This morning, the Illinois Supreme Court (ISC) issued its opinion in the case claiming that retiree healthcare charges are unconstitutional. The case is Kanerva vs. Weems, and the suits were filed in response to SB1313, which allowed CMS to implement a premium structure for retiree healthcare.
My impression is that this ruling is not only a victory for retirees in regard to healthcare premiums, but also a very positive indicator that the pending suits over pension reform may also be decided in our favor Let me caution, however, that the healthcare case is being returned to the lower court that was overruled by the ISC, so the outcome is not yet final. In other words, don’t count on seeing the charges for healthcare premiums removed from your monthly benefit check just yet.
Here are some key excerpts from the ISC opinion, compliments of Capitol Fax.
"Given 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."
Referring to the pension protection clause itself and the intent of its authors, the opinion continues:
"…If they had intended to protect only core pension annuity benefits and to exclude the various other benefits state employees were and are entitled to receive as a result of membership in the State’s pensions systems, the drafters could have so specified. But they did not….the drafters chose expansive language that goes beyond annuities and the terms of the Pension Code, defining the range of protected benefits broadly to encompass those attendant to membership in the State’s retirement systems. Then, as now, subsidized health care was one of those 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. 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."
"In light of the constitutional debates, we have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them." (emphasis added by Capitol Fax, along with this comment — "The new pension law sure appears dead to me."
"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."
And wrapping up,
"Finally, we point out again a fundamental principle noted at the outset of our discussion. 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. This rule of construction applies with equal force to our interpretation of the pension protection provisions set forth in article XIII, section 5. Accordingly, to the extent that there may be any remaining doubt regarding the meaning or effect of those provisions, we are obliged to resolve that doubt in favor of the members of the State’s public retirement systems."
Here’s the link to the full opinion — http://www.state.il.us/court/Opinions/SupremeCourt/2014/115811.pdf
By the time I learned of this encouraging development, others had already issued comments, some of which are of particular interest.
Amanda Kass, the speaker at our annual meeting two weeks ago, is quoted in Crain’s Chicago Business as saying that it seems unlikely that the court will not consider the COLA to be part of the pension and therefore covered by the constitutional protection clause.
From Senate President John Cullerton:
"Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says. The Court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve. The Clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly. If the Court’s decision is predictive, the challenge of reforming our pension systems will remain. As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution."
"AFSCME is very pleased that the Supreme Court has agreed with us that affordable health care in retirement, a promise made to tens of thousands of Illinois public servants in exchange for their service, is protected by the constitution."
“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,” AFSCME 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.”
SUAA will provide further information after having time to review the entire opinion.
Today’s ruling should further brighten our celebration of our nation’s birthday tomorrow.