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Two judges may have a valid point about their Tier 2 pensions

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Illinois

Two judges - one from Cook County [recently appointed Associate Judge Natosha Toller] and the other from St. Clair County [recently retired Associate Judge Patricia Kievlan], near St. Louis - have partnered in a lawsuit to potentially take down the state’s so-called Tier 2 pension law, a key pension reform measure they say was passed unconstitutionally and which they claim has unconstitutionally denied them a larger retirement pension than they believe they are owed. […]

In the meantime, the “Tier 2″ law has been interpreted by pension administrators to also limit the retirement earnings of current public employees if they move from one kind of public employment to another.

Under traditional “Tier 1″ pensions, public employees could use all of their years of public employment to calculate their final pension payout, no matter how many different taxpayer-funded agencies they may have worked for.

The judges’ new lawsuit said that practice, in particular, should be unconstitutional, as applied to longtime public workers who later become judges.

The lawsuit notes that Kievlan worked for “many years” as an instructor at a public community college in Belleville, and also served for years as a member of the St. Clair County Board. She was appointed as a judge in 2013, and retired in 2023.

According to the lawsuit, Toller was appointed to the Cook County judicial bench in 2023. Before that, she had worked for 17 years as a Cook County Assistant State’s Attorney, including as a top assistant to Cook County State’s Attorney Kim Foxx. Toller then worked for more than a year for the Illinois Judicial Inquiry Board.

They are missing out on a ton of pension money as a result.

The statute is here.

* What they’re basically arguing is that they were covered under the state’s 1963 reciprocal pension law that was in existence long before the Tier 2 law’s passage. From the lawsuit…

Under the Reciprocal Act, participants in more than one of the covered pension systems may combine their service credit earned from two separate government employers to calculate a single pension annuity

The Judicial Retirement System is covered by the Reciprocal Act. The State University Retirement System and the Municipal Retirement Fund are also both reciprocally covered, and the judges in the lawsuit belonged to those systems.

* From the Illinois Constitution…

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

Back to the lawsuit…

As applied to both Judge Kievlan and Judge Toller, Public Act 96-0889 violates the Pension Protection Clause set forth in article XIII, section 5, of the Illinois Constitution of 1970 […]

Both Judge Kievlan and Judge Toller are entitled to all of the benefits afforded to them under the Pension Code, including the Reciprocal Act, as of the day they first began as participants in a state pension system. But in the administrative decisions, JRS erroneously concluded that their respective rights to be treated as Tier 1 participants in JRS had not “vested” because neither of them had begun judicial service at the time Public Act 96–0889 was enacted. This analysis is faulty, and the decisions must be reversed, because prior to enactment of Public Act 96–0889, no tiers existed and Judge Kievlan and Judge Toller were each entitled to join JRS and obtain the full benefits of the Reciprocal Act in the determination of their annuity benefits.

Thoughts?

posted by Rich Miller
Monday, Apr 1, 24 @ 11:48 am

Comments

An interesting argument,seems reasonable at first blush.

Comment by Lincoln Lad Monday, Apr 1, 24 @ 11:56 am
Looks like the judges have a strong case.
Good for them and for realtors in Scottsdale and Naples who will probably be selling a few extra condos to IL government retirees in the years to come.

Comment by Larry Bowa Jr. Monday, Apr 1, 24 @ 12:00 pm
Said it when it passed. They (meaning the GA) will be revisiting Tier 2, for many reasons, within 20 years.

The tip was Pat Quinn thought it was the shizzle.

Comment by Flyin'Elvis'-Utah Chapter Monday, Apr 1, 24 @ 12:00 pm
Is the issue a question of whether these participants should be able to piggyback their earlier public service “time” into a larger tier two pension or whether their previous state time results in their being classified as Tier I judges for retirement purposes?

Comment by Bull Durham Monday, Apr 1, 24 @ 12:13 pm
Is the issue a question of whether the earlier state “time” can be piggybacked unto a larger Tier 2 pension or whether that earlier state time results in their being classified as Tier 1 judges for retirement purposes?

Comment by Bull Durham Monday, Apr 1, 24 @ 12:16 pm
They have about as sympathetic argument as Noland and Clayborne, and laches should apply to kick it.

Comment by Spare me Monday, Apr 1, 24 @ 12:16 pm
Don’t think this will “take down” all of Tier 2, but the judges have a point on reciprocity. Under the pension reform law, Tier 1 reciprocity applies to all public employees moving between pension systems (like going from working for state government to a job with a state university) unless they become a judge, in which case they become Tier 2 annuitants. Seems horribly inconsistent and I have no idea why the legislature did that when they created Tier 2.

Comment by TNR Monday, Apr 1, 24 @ 12:17 pm
They’ve got a pretty good argument, because all their pre-judge service credit were Tier I, so reciprocity would require Tier I retirement benefits when combining service credits and payouts.

Comment by thisjustinagain Monday, Apr 1, 24 @ 12:26 pm
When the Tier 2 legislation was proposed, many questions were asked about this very topic and it was always stated that once you were in Tier 1 you would always be Tier 1 even if you moved between state pension systems. I never moved from one to another so this was never an issue for me. But that was how it was explained.

Comment by JS Mill Monday, Apr 1, 24 @ 12:27 pm
Seems like an unconstitutional diminishment at first blush.

Comment by Captain Obvious Monday, Apr 1, 24 @ 12:27 pm
I don’t think this would make the entire Tier 2 system unconstitutional — just as applied to the judges.

Judges were the only group of people who had reciprocity eliminated as a part of the Tier 2 law. For example, If an employee worked for the State as a Tier 1 employee, but left for a position that pays into the Chicago Municipal employees pension fund after Tier 2 went into effect, that employee would still be considered Tier 1 for the purposes of their pension with the City.

Judges, on the other hand, are treated as Tier 2 regardless of their previous status if they became a judge after Tier 2 went into effect. There are dozens and dozens of public employees that would be affected by this law.

Should be a fascinating case to follow.

Comment by Hannibal Lecter Monday, Apr 1, 24 @ 12:29 pm
=== When the Tier 2 legislation was proposed, many questions were asked about this very topic and it was always stated that once you were in Tier 1 you would always be Tier 1 even if you moved between state pension systems. ===

Except for the judges - the judges all got pushed to Tier 2 regardless of reciprocity.

Comment by Hannibal Lecter Monday, Apr 1, 24 @ 12:31 pm
However this works out, expect IPI / Tillman etc. to reemerge like cicadas …

Comment by Anyone Remember Monday, Apr 1, 24 @ 12:41 pm
In every pension system except JRS and GRS, once a Tier I always a Tier I. If the right to transfer into a reciprocating system while still maintaining your status as a Tier I is not constitutionally protected, then the legislature could eliminate that ability for all the other reciprocating pension systems that currently enjoy the ability to transfer into another pension system while still maintaining their Tier 1 status in the new system.

The other reciprocating systems may want to support the suit or the legislature in the future could strip their members Tier I status when they move to a new system too.

Comment by Former PD Monday, Apr 1, 24 @ 12:46 pm
So sorry but I’m not understanding. Would it take all of tier 2 down or just the judges part? If it took tier 2 down would we go back to tier 1? This stuff freaks me out given that it’s so important for my retirement. I’ve got 14 more years but still. Every cent counts

Comment by Honeybear Monday, Apr 1, 24 @ 1:05 pm
=== Would it take all of tier 2 down or just the judges part? ===

This looks to only apply to the judges system since they are the only ones who had their reciprocity affected.

Comment by Hannibal Lecter Monday, Apr 1, 24 @ 1:32 pm
=Except for the judges - the judges all got pushed to Tier 2 regardless of reciprocity.=

It surprises me that the judges were left out.

And I don’t see how this “takes down” Tier 2.

Comment by JS Mill Monday, Apr 1, 24 @ 1:41 pm
It doesn’t take down Tier 2. It would only apply to the affected judges.

Comment by Hannibal Lecter Monday, Apr 1, 24 @ 1:43 pm
Have to agree with HL’s well stated posts. Appears to apply to judges only. Will be interesting to watch but my money would be on Kievlan and Toller prevailing.

Comment by Original Rambler Monday, Apr 1, 24 @ 1:54 pm
== Would it take all of tier 2 down or just the judges part? ==

The suit seeks to invalidate the entire Tier 2 law based on the “Three Readings Rule” being violated when the legislature passed it on a shell bill back in 2010. Previous litigation to overturn laws on this basis have failed, so I wouldn’t hold my breath on that count. But the specific complaint about judges being unconstitutionally denied Tier 1 reciprocity would seem to have a much better shot at prevailing.

== They have about as sympathetic argument as Noland and Clayborne, and laches should apply to kick it. ==

If my understanding is correct, “laches” applied to Noland and Clayborne because they waited so long to file suit — long after they left office. The plaintiffs in this case filed suit very soon after being denied their benefits by the pension board. So I don’t think there is a failure to take timely action here that would bring laches into play. And while judges are rarely sympathetic figures, unlike Noland and Clayborne, these plaintiffs are not asking a court to reverse a law they repeatedly voted in favor of.

Comment by TNR Monday, Apr 1, 24 @ 1:55 pm
It would not take down Tier II, but if the right to transfer between systems while maintaining your Tier I status is not a constitutionally protected benefit (as the judges are claiming), then the legislature would have the ability to remove that option for the other pension systems through future legislation.

Comment by Former PD Monday, Apr 1, 24 @ 2:04 pm
Having skimmed the Complaint it appears that PA 96-0889 treats Judges (and General Assembly members?) differently with respect to prior employment in other Public Pension Funds. Thus, any decision would only apply to Judges (and General Assembly members?)and not all other public employees. The Complaint is well thought out and this lawsuit should be very interesting. Indeed, do all Judges who were enrolled in a public pension fund but became a Judge after 2011 have a conflict of interest with respect to hearing this case?

Comment by Retired SURS Employee Monday, Apr 1, 24 @ 2:14 pm
Once Tier 1, always Tier 1. It’s a strong case. It has nothing to do with having to revisit Tier 2. If you start Tier 2, you are always Tier 2.

Comment by Ducky LaMoore Monday, Apr 1, 24 @ 2:29 pm
Looks like a winner

Comment by Annonin' Monday, Apr 1, 24 @ 2:41 pm
I agree that the argument about the refusal to apply the Reciprocal Act, if successful, would only affect those Tier 2 judges who were Tier 1 employees in other government positions. But, if they are correct about the Three Readings rule, all of Tier 2 is gone.

Comment by Not So Innocent Bystander Monday, Apr 1, 24 @ 3:15 pm
Anyone have details as to why judges were excluded when tier 2 was set up? Seems that might be an interesting exploration. They did it for a reason.

Comment by Papa2008 Monday, Apr 1, 24 @ 4:35 pm
Where have you gone, Retired Non Union Guy, a blogosphere turns its confused thoughts to you.

Comment by ZC Monday, Apr 1, 24 @ 4:41 pm
LOL, ZC. I came in to specifically hear RNUG’s comments.

I wonder how many potential judges didn’t take that route due to the fact their pensions would be diminished?

Comment by Diver Down Monday, Apr 1, 24 @ 4:51 pm
==But, if they are correct about the Three Readings rule, all of Tier 2 is gone.==

As would be many other laws, but they are arguing against well-established precedent that is directly contrary.

Comment by Big Dipper Monday, Apr 1, 24 @ 5:51 pm
For example: I was a tier 1 member when I worked with the city of chicago since January of 1998. I was appointed in August of 2013. I had zero days break in service. Actually even overlapped for two months city and state pension systems. I went from Tier 1 and then lowered into GRS as a Tier 2.

This was done for ONE REASON to protect sitting judges and general assembly members from future opponents. This discourages current Tier 1 members from seeking office because they would lose their current Tier 1 status if they run for either judge or for the General Assembly. Most people who run for judge were former prosecutors or public defenders, this provision of diminishing their pension discourages people from running. In turn eliminating a large pool of candidates. Also discourages any Tier 1 union members from running for office since they would also lose their Tier 1 status. This is completely unconstituional. I have been trying to change this since I first got here and no one is or has been willing to move the bill. This is not a pension enhancement, this is correcting a blatant change in law to protect incumbents when Tier 2 was created which is also unconstitutional. They say I can not sue because I am not adversely affected since I have not retired so I have no standing. Previous leadership was never willing and current leadership has not made a decision yet. But it has been 3 years since previous leadership has been gone, so let’s see what happens 🤷🏻‍♂️.

Comment by Rep. Jaime Andrade Tuesday, Apr 2, 24 @ 6:39 am