July 03, 2014

State Supreme Court says retiree health benefits are protected by constitution

In a major victory for state of Illinois and state university retirees, the Illinois Supreme Court has reversed a lower court’s dismissal of lawsuits challenging SB 1313, which effectively repealed promised retiree health care benefits. One of the suits was brought by AFSCME and its union partners – the IFT, the FOP and INA.

The court found that health care benefits for retired state and university employees are protected by the pension protection clause of the state constitution (Article XIII, Section 5) and cannot be diminished or impaired. The court sent the case back to Circuit Court for further proceedings.

“Giving the language of article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care, must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provision’s protections,” the court wrote in its opinion.

"The Supreme Court ruled today that men and women who work to provide essential public services – protecting children from abuse, keeping criminals locked up, caring for the most vulnerable and more – can count on the Illinois Constitution to mean what it says," Council 31 Executive Director Henry Bayer said. "Retirement security, including affordable health care and a modest pension, cannot be revoked by politicians.

"Unions representing public employees and retirees have stood virtually alone against political and corporate-funded attacks on retirement security," Bayer added. "Time and again we have urged legislators to respect the constitution they are sworn to uphold, and to work together with us to develop fair and constitutional solutions to the state's very real fiscal challenges. We remain ready to work in good faith with anyone to do so."

The opinion, and its validation of the pension protection clause, is an encouraging sign as AFSCME and other unions seek to overturn laws that would cut pension benefits for state of Illinois and state university retirees (SB 1 –Public Act 98-599) and City of Chicago retirees (SB 1922).

The court ruled that a lower court was wrong to dismiss the four consolidated lawsuits which argued that SB 1313 was unconstitutional. That legislation diminished retiree health care benefits by allowing the state to impose new and higher premium costs on current retirees.

In its opinion, the court indicated it supported the “plain language” of the pension protection clause without “restrictions or limitations” – an interpretation that includes health care benefits.

“For us to hold that such benefits are not among the benefits of membership protected by the constitution would require us to construe article XIII, section 5, in a way that the plain language of the provision does not support,” the court wrote. “We may not rewrite the pension protection clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.”

The court noted that the pension protection clause “was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them,” indicating the state is obligated to live up to is promises.

“When the constitution was written by the framers and approved by voters, they wanted to avoid a situation where politicians misspent money and then claimed the state couldn't afford to provide the modest pension retirees earned or affordable health insurance they were promised. It's a false choice,” Bayer said. “When a billionaire like Bruce Rauner takes home $55 million and ducks paying taxes, the problem isn't the $24,000 pension earned by a child protection worker or affordable health care for a retired correctional officer.”

AFSCME attorneys will be issuing a more detailed analysis of the impact of the Supreme Court’s ruling in the coming days.

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