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Local pension boards lose anti-consolidation court case

Wednesday, May 25, 2022 - Posted by Rich Miller

* Background

In 2019, the Illinois General Assembly passed Public Act 101-0610, which required downstate police and firefighter local pension funds’ assets to be consolidated into statewide funds for investment purposes. Since then, the Firefighters Pension Investment Fund (FPIF) and the Illinois Police Officers’ Pension Investment Fund (IPOPIF) have geared up to receive those investment funds and go to work. Recently, however, the consolidation encountered its first legal challenge—a class action lawsuit claiming Public Act 101-0610 unconstitutional.

On February 23, 2021, eighteen police and firefighter pension funds, as well as individual active and retired members of these funds, filed a complaint against Governor Pritzker, the two new consolidated pension investment funds, and others in the Kane County Circuit Court. The plaintiffs are seeking to certify the lawsuit as a class action. If successful, the lawsuit’s outcome would apply to every downstate police and firefighter pension fund in Illinois.

The 22-page complaint alleges the consolidation violates three provisions of the Illinois Constitution: (1) the Pension Protection Clause; (2) the Contracts Clause; and (3) the Takings Clause. However, each of these claims revolve around the same general premise. The plaintiffs claim that they “had a contractual and enforceable right to exclusively manage and control their investment expenditures and income, including interest dividends, capital gains, and other distributions on investments,” which the consolidation has infringed upon.

There are hundreds of these local pension boards in this state.

* The judge finally shot it all down today

Traditional Voting Rights Claims are Not at Issue. … The main distinction between the case at bar and the aforementioned cases is that those cases involved traditional “voters rights” claims such as procedural due process, equal protection, constitutional vagueness, improper delegation of legislative authority, and other guarantees found in the United States and Illinois Constitutions. […]

Voting is Not Presently a “Benefit” under the Pension Clause. … In this case, the Court finds that it cannot extend the term “benefits” beyond the reach of prior Illinois Supreme Court cases (that this Court is aware of) to find the challenged legislation unconstitutional against the Pension Clause’s protections. […]

The Takings Clause is Not Implicated. … In this case, Plaintiffs Takings Clause claim cannot be tied to real property as required under Illinois’ taking clause jurisprudence. Although, money damages can be sought in a takings clause claim, there are no allegations or evidence presented that Plaintiffs currently drawing their pension benefit have suffered a present or will suffer a future loss in benefit payment. […]

For all the aforementioned reasons, the cross motions for summary judgment are decided in favor of Defendants and against Plaintiffs.

Plaintiffs’ cross motion for summary judgment is denied.

       

5 Comments
  1. - Sue - Wednesday, May 25, 22 @ 5:53 pm:

    It will be very interesting to see if Pritzker’s promises that this consolidation saves money pans out. This likely is going to end up being a nothing burger in terms of obtaining any meaningful cost efficiencies


  2. - Just Sayin - Wednesday, May 25, 22 @ 5:57 pm:

    Now it’s time to consolidate all state pension plans into a single system. Make the GA and judges, and universities, get the same pension system as state employees.


  3. - Retired SURS Employee - Wednesday, May 25, 22 @ 10:23 pm:

    Actual consolidation of all pension plans (not just for investments) would violate the Pension Protection Clause.


  4. - PublicServant - Thursday, May 26, 22 @ 7:00 am:

    Find another grift, locals.


  5. - Anyone Remember - Thursday, May 26, 22 @ 7:28 am:

    ===Find another grift, locals.===

    How many townships out there operate without any media coverage ever? Target-rich environment.


Sorry, comments for this post are now closed.


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