In a split decision issued earlier this month, a majority of the Illinois Supreme Court held that a career lobbyist for the Illinois Federation of Teachers (IFT) union who worked one day as a substitute teacher could receive a state teacher pension. According to NPR, the one day of subbing allowed the lobbyist to nearly double his pension. Although the loophole in the Illinois Pension Code that allowed the result was removed in 2012, the decision has been criticized as one example of broader concerns with the Illinois pension system.
The case involved a 2007 amendment to the Illinois Pension Code that allowed an officer or employee of a statewide teachers’ union who was a certified teacher as of the effective date of the amendment to establish service credit in the Teachers Retirement System (TRS) for union work completed prior to becoming certified as a teacher. To obtain the benefit, the union employee would be required to: (1) be certified as a teacher on or before the effective date of the legislation (February 27, 2007); (2) apply in writing to the TRS within six months after the effective date of the legislation; and (3) pay into the system both the employee contribution and employer contribution, plus interest, for his prior union service. The definition of “teacher” applicable to the law included work as a substitute teacher.
In October 2011, a Chicago Tribune article highlighted efforts by the plaintiff in the case, David Piccioli, to take advantage of the small window in the 2007 law. In response to the media coverage, the Illinois Pension Code was amended in 2012 to remove the language added in 2007. TRS responded by eliminating the service credits for Piccioli had received for his union service and issuing a refund of his contributions.
Piccioli sued, arguing that the TRS’s actions violated the Illinois Constitution. It was undisputed that Piccioli had already complied with all of the statutory requirements for obtaining service credit in the TRS for his union service from before 2007 by the time the law was amended in 2012. But TRS argued that the 2007 amendment to the law was “special legislation,” which is a law that confers a special benefit or privilege upon one person or group, excluding others that are similarly situated. Such legislation is void from the outset.
The Illinois Supreme found that the 2007 amendment was not special legislation. The court acknowledged that the 2007 amendment used a cutoff date that discriminated between those union employees who were eligible before the date and those who were not. But such cutoff dates are rationally related to a legitimate state interest, such as budgetary considerations and preserving State funds with respect to a publicly-funded program. Even though Piccioli and Preckwinkle were among the only union employees who were aware of the amendment before the law was passed, the court found that the law was not special legislation. Accordingly, the 2012 law that led to the revocation of Piccioli’s benefits violated the pension protection clause. Further, the Supreme Court found that the 2007 amendment conferred pension benefits protected by the Illinois State Constitution. Under the Constitution, membership in any state pension or retirement system is an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. The Illinois legislature can eliminate such benefit for future employees, but it cannot reduce or eliminate a pension benefit an employee was awarded under an earlier version of the law. Accordingly, the 2012 law that led to the revocation of Piccioli’s benefits violated the pension protection clause and was invalid.
