Antedated Court Cases: Challenging the Pension Protection Clause

Article XIII, Section 5 of the Illinois Constitution states:  “Membership in any pension or retirement system of the state or any local government, or any agency or instrumentality of either, shall be an enforceable, contractual relationship, the benefits of which shall not be diminished or impaired.” (Helen Kinney and Henry Green were the delegates who jointly “sponsored the pension clause proposal as an amendment to the proposed Legislative Article” at the 1970 Illinois Constitution).

To let the courts decide is a reckless disregard of a senator’s and representative’s duty to uphold the State of Illinois and the United States Constitution. Besides the datum that a State cannot pass any law “impairing the obligations of contracts” (Article I, Section 10, the Constitution of the United States of America), Appellate and Supreme Court cases are costly lawsuits at the taxpayers’ expense. 

1974       Peters v. City of Springfield… firemen filed suit

Pension rights are “earned.” There is no distinction between “earned” and “unearned” pension benefits… “The Clause protects pension benefit rights as an enforceable contractual relationship that is subject to modification through contract principles.”

1975       People ex. Rel. Illinois Federation of Teachers v. Lindberg

              ...Can’t force the Illinois General Assembly to fund the pension systems at a specific percentage.

                (See McNamee ’96 and Sklodowski ‘98).

1979       Kraus v. Board of Trustees… Police Pension Fund, Niles

              The law existing at the time of “vesting” is incorporated into an employee’s agreement…

Pension benefits commence at the time employee contributions begin… General Assembly cannot modify benefits.  “The Clause protects pension benefit rights as an enforceable contractual relationship that is subject to modification through contract principles.”

1982       Village of Sherman v. Village of Williamsville

                Record of proceeding of Constitutional Convention (21 July 1970)…

                Rights are fixed when an employee embarks upon employment.

1985       Felt v. Board of Trustees (Judges)

…Can’t diminish terms of contract with pension system… Pensions are based upon salary of last day of service or last year. “The Clause protects pension benefit rights as an enforceable contractual relationship that is subject to modification through contract principles.”

1985       Taft v. Board of Trustees, Police, Village of Winthrop Harbor

               Employees have contractual rights regarding increases in their pension benefits.

1987       Carr v. Board of Trustees… Police (Peoria)

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1987       Buddell v. Board of Trustees State University Retirement System (SURS)

                …Can’t diminish terms of contract with pension system…

                Pension Code allows employees to purchase service credit for time in the military.

“The Clause protects pension benefit rights as an enforceable contractual

relationship that is subject to modification through contract principles.”

1988       DiFalco v. Board of Trustees… Fireman’s Pension of Wood Dale

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1991       Schroeder v. Morton Grove… Police

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1992       Hannigan v. Huffmeister

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1993       Barber v. Board of Trustees of Village of Barrington

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1996       McNamee v. State

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

Asks question: whether “the Pension Clause mandates that the pension system be funded at a particular funding percentage or according to a funding schedule.”  The Pension Clause “creates an enforceable contractual relationship that protects only the right to receive benefits… a cause of action would exist if legislation diminished a person’s right to receive benefits or placed the pension system on the verge of default or imminent bankruptcy.”

1998       People ex. Rel. Sklodowski v. State

Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.  (See Lindberg ‘75/McNamee ‘96) “Clause does not create a contractual basis for participants to expect a particular level of funding [unfortunately].”

1999       Doyle v. Holy Cross Hospital

Continued employment does not constitute supporting unilateral modification of an existing employment contract.

2001       Miller v. Retirement Board of Policemen (Chicago)

                …Can’t diminish terms of contract with pension system…

“The Clause protects pension benefit rights as an enforceable contractual

relationship that is subject to modification through contract principles.”

2007       Ross v. May Co.

Continued employment does not constitute supporting unilateral modification of an existing employment contract. 


[Added May 8, 2015]: Doris Heaton, et al. v. Pat Quinn, in his capacity as Governor of the State of Illinois, et al.
“…The judgment of the circuit court declaring Public Act 98-599 to be unconstitutional and permanently enjoining its enforcement is affirmed: The concerns of the delegates who drafted article XIII, section 5, and the citizens who ratified it have proven to be well founded. Even with the protections of that provision, the General Assembly has repeatedly attempted to find ways to circumvent its clear and unambiguous prohibition against the diminishment or impairment of the benefits of membership in public retirement systems. Public Act 98-599 is merely the latest assault in this ongoing political battle against public pension rights. As we noted earlier, through that legislation the General Assembly is attempting to do once again exactly what the people of Illinois, through article XIII, section 5, said it has no authority to do and must not do… The judgment of the circuit court declaring Public Act 98-599 to be unconstitutional and permanently enjoining its enforcement is affirmed” (Heaton v. Quinn, 2015 IL 118585).
 

Notes taken from the 76-page document entitled: IS WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS? AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE ILLINOIS CONSTITUTION by Eric M. Madiar

http://www.illinoissenatedemocrats.com/index.php/component/content/article/108-public-information-brochures/1517-pension-debate