PENSION REFORM UPDATE

Pension reform for all state workers (excluding judges) stalled in the legislature on May 31, 2012. SB 1673 essentially offered each state employee a choice. The employee could choose to keep a compounded 3% cost of living allowance (“COLA”). If the employee chooses to keep the compounded 3% COLA, the employee loses access to retiree health insurance benefits and would not have future salary increases apply to the employee’s pension.

Or, the employee could choose to accept a reduced non-compounding COLA equal to the lesser or 3% or ½ CPI-U. The COLA would begin at the earliest of the attainment of age 67 or 5 years after retirement. An employee making this choice would still have access to retiree health insurance benefits and future salary increases would apply to the employee’s pension.

A provision that attempted to shift the normal cost of teachers’ pensions from the State to local school districts proved quite contentious and has, at present, been removed from the bill.

The legislature may still return during the summer to address pension reform.

NEW POLICE PENSION CASE

Luczak v. Board of Trustees of the Rolling Meadows Police Pension Fund, 2012 IL App (1st) 103793-U. The First District Appellate Court issued this Rule 23 (unreported order) on May 25, 2012. The Pension Board denied the plaintiff’s application for a not-on-duty mental disability pension. The circuit court affirmed the Pension Board’s decision. The Appellate Court also affirmed the Pension Board’s decision.

The Appellate Court held that the Pension Board’s decision denying the plaintiff’s application for a not-on-duty mental disability pension was not against the manifest  weight of the evidence. Primarily, two psychiatrists selected by the Pension  Board concluded that the plaintiff was not disabled and one of those psychiatrists concluded the plaintiff was malingering.

Notably however, the Appellate Court also rejected the plaintiff’s argument that the revocation of her FOID card because her mental condition posed a clear and present danger was not determinative proof that she was disabled. Additionally the phrase “mental condition” in the FOID card revocation statute is defined as a state of mind manifested by violent, suicidal, threatening or assaultive behavior. The  Appellate Court noted however that there was no evidence that the plaintiff had been violent, suicidal, threatening, or assaultive.

Jeff Goodloe wrote the administrative review briefs and argued this case in the circuit court. Jeff also wrote the Pension Board’s First District Appellate Court briefs. The Appellate Court did not grant oral argument.

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