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SUAA Mini Briefing 09.04.2014

SUAA Mini Briefing
September 4, 2014

Court Strikes Discovery Dates in Anticipation of Ruling on Pension Clause Claims

In July, the Court had set discovery deadlines which included an August 29 date for the State to provide its six expert reports, an October 31 deadline for the Plaintiffs to provide their expert reports. Today the Court struck the October 31deadline instead indicating an inclination to address motions filed by the Plaintiffs groups.

On July 3, the Illinois Supreme Court issued a sweeping opinion reinstating the Kanerva case. SUAA filed several motions in that case in August including a Petition to intervene as a Plaintiff, a Motion for Judgment, a Motion for Injunctive Relief to stop the deductions for health care premiums, and a Motion for Class Certification so that the monies already taken from SURS members pursuant to Public Act 97-695 could be recovered. The Motion for Judgment specifically explained that the Pension Clause – both as applied to health care premiums, and as applied to pension benefits more generally – was not subject to the State’s “Reserved Sovereign Powers” defense.

In addition, SUAA filed a Motion to Strike the Affirmative Defense in the general pension litigation as a matter of law. (The remaining groups filed a Motion for Judgment on the Pleadings. As a technical matter that motion would have to assume that the State’s factual assertions are correct. As a result, SUAA did not sign that motion.)

The Court clearly read all of these motions, including the ones filed by SUAA and others in the Kanerva case. In an effort to streamline the case, the Court agreed to strike the deadlines for Plaintiffs to file their expert reports and instead focused on the State’s responses to the pending motions and the State’s own Motion for Summary Judgment. Rather than setting deadlines for the Plaintiffs to respond to the State’s filings, the Court set a status call for October 8, by which time it will have reviewed the materials filed by the State and will be in a position to hear from the Plaintiffs as to how much time is needed to file responsive papers.

Today’s comments by the Court are a strong indication that the Pension Reform Act is headed for defeat. The hard work that SUAA has put into this case is likely to pay considerable dividends. But we must not rest on our laurels. There remains considerable work to do even on this case. More importantly, we must remember that the battle for pension reform has just begun. We must be prepared for the battles to come as the State tries other ways to attack its obligations to the pension systems and their members.

Please consider contributing to the SUAA Legal Fund. Check out the SUAA website for details regarding the pension lawsuit along with how to make a contribution. You are welcome to pass this and all other information to your colleagues.

Linda L. Brookhart
Executive Director
State Universities Annuitants Association

 

 
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Posted by on September 5, 2014 in Courts, Health Insurance, Legal, Legislation

 

SUAA Win Boost to Pension Reform

SUAA Mini Briefing
August 28, 2014

The State Universities Annuitants Association won a big victory today for SURS university retirees who were seeing deductions from their pension distribution checks for state health insurance premiums. The Sangamon County Circuit Court granted a motion filed by SUAA to enjoin the State from deducting money from pension checks of university employees to cover state healthcare premiums.

Last October, with the Court having determined that state health insurance premiums were not pension benefits protected by the Pension Clause, SUAA pursued the issue in Federal Court on due process grounds. In July, the Illinois Supreme Court reversed the Sangamon County Court finding that the state health insurance premiums are indeed pension benefits and therefore protected by the Pension Clause.

Two weeks ago, SUAA filed a motion to intervene before the Sangamon County Court in the Kanerva case along with a motion for a preliminary injunction to stop the State from making the deductions to SURS university retirees’ pension distribution checks which the Court granted. (Other motions for permanent injunction were filed by other Plaintiffs but the Court was not yet prepared to grant permanent injunctive relief.)

Two weeks ago SUAA prevailed upon the Department of Central Management Services to withdraw the emergency rule which doubled the amount of deductions being made since July. With today’s ruling, the State is required to stop the deductions altogether. However, it may take the State a month or so to catch-up as pension checks are already in the process of being sent for September. Please take note that this applies to deductions being made for statehealth insurance premiums and today’s ruling does not affect community college retirees.)

This victory today is also a huge boost to the challenge against general pension reform. Last week SUAA filed a motion in the general pension case arguing that pension benefits were simply not subject to deductions at all. In granting the injunctive relief today, the Court gave a clear indication that pension benefits generally cannot be violated. You can be sure that this point will be made to the judge in the general pension case next week which will have a huge impact on the rights of all SURS members – community college employees and university employees alike.

Meanwhile, the next step in this case is to recover the monies already taken. The Court has given the State until October 13 to file its response to SUAA’s Motion for Judgment and Permanent Injunction and SUAA has 21 days after that (November 3) to file any reply. The Court has set the next hearing for November 21st at which time it will rule on the various motions for judgment and permanent injunction.

SUAA has also filed a motion for class certification to facilitate collecting monies taken from SURS members for state health insurance premiums and returning them. The Court was not prepared to address that motion at this time preferring to see what the State had to say about the other motions. SUAA attorney Aaron Maduff did reserve the right to take discovery to find the monies already taken if necessary, a point of which the Judge took due notice.

SUAA is represented by the Law Offices of Maduff & Maduff, LLC, www.madufflaw.com, and John D. Carr.

Linda L. Brookhart

Executive Director

State Universities Annuitants Association

 
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Posted by on September 2, 2014 in Courts, Health Insurance, Legal, Legislation, SUAA

 

Current Legal Actions: Motion in Kanerva Case

Linked below is a copy of a motion that has been filed in the Kanerva case, which is the case on whether the state can begin charging for health care for retirees. Remember that a promise was made to reduce healthcare payments by 5% for each year a person worked. The Illinois Supreme Court has ruled that this promise is part of the pension benefit covered by the ILL constitution.

This motion was filed by other plaintiffs on this issue. SUAA is filing a similar motion.

motion.pdf

 
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Posted by on August 25, 2014 in Legal

 

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GSU SUAA Meetings and Fall Focus

GSU SUAA meets monthly on the third Thursday of the month at noon in the GSU cafeteria. All are welcome to attend. Minutes for the August meeting can be found by clicking here.

The focus this fall is twofold.

1. For each legislative district in which a GSU SUAA member resides, we would like to organize a visit with the candidates prior to the election. The GSU SUAA Board is compiling materials that can be shared with the candidates. Let us know if you would be willing to join a group in your district.

2. Our chapter has about 350 members. We would like to increase the membership to 400 because then we would have an additional Director on the statewide Board that governs SUAA. If you have ideas on how to increase membership or would like to be active in that effort, please contact Colleen Rock at ckrock73.

Finally, don’t forget to donate to the Legal Fund at www.suaa.org. We hope to see you at the September meeting.

 

Minutes from 7/17/14 GSU SUAA Meeting

Click here to read/download the minutes from the July 17, 2014 GSU SUAA meeting.

(The file is in MS Word .doc format.)

 
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Posted by on August 21, 2014 in GSU SUAA, Meetings

 

Further Health Care Clarification

Someone asked for further clarification of the communications from SUAA on the health care costs for retirees. It is a complicated situation that I will try to unravel.

A couple of years ago, a law was passed to require retirees to pay some of their health care costs. CMS was charged with setting the rates. AFSCME negotiated that retirees on Medicare would pay 1% of their pension in year 1 and 2% in year 2. Non Medicare retirees would pay 2% and 4%, respectively. Payments began July 1, 2013. The higher rates were scheduled to go into effect July 1, 2014. SURS implemented the new rates in July. Other events, however, have occurred to call the health care premiums into question.

A court case was filed challenging whether the state can begin charging retirees for health care after promising a 5% reduction in healthcare cost for each year of employment. The lower court ruled that they did not need to consider the question because health care benefits were not part of the pension benefit and not protected by the IL constitution. The Supreme Court then heard the case and ruled that health care premium promises in fact are part of the pension benefit and must be viewed in terms of the constitutional protections. They sent the case back to the lower court to reconsider. The question now being, ‘can the state change this part of the pension in view of the protection for pensions that is provided by the IL constitution?’

As you know, last year a law was passed with drastic implications for SURS members. It reduces the annual automatic increase (COLA) and changes the retirement terms for current employees. SUAA, as well as others, filed a case challenging this law. A judge issued a stay on the implementation of that law pending a ruling by the courts. A fundamental issue in the case is the constitutionality of reducing pension benefits. If the courts find this law unconstitutional, they probably will also find the the former law on health care benefits also to be unconstitutional.

In view of this, SUAA asked that the increase in health care payments not be implemented. They were successful. The lower payment rates that were initiated last year will continue to be in effect. If you saw a reduction in your pension payment in July because of the application of the 2% or 4% rate, you should see a decrease back to the former amount based of the 1% or 2%.

In addition, SUAA plans to ask the court to issue an injunction to stop these deductions for health insurance until the constitutionality of the law is determined. The rationale is that the law may well be found unconstitutional, and these premiums would have been collected in error. It is doubtful that the state will return the past premiums, but the court could insist that the state stop collecting them until the case is decided.

 
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Posted by on August 18, 2014 in Uncategorized

 

UAA News Alert Follow-Up

August 14, 2014

To All SUAA Members and Friends!

Some of you were confused by yesterday’s email – SUAA News Alert! “CMS Withdraws New Rule Doubling Pension Deductions at SUAA Urging”

For clarification –

The Department of Central Management Services (CMS) enacted an emergency rule in July which went into effect immediately. That rule caused deductions for health insurance to double (1% to 2% for retirees on Medicare and 2% to 4% for retirees without Medicare). Because the rule went into effect immediately, you will have already seen those deductions on your recent pension checks.

Normally, an emergency rule goes into effect and remains in effect for 120 days. During that time, the Joint Committee on Administrative Rules (JCAR) takes comments on the rule. At the end of that period, JCAR either objects to the rule or approves it.

However, in light of Kanerva v. Weems, SUAA Executive Director Linda Brookhart sent a letter to Governor Quinn’s office complaining that the rule was inappropriate. As a result, the emergency rule was placed on JCAR’s radar and set for an immediate review at its August 12, 2014 hearing. This is not a normal step in the process.

Once the rule went onto JCAR’s agenda, SUAA followed up on Ms. Brookhart’s original letter to the Governor’s Office with a second letter from SUAA’s attorney, Aaron Maduff. Mr. Maduff’s letter included a legal analysis of the Kanerva v. Weems opinion. Mr. Maduff’s letter went to both CMS and JCAR. On Monday, August 11, Mr. Maduff was contacted by one of the JCAR members. At this time, Mr. Maduff provided a detailed explanation of why SUAA believed the rule was inappropriate in light of Kanerva.

CMS confirms that it has indeed withdrawn the emergency rule and expects to be publishing a new rule on August 22nd. This does not mean that a wand will be waived to change your health insurance withholding for July and August. It also does not change the 1% and 2% deduction that has been occurring since July of 2013. What should happen is that on your next pension check you should see a return to the 1% and 2% deduction.

Yesterday, SUAA filed a Petition to Intervene in the Kanerva case that has now been returned to the Sangamon County Court. SUAA intends to argue that, in light of the Supreme Court’s opinion, the Sangamon County Court should order that all deductions for health insurance premiums (i.e. the 1% and 2% that is still in effect) should cease. Legal battles like this, however, can take time and effort and there is no guarantee that those deductions will cease immediately. We do hope that we will prevail on the Court to do so within the next few months.

As always, SUAA will keep you updated as more information becomes available.

SUAA is represented by the Law Offices of Maduff & Maduff, LLC and by John D. Carr.

(A timeline of filings etc. with be provided soon)

Linda L. Brookhart

Executive Director

State Universities Annuitants Association

 
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Posted by on August 14, 2014 in Uncategorized

 
 
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