BBP Asks Supreme Court to Reinstate Pension Board Ruling

An appellate court decision granting enhanced pension benefits to certain widows of deceased Chicago firefighters without requiring them to pay any corresponding contribution is contrary to the Illinois Pension Code and threatens the future viability of the Chicago firefighters pension fund, BBP partner Vincent D. Pinelli argued Wednesday to the Illinois Supreme Court.

“There is a strict prohibition in the [Pension Code],” Pinelli argued on behalf of the Firemen’s Annuity & Benefit Fund of Chicago to the seven Justices in oral arguments at the 18th floor courtroom in the Michael J. Bilandic Building. “[It] says that ‘any duty availability pay for which the corresponding employee contribution has not been paid shall not be included in the calculation [of the annuity].”

The case, Hooker and Murphy v. Retirement Board of the Firemen’s Annuity and Benefit Fund of Chicago, 2012 IL App (1st) 111625, involved claims by two firefighter widows that the Retirement Board should have included duty availability pay (“DAP”) in the current salary attached to the deceased husbands’ positions in calculating the widows’ annuities under the Pension Code. The Illinois Appellate Court, First District, 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 BBP, sought review in the Supreme Court. The high court agreed last year to take the case, and oral arguments were scheduled for the Court’s fall 2013 session, which is being held in Chicago because of renovation to the Court’s Springfield offices.

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 even 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 that will continue to grow, thereby threatening its ability to meet future obligations to all its other participants and beneficiaries.

“[It’s] not consistent with the legislative intent that’s expressed [in Section 6-111],” Pinelli argued. “If you’re going to get these benefits now, and they’re going to be pensionable, they have to be paid for…. Otherwise the fund will go broke.”

Following oral arguments, the Court took the case under advisement. A ruling is expected by March, 2014.

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