SENATE BILL 2775

On February 17, 2016 Republican Senator Pamela Althoff introduce Senate Bill 2775.  The bill would amend the funding provisions for downstate fire and police pension funds.

Beginning in 2017 the bill would redefine the annual actuarial requirement as the (1) normal cost and (2) the amount sufficient to amortize 85% of the accrued unfunded liability by 2055.  Currently, the code requires amortizing 90% of the accrued unfunded liability by 2040.  Prior to 2011, the code required amortizing 100% of the accrued unfunded liability by 2033.

The bill would also change the actuarial method from the “projected unit credit” (“PUC”) method to the “entry age normal” method.

Finally, the bill would delay the enforcement provisions in sections 3-125(c) and 4-118(b-5) from fiscal year 2016 to fiscal year 2020.

VILLAGE OF CHICAGO RIDGE v. BOARD OF TRUSTEES OF THE CHICAGO RIDGE FIREFIGHTERS’ PENSION FUND

On February 4, 2016 the First District Appellate Court issued its Rule 23 Order in Village of Chicago Ridge v. Board of Trustees of the Chicago Ridge Firefighters’ Pension Fund.  In 2014 the plaintiff, a firefighter, retired.  Pursuant to the collective bargaining agreement (“CBA”), the plaintiff was entitled to a 20% increase in his salary on the last day he worked. The pension board granted the plaintiff a pension inclusive of the 20% salary increase and the village appealed.  The trial court reversed the pension board’s decision and the appellate court affirmed the trial court’s decision.  Both courts held that the pension board’s decision was clearly erroneous.

The CBA contained a letter of understanding that provided that any firefighter who retires on his 25th anniversary is entitled to a 20% increase in salary (paid per hour only for the last day worked).  The pension board, citing section 4402.35 of the Illinois Administrative Code determined that the 20% increase constituted salary attached to rank for pension purposes.

The appellate court held that the plain language of 40 ILCS 5/4-118.1(d) and section 4402.30 of the Illinois Administrative Code required that salary be “approved through the appropriations ordinance of the municipality.”  The appellate court held that the village did not approve, through an appropriations ordinance, the 20% buyout provision in the CBA. The appellate court rejected the pension board’s argument that the village’s approval of the CBA had the same effect as though the village had approved an appropriations ordinance providing for the 20% increase in salary.  The appellate court held that a municipality’s approval of a CBA and an appropriations ordinance are not the same thing. “Where an act is required by ordinance, anything less, such as a referendum or resolution, is not sufficient.”  As such, the village’s “resolution” approving the CBA and side letter was not sufficient to make the 20% increase “salary” for pension purposes.  Additionally the appellate court rejected the pension board’s reliance on an arbitration decision and an Illinois Department of Insurance advisory opinion that the 20% increase constituted “salary” for pension purposes.  If the plain language of the statute is clear, the appellate court does not have to resort to additional sources to determine the legislature’s intent.

RIVERA v. BOARD OF TRUSTEES OF THE BOLINGBROOK POLICE PENSION FUND

On February 10, 2016 the Third District Appellate Court issued its Rule 23 Order in Rivera v. Board of Trustees of the Bolingbrook Police Pension Fund.  The plaintiff applied for a line of duty disability pension.  The pension board denied the plaintiff’s application for a line of duty disability pension and granted him a non-duty disability pension.  The trial court and the appellate court affirmed the pension board’s decision.

The plaintiff testified that he felt his knee buckle while on duty and responding to a call for a domestic disturbance.  A workers’ compensation independent medical examination (IME) testified that the plaintiff’s disability did not result from responding to the domestic disturbance.  The workers’ compensation IME provider opined that the plaintiff’s injury was simply the “spontaneous onset of symptoms while walking.”  The first pension board IME physician opined that the plaintiff’s disability did not result from the response to the domestic disturbance. The second pension board IME physician opined that the plaintiff’s disability resulted from degenerative arthritis and that any exacerbation of the plaintiff’s pre-existing while responding to the domestic call was temporary.  The third pension board IME physician opined that the plaintiff’s disability resulted from the on duty exacerbation of his pre-existing condition.

The appellate court ultimately held that the pension board’s decision was not against the manifest weight of the evidence.  However, the appellate court held that the pension board erred in relying on the workers’ compensation IME because the physician’s opinion was inconsistent with the plaintiff’s medical records.  Even though it was error for the pension board to rely on the workers’ compensation IME, the pension board did not err in relying on the opinions of the two pension board IME physicians who concluded that the plaintiff’s disability did not result an exacerbation of a pre-existing condition while responding to the domestic call.

One appellate court justice dissented and opined that the pension board’s decision was against the manifest weight of the evidence.  The dissenting justice opined that the plaintiff proved that the act of responding to the domestic call in some way contributed to his disability by exacerbating his pre-existing condition.  The dissenting justice noted that one IME provider misstated that the evidence and that the other IME provider did not physically examine the plaintiff but instead only reviewed the plaintiff’s medical records.