pension protection clause in Illinois

2024We have repeatedly held that the pension protection clause means precisely what it says: “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.” Kanerva v. Weems, 2014 IL 115811, ¶ 38 ; id. ¶ 40 (holding that subsidized health care provided to state employees was a benefit of membership in a state retirement system protected by the pension protection clause).

2024See Kanerva, 2014 IL 115811, ¶ 48 (holding that the pension protection clause was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them); McNamee v. State, 173 Ill. 2d 433, 444 (1996) (holding that the pension protection clause does not create a contractual basis for participants to expect a particular level of funding but only a contractual right that they would receive the money due them at the time of their retirement). ¶ 29 It is axiomatic that, if plaintiffs have no constitutional right in how their local pension funds a

2024See Kanerva, 2014 IL 115811, ¶ 48 (holding that the pension protection clause was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them); McNamee v. State, 173 Ill. 2d 433, 444 (1996) (holding that the pension protection clause does not create a contractual basis for participants to expect a particular level of funding but only a contractual right that they would receive the money due them at the time of their retirement). ¶ 29 It is axiomatic that, if plaintiffs have no constitutional right in how their local pension funds a

2016Id.; McNamee v. State, 173 Ill. 2d 433, 440 (1996); see also Buddell v. Board of Trustees, State University Retirement System, 118 Ill. 2d 99, 102 (1987). ¶ 58 The pension protection clause effected a fundamental change in the characterization of mandatory pension plans by ensuring that the benefits of such plans were no longer viewed as gratuities that could be modified or eliminated at the employer’s discretion.

2023These benefits directly impacted the participants’ eventual pension benefit. ¶ 13 As our supreme court has said: “The benefits protected by the pension protection clause include those benefits attendant to membership in the State’s retirement system, such as subsidized health care, disability and life insurance coverage, and eligibility to receive a retirement annuity and survivor -7- 2023 IL App (2d) 220198 benefits (see Jones v. Municipal Employees’ Annuity & Benefit Fund, 2016 IL 119618, ¶ 36 ; Kanerva, 2014 IL 115811, ¶¶ 39, 41 ), along with the right to purchase optional service credit in

2020Buddell, 118 Ill. 2d at 101-02 . ¶ 44 On direct review in this court, we agreed with the circuit court that the amendment adding the deadline was unconstitutional under the Illinois Constitution’s pension protection clause.

2026The clause “is a statement by the people of [this state], made in the clearest possible terms, that the authority of the legislature does not include the power to diminish or impair the benefits of membership in a public retirement system.” Heaton, 2015 IL 118585 , ¶ 76. ¶ 33 The protection provided by the pension protection clause is broad in nature.

2026Heaton, 2015 IL 118585 , ¶ 45. ¶ 34 The protection provided by the pension protection clause attaches once an individual begins employment in a position covered by a public pension system, not when the individual ultimately retires.

2017The pension protection clause is intended to eliminate the uncertainty that surrounded public pension benefits (People ex rel., Sklodowski v. State, 182 Ill. 2d 220, 228 (1998)) and to provide public employees with a basic protection against the complete abolition of their rights or the reduction of their benefits after they have already embarked upon employment (Miller v. Retirement Board of Policemen's Annuity, 329 Ill.

2016Sklodowski, 182 Ill. 2d at 231-32 ; Fumarolo v. Chicago Board of Education, 142 Ill. 2d 54, 105 (1990)), the pension protection clause guarantees the contractual relationship and the benefits that flow from their retirement system membership.

2016Heaton, 2015 IL 118585, ¶ 46 ; Lindberg, 60 Ill. 2d at 271 (holding that the pension protection clause was a guarantee that members of the pension system would receive pension payments when they became due at retirement).

2014See Sklodowski, 182 Ill. 2d 220 , McNamee, 173 Ill. 2d 433 ; Lindberg, 60 Ill. 2d 266 (considering whether there was a contractual right to funding based on the pension protection clause (Ill.

2016See Kanerva, 2014 IL 115811, ¶¶ 48, 57 ; Buddell, 118 Ill. 2d at 104-05, 106 ; Felt v. Board of Trustees of the Judges Retirement System, 107 Ill. 2d 158, 162-63 (1985).

2016See Kanerva, 2014 IL 115811, ¶¶ 48, 57 ; Buddell, 118 Ill. 2d at 104-05, 106 ; Felt v. Board of Trustees of the Judges Retirement System, 107 Ill. 2d 158, 162-63 (1985).

2017The scope of the pension protection clause’s application is “governed by the actual terms of the contract or pension.” Kerner v. State Employees' Retirement System, 72 Ill. 2d 507, 514 (1978) (citing 1970 Const., art.

2017The scope of the pension protection clause’s application is “governed by the actual terms of the contract or pension.” Kerner v. State Employees’ Retirement System, 72 Ill. 2d 507, 514 (1978) (citing Ill.

2016Sklodowski, 182 Ill. 2d at 231-32 ; Fumarolo v. Chicago Board of Education, 142 Ill. 2d 54, 105 (1990)), the pension protection clause guarantees the contractual relationship and the benefits that flow from their retirement system membership.

2016Sklodowski, 182 Ill. 2d at 231-32 ; Fumarolo v. Chicago Board of Education, 142 Ill. 2d 54, 105 (1990)), the pension protection clause guarantees the contractual relationship and the benefits that flow from their retirement system membership.

2023These benefits directly impacted the participants’ eventual pension benefit. ¶ 13 As our supreme court has said: “The benefits protected by the pension protection clause include those benefits attendant to membership in the State’s retirement system, such as subsidized health care, disability and life insurance coverage, and eligibility to receive a retirement annuity and survivor -7- 2023 IL App (2d) 220198 benefits (see Jones v. Municipal Employees’ Annuity & Benefit Fund, 2016 IL 119618, ¶ 36 ; Kanerva, 2014 IL 115811, ¶¶ 39, 41 ), along with the right to purchase optional service credit in

2019The benefits protected by the pension protection clause include those benefits attendant to membership in the State’s retirement system, such as subsidized health care, disability and life insurance coverage, and eligibility to receive a retirement annuity and survivor benefits (see Jones v. Municipal Employees’ Annuity & Benefit Fund, 2016 IL 119618, ¶ 36 ; Kanerva, 2014 IL 115811, ¶¶ 39, 41 ), along with the right to purchase optional service credit in the state pension system for past military service (see Buddell v. Board of Trustees, 118 Ill. 2d 99, 105-06 (1987)). ¶ 26 The protections af

2026See, e.g., Heaton, 2015 IL 118585 , ¶ 47 (finding that amendments to the Pension Code that reduced the Tier 1 pension benefits of current Tier 1 members of several of the public pension systems violated the pension protection clause); Carmichael, 2018 IL 122793, ¶¶ 32, 51 (finding that amendments to the Pension Code that took away the rights of current members of the public pension systems at issue to earn pension service credit while they worked 20 for private unions during leaves of absence and to have their pension benefits calculated using their higher union salaries violated the pension p

2024In Carmichael, we also listed, as examples of the benefits protected by the pension protection clause, “subsidized health care, disability and life insurance coverage, and eligibility to receive a retirement annuity and survivor benefits.” Carmichael, 2018 IL 122793, ¶ 25 . -8- ¶ 28 In contrast, the ability to vote in elections for local pension board members is not such a constitutionally protected benefit, nor is the ability to have local board members control and invest pension funds.

2026Williamson County Board of Commissioners, 2020 IL 125330, ¶ 32 . ¶ 35 The “benefit” that plaintiffs claim is protected by the pension protection clause in this case is the right to access Tier 1 membership in JRS.

2025See, e.g., Williamson County Board of Commissioners v. Board of Trustees of the Illinois Municipal Retirement Fund, 2020 IL 125330, ¶ 47 (amendment to Pension Code held unconstitutional where it changed the requirements for participation after plaintiffs had already been employed and were members of the fund); In re Pension Reform Litigation, 2015 IL 118585, ¶ 47 (legislative changes that reduced retirement annuities to which “members *** became entitled when they joined those systems” violated the pension protection clause).

2016At oral argument, plaintiffs specifically referenced our supreme court’s statement that the “United States Constitution ‘bar[s] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole [citations].’ ” Id. ¶ 69 (quoting United States v. Winstar Corp., 518 U.S. 839, 883 (1996)). ¶ 21 In re Pension Reform Litigation is distinguishable from the instant case in that it dealt with the pension protection clause (Ill.

2015At oral argument, plaintiffs specifically referenced our supreme court’s statement that the “United States Constitution ‘bar[s] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole [citations].’ ” Id. ¶ 69 (quoting United States v. Winstart Corp., 518 U.S. 839, 883 (1996)). ¶ 21 In re Pension Reform Litigation is distinguishable from the instant case in that it dealt with the pension protection clause (Ill.

2016Id. ¶¶ 99-104 (citing Marconi v. City of Joliet, 2013 IL App (3d) 110865, ¶¶ 24-38 ; Roth v. City of Glendale, 2000 WI 100, ¶¶ 26-29, 33, 35-36 , 237 Wis. 2d 173 , 614 N.W.2d 467 ; International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America v. Yard-Man, Inc., 716 F.2d 1476, 1482 (6th Cir. 1983)).

2016Id. ¶¶ 99-104 (citing Marconi v. City of Joliet, 2013 IL App (3d) 110865, ¶¶ 24-38 ; Roth v. City of Glendale, 2000 WI 100, ¶¶ 26-29, 33, 35-36 , 237 Wis. 2d 173 , 614 N.W.2d 467 ; International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America v. Yard-Man, Inc., 716 F.2d 1476, 1482 (6th Cir. 1983)).

2017The final rate of earnings in the present case is like the length of service in Peters: they are variables, x and y. -9- The point of Peters is that the pension protection clause protects the statutory formula, not the inputs from the employment relationship. ¶ 32 Plaintiffs point out that, in Miller, 329 Ill.

2017The point of Peters is that the pension protection clause protects the statutory formula, not the inputs from the employment relationship. ¶ 32 Plaintiffs point out that, in Miller, 329 Ill.

2019“If it were, all members of the [IMRF] would have had the vacation buyback option, simply by virtue of being members of the [IMRF]—but they did not.” (Emphasis in original.) Pisani, 2017 IL App (4th) 160417 , ¶ 28. ¶ 39 While we recognized the terms and conditions of the plaintiff’s employment contract with the defendant had a tangible effect on his pension benefits, our supreme court in - 18 - Peters v. City of Springfield, 57 Ill. 2d 142, 151-52 , 311 N.E.2d 107, 112 (1974), held the pension protection clause did not apply to terms of employment, even when the changes to the terms would caus

2019“If it were, all members of the [IMRF] would have had the vacation buyback option, simply by virtue of being members of the [IMRF]—but they did not.” (Emphasis in original.) Pisani, 2017 IL App (4th) 160417 , ¶ 28. ¶ 39 While we recognized the terms and conditions of the plaintiff’s employment contract with the defendant had a tangible effect on his pension benefits, our supreme court in - 18 - Peters v. City of Springfield, 57 Ill. 2d 142, 151-52 , 311 N.E.2d 107, 112 (1974), held the pension protection clause did not apply to terms of employment, even when the changes to the terms would caus

2019See Pisani v. City of Springfield, 2017 IL App (4th) 160417, ¶¶ 25-32 (finding that the city’s elimination of a vacation buyback provision, which was an employment policy contained in an ordinance, did not violate the pension protection clause).

2019Dawson, 2018 IL App (3d) 170625, ¶ 13 . ¶ 38 In Pisani, 2017 IL App (4th) 160417, ¶ 25 , this court was asked to determine whether the defendant’s elimination of a vacation buyback provision in its ordinance violated the pension protection clause.

2020See People v. Blair, 2013 IL 114122, ¶ 28 (stating that an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers - 16 - no rights” ’ ” (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby County, 118 U.S. 425, 442 (1886))). ¶ 70 For the foregoing reasons, I respectfully dissent. ¶ 71 JUSTICES THOMAS and GARMAN join in this dissent. - 17 -

2019See People v. Blair, 2013 IL 114122, ¶ 28 (stating that an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers no rights” ’ ” (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby County, 118 U.S. 425, 442 (1886))). ¶ 70 For the foregoing reasons, I respectfully dissent. ¶ 71 JUSTICES THOMAS and GARMAN join in this dissent. - 24 -

2020See People v. Blair, 2013 IL 114122, ¶ 28 (stating that an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers - 16 - no rights” ’ ” (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby County, 118 U.S. 425, 442 (1886))). ¶ 70 For the foregoing reasons, I respectfully dissent. ¶ 71 JUSTICES THOMAS and GARMAN join in this dissent. - 17 -

2019See People v. Blair, 2013 IL 114122, ¶ 28 (stating that an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers no rights” ’ ” (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby County, 118 U.S. 425, 442 (1886))). ¶ 70 For the foregoing reasons, I respectfully dissent. ¶ 71 JUSTICES THOMAS and GARMAN join in this dissent. - 24 -

2020See People v. Blair, 2013 IL 114122, ¶ 28 (stating that an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers - 16 - no rights” ’ ” (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby County, 118 U.S. 425, 442 (1886))). ¶ 70 For the foregoing reasons, I respectfully dissent. ¶ 71 JUSTICES THOMAS and GARMAN join in this dissent. - 17 -

2019See People v. Blair, 2013 IL 114122, ¶ 28 (stating that an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers no rights” ’ ” (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby County, 118 U.S. 425, 442 (1886))). ¶ 70 For the foregoing reasons, I respectfully dissent. ¶ 71 JUSTICES THOMAS and GARMAN join in this dissent. - 24 -

2019See Heastie, 226 Ill. 2d at 531 ; Board of Directors of Bloomfield Club Recreation Ass’n, 186 Ill. 2d at 424 . 2 Some of the pension or retirement systems provided for under the Illinois Pension Code include the General Assembly Retirement System (40 ILCS 5/2-101 et seq.

2018See Heastie , 226 Ill. 2d at 531 , 315 Ill.Dec. 735 , 877 N.E.2d 1064 ; Board of Directors of Bloomfield Club Recreation Ass'n , 186 Ill. 2d at 424 , 238 Ill.Dec. 608 , 712 N.E.2d 330 . ¶ 14 B.

2017Bosco v. Chicago Transit Authority, 164 F. Supp. 2d 1040, 1056 (N.D.

2017Bosco v. Chicago Transit Authority, 164 F. Supp. 2d 1040, 1056 (N.D.

2016Hawthorne v. Village of Olympia Fields, 204 Ill. 2d 243, 254-55 (2003); Carr v. Gateway, Inc., 241 Ill. 2d 15, 20 (2011). ¶ 54 Article XIII, section 5, of the Illinois Constitution provides that “[m]embership in any pension or retirement system of the State, any unit of local government *** or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” Ill.

2016Hawthorne v. Village of Olympia Fields, 204 Ill. 2d 243, 254-55 (2003); Carr v. Gateway, Inc., 241 Ill. 2d 15, 20 (2011). ¶ 54 Article XIII, section 5, of the Illinois Constitution provides that “[m]embership in any pension or retirement system of the State, any unit of local government *** or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” Ill.

2016Id. ¶¶ 99-104 (citing Marconi v. City of Joliet, 2013 IL App (3d) 110865, ¶¶ 24-38 ; Roth v. City of Glendale, 2000 WI 100, ¶¶ 26-29, 33, 35-36 , 237 Wis. 2d 173 , 614 N.W.2d 467 ; International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America v. Yard-Man, Inc., 716 F.2d 1476, 1482 (6th Cir. 1983)).

2016Id. ¶¶ 99-104 (citing Marconi v. City of Joliet, 2013 IL App (3d) 110865, ¶¶ 24-38 ; Roth v. City of Glendale, 2000 WI 100, ¶¶ 26-29, 33, 35-36 , 237 Wis. 2d 173 , 614 N.W.2d 467 ; International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America v. Yard-Man, Inc., 716 F.2d 1476, 1482 (6th Cir. 1983)).

2024“The primary purpose of article XIII, section 5, was to eliminate any uncertainty surrounding the payment of public pension benefits and to clarify that state and local governments were obligated to provide pension benefits to their employees.” Matthews v. Chicago Transit Authority, 2016 IL 117638, ¶ 57 . ¶ 22 This court has further explained that the pension protection clause “ ‘protects all of the benefits that flow from the contractual relationship arising from membership in a public retirement system.’ ” Williamson County Board of Commissioners v. Board of Trustees of the Illinois Municipa

2024“The primary purpose of article XIII, section 5, was to eliminate any uncertainty surrounding the payment of public pension benefits and to clarify that state and local governments were obligated to provide pension benefits to their employees.” Matthews v. Chicago Transit Authority, 2016 IL 117638, ¶ 57 . ¶ 22 This court has further explained that the pension protection clause “ ‘protects all of the benefits that flow from the contractual relationship arising from membership in a public retirement system.’ ” Williamson County Board of Commissioners v. Board of Trustees of the Illinois Municipa