HB 4666 – TRUSTEE TRAINING

House Bill 4666 would change the training requirements for downstate fire and police pension trustees.  The Illinois Senate executive committee voted yesterday to recommend adopting the proposed amendment that would change the training requirements.  If the bill passes both houses, PGM will provide a detailed description of the changes.

HOFFMAN v. ORLAND FIREFIGHTERS’ PENSION BOARD

On November 21, 2012 the First District Appellate Court issued its Opinion in Hoffman v. Orland Firefighters’ Pension Board.  In a 2-1 decision, the Appellate Court affirmed the trial court’s decision reversing the Pension Board’s decision to terminate the plaintiff’s disability pension.  The Court held that Section 4-112 provides that a disability pension may only be terminated “upon satisfactory proof to the board that a firefighter on the disability pension has recovered from disability.”  The Court noted that the record only contained evidence of a doctor that the plaintiff “was never disabled”, not that the plaintiff had “recovered” from disability.  The Court held, “We are presented with no authority under the Code that the nonexistence of medical evidence showing a disability, based on the testimony and report of the Board’s expert, is tantamount to satisfactory proof of recovery.”

The dissent agreed with the majority’s legal conclusion that the Board was required to obtain evidence of recovery from disability.  However, the dissent held that the Board had the right to accept the doctor’s opinion that the plaintiff is not now permanently disabled and to reject the doctor’s opinion that the plaintiff never had a disability.

Although not at issue in the case, the Court also noted that the Pension Code “bars examination to verify continuance of disability after age 50.”  This case provides further support to the position that physical examinations to verify continuance of disability are precluded after age 50.  Therefore, a Board would have no authority to terminate a disability pension after age 50.

Oral Argument  

COGFA SPECIAL PENSION REPORT

The Commission on Government Forecasting and Accountability (“COGFA”) recently issued a special report on Illinois’ 5 State Pension Systems.  COGFA found that the total unfunded liabilities for the 5 State Pension Systems totaled $94.6 billion as of June 30, 2012.  The 5 systems have total liabilities of $158.6 billion and $64 billion in assets.  The Teachers’ Retirement System (“TRS”) accounted for $52.1 billion of the total unfunded liability.  The average percent funded for the 5 State Pension Systems is 40.4% (TRS – 42.1%, SERS – 34.7%, SURS – 42.1%, JRS – 29.7%, GARS – 18.5%).  If the State applied the June 30, 2012 market value of assets, the percent funded drops to 39% and the total unfunded liabilities total $96.8 billion.