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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.