HOUSE PASSES BILL AMENDING ARTICLE 4 SURVIVOR’S PENSION

The Illinois House has passed HB-1375.  HB-1375 changes the survivor’s pension amount for minor children in the event a firefighter dies leaving minor children but no surviving spouse.  In the event a firefighter dies leaving minor children but no surviving spouse, the guardian of the minor child would be entitled to 20% of the firefighter’s salary attached to rank for each minor child.  Under the previous version of Section 4-114 of the pension code, the guardian of such minor children was entitled to 12% of salary attached to rank.  Guardian’s receiving 12% of salary attached to rank would have the benefit recomputed and would be paid 20% of salary attached to rank prospectively.

The bill passed the House with unanimous support.  The bill is now waiting for a vote in the Senate.

SUMMERS v. RETIREMENT BOARD OF POLICEMEN’S ANNUITY AND BENEFIT FUND OF CHICAGO

On April 18, 2013 the First District Appellate Court issued its Opinion in Summers v. Retirement Board of Policemen’s Annuity and Benefit Fund of the City of Chicago.  The Board denied the plaintiff’s application for duty disability benefits and awarded the plaintiff a non-duty disability pension.  The trial court reversed the Board’s decision.  The appellate court reversed the trial court and affirmed the Board’s decision.

The plaintiff’s job duties included loading boxes into a box truck.  While loading the truck, the plaintiff injured his back.  The Board however concluded that the Applicant was not performing an “act of duty” at the time he injured his back while performing his assigned tasks of loading and delivering supplies.

First, the court concluded that it should review de novo the issue of whether the Applicant’s disability was incurred in the performance of an act of duty.  The court concluded the facts were undisputed and that its only function was to interpret the phrase “act of duty.”  The court performed an exhaustive analysis of Article 3 and Article 5 “act of duty” case law.  The court concluded that although pension statutes are to be liberally construed in favor of the pensioner, the court could not conclude that the Board erred when it found the plaintiff was not injured in the performance of an act of duty.  The court concluded that the “capacity” the plaintiff was acting in at the time of his injury – regardless of the facts that he was on duty and in uniform – was that of a “delivery person.”  The plaintiff was acting in a capacity that has a clear counterpart in civilian life.  The court held that it was not relevant to the “act of duty” inquiry that the plaintiff was injured while performing his assigned task or that only police officers were assigned to the delivery truck.

Summers represents an important case for Article 3 line of duty disability claims.  Please contact PGM if you have any questions regarding this matter.

COGFA 3-YEAR BUDGET FORECAST: FY 2014 – FY 2016

An excerpt from the COGFA report regarding pensions:

State Pension Liability
The current unfunded pension liability remains an imminent threat to the fiscal and
economic health of Illinois. The uncertainty of the possibility of any prolific and
constructive pension reform measures portrays only grim conditions and forecasts for the
coming budget years. The FY 14 certified contribution appropriation for the five retirement
systems is a combined $6.8 billion. This is an increase of $965 million, or 16.4%
compared to the current fiscal year. Under current law, estimated payments in fiscal years
2015 and 2016 are $7.0 billion and $7.2 billion, respectively. The FY 15 estimated
payment is an increase of $200 million, or 3% over FY 14. The increase in FY 16 is an
additional $204.7 million (3%). Due to the statutorily required annual increases, the
current pension payments that comprise a disproportionate total of annual expenditures
would consume any proceeds derived from any new recurring revenue sources, thus
minimizing the ability to make substantial efforts to improve both the budgetary and
economic positions of the State. Until annual pension liabilities are addressed, attempting to implement improvements in other areas of the budget will prove to be an ongoing
challenge.”

DIRECTOR KOSIBA DISCUSSES THE IMRF

IMRF Pension Director Proud of Healthy Fund

IMRF Pension Director, Louis Kosiba gave a presentation to the Rotary Club of Quincy, Illinois on April 9, 2013.  Director Kosiba noted the IMRF was between 85.9% and 88% funded.  According to the article, “Under IMRF rules, [municipal entities] must contribute the required…payments.  If people don’t pay what they are required to pay, we go after them.”

Unlike other Illinois pension systems, Article 7 permits the IMRF to seize tax money if the participating municipality does not make its required pension contribution to the IMRF.