Supreme Court Summaries

Opinion filed May 8, 2015

In re Pension Reform Litigation, 2015 IL 118585
Direct appeal from the circuit court of Sangamon County
JUSTICE KARMEIER delivered the judgment of the court, with opinion.
Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Burke, and
Theis concurred in the judgment and opinion.
In the fall of 2013, the General Assembly enacted a statute amending the
Illinois Pension Code to reduce the retirement annuity benefits of individuals who
first became members of four of the State of Illinois pension systems prior to
January 1, 2011. That enactment became effective on June 1, 2014. It was
challenged in five separate actions which were consolidated in the circuit court of
Sangamon County. That court declared the statute to be unconstitutional in its
entirety as a violation of the pension protection clause of the Illinois Constitution of
1970, and enforcement of the statute was permanently enjoined. The circuit court
stated that the State of Illinois made a constitutionally protected promise to its
employees concerning their pension benefits. Under established and
uncontroverted Illinois law, the State of Illinois cannot break that promise. Appeal
of this statutory invalidation lay directly to the Illinois Supreme Court.
The pension protection clause states that [m]embership 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.
Although it was argued in defense of the statute that the current financial
emergencies of the State of Illinois justify this measure as an exercise of police
power as a matter of reserved state sovereignty, the supreme court noted in this
decision that the States financial problems were also a concern when the
Constitution of 1970 was enacted and, in fact, drove the inclusion of the pension
protection clause at that time. The legislature cannot exercise a higher power than
that given by the state constitution itself. This outcome is supported by years of
legal precedent, as well as by Kanerva v. Weems, which, in July of 2014,
announced the supreme courts ruling that the constitutional pension protection
clause prohibited a statutory reduction in health care premium subsidies under State
retirement systems.
Even vendors to whom the State owes money because of the financial crisis are
entitled to interest on their unpaid bills. What the General Assembly has done is to
force retirees, alone, to bear public burdens which, in all fairness and justice, should
be borne by the public as a whole. No effort was made to distribute this financial
burden evenly among Illinoisans. A temporary increase in the rate of income tax,

allowing for additional revenue, was recently allowed by the legislature to lapse. It
cannot be said that there are no alternative remedies available to address these
financial difficulties.
The result reached in the circuit court was affirmed.