IL Supreme Court Rules Health Benefits Part of Pension

The IL Supreme Court today ruled that retirement health care benefits within the State pension systems are to be considered part of pension benefits that can not be constitutionally diminished or reduced.

Paragraph 40 [Emphasis mine] ~ Although some of the benefits are governed by a group health insurance statute and others are covered by the Pension Code, eligibility for all of the benefits is limited to, conditioned on, and flows directly from membership in one of the State’s various public pension systems. 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.

Paragraph 55 [Emphasis mine] ~ Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.

The conclusion of the case makes it pretty evident that the so called pension reform bill passed in the last session is dead on arrival in the courts.

Paragraph 57 [Emphasis mine] ~ For the foregoing reasons, we conclude that the State’s provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning of article XIII, section 5, of the Illinois  Constitution, and the General Assembly was precluded from diminishing or impairing  that benefit for those employees, annuitants, and survivors whose rights were governed by the version of section 10 of the Group Insurance Act that was in effect prior to the enactment of Public Act 97-695. Accordingly, the circuit court erred in dismissing plaintiffs’ claims that Public Act 97-695 is void and unenforceable under article XIII, section 5.

For several years, myself and others have been advocating fixing the pensions for new or non-vested employees to stop the bleeding in the system while a plan could be developed to fix/fund the current system.  My compromise plan can be found here.  To date none of the legislators on either side of the aisle have been really interested in fixing the long term problem while solving the short term needs.  They continue to want a comprehensive plan which has lead to nothing but watered down solutions that now appear to be unconstitutional  They have now wasted many more years and have made the problem even more dire by their refusal to act appropriately. The all or nothing approach is far to prevalent in Springfield.