certain changes. We are monitoring the Bill‟s progress on a daily, if not hourly, basis.

By passing SB 3538, the General Assembly changed the Pension Code in three ways: (1) it created a new pension benefit structure for police officers and firefighters hired on or after January 1, 2011; (2) it expanded investment authority for pension funds with more than $10 million in net assets; and (3) it phases in a means to enforce mandatory municipal funding (similar to the manner by which IMRF is funded).

The first, and perhaps most dramatic, change to the Pension Code creates a new benefit structure for officers and firefighters hired on or after January 1, 2011. Again, the benefit structure for current officers/firefighters and the benefits for beneficiaries have not changed. As summary of the new benefit structure for newly hired police officers or firefighters is follows:

I. Creation of Two Tier System for Firefighters and Police Officers

A. The benefits for current police officers and firefighters have not changed.

B. Changes apply to police officers and firefighters hired after December 31, 2010.

C. Minimum retirement age – 55 years.

D. Minimum of 10 years service as police officer or firefighter.

E. Retirement pension based upon 2.5% of „final average salary‟ for a max. of 75%.

F. Can retire after age 50 with minimum of 10 years service, but penalty of ½ % for each month police officer/firefighter age is under 55.

G. Final average salary is defined as:

“The average monthly salary obtained by dividing the total salary of the police officer/firefighter during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.”

Meaning, the officer or firefighter‟s pension will be based upon his/her best eight consecutive years out of the last ten years of his/her service

H. Salary Cap – police officers‟/firefighters‟ salary for pension purposes is capped at $106,800 plus the lesser of ½ of the annual CPI-U or 3% (compounded).

I. Cost of Living Increases – Payable at age 60 either on the January 1stafter police officer/firefighter retires or the first anniversary of pension starting date, whichever is later. Non-compounding increases will occur annually, each January thereafter. The increase will be the lesser of 3% or ½ of CPI-U for proceeding calendar year. Meaning, if CPI-U is 0%, the retiree will receive no increase. However, there will never be a reduction in benefits.

J. Surviving spouse benefits – Initial benefit is 66 2/3% of police officer‟s/firefighter‟s earned pension at date of death. However, surviving spouses will receive cost of living increases in the same manner described above.

In addition to creating a two-tier benefit structure, the General Assembly expanded the investment authority of existing downstate police and fire pension funds with at least $10 million in net assets. The expanded investment authority is summarized as follows:

II. Changes to Article 3 and 4 Pension Fund Investment Authority

A. The increased investment authority only applies to funds with more than $10 million in net assets.

B. Can invest in corporate bonds through an investment advisor (not a consultant).

C. Corporate bonds must meet the following requirements:

1. Rated as investment grade by 1 of the 2 largest rating services at time of purchase.

2. If securities are downgraded subsequent to purchase below investment grade must be liquidated within 90 days of downgrade.

3. Total amount of investment in stocks, mutual funds, and corporate bonds may not exceed:

i. 50% of funds net assets effective July 1, 2011; and

ii. 55% of funds net assets effective July 1, 2012.

The final changes to the Pension Code involve enforcing mandatory pension payments by municipalities. Those changes are summarized as follows:

III. Municipal Funding Provisions

A. Amends 5/3-125 and 5/4-118 of Pension Code.

B. Pension funds must be 90% funded by 2040.

C. Annual Municipal contributions to be calculated as level percentage of payroll under “projected unit credit actuarial cost method.”

E. If a municipality fails to remit required municipal contributions within 90 days after payment is due:

a. Commencing fiscal year 2016, Pension fund certifies to state comptroller the amount delinquent;

b. Comptroller must deliver and deposit to pension fund the certified amounts or portion of amounts from “grant of state funds” owed to the municipality

i. In fiscal year 2016 – 1/3 of total amount of grant of state funds;

ii. In fiscal year 2017 – 2/3 of total amount of grant of state funds; and

iii. In fiscal year 2018 – the total amount of grant of state funds (not to exceed the amount of delinquent payments certified to the state comptroller by the pension funds).

Fortunately, the Illinois General Assembly ignored the anti-pension extremists. By standing together, Illinois‟ police and fire professionals thwarted an unprecedented attack on the benefits first responders and their families depend upon. Illinois‟ police officers, firefighters, and their families were particularly well served by the Public Safety Coalition. This alliance of the Illinois Public Pension Fund Association (IPPFA), Associated Fire Fighters‟ of Illinois (AFFI), the Illinois Fraternal Order of Police (FOP), and the Police Benevolent and Protective Association (PBPA) were the only reason the attack was repelled. We owe the Coalition a sincere debt of gratitude for its members‟ perseverance, savvy, and loyalty to its members. Without their work in Springfield‟s trenches sorting facts from venom-laden fiction, we would have not only lost this battle, but the war.

We are in the process of further studying this legislation and will provide further information to you as it becomes available. In the event that you have any questions regarding this matter please contact our office.Sincerely,Richard J. ReimerGeneral Counsel, IPPFAClick here to read Senate Bill 3538

PDF Version

 

Amendment to Senate Bill 3538

December 3rd, 2010

AMENDMENT TO SENATE BILL 3538

Amend Senate Bill 3538, AS AMENDED, by replacing everything after the enacting clause with the following: “Section 5. The Illinois Pension Code is amended by changing Sections 1-113.2, 3-111, 3-111.1, 3-112, 3-125, 4-109, 4-109.1, 4-114, 4-118, 5-167.1, 5-168, 6-164, 6-165, and 7-142.1 and by adding Sections 1-113.4a, 1-165, 5-238, and 6-229 as follows:

(40 ILCS 5/1-113.2) Sec. 1-113.2. List of permitted investments for all Article 3 or 4 pension funds. Any pension fund established under Article 3 or 4 may invest in the following items:

(1) Interest bearing direct obligations of the United States of America.
(2) Interest bearing obligations to the extent that they are fully guaranteed or insured as to payment of principal and interest by the United States of America.
(3) Interest bearing bonds, notes, debentures, or other similar obligations of agencies of the United States of America. For the purposes of this Section, “agencies of the United States of America” includes:

(i) the Federal National Mortgage Association and the Student Loan Marketing Association;
(ii) federal land banks, federal intermediate credit banks, federal farm credit banks, and any other entity authorized to issue direct debt obligations of the United States of America under the Farm Credit Act of 1971 or amendments to that Act;
(iii) federal home loan banks and the Federal Home Loan Mortgage Corporation; and
(iv) any agency created by Act of Congress that is authorized to issue direct debt obligations of the United States of America.

(4) Interest bearing savings accounts or certificates of deposit, issued by federally chartered banks or savings and loan associations, to the extent that the deposits are insured by agencies or instrumentalities of the federal government.
(5) Interest bearing savings accounts or certificates of deposit, issued by State of Illinois chartered banks or savings and loan associations, to the extent that the deposits are insured by agencies or instrumentalities of the federal government.
(6) Investments in credit unions, to the extent that the investments are insured by agencies or instrumentalities of the federal government.
(7) Interest bearing bonds of the State of Illinois.
(8) Pooled interest bearing accounts managed by the Illinois Public Treasurer’s Investment Pool in accordance with the Deposit of State Moneys Act, and interest bearing funds or pooled accounts of the Illinois Metropolitan Investment Funds, and interest bearing funds or pooled accounts managed, operated, and administered by banks, subsidiaries of banks, or subsidiaries of bank holding companies in accordance with the laws of the State of Illinois.
(9) Interest bearing bonds or tax anticipation warrants of any county, township, or municipal corporation of the State of Illinois.
(10) Direct obligations of the State of Israel, subject to the conditions and limitations of item (5.1) of Section 1-113.
(11) Money market mutual funds managed by investment companies that are registered under the federal Investment Company Act of 1940 and the Illinois Securities Law of 1953 and are diversified, open-ended management investment companies; provided that the portfolio of the money market mutual fund is limited to the following:

(i) bonds, notes, certificates of indebtedness, treasury bills, or other securities that are guaranteed by the full faith and credit of the United States of America as to principal and interest;
(ii) bonds, notes, debentures, or other similar obligations of the United States of America or its agencies; and
(iii) short term obligations of corporations organized in the United States with assets exceeding $400,000,000, provided that (A) the obligations mature no later than 180 days from the date of purchase, (B) at the time of purchase, the obligations are rated by at least 2 standard national rating services at one of their 3 highest classifications, and (C) the obligations held by the mutual fund do not exceed 10% of the corporation’s outstanding obligations.

(12) General accounts of life insurance companies authorized to transact business in Illinois.
(13) Any combination of the following, not to exceed 10% of the pension fund’s net assets:

(i) separate accounts that are managed by life insurance companies authorized to transact business in Illinois and are comprised of diversified portfolios consisting of common or preferred stocks, bonds, or money market instruments;
(ii) separate accounts that are managed by insurance companies authorized to transact business in Illinois, and are comprised of real estate or loans upon real estate secured by first or second mortgages; and
(iii) mutual funds that meet the following requirements: (A) the mutual fund is managed by an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953; (B) the mutual fund has been in operation for at least 5 years; (C) the mutual fund has total net assets of $250 million or more; and (D) the mutual fund is comprised of diversified portfolios of common or preferred stocks, bonds, or money market instruments.

(14) Corporate bonds managed through an investment advisor must meet all of the following requirements:

(1) The bonds must be rated as investment grade by one of the 2 largest rating services at the time of purchase.
(2) If subsequently downgraded below investment grade, the bonds must be liquidated from the portfolio within 90 days after being downgraded by the manager. (Source: P.A. 90-507, eff. 8-22-97; 91-887, eff. 7-6-00.)

(40 ILCS 5/1-113.4a new)
Sec. 1-113.4a. List of additional permitted investments for Article 3 and 4 pension funds with net assets of $10,000,000 or more.

(a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $10,000,000 and has appointed an investment adviser, as defined under Sections 1-101.4 and 1-113.5, may, through that investment adviser, invest an additional portion of its assets in common and preferred stocks and mutual funds.
(b) The stocks must meet all of the following requirements:

(1) The common stocks must be listed on a national securities exchange or board of trade (as defined in the Federal Securities Exchange Act of 1934 and set forth in paragraph G of Section 3 of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System.
(2) The securities must be of a corporation in existence for at least 5 years.
(3) The market value of stock in any one corporation may not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation may not exceed 5% of the total outstanding stock of that corporation.
(4) The straight preferred stocks or convertible preferred stocks must be issued or guaranteed by a corporation whose common stock qualifies for investment by the board.

(c) The mutual funds must meet the following requirements: (1) The mutual fund must be managed by an investment company registered under the Federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953. (2) The mutual fund must have been in operation for at least 5 years. (3) The mutual fund must have total net assets of $250,000,000 or more. (4) The mutual fund must be comprised of a diversified portfolio of common or preferred stocks, bonds, or money market instruments.
(d) A pension fund’s total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 50% effective July 1, 2011 and 55% effective July 1, 2012 of the market value of the pension fund’s net present assets stated in its most recent annual report on file with the Department of Insurance.
(e) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the time and in the format required by the Division. (40 ILCS 5/1-165 new) Sec. 1-165. Commission on Government Forecasting and Accountability study. The Commission on Government Forecasting and Accountability shall conduct a study on the feasibility of: (1) the creation of an investment pool to supplement and enhance the investment opportunities available to boards of trustees of the pension funds organized under Articles 3 and 4 of this Code; the study shall include an analysis on any cost or cost savings associated with establishing the system and transferring assets for management under the investment pool; and (2) enacting a contribution cost-share component wherein employing municipalities and members of funds established under Articles 3 and 4 of this Code each contribute 50% of the normal cost of the defined-benefit plan. The Commission shall issue a report on its findings on or before December 31, 2011.

(40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111) Sec. 3-111. Pension.

(a) A police officer age 50 or more with 20 or more years of creditable service, who is not a participant in the self-managed plan under Section 3-109.3 and who is no longer in service as a police officer, shall receive a pension of 1/2 of the salary attached to the rank held by the officer on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater. The pension shall be increased by 2.5% of such salary for each additional year of service over 20 years of service through 30 years of service, to a maximum of 75% of such salary. The changes made to this subsection (a) by this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.

(a) No pension in effect on or granted after June 30, l973 shall be less than $200 per month. Beginning July 1, 1987, the minimum retirement pension for a police officer having at least 20 years of creditable service shall be $400 per month, without regard to whether or not retirement occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this subsection, the Section 3-113.1 minimum controls.

(b) A police officer mandatorily retired from service due to age by operation of law, having at least 8 but less than 20 years of creditable service, shall receive a pension equal to 2 1/2% of the salary attached to the rank he or she held on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater, for each year of creditable service. A police officer who retires or is separated from service having at least 8 years but less than 20 years of creditable service, who is not mandatorily retired due to age by operation of law, and who does not apply for a refund of contributions at his or her last separation from police service, shall receive a pension upon attaining age 60 equal to 2.5% of the salary attached to the rank held by the police officer on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater, for each year of creditable service.

(c) A police officer no longer in service who has at least one but less than 8 years of creditable service in a police pension fund but meets the requirements of this subsection (c) shall be eligible to receive a pension from that fund equal to 2.5% of the salary attached to the rank held on the last day of service under that fund or for one year prior to that last day, whichever is greater, for each year of creditable service in that fund. The pension shall begin no earlier than upon attainment of age 60 (or upon mandatory retirement from the fund by operation of law due to age, if that occurs before age 60) and in no event before the effective date of this amendatory Act of 1997. In order to be eligible for a pension under this subsection (c), the police officer must have at least 8 years of creditable service in a second police pension fund under this Article and be receiving a pension under subsection (a) or (b) of this Section from that second fund. The police officer need not be in service on or after the effective date of this amendatory Act of 1997.

(d) Notwithstanding any other provision of this Article, the provisions of this subsection (d) apply to a person who is not a participant in the self-managed plan under Section 3-109.3 and who first becomes a police officer under this Article on or after January 1, 2011. A police officer age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly pension for his service as a police officer computed by multiplying 2.5% for each year of such service by his or her final average salary. The pension of a police officer who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the police officer’s age is under age 55. The maximum pension under this subsection (d) shall be 75% of final average salary. For the purposes of this subsection (d), “final average salary” means the average monthly salary obtained by dividing the total salary of the police officer during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.
(Source: P.A. 90-460, eff. 8-17-97; 91-939, eff. 2-1-01.)

(40 ILCS 5/3-111.1) (from Ch. 108 1/2, par. 3-111.1)
Sec. 3-111.1. Increase in pension.

(a) Except as provided in subsection (e), the monthly pension of a police officer who retires after July 1, 1971, and prior to January 1, 1986, shall be increased, upon either the first of the month following the first anniversary of the date of retirement if the officer is 60 years of age or over at retirement date, or upon the first day of the month following attainment of age 60 if it occurs after the first anniversary of retirement, by 3% of the originally granted pension and by an additional 3% of the originally granted pension in January of each year thereafter.
(b) The monthly pension of a police officer who retired from service with 20 or more years of service, on or before July 1, 1971, shall be increased in January of the year following the year of attaining age 65 or in January of 1972, if then over age 65, by 3% of the originally granted pension for each year the police officer received pension payments. In each January thereafter, he or she shall receive an additional increase of 3% of the original pension.
(c) The monthly pension of a police officer who retires on disability or is retired for disability shall be increased in January of the year following the year of attaining age 60, by 3% of the original grant of pension for each year he or she received pension payments. In each January thereafter, the police officer shall receive an additional increase of 3% of the original pension.
(d) The monthly pension of a police officer who retires after January 1, 1986, shall be increased, upon either the first of the month following the first anniversary of the date of retirement if the officer is 55 years of age or over, or upon the first day of the month following attainment of age 55 if it occurs after the first anniversary of retirement, by 1/12 of 3% of the originally granted pension for each full month that has elapsed since the pension began, and by an additional 3% of the originally granted pension in January of each year thereafter. The changes made to this subsection (d) by this amendatory Act of the 91st General Assembly apply to all initial increases that become payable under this subsection on or after January 1, 1999. All initial increases that became payable under this subsection on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated and the additional amount accruing for that period, if any, shall be payable to the pensioner in a lump sum.
(e) Notwithstanding the provisions of subsection (a), upon the first day of the month following (1) the first anniversary of the date of retirement, or (2) the attainment of age 55, or (3) July 1, 1987, whichever occurs latest, the monthly pension of a police officer who retired on or after January 1, 1977 and on or before January 1, 1986, and did not receive an increase under subsection (a) before July 1, 1987, shall be increased by 3% of the originally granted monthly pension for each full year that has elapsed since the pension began, and by an additional 3% of the originally granted pension in each January thereafter. The increases provided under this subsection are in lieu of the increases provided in subsection (a).
(f) Notwithstanding the other provisions of this Section, beginning with increases granted on or after July 1, 1993, the second and all subsequent automatic annual increases granted under subsection (a), (b), (d), or (e) of this Section shall be calculated as 3% of the amount of pension payable at the time of the increase, including any increases previously granted under this Section, rather than 3% of the originally granted pension amount. Section 1-103.1 does not apply to this subsection (f).
(g) Notwithstanding any other provision of this Article, the monthly pension of a person who first becomes a police officer under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the pension start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the pension shall not be increased. For the purposes of this subsection (g), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds. (Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-112) (from Ch. 108 1/2, par. 3-112)

Sec. 3-112. Pension to survivors.

(a) Upon the death of a police officer entitled to a pension under Section 3-111, the surviving spouse shall be entitled to the pension to which the police officer was then entitled. Upon the death of the surviving spouse, or upon the remarriage of the surviving spouse if that remarriage terminates the surviving spouse’s eligibility under Section 3-121, the police officer’s unmarried children who are under age 18 or who are dependent because of physical or mental disability shall be entitled to equal shares of such pension. If there is no eligible surviving spouse and no eligible child, the dependent parent or parents of the officer shall be entitled to receive or share such pension until their death or marriage or remarriage after the death of the police officer. Notwithstanding any other provision of this Article, for a person who first becomes a police officer under this Article on or after January 1, 2011, the pension to which the surviving spouse, children, or parents are entitled under this subsection (a) shall be in the amount of 66 2/3% of the police officer’s earned pension at the date of death. Nothing in this subsection (a) shall act to diminish the survivor’s benefits described in subsection (e) of this Section. Notwithstanding any other provision of this Article, the monthly pension of a survivor of a person who first becomes a police officer under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor’s pension and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor’s pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the survivor’s pension shall not be increased. For the purposes of this subsection (a), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(b) Upon the death of a police officer while in service, having at least 20 years of creditable service, or upon the death of a police officer who retired from service with at least 20 years of creditable service, whether death occurs before or after attainment of age 50, the pension earned by the police officer as of the date of death as provided in Section 3-111 shall be paid to the survivors in the sequence provided in subsection (a) of this Section.

(c) Upon the death of a police officer while in service, having at least 10 but less than 20 years of service, a pension of 1/2 of the salary attached to the rank or ranks held by the officer for one year immediately prior to death shall be payable to the survivors in the sequence provided in subsection (a) of this Section. If death occurs as a result of the performance of duty, the 10 year requirement shall not apply and the pension to survivors shall be payable after any period of service.

(d) Beginning July 1, 1987, a minimum pension of $400 per month shall be paid to all surviving spouses, without regard to the fact that the death of the police officer occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this subsection, the Section 3-113.1 minimum controls.

(e) The pension of the surviving spouse of a police officer who dies (i) on or after January 1, 2001, (ii) without having begun to receive either a retirement pension payable under Section 3-111 or a disability pension payable under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6, and (iii) as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty shall not be less than 100% of the salary attached to the rank held by the deceased police officer on the last day of service, notwithstanding any provision in this Article to the contrary. (Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)

Sec. 3-125. Financing.

(a) The city council or the board of trustees of the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce an amount which, when added to the deductions from the salaries or wages of police officers, and revenues available from other sources, will equal a sum sufficient to meet the annual requirements of the police pension fund. The annual requirements to be provided by such tax levy are equal to (1) the normal cost of the pension fund for the year involved, plus (2) an the amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method necessary to amortize the fund’s unfunded accrued liabilities as provided in Section 3-127. The tax shall be levied and collected in the same manner as the general taxes of the municipality, and in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and shall be in addition to the amount authorized to be levied for general purposes as provided by Section 8-3-1 of the Illinois Municipal Code, approved May 29, 1961, as amended. The tax shall be forwarded directly to the treasurer of the board within 30 business days after receipt by the county.
(b) For purposes of determining the required employer contribution to a pension fund, the value of the pension fund’s assets shall be equal to the actuarial value of the pension fund’s assets, which shall be calculated as follows: (1) On March 30, 2011, the actuarial value of a pension fund’s assets shall be equal to the market value of the assets as of that date. (2) In determining the actuarial value of the System’s assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.
(c) If a participating municipality fails to transmit to the fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the fund may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller must, beginning in fiscal year 2016, deduct and deposit into the fund the certified amounts or a portion of those amounts from the following proportions of grants of State funds to the municipality: (1) in fiscal year 2016, one-third of the total amount of any grants of State funds to the municipality; (2) in fiscal year 2017, two-thirds of the total amount of any grants of State funds to the municipality; and (3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any grants of State funds to the municipality. The State Comptroller may not deduct from any grants of State funds to the municipality more than the amount of delinquent payments certified to the State Comptroller by the fund.
(d) The police pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality: (1) All moneys derived from the taxes levied hereunder; (2) Contributions by police officers under Section 3-125.1; (3) All moneys accumulated by the municipality under any previous legislation establishing a fund for the benefit of disabled or retired police officers; (4) Donations, gifts or other transfers authorized by this Article.
(e) The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2013. To the fullest extent possible, the study shall include, but not be limited to, the following: (1) fund balances; (2) historical employer contribution rates for each fund; (3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund; (4) available contribution funding sources; (5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and (6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds. (Source: P.A. 95-530, eff. 8-28-07.)

(40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)

Sec. 4-109. Pension.

(a) A firefighter age 50 or more with 20 or more years of creditable service, who is no longer in service as a firefighter, shall receive a monthly pension of 1/2 the monthly salary attached to the rank held by him or her in the fire service at the date of retirement. The monthly pension shall be increased by 1/12 of 2.5% of such monthly salary for each additional month over 20 years of service through 30 years of service, to a maximum of 75% of such monthly salary. The changes made to this subsection (a) by this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.
(b) A firefighter who retires or is separated from service having at least 10 but less than 20 years of creditable service, who is not entitled to receive a disability pension, and who did not apply for a refund of contributions at his or her last separation from service shall receive a monthly pension upon attainment of age 60 based on the monthly salary attached to his or her rank in the fire service on the date of retirement or separation from service according to the following schedule: For 10 years of service, 15% of salary; For 11 years of service, 17.6% of salary; For 12 years of service, 20.4% of salary; For 13 years of service, 23.4% of salary; For 14 years of service, 26.6% of salary; For 15 years of service, 30% of salary; For 16 years of service, 33.6% of salary; For 17 years of service, 37.4% of salary; For 18 years of service, 41.4% of salary; For 19 years of service, 45.6% of salary.
(c) Notwithstanding any other provision of this Article, the provisions of this subsection (c) apply to a person who first becomes a firefighter under this Article on or after January 1, 2011. A firefighter age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly pension for his service as a firefighter computed by multiplying 2.5% for each year of such service by his or her final average salary. The pension of a firefighter who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the firefighter’s age is under age 55. The maximum pension under this subsection (c) shall be 75% of final average salary. For the purposes of this subsection (c), “final average salary” means the average monthly salary obtained by dividing the total salary of the firefighter during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments. (Source: P.A. 91-466, eff. 8-6-99.)

(40 ILCS 5/4-109.1) (from Ch. 108 1/2, par. 4-109.1)

Sec. 4-109.1. Increase in pension.

(a) Except as provided in subsection (e), the monthly pension of a firefighter who retires after July 1, 1971 and prior to January 1, 1986, shall, upon either the first of the month following the first anniversary of the date of retirement if 60 years of age or over at retirement date, or upon the first day of the month following attainment of age 60 if it occurs after the first anniversary of retirement, be increased by 2% of the originally granted monthly pension and by an additional 2% in each January thereafter. Effective January 25, 1976, the rate of the annual increase shall be 3% of the originally granted monthly pension.

(b) The monthly pension of a firefighter who retired from service with 20 or more years of service, on or before July 1, 1971, shall be increased, in January of the year following the year of attaining age 65 or in January 1972, if then over age 65, by 2% of the originally granted monthly pension, for each year the firefighter received pension payments. In each January thereafter, he or she shall receive an additional increase of 2% of the original monthly pension. Effective January 1976, the rate of the annual increase shall be 3%.

(c) The monthly pension of a firefighter who is receiving a disability pension under this Article shall be increased, in January of the year following the year the firefighter attains age 60, or in January 1974, if then over age 60, by 2% of the originally granted monthly pension for each year he or she received pension payments. In each January thereafter, the firefighter shall receive an additional increase of 2% of the original monthly pension. Effective January 1976, the rate of the annual increase shall be 3%. (c-1) On January 1, 1998, every child’s disability benefit payable on that date under Section 4-110 or 4-110.1 shall be increased by an amount equal to 1/12 of 3% of the amount of the benefit, multiplied by the number of months for which the benefit has been payable. On each January 1 thereafter, every child’s disability benefit payable under Section 4-110 or 4-110.1 shall be increased by 3% of the amount of the benefit then being paid, including any previous increases received under this Article. These increases are not subject to any limitation on the maximum benefit amount included in Section 4-110 or 4-110.1. (c-2) On July 1, 2004, every pension payable to or on behalf of a minor or disabled surviving child that is payable on that date under Section 4-114 shall be increased by an amount equal to 1/12 of 3% of the amount of the pension, multiplied by the number of months for which the benefit has been payable. On July 1, 2005, July 1, 2006, July 1, 2007, and July 1, 2008, every pension payable to or on behalf of a minor or disabled surviving child that is payable under Section 4-114 shall be increased by 3% of the amount of the pension then being paid, including any previous increases received under this Article. These increases are not subject to any limitation on the maximum benefit amount included in Section 4-114.

(d) The monthly pension of a firefighter who retires after January 1, 1986, shall, upon either the first of the month following the first anniversary of the date of retirement if 55 years of age or over, or upon the first day of the month following attainment of age 55 if it occurs after the first anniversary of retirement, be increased by 1/12 of 3% of the originally granted monthly pension for each full month that has elapsed since the pension began, and by an additional 3% in each January thereafter. The changes made to this subsection (d) by this amendatory Act of the 91st General Assembly apply to all initial increases that become payable under this subsection on or after January 1, 1999. All initial increases that became payable under this subsection on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated and the additional amount accruing for that period, if any, shall be payable to the pensioner in a lump sum.

(e) Notwithstanding the provisions of subsection (a), upon the first day of the month following (1) the first anniversary of the date of retirement, or (2) the attainment of age 55, or (3) July 1, 1987, whichever occurs latest, the monthly pension of a firefighter who retired on or after January 1, 1977 and on or before January 1, 1986 and did not receive an increase under subsection (a) before July 1, 1987, shall be increased by 3% of the originally granted monthly pension for each full year that has elapsed since the pension began, and by an additional 3% in each January thereafter. The increases provided under this subsection are in lieu of the increases provided in subsection (a).

(f) In July 2009, the monthly pension of a firefighter who retired before July 1, 1977 shall be recalculated and increased to reflect the amount that the firefighter would have received in July 2009 had the firefighter been receiving a 3% compounded increase for each year he or she received pension payments after January 1, 1986, plus any increases in pension received for each year prior to January 1, 1986. In each January thereafter, he or she shall receive an additional increase of 3% of the amount of the pension then being paid. The changes made to this Section by this amendatory Act of the 96th General Assembly apply without regard to whether the firefighter was in service on or after its effective date.

(g) Notwithstanding any other provision of this Article, the monthly pension of a person who first becomes a firefighter under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the pension start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the pension shall not be increased. For the purposes of this subsection (g), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds. (Source: P.A. 96-775, eff. 8-28-09.)

(40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)

Sec. 4-114. Pension to survivors.

If a firefighter who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, or (2) from any cause while in receipt of a disability pension under this Article, or (3) during retirement after 20 years service, or (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, a pension shall be paid to his or her survivors, based on the monthly salary attached to the firefighter’s rank on the last day of service in the fire department, as follows:

(a)(1) To the surviving spouse, a monthly pension of 40% of the monthly salary, and to the guardian of any minor child or children including a child which has been conceived but not yet born, 12% of such monthly salary for each such child until attainment of age 18 or until the child’s marriage, whichever occurs first. Beginning July 1, 1993, the monthly pension to the surviving spouse shall be 54% of the monthly salary for all persons receiving a surviving spouse pension under this Article, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of 1993. (2) Beginning July 1, 2004, unless the amount provided under paragraph (1) of this subsection (a) is greater, the total monthly pension payable under this paragraph (a), including any amount payable on account of children, to the surviving spouse of a firefighter who died (i) while receiving a retirement pension, (ii) while he or she was a deferred pensioner with at least 20 years of creditable service, or (iii) while he or she was in active service having at least 20 years of creditable service, regardless of age, shall be no less than 100% of the monthly retirement pension earned by the deceased firefighter at the time of death, regardless of whether death occurs before or after attainment of age 50, including any increases under Section 4-109.1. This minimum applies to all such surviving spouses who are eligible to receive a surviving spouse pension, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of the 93rd General Assembly, and notwithstanding any limitation on maximum pension under paragraph (d) or any other provision of this Article. (3) If the pension paid on and after July 1, 2004 to the surviving spouse of a firefighter who died on or after July 1, 2004 and before the effective date of this amendatory Act of the 93rd General Assembly was less than the minimum pension payable under paragraph (1) or (2) of this subsection (a), the fund shall pay a lump sum equal to the difference within 90 days after the effective date of this amendatory Act of the 93rd General Assembly. The pension to the surviving spouse shall terminate in the event of the surviving spouse’s remarriage prior to July 1, 1993; remarriage on or after that date does not affect the surviving spouse’s pension, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of 1993. The surviving spouse’s pension shall be subject to the minimum established in Section 4-109.2.

(b) Upon the death of the surviving spouse leaving one or more minor children, to the duly appointed guardian of each such child, for support and maintenance of each such child until the child reaches age 18 or marries, whichever occurs first, a monthly pension of 20% of the monthly salary.

(c) If a deceased firefighter leaves no surviving spouse or unmarried minor children under age 18, but leaves a dependent father or mother, to each dependent parent a monthly pension of 18% of the monthly salary. To qualify for the pension, a dependent parent must furnish satisfactory proof that the deceased firefighter was at the time of his or her death the sole supporter of the parent or that the parent was the deceased’s dependent for federal income tax purposes.

(d) The total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 75% of the monthly salary of the deceased firefighter (1) when paid to the survivor of a firefighter who has attained 20 or more years of service credit and who receives or is eligible to receive a retirement pension under this Article, or (2) when paid to the survivor of a firefighter who dies as a result of illness or accident, or (3) when paid to the survivor of a firefighter who dies from any cause while in receipt of a disability pension under this Article, or (4) when paid to the survivor of a deferred pensioner. For all other survivors of deceased firefighters, the total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 50% of the retirement annuity the firefighter would have received on the date of death. The maximum pension limitations in this paragraph (d) do not control over any contrary provision of this Article explicitly establishing a minimum amount of pension or granting a one-time or annual increase in pension.

(e) If a firefighter leaves no eligible survivors under paragraphs (a), (b) and (c), the board shall refund to the firefighter’s estate the amount of his or her accumulated contributions, less the amount of pension payments, if any, made to the firefighter while living.

(f) (Blank).
(g) If a judgment of dissolution of marriage between a firefighter and spouse is judicially set aside subsequent to the firefighter’s death, the surviving spouse is eligible for the pension provided in paragraph (a) only if the judicial proceedings are filed within 2 years after the date of the dissolution of marriage and within one year after the firefighter’s death and the board is made a party to the proceedings. In such case the pension shall be payable only from the date of the court’s order setting aside the judgment of dissolution of marriage.

(h) Benefits payable on account of a child under this Section shall not be reduced or terminated by reason of the child’s attainment of age 18 if he or she is then dependent by reason of a physical or mental disability but shall continue to be paid as long as such dependency continues. Individuals over the age of 18 and adjudged as a disabled person pursuant to Article XIa of the Probate Act of 1975, except for persons receiving benefits under Article III of the Illinois Public Aid Code, shall be eligible to receive benefits under this Act.

(i) Beginning January 1, 2000, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1994 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

(j) Beginning July 1, 2004, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1988 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article. Notwithstanding any other provision of this Article, if a person who first becomes a firefighter under this Article on or after January 1, 2011 and who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, (2) from any cause while in receipt of a disability pension under this Article, (3) during retirement after 20 years service, (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, then a pension shall be paid to his or her survivors in the amount of 66 2/3% of the firefighter’s earned pension at the date of death. Nothing in this Section shall act to diminish the survivor’s benefits described in subsection (j) of this Section. Notwithstanding any other provision of this Article, the monthly pension of a survivor of a person who first becomes a firefighter under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor’s pension and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor’s pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the survivor’s pension shall not be increased. For the purposes of this Section, “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds. (Source: P.A. 95-279, eff. 1-1-08.)

(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

Sec. 4-118. Financing.

(a) The city council or the board of trustees of the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce an amount which, when added to the deductions from the salaries or wages of firefighters and revenues available from other sources, will equal a sum sufficient to meet the annual actuarial requirements of the pension fund, as determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or municipality. For the purposes of this Section, the annual actuarial requirements of the pension fund are equal to (1) the normal cost of the pension fund, or 17.5% of the salaries and wages to be paid to firefighters for the year involved, whichever is greater, plus (2) an the annual amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method necessary to amortize the fund’s unfunded accrued liabilities over a period of 40 years from July 1, 1993, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. The amount to be applied towards the amortization of the unfunded accrued liability in any year shall not be less than the annual amount required to amortize the unfunded accrued liability, including interest, as a level percentage of payroll over the number of years remaining in the 40 year amortization period. (a-5) For purposes of determining the required employer contribution to a pension fund, the value of the pension fund’s assets shall be equal to the actuarial value of the pension fund’s assets, which shall be calculated as follows: (1) On March 30, 2011, the actuarial value of a pension fund’s assets shall be equal to the market value of the assets as of that date. (2) In determining the actuarial value of the pension fund’s assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.
(b) The tax shall be levied and collected in the same manner as the general taxes of the municipality, and shall be in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and in addition to the amount authorized to be levied for general purposes, under Section 8-3-1 of the Illinois Municipal Code or under Section 14 of the Fire Protection District Act. The tax shall be forwarded directly to the treasurer of the board within 30 business days of receipt by the county (or, in the case of amounts added to the tax levy under subsection (f), used by the municipality to pay the employer contributions required under subsection (b-1) of Section 15-155 of this Code). (b-5) If a participating municipality fails to transmit to the fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the fund may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller must, beginning in fiscal year 2016, deduct and deposit into the fund the certified amounts or a portion of those amounts from the following proportions of grants of State funds to the municipality: (1) in fiscal year 2016, one-third of the total amount of any grants of State funds to the municipality; (2) in fiscal year 2017, two-thirds of the total amount of any grants of State funds to the municipality; and (3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any grants of State funds to the municipality. The State Comptroller may not deduct from any grants of State funds to the municipality more than the amount of delinquent payments certified to the State Comptroller by the fund.
(c) The board shall make available to the membership and the general public for inspection and copying at reasonable times the most recent Actuarial Valuation Balance Sheet and Tax Levy Requirement issued to the fund by the Department of Insurance.
(d) The firefighters’ pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality: (1) all moneys derived from the taxes levied hereunder; (2) contributions by firefighters as provided under Section 4-118.1; (3) all rewards in money, fees, gifts, and emoluments that may be paid or given for or on account of extraordinary service by the fire department or any member thereof, except when allowed to be retained by competitive awards; and (4) any money, real estate or personal property received by the board.
(e) For the purposes of this Section, “enrolled actuary” means an actuary: (1) who is a member of the Society of Actuaries or the American Academy of Actuaries; and (2) who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974, or who has been engaged in providing actuarial services to one or more public retirement systems for a period of at least 3 years as of July 1, 1983.
(f) The corporate authorities of a municipality that employs a person who is described in subdivision (d) of Section 4-106 may add to the tax levy otherwise provided for in this Section an amount equal to the projected cost of the employer contributions required to be paid by the municipality to the State Universities Retirement System under subsection (b-1) of Section 15-155 of this Code.
(g) The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2013. To the fullest extent possible, the study shall include, but not be limited to, the following: (1) fund balances; (2) historical employer contribution rates for each fund; (3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund; (4) available contribution funding sources; (5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and (6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds. (Source: P.A. 94-859, eff. 6-15-06.)

(40 ILCS 5/5-167.1) (from Ch. 108 1/2, par. 5-167.1)

Sec. 5-167.1. Automatic increase in annuity; retirement from service after September 1, 1967.

(a) A policeman who retires from service after September 1, 1967 with at least 20 years of service credit shall, upon either the first of the month following the first anniversary of his date of retirement if he is age 60 (age 55 if born before January 1, 1955) or over on that anniversary date, or upon the first of the month following his attainment of age 60 (age 55 if born before January 1, 1955) if it occurs after the first anniversary of his retirement date, have his then fixed and payable monthly annuity increased by 1 1/2% and such first fixed annuity as granted at retirement increased by an additional 1 1/2% in January of each year thereafter up to a maximum increase of 30%. Beginning January 1, 1983 for policemen born before January 1, 1930, and beginning January 1, 1988 for policemen born on or after January 1, 1930 but before January 1, 1940, and beginning January 1, 1996 for policemen born on or after January 1, 1940 but before January 1, 1945, and beginning January 1, 2000 for policemen born on or after January 1, 1945 but before January 1, 1950, and beginning January 1, 2005 for policemen born on or after January 1, 1950 but before January 1, 1955, such increases shall be 3% and such policemen shall not be subject to the 30% maximum increase. Any policeman born before January 1, 1945 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 1996 is entitled to receive the initial increase under this subsection on (1) January 1, 1996, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by Public Act 89-12 apply beginning January 1, 1996 and without regard to whether the policeman or annuitant terminated service before the effective date of that Act. Any policeman born before January 1, 1950 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2000 is entitled to receive the initial increase under this subsection on (1) January 1, 2000, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 92nd General Assembly apply without regard to whether the policeman or annuitant terminated service before the effective date of this amendatory Act. Any policeman born before January 1, 1955 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2005 is entitled to receive the initial increase under this subsection on (1) January 1, 2005, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 94th General Assembly apply without regard to whether the policeman or annuitant terminated service before the effective date of this amendatory Act.
(b) Subsection (a) of this Section is not applicable to an employee receiving a term annuity.
(c) To help defray the cost of such increases in annuity, there shall be deducted, beginning September 1, 1967, from each payment of salary to a policeman, 1/2 of 1% of each salary payment concurrently with and in addition to the salary deductions otherwise made for annuity purposes. The city, in addition to the contributions otherwise made by it for annuity purposes under other provisions of this Article, shall make matching contributions concurrently with such salary deductions. Each such 1/2 of 1% deduction from salary and each such contribution by the city of 1/2 of 1% of salary shall be credited to the Automatic Increase Reserve, to be used to defray the cost of the 1 1/2% annuity increase provided by this Section. Any balance in such reserve as of the beginning of each calendar year shall be credited with interest at the rate of 3% per annum. Such deductions from salary and city contributions shall continue while the policeman is in service. The salary deductions provided in this Section are not subject to refund, except to the policeman himself, in any case in which a policeman withdraws prior to qualification for minimum annuity and applies for refund or applies for annuity, and also where a term annuity becomes payable. In such cases, the total of such salary deductions shall be refunded to the policeman, without interest, and charged to the Automatic Increase Reserve.
(d) Notwithstanding any other provision of this Article, for a person who first becomes a policeman under this Article on or after January 1, 2011, the annuity to which the survivor is entitled under this subsection (d) shall be in the amount of 66 2/3% of the policeman’s earned annuity at the date of death. Nothing in this subsection (d) shall act to diminish the survivor’s benefits described in this Section. Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a person who first becomes a policeman under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor’s annuity and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted annuity. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased. For the purposes of this subsection (d), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds. (Source: P.A. 94-719, eff. 1-6-06.)

(40 ILCS 5/5-168) (from Ch. 108 1/2, par. 5-168)

Sec. 5-168. Financing.

(a) Except as expressly provided in this Section, the city shall levy a tax annually upon all taxable property therein for the purpose of providing revenue for the fund. The tax shall be at a rate that will produce a sum which, when added to the amounts deducted from the policemen’s salaries and the amounts deposited in accordance with subsection (g), is sufficient for the purposes of the fund. For the years 1968 and 1969, the city council shall levy a tax annually at a rate on the dollar of the assessed valuation of all taxable property that will produce, when extended, not to exceed $9,700,000. Beginning with the year 1970 and through 2014, each year thereafter the city council shall levy a tax annually at a rate on the dollar of the assessed valuation of all taxable property that will produce when extended an amount not to exceed the total amount of contributions by the policemen to the Fund made in the calendar year 2 years before the year for which the applicable annual tax is levied, multiplied by 1.40 for the tax levy year 1970; by 1.50 for the year 1971; by 1.65 for 1972; by 1.85 for 1973; by 1.90 for 1974; by 1.97 for 1975 through 1981; by 2.00 for 1982 and for each year through 2014 thereafter. Beginning in 2015, the city council shall levy a tax annually at a rate on the dollar of the assessed valuation of all taxable property that will produce when extended an annual amount that is equal to (1) the normal cost to the Fund, plus (2) an annual amount sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the Fund or the city. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method. For the purposes of this subsection (a), contributions by the policeman to the Fund shall not include payments made by a policeman to establish credit under Section 5-214.2 of this Code. (a-5) For purposes of determining the required employer contribution to the Fund, the value of the Fund’s assets shall be equal to the actuarial value of the Fund’s assets, which shall be calculated as follows: (1) On March 30, 2011, the actuarial value of the Fund’s assets shall be equal to the market value of the assets as of that date. (2) In determining the actuarial value of the Fund’s assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year. (a-7) If the city fails to transmit to the Fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the Fund may, after giving notice to the city, certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller must, beginning in fiscal year 2016, deduct and deposit into the Fund the certified amounts or a portion of those amounts from the following proportions of grants of State funds to the city: (1) in fiscal year 2016, one-third of the total amount of any grants of State funds to the city; (2) in fiscal year 2017, two-thirds of the total amount of any grants of State funds to the city; and (3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any grants of State funds to the city. The State Comptroller may not deduct from any grants of State funds to the city more than the amount of delinquent payments certified to the State Comptroller by the Fund.
(b) The tax shall be levied and collected in like manner with the general taxes of the city, and is in addition to all other taxes which the city is now or may hereafter be authorized to levy upon all taxable property therein, and is exclusive of and in addition to the amount of tax the city is now or may hereafter be authorized to levy for general purposes under any law which may limit the amount of tax which the city may levy for general purposes. The county clerk of the county in which the city is located, in reducing tax levies under Section 8-3-1 of the Illinois Municipal Code, shall not consider the tax herein authorized as a part of the general tax levy for city purposes, and shall not include the tax in any limitation of the percent of the assessed valuation upon which taxes are required to be extended for the city.
(c) On or before January 10 of each year, the board shall notify the city council of the requirement that the tax herein authorized be levied by the city council for that current year. The board shall compute the amounts necessary for the purposes of this fund to be credited to the reserves established and maintained within the fund; shall make an annual determination of the amount of the required city contributions; and shall certify the results thereof to the city council. As soon as any revenue derived from the tax is collected it shall be paid to the city treasurer of the city and shall be held by him for the benefit of the fund in accordance with this Article.
(d) If the funds available are insufficient during any year to meet the requirements of this Article, the city may issue tax anticipation warrants against the tax levy for the current fiscal year.
(e) The various sums, including interest, to be contributed by the city, shall be taken from the revenue derived from such tax or otherwise as expressly provided in this Section. Any moneys of the city derived from any source other than the tax herein authorized shall not be used for any purpose of the fund nor the cost of administration thereof, unless applied to make the deposit expressly authorized in this Section or the additional city contributions required under subsection (h).
(f) If it is not possible or practicable for the city to make its contributions at the time that salary deductions are made, the city shall make such contributions as soon as possible thereafter, with interest thereon to the time it is made.
(g) In lieu of levying all or a portion of the tax required under this Section in any year, the city may deposit with the city treasurer no later than March 1 of that year for the benefit of the fund, to be held in accordance with this Article, an amount that, together with the taxes levied under this Section for that year, is not less than the amount of the city contributions for that year as certified by the board to the city council. The deposit may be derived from any source legally available for that purpose, including, but not limited to, the proceeds of city borrowings. The making of a deposit shall satisfy fully the requirements of this Section for that year to the extent of the amounts so deposited. Amounts deposited under this subsection may be used by the fund for any of the purposes for which the proceeds of the tax levied under this Section may be used, including the payment of any amount that is otherwise required by this Article to be paid from the proceeds of that tax.
(h) In addition to the contributions required under the other provisions of this Article, by November 1 of the following specified years, the city shall deposit with the city treasurer for the benefit of the fund, to be held and used in accordance with this Article, the following specified amounts: $6,300,000 in 1999; $5,880,000 in 2000; $5,460,000 in 2001; $5,040,000 in 2002; and $4,620,000 in 2003. The additional city contributions required under this subsection are intended to decrease the unfunded liability of the fund and shall not decrease the amount of the city contributions required under the other provisions of this Article. The additional city contributions made under this subsection may be used by the fund for any of its lawful purposes. (Source: P.A. 95-1036, eff. 2-17-09.)

(40 ILCS 5/5-238 new)

Sec. 5-238. Provisions applicable to new hires.

(a) Notwithstanding any other provision of this Article, the provisions of this Section apply to a person who first becomes a policeman under this Article on or after January 1, 2011.
(b) A policeman age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly retirement annuity for his service as a police officer computed by multiplying 2.5% for each year of such service by his or her final average salary. The retirement annuity of a policeman who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the police officer’s age is under age 55. The maximum retirement annuity under this subsection (b) shall be 75% of final average salary. For the purposes of this subsection (b), “final average salary” means the average monthly salary obtained by dividing the total salary of the policeman during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.
(c) Notwithstanding any other provision of this Article, for a person who first becomes a policeman under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (c) shall be in the amount of 66 2/3% of the policeman’s earned annuity at the date of death. Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a person who first becomes a policeman under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor’s annuity and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor’s annuity. If the unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased. For the purposes of this Section, “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(40 ILCS 5/6-164) (from Ch. 108 1/2, par. 6-164)
Sec. 6-164. Automatic annual increase; retirement after September 1, 1959.

(a) A fireman qualifying for a minimum annuity who retires from service after September 1, 1959 shall, upon either the first of the month following the first anniversary of his date of retirement if he is age 60 (age 55 if born before January 1, 1955) or over on that anniversary date, or upon the first of the month following his attainment of age 60 (age 55 if born before January 1, 1955) if that occurs after the first anniversary of his retirement date, have his then fixed and payable monthly annuity increased by 1 1/2%, and such first fixed annuity as granted at retirement increased by an additional 1 1/2% in January of each year thereafter up to a maximum increase of 30%. Beginning July 1, 1982 for firemen born before January 1, 1930, and beginning January 1, 1990 for firemen born after December 31, 1929 and before January 1, 1940, and beginning January 1, 1996 for firemen born after December 31, 1939 but before January 1, 1945, and beginning January 1, 2004, for firemen born after December 31, 1944 but before January 1, 1955, such increases shall be 3% and such firemen shall not be subject to the 30% maximum increase. Any fireman born before January 1, 1945 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 1996 is entitled to receive the initial increase under this subsection on (1) January 1, 1996, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of 1995 apply beginning January 1, 1996 and apply without regard to whether the fireman or annuitant terminated service before the effective date of this amendatory Act of 1995. Any fireman born before January 1, 1955 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2004 is entitled to receive the initial increase under this subsection on (1) January 1, 2004, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 93rd General Assembly apply without regard to whether the fireman or annuitant terminated service before the effective date of this amendatory Act. (b) Subsection (a) of this Section is not applicable to an employee receiving a term annuity. (c) To help defray the cost of such increases in annuity, there shall be deducted, beginning September 1, 1959, from each payment of salary to a fireman, 1/8 of 1% of each such salary payment and an additional 1/8 of 1% beginning on September 1, 1961, and September 1, 1963, respectively, concurrently with and in addition to the salary deductions otherwise made for annuity purposes. Each such additional 1/8 of 1% deduction from salary which shall, on September 1, 1963, result in a total increase of 3/8 of 1% of salary, shall be credited to the Automatic Increase Reserve, to be used, together with city contributions as provided in this Article, to defray the cost of the 1 1/2% annuity increments herein specified. Any balance in such reserve as of the beginning of each calendar year shall be credited with interest at the rate of 3% per annum. The salary deductions provided in this Section are not subject to refund, except to the fireman himself, in any case in which a fireman withdraws prior to qualification for minimum annuity and applies for refund, or applies for annuity, and also where a term annuity becomes payable. In such cases, the total of such salary deductions shall be refunded to the fireman, without interest, and charged to the aforementioned reserve. (d) Notwithstanding any other provision of this Article, the monthly annuity of a person who first becomes a fireman under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased. For the purposes of this subsection (d), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds. (Source: P.A. 93-654, eff. 1-16-04.)

(40 ILCS 5/6-165) (from Ch. 108 1/2, par. 6-165)

Sec. 6-165. Financing; tax.

(a) Except as expressly provided in this Section, each city shall levy a tax annually upon all taxable property therein for the purpose of providing revenue for the fund. For the years prior to the year 1960, the tax rate shall be as provided for in the “Firemen’s Annuity and Benefit Fund of the Illinois Municipal Code”. The tax, from and after January 1, 1968 to and including the year 1971, shall not exceed .0863% of the value, as equalized or assessed by the Department of Revenue, of all taxable property in the city. Beginning with the year 1972 and through 2014, each year thereafter the city shall levy a tax annually at a rate on the dollar of the value, as equalized or assessed by the Department of Revenue of all taxable property within such city that will produce, when extended, not to exceed an amount equal to the total amount of contributions by the employees to the fund made in the calendar year 2 years prior to the year for which the annual applicable tax is levied, multiplied by 2.23 through the calendar year 1981, and by 2.26 for the year 1982 and for each year through 2014 thereafter. Beginning in 2015, the city council shall levy a tax annually at a rate on the dollar of the assessed valuation of all taxable property that will produce when extended an annual amount that is equal to (1) the normal cost to the Fund, plus (2) an annual amount sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the Fund or the city. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method. To provide revenue for the ordinary death benefit established by Section 6-150 of this Article, in addition to the contributions by the firemen for this purpose, the city council shall for the year 1962 and each year thereafter annually levy a tax, which shall be in addition to and exclusive of the taxes authorized to be levied under the foregoing provisions of this Section, upon all taxable property in the city, as equalized or assessed by the Department of Revenue, at such rate per cent of the value of such property as shall be sufficient to produce for each year the sum of $142,000. The amounts produced by the taxes levied annually, together with the deposit expressly authorized in this Section, shall be sufficient, when added to the amounts deducted from the salaries of firemen and applied to the fund, to provide for the purposes of the fund. (a-5) For purposes of determining the required employer contribution to the Fund, the value of the Fund’s assets shall be equal to the actuarial value of the Fund’s assets, which shall be calculated as follows: (1) On March 30, 2011, the actuarial value of the Fund’s assets shall be equal to the market value of the assets as of that date. (2) In determining the actuarial value of the Fund’s assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year. (a-7) If the city fails to transmit to the Fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the Fund may, after giving notice to the city, certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller must, beginning in fiscal year 2016, deduct and deposit into the Fund the certified amounts or a portion of those amounts from the following proportions of grants of State funds to the city: (1) in fiscal year 2016, one-third of the total amount of any grants of State funds to the city; (2) in fiscal year 2017, two-thirds of the total amount of any grants of State funds to the city; and (3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any grants of State funds to the city. The State Comptroller may not deduct from any grants of State funds to the city more than the amount of delinquent payments certified to the State Comptroller by the Fund. (b) The taxes shall be levied and collected in like manner with the general taxes of the city, and shall be in addition to all other taxes which the city may levy upon all taxable property therein and shall be exclusive of and in addition to the amount of tax the city may levy for general purposes under Section 8-3-1 of the Illinois Municipal Code, approved May 29, 1961, as amended, or under any other law or laws which may limit the amount of tax which the city may levy for general purposes. (c) The amounts of the taxes to be levied in each year shall be certified to the city council by the board. (d) As soon as any revenue derived from such taxes is collected, it shall be paid to the city treasurer and held for the benefit of the fund, and all such revenue shall be paid into the fund in accordance with the provisions of this Article. (e) If the funds available are insufficient during any year to meet the requirements of this Article, the city may issue tax anticipation warrants, against the tax levies herein authorized for the current fiscal year. (f) The various sums, hereinafter stated, including interest, to be contributed by the city, shall be taken from the revenue derived from the taxes or otherwise as expressly provided in this Section. Except for defraying the cost of administration of the fund during the calendar year in which a city first attains a population of 500,000 and comes under the provisions of this Article and the first calendar year thereafter, any money of the city derived from any source other than these taxes or the sale of tax anticipation warrants shall not be used to provide revenue for the fund, nor to pay any part of the cost of administration thereof, unless applied to make the deposit expressly authorized in this Section or the additional city contributions required under subsection (h). (g) In lieu of levying all or a portion of the tax required under this Section in any year, the city may deposit with the city treasurer no later than March 1 of that year for the benefit of the fund, to be held in accordance with this Article, an amount that, together with the taxes levied under this Section for that year, is not less than the amount of the city contributions for that year as certified by the board to the city council. The deposit may be derived from any source legally available for that purpose, including, but not limited to, the proceeds of city borrowings. The making of a deposit shall satisfy fully the requirements of this Section for that year to the extent of the amounts so deposited. Amounts deposited under this subsection may be used by the fund for any of the purposes for which the proceeds of the taxes levied under this Section may be used, including the payment of any amount that is otherwise required by this Article to be paid from the proceeds of those taxes. (h) In addition to the contributions required under the other provisions of this Article, by November 1 of the following specified years, the city shall deposit with the city treasurer for the benefit of the fund, to be held and used in accordance with this Article, the following specified amounts: $6,300,000 in 1999; $5,880,000 in 2000; $5,460,000 in 2001; $5,040,000 in 2002; and $4,620,000 in 2003. The additional city contributions required under this subsection are intended to decrease the unfunded liability of the fund and shall not decrease the amount of the city contributions required under the other provisions of this Article. The additional city contributions made under this subsection may be used by the fund for any of its lawful purposes. (Source: P.A. 93-654, eff. 1-16-04.)

(40 ILCS 5/6-229 new)

Sec. 6-229. Provisions applicable to new hires.

(a) Notwithstanding any other provision of this Article, the provisions of this Section apply to a person who first becomes a fireman under this Article on or after January 1, 2011. (b) A fireman age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly retirement annuity for his service as a fireman computed by multiplying 2.5% for each year of such service by his or her final average salary. The retirement annuity of a fireman who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the fireman’s age is under age 55. The maximum retirement annuity under this subsection (b) shall be 75% of final average salary. For the purposes of this subsection (b), “final average salary” means the average monthly salary obtained by dividing the total salary of the fireman during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments. (c) Notwithstanding any other provision of this Article, for a person who first becomes a fireman under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (c) shall be in the amount of 66 2/3% of the fireman’s earned pension at the date of death. Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a person who first becomes a fireman under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor’s pension and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with September preceding each November 1, whichever is less, of the originally granted survivor’s annuity. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased.

(40 ILCS 5/7-142.1) (from Ch. 108 1/2, par. 7-142.1)

Sec. 7-142.1. Sheriff’s law enforcement employees.

(a) In lieu of the retirement annuity provided by subparagraph 1 of paragraph (a) of Section 7-142: Any sheriff’s law enforcement employee who has 20 or more years of service in that capacity and who terminates service prior to January 1, 1988 shall be entitled at his option to receive a monthly retirement annuity for his service as a sheriff’s law enforcement employee computed by multiplying 2% for each year of such service up to 10 years, 2 1/4% for each year of such service above 10 years and up to 20 years, and 2 1/2% for each year of such service above 20 years, by his annual final rate of earnings and dividing by 12. Any sheriff’s law enforcement employee who has 20 or more years of service in that capacity and who terminates service on or after January 1, 1988 and before July 1, 2004 shall be entitled at his option to receive a monthly retirement annuity for his service as a sheriff’s law enforcement employee computed by multiplying 2.5% for each year of such service up to 20 years, 2% for each year of such service above 20 years and up to 30 years, and 1% for each year of such service above 30 years, by his annual final rate of earnings and dividing by 12. Any sheriff’s law enforcement employee who has 20 or more years of service in that capacity and who terminates service on or after July 1, 2004 shall be entitled at his or her option to receive a monthly retirement annuity for service as a sheriff’s law enforcement employee computed by multiplying 2.5% for each year of such service by his annual final rate of earnings and dividing by 12. If a sheriff’s law enforcement employee has service in any other capacity, his retirement annuity for service as a sheriff’s law enforcement employee may be computed under this Section and the retirement annuity for his other service under Section 7-142. In no case shall the total monthly retirement annuity for persons who retire before July 1, 2004 exceed 75% of the monthly final rate of earnings. In no case shall the total monthly retirement annuity for persons who retire on or after July 1, 2004 exceed 80% of the monthly final rate of earnings.

(b) Whenever continued group insurance coverage is elected in accordance with the provisions of Section 367h of the Illinois Insurance Code, as now or hereafter amended, the total monthly premium for such continued group insurance coverage or such portion thereof as is not paid by the municipality shall, upon request of the person electing such continued group insurance coverage, be deducted from any monthly pension benefit otherwise payable to such person pursuant to this Section, to be remitted by the Fund to the insurance company or other entity providing the group insurance coverage.

(c) A sheriff’s law enforcement employee who has service in any other capacity may convert up to 10 years of that service into service as a sheriff’s law enforcement employee by paying to the Fund an amount equal to (1) the additional employee contribution required under Section 7-173.1, plus (2) the additional employer contribution required under Section 7-172, plus (3) interest on items (1) and (2) at the prescribed rate from the date of the service to the date of payment.

(d) The changes to subsections (a) and (b) of this Section made by this amendatory Act of the 94th General Assembly apply only to persons in service on or after July 1, 2004. In the case of such a person who begins to receive a retirement annuity before the effective date of this amendatory Act of the 94th General Assembly, the annuity shall be recalculated prospectively to reflect those changes, with the resulting increase beginning to accrue on the first annuity payment date following the effective date of this amendatory Act.

(e) Any elected county officer who was entitled to receive a stipend from the State on or after July 1, 2009 and on or before June 30, 2010 may establish earnings credit for the amount of stipend not received, if the elected county official applies in writing to the fund within 6 months after the effective date of this amendatory Act of the 96th General Assembly and pays to the fund an amount equal to (i) employee contributions on the amount of stipend not received, (ii) employer contributions determined by the Board equal to the employer’s normal cost of the benefit on the amount of stipend not received, plus (iii) interest on items (i) and (ii) at the actuarially assumed rate.

(f) Notwithstanding any other provision of this Article, the provisions of this subsection (f) apply to a person who first becomes a sheriff’s law enforcement employee under this Article on or after January 1, 2011. A sheriff’s law enforcement employee age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly retirement annuity for his or her service as a sheriff’s law enforcement employee computed by multiplying 2.5% for each year of such service by his or her final rate of earnings. The retirement annuity of a sheriff’s law enforcement employee who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the sheriff’s law enforcement employee’s age is under age 55. The maximum retirement annuity under this subsection (f) shall be 75% of final rate of earnings. For the purposes of this subsection (f), “final rate of earnings” means the average monthly earnings obtained by dividing the total salary of the sheriff’s law enforcement employee during the 96 consecutive months of service within the last 120 months of service in which the total earnings was the highest by the number of months of service in that period. Notwithstanding any other provision of this Article, beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual earnings of a sheriff’s law enforcement employee to whom this Section applies shall not include overtime and shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

(g) Notwithstanding any other provision of this Article, the monthly annuity of a person who first becomes a sheriff’s law enforcement employee under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased.

(h) Notwithstanding any other provision of this Article, for a person who first becomes a sheriff’s law enforcement employee under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (h) shall be in the amount of 66 2/3% of the sheriff’s law enforcement employee’s earned annuity at the date of death.

(i) Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a person who first becomes a sheriff’s law enforcement employee under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor’s annuity and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased.

(j) For the purposes of this Section, “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds. (Source: P.A. 96-961, eff. 7-2-10.)

Section 99. Effective date. This Act takes effect January 1, 2011.

PDF Version

 

Reimer to Speak at 51st Annual IPFA Seminar

October 6th, 2010

[Hinsdale, IL] On November 4, 2010, Attorney Richard Reimer will be speaking at the
51st Annual Illinois Professional Firefighters Association’s Annual Pension Training
Seminar, held in Addison, Illinois. Mr. Reimer will address fiduciary liability of pension
fund trustees, ethical considerations for pension fund trustees, and will share an
update of the Pension Code and applicable case law.

PDF Version

 

Reimer Speaks at Public Pension Fund Assoc. Conference

October 5th, 2010

[St. Louis, MO] Richard Reimer will be speaking at the Illinois Public Pension Fund
Association’s 2010 Annual Midwest Training Conference in St. Louis from October 5-8,
2010.

PDF Version

 

Reimer to Discuss Fiduciary Fundamentals

October 4th, 2010

On January 20, 2011, Attorney Richard Reimer will be teaching a “Fiduciary
Fundamentals” class as part of the Illinois Public Pension Fund Association’s certified
trustee training program.

The certification has been affiliated with Northern Illinois University since 1999. This
educational curriculum is designed to increase Police and Fire Pension trustees basic
knowledge of fiduciary responsibility, fundamentals of investing, funding and actuarial
concepts, medical and disability issues, administration of pension benefits, and legal
and ethical issues.

More information regarding the IPPFA/NIU Certified Trustee Education Program can
be found at: http://www.ippfa.org/training/certified_trustee_program.htm

PDF Version

 

New Legal Developments for 2010 Added

October 1st, 2010

Please see this PDF version.

 

Karlson to Teach Civil Liability Course

September 9th, 2010

[Hinsdale, IL] Attorney Keith Karlson returns to teaching at Lewis University in the Fall
semester of 2010. He will be teaching Civil Liability for Law Enforcement Officers.
This is the third time he has taught this course.

PDF Version

 

Karlson Published in DuPage County Bar Journal

June 11th, 2010

Attorney Keith Karlson wrote an article published in the June 2010 edition of the
DuPage County Bar Journal, “The Brief.” The article was entitled, Balancing a Public
Employer’s Right to Know Against a Public Employee’s Right to Remain Silent:
An Analysis of Garrity and its progeny. Mr. Karlson also served as co-editor of the
June 2010 edition of The Brief.
Details of the brief can be seen at: http://www.dcbabrief.org/vol220610art3.html

PDF Version

 

Karlson Honored with Amicus Volunteer Award

June 5th, 2010

[Springfield, IL] On June 14, 2010, Attorney Keith A. Karlson, an associate with
Richard J. Reimer & Associates LLC, was honored by the Illinois Trial Lawyers
Association (“ITLA”) with the William J. Harte Amicus Volunteer Award.

Awarded by ITLA’s Board of Managers, the Harte award recognizes pro bono work
done by Karlson on behalf of ITLA and its members. This is the third time Karlson has
been awarded with the Harte award. Each time he was awarded for work on behalf of
Illinois’ consumers in cases pending before the Supreme Court of Illinois.

PDF Version

 

IPPFA Recent Legal Developments

October 11th, 2009

ANNUAL TRAINING CONFERENCE
October 8, 2009
Lake Geneva, Wisconsin

 

1. Illinois Supreme Court Holds Surviving Spouses of Police Officers
Not Entitled to Cost of Living Increases

On March 19, 2009, the Supreme Court of Illinois issued its Opinion in
Roselle Police Pension Board v. Village of Roselle, 232 Ill.2d 546, 905
N.E.2d 831 (Ill.Sup.Ct.2009). Unfortunately, the court ruled that a pension
board lacks the statutory authority to award surviving spouses of police officers
cost of living increases.

A number of pension boards have granted cost of living increase
benefits under the theory that the Statute was ambiguous and that principles of
liberal construction permitted the pension board to award surviving spouses of
police officers cost of living increases. The Illinois Department of Professional
Regulation, Division of Insurance rendered an opinion that the Board lacked
the statutory authority to grant such increases and the Village of Roselle and
its attorneys, embarked on a crusade to have the court declare such cost of
living increases impermissible under Article III of the Illinois Pension Code.
Unfortunately, they prevailed.

The following organizations and attorneys filed briefs amicus curiae in
support of our position: Illinois Public Pension Fund Association (Richard and
Laura Puchalski), Metropolitan Alliance of Police (Joseph Mazzone), and
Fraternal Order of Police Labor Council (Heidi Parker). These organizations
stood together when it mattered. They should be applauded for doing so. The
Roselle Police Pension Board and this Firm fought and lost the battle, but in
our opinion, it was a battle worth fighting.

Despite the Supreme Court’s decision, Sola v Roselle Police Pension
Board, 342 Ill. App.3d 227 (2d Dist. 2003), stands for the proposition that those
previously granted increases should continue, as the board lacks the statutory
authority to amend or modify a previous decision to grant cost of living
increases. However, based on the Illinois Supreme Court’s Decision, no
further surviving spouses are eligible for cost of living increases.

2. Public Safety Employee Benefits Act Case


DeRose v City of Highland Park, 386 Ill. App.3d 658, 898 N.E.2d 1115 (2nd Dist. 2008).
Police officer with the Highland Park Police Department with eight (8)
years of service responded to an activated residential burglary alarm that had
been triggered, apparently during a severe storm. While on the call, the
Applicant slipped and fell and sustained a disabling injury to his shoulder,
resulting in the Pension Board awarding a line of duty disability benefit.
Thereafter, the officer applied to the City for benefits under the Public Safety
Employee Benefits Act (PSEBA), requiring the City to pay the officer’s health
insurance premiums.

The Parties proceeded to a bench trial. At the trial, the Plaintiff testified
that once he received the call he responded as quickly as he could in a safe
manner; that he did not activate the siren or overhead lights on his police
vehicle because doing so might have alerted any intruders to the residence
that he was approaching. Plaintiff acknowledged that there was a
thunderstorm, and there was very little lightning when he parked the squad car
near the front of the residence. Plaintiff further testified that there was no
backup officer because the Department was understaffed that evening. He
testified that he proceeded to the back of the house after checking the front,
and noticed a wooden deck which led to a sliding glass door. As Plaintiff
approached the sliding glass door looking for movement in the house, he
slipped and fell injuring his shoulder. The Plaintiff continued his investigation
determining that the alarm was a false alarm. On cross examination he did not
un-holster his firearm during his investigation. The City entered evidence that
the City of Highland Park Police Department received numerous calls in the
preceding years and that less than 1% of the calls were “bona fide”. Further
testimony was introduced that on the night of the incident, the Department
received more than twenty (20) alarm calls which was not an unusual number
during a power outage or a strong storm. The Plaintiff’s Commander testified
that he did not consider panic alarms to always constitute emergencies
because they were overwhelmingly false. The trial court ruled that the Plaintiff
reasonably believed he was responding to an emergency at the time he was
injured, because the alarm required “immediate action”. The City filed an
appeal.

On appeal the court was tasked with determining the meaning of
“emergency” as used in PSEBA, which was not defined by the Legislature.
The City argued that emergency means “the urgent need for assistance or
relief” or “an unforeseen combination of circumstances that calls for immediate
action”. The officer proffered a dictionary definition of the term as “a sudden
condition or state of affairs that calls for immediate action”. The court relied
upon yet another dictionary definition which defines emergency as “an
unforeseen combination of circumstances or the resulting state that calls for
immediate action”. Thus the court reasoned that, for purposes of PSEBA an
emergency is where it is “urgent and calls for immediate action”.
Applying the facts to that definition, the court soundly rejected the
City’s argument that the officer was not responding to an emergency because
he did not use his overhead lights and did not call for a backup officer. The
court concluded that to accept the City’s approach, even if the call was
eventually determined not to be bona fide, the officer investigating the call
cannot know whether it is bona fide until he has completed his investigation.
Until the officer is able to eliminate the possibility of danger, even if remote, he
must conclude the call requires his immediate attention and thus the call
presents an emergency. The court further reasoned that to accept the City’s
approach, officers would have to delay their responses to potentially
dangerous situations based on the notion that many similar situations were not
bona fide. Secondly, the City would have the statistically likely outcome of a
call control whether the call is an emergency regardless of what actually
happens on the call. The court held that a call requires an officer’s immediate
response as an emergency, until the officer eliminates the possibility that the
call is bona fide.

3. QILDRO – Division of Benefits Case

In Re Marriage of Winter, 387 Ill. App.3d 21, 899 N.E.2d 1080 (1st Dist. 2008).
Winter was a retired member of the Public Teacher’s Retirement Fund
of Chicago (pension fund) involved in a bitter divorce dispute which resulted in
him fleeing to England with the parties’ child. Mr. Winters refused to sign a
Consent to Issuance of a Qualified Illinois Domestic Relations Order (QILDRO)
or a Qualified Domestic Relations Order (QDRO). Given the fact that the entry
of a QILDRO was not possible without Mr. Winter’s consent and the court’s
contempt powers could not reach Winter in England, the court concluded that
the spouse had no adequate remedy at law and entered a preliminary
injunction, compelling the Pension Fund to freeze Winter’s retirement benefits
and hold those benefits in trust until the benefits could be apportioned by the
court, and thus preventing Winter from dissipating the assets previously
adjudicated to be marital property (i.e., pension benefits). The Pension Fund
was not made a party to the suit and did not receive notice and upon learning
of the entry of the preliminary injunction freezing Pension Fund assets, filed a
petition to intervene.

In a lengthy opinion, the Appellate court reviewed the action of the trial
court entering the preliminary injunction. Among the numerous arguments
made by Mr. Winter and the Pension Fund, the most significant was the two
arguments that were raised that the preliminary injunction deviated from the
Pension Code and case law and that issuance of the preliminary injunction
violated Mr. Winter’s rights. First the court rejected Winter’s contention that his
rights were impaired or diminished under the Illinois Constitution because the
total amount of his pension was unaffected. Winter’s full pension payments
were sent to a trustee, who was required to remain in possession of the funds
until further order of the court. Reasoning that the order curtails Winter’s
access to his pension, it was temporary in nature, and it prevented his
wrongful receipt of his share of pension benefits to the determent of his wife.
Finally, the court rejected the argument raised by Winter and the Pension
Board that the anti-alienation provisions contained in Article 17 of the Pension
Code prohibited the court from entering a preliminary injunction against the
Board. Drawing upon the equitable powers of the court, the court affirmed the
trial court, holding that the court had the power to correct an ongoing
wrongdoing by Mr. Winter to do justice between the parties, as Winter was not
free to turn to the protection afforded by Section 17-151 of the Pension Code
into a sword to keep his wife at bay from that portion of Winter’s pension
payments to which she is entitled to under the judgment of Dissolution of
Marriage. Accordingly, the court found that there was no deviation from the
Pension Code or case law.

In Re Marriage of Rafferty – Plunkett, 392 Ill. App.3d 100, 910 N.E.2d 670 (3rd Dist. 2009).

Marie and Patrick Plunkett became yet another unhappily divorced
couple destined to make case law suitable for inclusion in this portion of the
training seminar. Patrick was a member of the State University’s Retirement
System (SURS). The trial court entered a judgment order dissolving the
marriage and as part of the dissolution order approved as fair, just, and
equitable an oral agreement incorporating a provision that Marie was to be
awarded 50% of Patrick’s pension plan benefits acquired during the marriage,
which provided that Patrick had been receiving. Patrick apparently moved to
Ireland and failed to sign a Consent to Issuance of a Qualified Illinois Domestic
Relations Order and failed to live up to his end of the bargain, by not paying
Marie pursuant to the Dissolution Judgment Order.

The trial court entered a Rule to Show Cause against Patrick for his
failure to pay benefits and entered judgment in the amount of $68,374.00 and
ordered Patrick to execute a Consent to Issuance of a QILDRO. Marie than
issued citations to discover assets to various banks and brokerage firms and
SURS, and requested the court issue a turnover order to SURS to turnover
certain assets. The Trial court granted SURS Motion to Dismiss the citation to
discover assets and denied Marie’s Motion for a turnover order directed at
SURS. The trial court found that Patrick had not executed a Consent to
Issuance of a QILDRO and that the trial court was without statutory authority to
otherwise override the exemption provision of the Pension Code and the
Illinois Code of Civil Procedure. Marie appealed.

On appeal the court embarked on a detailed analysis of case law
involving public pensions and dissolutions of marriage similar to the approach
in Winter, cited supra. Once again relying on the equitable powers of the
court, the court reversed the decision of the trial court and held that the trial
court had the authority to enforce the voluntary fair, just, and equitable oral
settlement agreement, acknowledging that Patrick signed the written
Settlement Agreement, in which he consented to an award to Marie of 50%
of his pension plan benefits acquired during the marriage. Patrick’s written
and oral consent, even though not reduced to an actual consent and
QILDRO, was sufficient to constitute substantial compliance with the directive
of §1-119m-1 of the QILDRO Legislation. Therefore the court had the
authority to direct SURS to make pension payments directly to Marie.

 

4. Jurisdiction to Modify Pension Board Decision

Board of Education of the City of Chicago v. Board of Trustees of
the Public Schools’ Teachers’ Pension and Retirement Fund of Chicago,
(Retired Teachers Association of Chicago Intervening Plaintiff-Appellee).
No. 1-08-1517. Slip Op. Aug. 20, 2009 (1stDist. 2009)

January 24, 2005, the Board of Education (Board) filed a complaint
against the Trustees. The Board alleged that from July 1999 to July 2004, the
Trustees paid pensions to certain newly retired teachers on a basis not
authorized by the Illinois Pension Code (Pension Code) (40 ILCS 5/1-101 et
seq. (West 2006), resulting in overpayments from the Public Schools
Teachers’ Pension and Retirement Fund of Chicago (Fund) to the affected
retirees. The Board alleged that the Pension Code requires the Board to make
up shortfalls when the Fund’s assets drop below 90% of its total actuarial
liabilities. This Complaint was filed more than 35 days after the awards were
made.

Here, the Board sought leave to amend its Complaint to show that, in
awarding teachers pension credit, the Trustees essentially “rubber-stamped”
the recommendations of its staff, without conducting hearings or analysis of
the staff’s calculations. Thus, the Board argues that this case does not involve
“administrative decisions” as defined by the statute, but challenges a general
policy that went unchallenged in the underlying pension proceedings.
Count I of the complaint sought a declaration that the Trustees had
violated the Pension Code by using an unauthorized method of calculating
average salaries for teachers receiving 22 paychecks per year, as opposed to
those receiving 26 paychecks per year. Count II sought an accounting. Count
III sought an injunction ordering the Trustees to discontinue and remedy past
overpayments.

On October 12, 2006, the Board filed a motion for summary judgment on
counts I and II of its complaint. On June 15, 2007, following briefing and a
hearing, the circuit court granted the Board’s motion, ruling that the Trustees
had overpaid teachers receiving 22 paychecks per year, in violation of the
Pension Code. The case was set for further proceedings regarding an
accounting and remedy.

On July 18, 2007, the Retired Teachers sought leave to intervene in the
case, which the trial court granted on July 31, 2007. The Retired Teachers
filed a complaint for declaratory relief on September 4, 2007. The Retired
Teachers filed a supporting brief, arguing in part that the Board was barred
from seeking relief for failure to seek timely administrative review of the
pension awards at issue.

On December 20, 2007, following briefing and oral argument from the
parties, the circuit court entered an order treating the Retired Teachers’ brief
as a motion to dismiss and dismissing the Board’s complaint. The order also
set the case for status on the Board’s motion for leave to file a second
amended complaint. On May 9, 2008, the circuit court denied the Board leave
to file a second amended complaint, ruling that no new facts or law was
presented that would remedy the defect in the dismissed complaint. On June
6, 2008, the Board filed a timely notice of appeal to this court.
The Appellate Court quoted from a firefighters pension fund case, Karfs v.
City of Belleville, 329 Ill.App.3d 1198, 770 N.E.2d 256 (2002), at length
because it was relevant on certain points that favored the Board. Unlike the
other cases cited by the parties, Karfs centers on the unusual situation in
which a case is brought by a third-party governmental entity whose finances
are affected by the actions of a pension board. Karfs recognizes that a third
party-like the Board in this appeal-may challenge a method of calculation as
being prohibited by the Pension Code. Karfs also recognizes that such a third
party will not have an interest in and standing to seek the review of each
individual case that comes before the pension board, but will have standing to
challenge the decision regarding the calculation at issue.

Quoting from Karfs, “If, for example, in deciding a firefighter’s pension
benefit, the pension board uses or approves a method of calculation that is
prohibited by the Code or violates the labor contract, that decision may be
deemed to have a direct impact on a municipality’s duty to levy taxes in
sufficient proportions to enable the pension system to function, because it is
reasonably likely that the pension board would continue to use an improper
method to calculate other pensions, resulting in a depletion of the fund. Under
those facts, the municipality could seek a review of the agency’s decision
because the decision potentially impacts the municipality’s duty to provide a
sufficient sum to meet the requirements of the pension fund. We caution that
the pension board’s decision must impact a duty or interest of the municipality.
A municipality will not have an interest in and standing to seek the review of
each individual case that comes before the pension board. Furthermore, a
municipality has no authority to review or modify adjudicative decisions made
by an administrative agency. See Board of Trustees of Police Pension Fund v.
Washburn, 153 Ill.App.3d 482, 486-87, 505 N.E.2d 1209, 1212-13 (1987)”
Nevertheless, Karfs is distinguishable from the instant facts in one key
aspect. Karfs suggests that a third party must seek review of the calculation
decision within the 35-day period permitted in the Administrative Review Law.
However, Karfs involved an individualized miscalculation, whereas the
alleged miscalculation in this case was systemic.
The Appellate Court held that systemic miscalculation falls outside the
definition of an “administrative decision” under the review law. It is not a
“decision, order or determination of any administrative agency rendered in a
particular case,” but a “rule [ ], regulation[ ], standard[ ] or statement[ ] of
policy.” 735 ILCS 5/3-101 (West 2006). Moreover, even assuming arguendo that the
internal procedures producing the alleged miscalculation here were sufficiently
quasi-judicial to constitute an “administrative decision,” the review
law’s 35-day clock starts when the decision sought to be reviewed is served
upon the party affected by the decision, and no such notification appears to
have been given to the Board in this case. The Trustees and the Retired
Teachers note that members of the Board also are also members of the
Trustees, but there does not appear to be any evidence that even those
members were notified of the decision to calculate the underlying pensions at
issue in this appeal in a particular manner.

Kosakowski v Calumet City Police Pension Fund, 389 Ill. App.3d 381, 906 N.E.2d 689 (1st Dist. 2009).
Calumet City Police Pension Board awarded a police officer a line of
duty disability injury as a result of a back injury he sustained while making an
arrest. The Plaintiff received full salary and benefits for up to one year or until
January 5, 2003 under the Public Employee Disability Act (PEDA). During this
time pension calculations were deducted. From the period of January 6, 2003
through April 19, 2004 the Plaintiff received temporary total disability benefits
(TTD) under the Workers’ Compensation Act, for which no pension
contributions were deducted. The Pension Board awarded a line of duty
disability and issued a written decision awarding the Plaintiff line of duty
disability benefits based upon 65% of his salary attached to his rank as of
January 4, 2003, the day before his PEDA benefits ran. No judicial review was
sought by either party of the Board’s written decision.

The Pension Board requested an advisory opinion from the
Department of Insurance (DOI) as to the appropriate salary to be use. The
Department responded stating that the salary to be used for pension purposes
should be the last day the officer was on the payrolls. According to the DOI, if
an officer receives PEDA, the salary to be used for pension purposes is the
salary the officer was receiving on the last day that contributions were withheld
and creditable service was earned. Without affording the Officer a hearing, the
Board issued a letter to the Officer advising him that it had miscalculated the
benefits, and notified him that his benefits would be reduced from the next
twelve (12) monthly pension payments due to an alleged overpayment of
$4,840.56. The Plaintiff sought Administrative Review seeking reversal of the
Board’s reduction of his benefits and a demand of repayment of the alleged
overpayment and reinstatement of his monthly benefit. The trial court
reversed the Pension Board’s recalculation of the Officer’s benefit finding that
the Board lacked jurisdiction to make such a modification, since the thirty-five
(35) day time requirement for Administrative Review had passed. The Board
appealed.

On appeal the Board argued that it made an “error” in the initial
calculation of the disability pension to which the Officer was entitled.
According to the Board, it calculated the benefit on the last day that the Officer
received workers compensation benefits, where as it should have calculated
the Plaintiff’s benefits based upon his salary as of January 5, 2003, the last
day he received PEDA benefits, from which pension contributions were
deducted. The Board relied on §3-144.2 of the Pension Code which permits
the deduction of any amounts of benefits paid due to overpayment, fraud,
misrepresentation, or error. No claim was made that the error was a product
of fraud or misrepresentation. Interestingly, the court declined to adopt the
Rossler court’s limited interpretation of error which is quoted in §3-144.2 of the
Code, the court was still required to interpret whether an error was made
within the meaning of that Statute. The court noted that although the
Department of Insurance is authorized to render advisory opinions, the Statute
does not mandate that a Pension Board follow or adopt those
recommendations. In computing the Officer’s disability benefits, the Board
interpreted the phrase “at the date of suspension of duty” to mean the last date
the Plaintiff worked. However, after the DOI opinion, the Board interpreted §3-
144.2 that the Officer’s benefits should have been calculated based upon his
salary as of the day he received PEDA benefits from which pension
contributions were deducted. The court held that the Pension Board’s error
did not qualify as an error, which should be quoted within the meaning of §3-
144.2 of the Act. The Board made no mathematical error in its calculation,
rather the Board’s claim of error was premised on its reinterpretation of §3-
114.2 following the DOI advisory opinion.

The court held that the Board’s changes in interpretation of the Code
based upon the DOI recommendation did not constitute error which was
quoted within the meaning of §3-114.2 of the Act. The court also commented
that the Pension Board should have afforded the Officer procedural due
process before attempting to modify the Officer’s disability pension, meaning
that he should have received notice and afforded a hearing. The judgment of
the trial court was affirmed.

Harrisburg Police Pension Board et. al. v Harper, No. 5-08-0352,
SlipOp.Sept. 8, 2009 (5th Dist. 2009)

The Illinois Department of Insurance (DOI) conducted an audit on the
Harrisburg Police Pension Board. In its audit summary of findings, the audit
concluded that certain original pension determinations were made which
mistakenly included in beneficiaries salaries a $6,000.00 retirement incentive
and in one case, a clothing allowance, which according to the DOI resulted in
greater payments to those beneficiaries than their actual salaries justified.
Following receipt of the audit, the treasurer wrote to the Pension Board,
recommending that the trustees change the beneficiaries’ benefits to comply
with the DOI audit and requested direction from the Board. When the
treasurer received no response to his letter, he unilaterally adjusted the
pension payments to reflect the figures as calculated by the DOI. The Pension
Board then filed for a writ of mandamus, seeking to compel the treasurer to
reinstate the beneficiaries’ retirement amounts. The trial court entered an
order for mandamus, the treasurer appealed.

A writ of mandamus commands a public officer to perform an official,
non-discretionary duty that the petitioner is entitled to have performed and that
officer has failed or refused to perform (citation omitted). Here, it was
undisputed that the treasurer was a public officer and that the duty is
ministerial (i.e., no exercise of discretion is involved). The court reviewed
various provision of Article III of the Illinois Pension Code, which reflected that
it was the pension board, not the treasurer that had the exclusive authority to
administer the pension fund and to pay benefits (40 ILCS §5/3-128). Further,
the trustees have a duty to order pension payments and other benefits (40
ILCS §5/3-133). The treasurer is only authorized to hold or pay out money
following the direction of the pension board trustees (40 ILCS §5/3-132).

The treasurer attempted to defend his actions by relying upon §5/3-
144.2 of the Pension Code, allowing deductions from future payments due to
overpayment, due to fraud, misrepresentation, or error. The court noted that
to the extent that the Pension Code authorizes corrections for overpayments,
etc., it gives authority to the trustees not the treasurer. The court rejected the
treasurer’s argument that §5/3-144.2 justified the actions of the treasurer or
should that provision defeat the pension board’s action for mandamus.
Parenthetically, the court noted that the treasurer could have filed a counterclaim seeking affirmative relief, but declined to decide that issue as it was not
properly pled. Would the decision have been different?

5. Pension Spike Cases

Kocek v Board of Trustees of the Tinley Park Police Pension
Fund, Cook County Case No.: 07 CH 7152; First District Appellate Court
No.: 09-0806

On November 11, 2005, the Plaintiff informed the Pension Board that
he intended to retire. The Plaintiff retired on January 14, 2006 and received a
retirement pension. On May 17, 2006, the Plaintiff and the Village Treasurer
attended a Pension Board meeting to discuss a retroactive salary increase that
would increase the Plaintiff’s pension. On that date, the Pension Board
granted the Plaintiff an increase in his pension and the Plaintiff received his
increased pension on May 25, 2006. On November 10, 2006, the Pension
Board notified the Plaintiff that his pension amount was incorrect and that the
Pension Board intended to hold a hearing to reduce the Plaintiff’s pension
benefit. On August 1, 2007, the Circuit Court granted the Plaintiff’s motion for
a preliminary injunction enjoining the Pension Board from holding a hearing to
reduce the Plaintiff’s pension benefit.

The Court held the Pension Board lacked jurisdiction to review or
modify its May 17, 2006 decision to increase the Plaintiff’s pension because
the 35-day administrative review period had expired. The Pension Board
argued however, that Section 3-114.2 of the Pension Code permitted the
Pension Board to hold a hearing. Section 3-144.2 permits the “…amount of
any overpayment, due to fraud, misrepresentation or error, of any pension or
benefit granted under this Article may be deducted from future payments to the
recipient of such pension or benefit.”

The Court held that the Pension Board failed to establish fraud or
misrepresentation on the part of the Village. The Court also held that even if
the Pension Board established fraud on the part of the Village, Section 3-
114.2, as interpreted by the Rossler case, did not apply because that section
has been interpreted to require a showing of fraud or misrepresentation by the
claimant (ie. Plaintiff). The Court held the Pension Board did not show fraud
by any party. Therefore, the Court granted the Plaintiff’s motion for a
permanent injunction enjoining the Pension Board from holding a hearing to
determine whether to reduce the Plaintiff’s pension. The Court denied the
Pension Board’s motion to dissolve the preliminary injunction. The Plaintiff
filed a motion for sanctions against the Pension Board and its attorneys. The
Court denied that motion.

The Pension Board appealed the denial of its motion to dissolve the
preliminary injunction. The Plaintiff cross-appealed the denial of his motion for
sanctions. The parties are currently briefing the issues and a decision is not
anticipated until next year.

 

Principe v Board of Trustees of the Melrose Park Police Pension
Fund, Cook County Case No.: 08 CH 30957.

Prior to November 1, 2006, the Plaintiff was a lieutenant with the
Melrose Park Police Department. On November 1, 2006, the Mayor made
Plaintiff the “Administrative Aide to the Chief of Police” (“AACP”). As AACP,
the Plaintiff performed the same job duties he had performed as a lieutenant.
On November 16, 2006, the Plaintiff received a $13,223.42 pay raise to reflect
his new role as AACP. In December 2006, the Plaintiff asked the Pension
Board for a computation of his retirement pension. The Pension Board based
the Plaintiff’s retirement pension on the Plaintiff’s salary as a lieutenant.
Sometime in January 2007, the Village passed an ordinance creating the
AACP position. The Plaintiff retired in April 2007 and requested a pension
based on his salary as AACP. The Pension Board granted the Plaintiff a
retirement pension based on his salary as a lieutenant. The Plaintiff filed a
timely complaint for administrative review.

The Pension Board determined that the AACP is not a “rank” for
purposes of calculating the Plaintiff’s pension based on “salary attached to
rank.” The Pension Board argued that Melrose Park, as a non-home-rule
municipality, lacked authority to create an AACP rank. The Pension Board
noted that all promotions in Melrose Park are governed by the Board of Fire
and Police Commissioners’ (“BOFPC”) Act. The BOFPC Act allowed the
municipality to create only three exempt positions – Police Chief and two
Deputy Chiefs. Melrose Park already had one Police Chief and two Deputy
Chiefs when the Mayor created the AACP position. Therefore the Pension
Board argued that the Mayor lacked legal authority to create an exempt
position called AACP to which he unilaterally promoted the Plaintiff.

The Pension Board also argued that the Mayor violated the collective
bargaining agreement (“CBA”) by creating the AACP position. The exclusive
bargaining unit negotiated all wages for non-exempt positions, including
lieutenants. The Pension Board argued the municipality never bargained over
the wages for the AACP and therefore the municipality violated the CBA.

The Circuit Court affirmed the Pension Board’s decision. The Court
held that AACP was not a “rank” recognized by the CBA and it was not an
exempt position recognized by the BOFPC Act. Therefore, the municipality
lacked authority to unilaterally create the position and establish a
corresponding salary. The Pension Board properly based the Plaintiff’s
pension on his salary attached to rank as a lieutenant.

The Circuit Court currently has this case under advisement and the
parties are waiting for the Court to enter its final order.

 

Schultz v Board of Trustees of the Willow Springs Police Pension
Fund, et al., Cook County Case No.: 07 CH 2168; First District Appellate
Court No.: 08-2770

Sometime in May 2002, the Plaintiff, former Police Chief, wrote a letter
to the Village indicating that he intended to retire. The Village granted the
Plaintiff a pay increase of approximately $20,000.00 on November 24, 2002.
The Plaintiff retired on December 6, 2002. The Plaintiff received two
retroactive pay checks after he retired, reflecting the increased salary.

The Plaintiff contacted the Pension Board’s accountant and provided
the accountant with his salary information for purposes of calculating his
retirement pension. The Pension Board’s accountant prepared two separate
pension checks based on the increased salary amount. At the time, a former
pension board trustee and the Village treasurer signed the two pension
checks. The Plaintiff received both pension checks in January 2003. The
Pension Board never held a hearing to determine the Plaintiff’s salary attached
to rank or voted prior to issuing the two checks. The trustee who signed the
pension checks later contacted the Pension Board’s accountant and asked her
to recalculate the Plaintiff’s pension based on a the lower salary amount.

In March 2003 the Pension Board notified the Plaintiff that it intended to
hold a hearing to formally authorize his retirement pension benefit. In April
2003 the Plaintiff requested an advisory opinion from the DOI. The DOI wrote,
“From the information you provided, Mr. Schultz received at least two (2)
paychecks based on a salary of $80,000.00 and received retirement checks
based on that salary. If this information is correct, the Pension Division
opinion is that Mr. Schultz pension should be based on his salary of
$80,000.00.”

The Pension Board held hearings in 2005 and 2006 and issued a
Decision and Order finding that the $20,000.00 increase constituted a bonus
that could not be included in salary for purposes of calculating the Plaintiff’s
pension. The Plaintiff filed a timely complaint for administrative review. The
Circuit Court reversed and held that the Pension Board rendered a “final
administrative decision” after it issued a check based on the $80,000.00 salary
amount and the Plaintiff received the check. Therefore, the Pension Board
lacked jurisdiction to hold a hearing because more than 35 days had passed
since it rendered the final administrative decision sometime in January 2003.

The Pension Board appealed to the First District Appellate Court. The
Appellate Court has taken the case on the Pension Board’s brief only because
the Plaintiff did not file a response brief.

 

Smith v. Board of Trustees of the Westchester Police Pension
Fund, Cook County Case No.: 08 CH 43592, First District Appellate Court
No.: 09-0917


On March 23, 2007, the Plaintiff, former Police Chief, wrote a letter to
the Village indicating that he intended to retire and requesting a salary
increase of approximately $8,224.00 (Step increase from level 4 to level 6).
The Plaintiff believed that he was entitled to the increase because the former
Fire Chief had received the same increase upon notification of his intent to
retire. On May 1, 2007, the Village granted the Plaintiff his requested pay
increase, a 4% increase (3% raise + 1% merit pay) granted to all non-union
Village employees, and holiday pay of $6,177.00. The Plaintiff retired on July
13, 2007. The Plaintiff contended that his salary attached to rank should have
been $113,261.62.

The Pension Board calculated the Plaintiff’s salary attached to rank
based on his salary (Step level 4) prior to the requested May 1, 2007 increase,
the 3% increase given to all employees on May 1, 2007 (the Pension Board
did not include the 1% merit pay), and the holiday pay the Plaintiff had
received on December 1, 2006. The Pension Board excluded the May 1, 2007
holiday pay amount because the Village always paid holiday pay in December,
not May as was done for the Plaintiff. The Pension Board contended that the
Plaintiff’s salary attached to rank should have been $103,324.45.

The Illinois Department of Financial and Professional Regulation,
Division of Insurance (“DOI”) issued two separate advisory opinions regarding
this issue. The DOI concluded: “This is clearly a retirement incentive and
would not be added to the salary attached to rank for pension calculation
purposes.” The DOI also wrote that the step increase was “…either a pay
spike or a retirement enhancement. No matter how it is labeled, this would not
be considered salary for pension purposes.”

The Pension Board held a hearing to determine the Plaintiff’s salary
attached to rank for purposes of calculating his pension. The Plaintiff filed a
timely complaint for administrative review. The Circuit Court affirmed the
Pension Board’s decision. The Circuit Court held that the Pension Board’s
decision was not clearly erroneous based on “…all of the circumstances of this
particular transaction” in the administrative record. The Circuit Court also
relied heavily on the DOI’s advisory opinions and the fact that the Plaintiff
himself requested the increase in anticipation of his retirement.

The Plaintiff appealed to the First District Appellate Court. The parties
are currently briefing the issues and a decision is not anticipated until next
year.

PDF Version

 

Attorney Richard J. Reimer Teaches Fiduciary Duties of Pension Fund Trustees

August 19th, 2009

[Oak Brook, Illinois] Attorney Richard J. Reimer instructed representatives from police
and fire pension boards across Illinois about fiduciary duties of pension fund trustees.
The class is part of the Illinois Public Pension Fund Association (“IPPFA”) Certified
Trustee Education Program. The certification has been affiliated with Northern Illinois
University since 1999. This four-part educational program is designed to increase a
trustee’s basic knowledge of fiduciary responsibility, fundamentals of investing, funding
and actuarial concepts, medical and disability issues, administration of pension
benefits, and legal and ethical issues.

More information regarding the IPPFA/NIU Certified Trustee Education Program can
be found at: http://www.ippfa.org/certified-trustee-education-program.html

PDF Version

 

Attorney Keith A. Karlson Teaches about PSOBA at Seminar

July 5th, 2009

[Wood Dale, IL] Attorney Keith A. Karlson taught representatives of over fifty (50)
police and fire pension boards about death benefits for survivors of firefighters and
police officers killed in the line of duty. Hosted by the Illinois Public Pension Fund
Association (“IPPFA”), attorney Keith A. Karlson spoke about death and disability
benefits afforded under the Public Safety Officers’ Benefits Act. Karlson also lectured
about benefits available from the federal government for police officers and firefighters
who are severely injured in the line of duty.

PDF Version

 

Attorney Keith A. Karlson Named to DCBA Editorial Board

June 18th, 2009

[Wheaton, IL] Attorney Keith A. Karlson, an associate with the Law Firm of Richard J.
Reimer & Associates LLC, has been named to the Editorial Board for the DuPage
County Bar Association. The DCBA’s monthly bar journal is entitled “The Brief.”

PDF Version

 

Attorney Keith A. Karlson Honored by Illinois Trial Lawyers Association

June 5th, 2009

[Oak Brook, IL] Attorney Keith A. Karlson, an associate with Richard J. Reimer &
Associates LLC, was honored by the Illinois Trial Lawyers Association (“ITLA”) with the
William J. Harte Amicus Volunteer Award. Awarded by ITLA’s Board of Managers, the
Harte award recognizes pro bono work done by Karlson on behalf of ITLA and its
members. This is the second time Karlson has been awarded with the Harte award.
Both times he was awarded for work on behalf of Illinois’ consumers in cases pending
before the Supreme Court of Illinois.

PDF Version

 

Attorney Richard J. Reimer Teaches PSEBA and PEDA at Seminar

June 4th, 2009

[Wood Dale, Illinois] Attorney Richard J. Reimer taught representatives of over fifty
(50) police and fire pension boards about benefits for injured firefighters and police
officers. Hosted by the Illinois Public Pension Fund Association (“IPPFA”), IPPFA
General Counsel Richard Reimer spoke about benefits afforded under the Public
Safety Employees’ Benefits Act (“PSEBA”) and the Public Employees’ Disability Act
(“PEDA”).

PDF Version

 

Richard Reimer recognized for excellence in labor and employment law

January 20th, 2009

[Hinsdale, IL] Yet again, the founding member of Richard J. Reimer & Associates LLC,
Richard Reimer, was recognized by Illinois Super Lawyers Magazine as a 2009 “Super
Lawyer” in labor and employment law. After being nominated by his peers for
outstanding professional performance, less than 5% of Illinois’ attorneys are eligible to
receive this distinction.

PDF Version