On June 24, 2015 the Third District Appellate Court heard Oral Argument in Hendricks v. The Board of Trustees of the Police Pension Fund of the City of Galesburg. The plaintiff, a police officer, was convicted of official misconduct and possession of a controlled substance after he took drugs from the police department’s evidence locker. The plaintiff was improperly placed on TASC probation which permits a plaintiff to have his convicted vacated after he completes the terms of his probation. The plaintiff subsequently completed his prison sentence and and probation. The plaintiff moved to vacate his convictions. The state’s attorney did not object and the trial court granted the plaintiff’s motion to vacate his convictions. After the plaintiff’s convictions were vacated, he applied for a retirement pension. The Pension Board, citing the felony divestiture statute, denied the application. The plaintiff appealed and the circuit court reversed the Pension Board’s decision because the plaintiff “…is not convicted of any felony relating to or arising out of or in connection with his service as a police officer.” The Pension Board appealed and argued that (1) the plaintiff should never been permitted to be on TASC probation and to have his convictions vacated and (2) that allowing the plaintiff to receive his pension would violate public policy. The plaintiff argued that he is entitled to his pension because, under the plain language of the statute, he is not convicted of any felonies. Even if the trial court erred in placing the plaintiff on TASC probation or vacating his convictions, the Pension Board does not have authority to ignore the trial court’s decision vacating his felony convictions. The appellate court will issue its written decision in due course.
On May 29, 2015 the Third District Appellate Court issued its Opinion in In Re Marriage of Roberts. The opinion provides an interesting discussion on the appropriate division of pension benefits during a dissolution of marriage in which both parties will also receive social security benefits.
On May 26, 2015 the Second District Appellate Court issued its Rule 23 Order in Village of Westmont v. Illinois Municipal Retirement Fund. The Village is a member of the Illinois Municipal Retirement Fund (“IMRF”). The Village has a fire department but does not have an Article 4 pension fund because it only employs part-time firefighters. The IMRF did not require the Village to enroll its part-time firefighters in the IMRF because the Village had more than 5000 people. However, the part-time firefighters worked more than 1000 hours per week and Article 7 of the Pension Code required all employees who worked more than 1000 hours per week to be enrolled in the IMRF. Therefore, In this case a scenario existed in which the IMRF manual excluded the Village’s part-time firefighters from participation in IMRF even though Article 7 required those firefighters to be enrolled in IMRF. In 2013, the IMRF changed its rules and required the Village to enroll its part-time firefighters in IMRF. The IMRF Board upheld the reclassification and the Village sued. The trial court affirmed the IMRF decision and the appellate court affirmed.
Although the appellate court agreed with the Village’s position that it fit into the IMRF manual’s category that did not require the part-time firefighters enrollment in the IMRF, the appellate court held that the manual’s classification violated the Pension Code. Because the IMRF’s classification conflicted with the Pension Code, the Village could not invoke estoppel to prohibit the IMRF from reclassifying the Village’s part-time firefighters in compliance with the Pension Code. The plain language of Article 7 requires that part-time firefighters who work more than 1000 hours must be enrolled in the IMRF because the Village was not required to create an Article 4 pension fund.
On June 9, 2015 the Fifth District Appellate Court heard Oral Argument in Harris v. Mount Vernon Firefighters’ Pension Fund. The Pension Board denied the plaintiff’s application for a line of duty disability pension. The Pension Board found that the plaintiff’s hearing loss did not result from the performance of an act of duty or the cumulative effects of acts of duty. The trial court affirmed and the plaintiff appealed.
The plaintiff argued that the evidence in the administrative record did not support the Pension Board’s finding that the plaintiff’s hearing loss did not result from the performance of an act of duty. The case also presents questions as to (1) the appropriate standard of review, (2) whether the plaintiff’s hearing loss could be remedied through the use of hearing aids and (3) whether the Pension Board correctly denied the plaintiff’s application because the City made a light duty position as Fire Inspector available to the plaintiff.
The plaintiff’s attorney also attacked, what he described, as the Pension Board’s failure to prepare a comprehensive written decision that addressed the light duty issue. The defendant conceded during the oral argument that the Pension Board’s written findings of fact were “scant.” At least one justice stated that she was troubled by the Pension Board’s lack of factual findings. Additionally, the Pension Board’s attorney conceded that there was no medical evidence in the record connecting the plaintiff’s hearing loss with loud noises associated with the plaintiff’s hobbies.
On June 30, 2014 the Chicago Public School System will be required to pay $634 million to its pension fund after legislation to delay the payment failed in the House.
Click HERE to view the 2015 COGFA Report on the Financial Condition of the Downstate Police and Fire Pension Funds in Illinois.
Catalyst Chicago – Q&A: Charles Burbridge, Chicago Teachers Pension Fund
On May 31, 2015 the Illinois Legislature approved House Amendment #4 to Senate Bill 777 that amends the funding requirements for the Chicago Police and Fire Pension Funds. The law reduces the City of Chicago’s contribution to its Police and Fire Pension Funds and extends the time period for amortizing the accrued unfunded liability from 2040 to 2055. The law replaces the projected unit credit actuarial method with the actuarially sound entry age normal cost method. The law also requires the the Pension Boards to seek enforcement if the City does not contribute the required amounts. The law requires the City to use any casino proceeds to fund its Police and Fire Pension Funds. Finally, the law permits the Pension Board to file a complaint for mandamus to enforce the annual funding requirements set forth in the Pension Code. The Governor has not yet signed the bill into law and a motion to reconsider the vote is currently pending.
Chicago Tribune – Back To The Future On Pensions
Progress Illinois – Chicago Pension Measure Clears State Legislature
Illinois Public Policy Institute – Downstate Police and Fire Pension Funds in Illinois: The Impacts of Funding Reforms and Investment Returns on Fund Solvency