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 General Assembly to fund the pension at a specific percentage
(See McNamee ’96 and Sklodowski ‘98).
1979 Kraus v. Board of Trustees… Police Pension Fund, Niles
Law existing at the time of “vesting” is incorporated into 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… Pension 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 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 questions 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.
2013 People... v. State...
2013 People... v. State...
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
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