To impair the obligation of a contract is to lessen its value. “Any law which changes the intention and legal effect of the original parties, giving to one a greater and to the other a less interest or benefit in the contract, impairs its obligation” (115 A. 484, 486). State statutes which do so are prohibited by Article 1, Section 10 of the United States Constitution.
It was not too long ago that the Illinois Supreme Court ruled that Public Act 98-599 (the Illinois General Assembly's attempt to diminish public employees' and retirees' pensions) violated the Pension Protection Clause, the Contracts Clause, the Takings Clause, and Equal Protection of the Illinois Constitution on May 8, 2015:
“…[The] plaintiffs’ challenges to the new law were predicated on the Illinois Constitution of 1970. In all five actions, plaintiffs’ principal contention was that the reduction in retirement annuity benefits for Tier I employees was void and unenforceable as a violation of the constitution’s pension protection clause (Ill. Const. 1970, art. XIII, § 5). Four of the complaints (RSEA, ISEA, Harrison, and SUAA) also alleged that the annuity reduction provisions violated article I, section 16, of the Illinois Constitution (Ill. Const. 1970, art. I, § 16), which provides, inter alia, that no law impairing the obligation of contracts shall be passed. Two of those four complaints (RSEA and ISEA) included separate impairment of contract claims on behalf of a specific subset of employees who elected to participate in early retirement programs offered by the State in 1991, 2002 and 2005. Violations of article I, section 15, of the Illinois Constitution (Ill. Const. 1970, art. I, § 15), which prohibits the taking or damaging of private property for public use without just compensation, were alleged in Harrison and SUAA. In addition, RSEA and ISEA asserted that the annuity reductions violated equal protection under article I, section 2, of the Illinois Constitution (Ill. Const. 1970, art. I, § 2) because they did not also include members of the JRS system, i.e., judges…” (In re Pension Reform Litigation (Doris Heaton et al., Appellees, v. Pat Quinn, Governor, State of Illinois, et al., Appellants, May 8, 2015).
Instead of some unethical Illinois politicians seeking to change the pension code in order to impair the rights of individuals and to force a choice between two negative alternatives, Illinois politicians should stop ignoring their moral responsibility and legal obligation to fund public pension systems. It is their moral duty and legal concern to find ways to increase the state’s revenue so that the public pension systems of Illinois are properly funded.
Of course, we knew that some unethical Illinois politicians would continue to dispute one of the Bill of Rights contained in both the Illinois and U.S. Constitutions instead of addressing the real causes of the state's budget deficits: the pension ramp, the resultant pension debt, and the state’s insufficient flow of revenue. What they should have been doing after the Illinois Supreme Court ruling was reexamining the concept of justice and what lawfulness demands: that people must keep their covenants with one another.
Any modifications of the Pension Protection Clause by the Illinois General Assembly will be seen for what it is: an accommodation for “only” the General Assembly who have stolen money from the public pension systems for decades and are, thus, avoiding a pre-existing duty rule.
I have said this many times: No justice is accomplished when diminishing public employees' constitutionally-guaranteed benefits and rights. Contracts supported by consideration are often one-sided, advantageous arrangements, especially a consideration that would be in exchange for reductions of originally-vested benefits assured by the Illinois Constitution.
Unfortunately, what some unethical Illinois politicians will have to be reminded of again and again is that the Illinois Supreme Court “has consistently invalidated amendments to the Pension Code where the result is to diminish benefits” (McNamee v. State, 173 Ill. 2d 433, 445 (1996)). “Any alteration of the pension system amounts to a modification of an existing contract between the State (or one of its agencies) and all members of the pension system, whether employees or retirees. A member is contractually protected against a reduction in benefits” (Kuhlmann v. Board of Trustees of the Police Pension Fund of Maywood, 106 Ill. App. 3d 603, 608 (1st Dist. 1982)).
To name the most recent cases that these liars and thieves have ignored:
2014 KANERVA v. WEEMS (July 3):
The Pension Protection Clause makes it “clear that if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired… [The State of Illinois or anyone else] may not rewrite the Pension Protection Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve... [P]ension benefits are insulated from diminishment or impairment by the General Assembly…” (Kanerva, 2014 IL 115811, 38, 41, 48).
2015 MARY J. JONES et al., Appellees, v. MUNICIPAL EMPLOYEES’ ANNUITY AND BENEFIT FUND OF CHICAGO et al., Appellants (March 24):
“…In this case, it is undisputed that the unions were not acting as authorized agents within a collective bargaining process. Thus, we need not resolve whether the vote taken by union representatives as expressed in the Brandon affidavit bound members of the Funds in a collective bargaining process. Rather, we agree with the trial court that ‘these negotiations were no different than legislative advocacy on behalf of any interest group supporting collective interests to a lawmaking body.’ The individual members of the Funds have done nothing that could be said to have unequivocally assented to the new terms or to have ‘bargained away’ their constitutional rights. Accordingly, nothing in the legislative process that led to the enactment of the Act constituted a waiver of the Funds members’ constitutional rights under the pension protection clause… The judgment of the circuit court declaring Public Act 98-641 to be unconstitutional and permanently enjoining its enforcement is affirmed.”
“[Furthermore, consider that] in the context of the collective bargaining process for public employees, employees designate a particular union as their exclusive agent for collective bargaining negotiations. See 5 ILCS 315/6 (West 2014). The cases that defendants rely upon to support a bargained-for exchange argument involved agreements reached through the collective bargaining process. See Ballentine v. Koch, 674 N.E.2d 292, 296 (N.Y. Ct. App. 1996) (“[B]ecause plaintiffs designated the PBA as their agent for the collective bargaining negotiations at issue here and were thus bound by its actions taken on their behalf during the negotiation process [citation], the PBA’s waiver of the constitutional protections of [New York’s pension protection clause] is valid as to plaintiffs ***.”); Schacht v. City of New York, 346 N.E.2d 518, 519 (N.Y. Ct. App. 1976) (“Plaintiff, having designated the union to be her agent for collective bargaining purposes, is bound by agreements made by that union on her behalf”)…” (2015 MARY J. JONES et al., Appellees, v. MUNICIPAL EMPLOYEES’ ANNUITY AND BENEFIT FUND OF CHICAGO et al., Appellants): Thus, unions need ratification by its membership, retirees, and non-members for any consideration.
2015 DORIS HEATON, et al. v. PAT QUINN, in his capacity as Governor of the State of Illinois, et al. (May 8):
“…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” (In re Pension Reform Litigation (Doris Heaton et al., Appellees, v. Pat Quinn, Governor, State of Illinois, et al., Appellants, May 8, 2015).