Supreme Court to hear BBP appeal in Chicago fire pension case

  

November 28, 2012         

             The Illinois Supreme Court has agreed to hear an appeal by the Firemen's Annuity and Benefit Fund of an appellate court decision last May that would have awarded $1.8 million in enhanced pension benefits to certain widows of deceased Chicago firefighters without requiring them to pay any corresponding contribution.

             The case, Hooker and Murphy v. Retirement Board of the Firemen's Annuity and BenefitFund of Chicago, 2012 IL App (1st) 111625, involved claims by two firefighter widows that the Retirement Board was required to include duty availability pay ("DAP") in the current salary attached to the deceased husbands' positions when calculating the widows' annuities under the Pension Code.  The Illinois Appellate Court, First District, had ruled unanimously in favor of the widows, reversing a trial court decision that had granted the Retirement Board (the "Board") summary judgment on administrative review while denying class certification of all similarly situated widows.  The Appellate court also denied the Board's Petition for Rehearing.

            Noting the potential $1.8 million impact of the Appellate Court's decision on the Fund and its participants, the Board, with the assistance of Burke Burns & Pinelli, Ltd., sought review in the Illinois Supreme Court.  The high court agreed Wednesday to take the case. 

            In its petition, the Firemen's Board argued that the Appellate Court had misinterpreted Section 6-111 of the Pension Code to require that DAP be included in calculating pensions in cases where corresponding contributions had not been paid.  Further, the Appellate Court had ignored binding precedent in holding that the Board had to include such pay in its calculation of widows' annuities even without payment of corresponding contributions.  The Appellate Court's decision, the Board concluded, would leave the already-strained fund with an additional $1.8 million unfunded liability, thereby threatening its ability to meet future obligations to all its other participants and beneficiaries.