If they get a pension bill, will the courts find it legal? Not for current retirees.
I just came back from the luncheon of the North Lake Shore Illinois Retired Teachers Association up in Des Plaines.
I sat at the table with Bob Lyons, one of the trustees of the Teacher Retirement System.
Lyons was the featured speaker.
The tone of his speech was generally optimistic. At least for those currently retired teachers. And that was who was in the room.
“It doesn’t mean we don’t have work to do,” Lyons warned.
But he was hesitant to guess what the legislature might do. And in Illinois, that is a sound approach.
He handed out the latest memorandum from the law firm of Tabet, DiVito and Rothstein. They were hired by the IRTA to look into the constitutional issues concerning current pension proposals, including Cullerton’s SB0001.
“SB 0001… constitutes a unilateral attempt to modify public employees’ employment agreements with the State, even with respect to those employees who have already retired… A unilateral reduction of pension rights is unconstitutional, even if coupled with an equally unilateral benefit that the [Illinois] General Assembly imagines retired and active public employees might theoretically find desirable. Accordingly, SB 0001 and other legislation that similarly seeks to unilaterally modify the pension rights of retired public employees would fail constitutional scrutiny (4)…“Part B attempts to extract a pretense of agreement from individual public employees and retirees to the reduction of their vested pension rights. The consent envisioned in Part B, however, is just as fictitious and legally invalid as that envisioned in Part A.“Because Part B forces a retiree to choose between pension rights and health care coverage, it rests upon an assumption that the State has an unlimited right to exclude a public employee or retiree from participation in a health insurance program. In many cases, however, retired teachers have a vested contractual right to participate in a health plan by virtue of collective bargaining agreements between their unions and their school districts. As the Illinois Appellate Court has recognized, if a collective bargaining agreement between a teacher’s union and a school district promises health benefits to teachers in retirement for a term that extends beyond the agreement’s duration, the teachers who retired under that agreement have a vested right to the promised health benefits. Haake v. Board of Education for Township High School Glenbard District 87, 399 Ill. App. 3d 121, 132-34, 137-39 (2010) (6)…“Vested contractual rights to health benefits in retirement cannot be taken away as a penalty for refusing to surrender vested pension rights. Accordingly, retired teachers who have vested rights to health coverage under their collective bargaining agreements could raise particularly strong legal challenges to SB 0001 or other legislation that would eliminate their health coverage as a consequence of their refusal to surrender their vested pension rights.“Moreover, an ‘agreement’ extracted from a retiree on the threat of losing his or her health coverage would hardly be the sort of voluntary undertaking that is necessary for a valid contractual modification. As the Illinois Appellate Court has explained, ‘[I]t is well settled that a contract, once made, must be performed according to its terms and that any modification of those terms must be made by mutual assent and for consideration’ (7)…“More fundamentally, Part B of SB 0001 and similar legislation effectively are mechanisms for circumventing the Pension Protection Clause. As explained inKraus v. Board of Trustees of Police Pension Fund of the Village of Niles, 72Ill. App. 3d 833, 849 (1979), legislation ‘which has an incidental effect on the pensions which employees would ultimately receive, is not prohibited’ if it is ‘directed toward another aim.’ Conversely, because Part B is directed specifically toward penalizing pension annuitants, it is an impermissible end-run around the Pension Protection Clause. Similar end-runs around the Pension Protection Clause are equally impermissible” (8).