Appeals court: One-time retirement buyout pay bumps can't be counted when calculating pensions

By Jonathan Bilyk | Apr 6, 2016

A state appeals court has ruled state law does not allow pension boards to include special buyout-generated pay bumps at the end of a public worker's career to be included in calculating a retiree’s pension, unless the buyout is appropriated through an ordinance.

On March 17, a three-justice panel of the Illinois First District Appellate Court upheld the ruling of Cook County Circuit Judge Moshe Jacobius, who had held the firefighters’ pension board in suburban Chicago Ridge had wrongly included a 20 percent buyout when it calculated the pension owed to a retiring Chicago Ridge firefighter.

The appellate opinion was authored by Justice Nathaniel R. Howse Jr., with justices David Ellis and Cynthia Y. Cobbs concurring.

Jacobius had ruled in favor of the village of Chicago Ridge in its dispute with its firefighters’ pension board over how much money in retirement income was owed to firefighter David Bricker.

According to court documents, Bricker retired in 2014 at the age of 50, after 25 years and 9 months of service in the village’s fire department. Based on the rules governing the village’s firefighters’ pension system, Bricker was eligible to receive a pension equal to about 64 percent of his pensionable salary per year.

The village had calculated that pensionable salary at $95,156. However, just before Bricker began his retirement, he took advantage of a buyout plan under the Chicago Ridge firefighters’ collective bargaining agreement (CBA), under which firefighters who are at least 50 years old and have worked for the department for 25 years can receive a 20 percent increase in pay at the time they retire, paid per hour on the final day of work. The pension board then purportedly included that buyout amount in pegging Bricker’s pensionable salary at $110,278.

The village then appealed that decision to Cook County Circuit Court, asserting the pension board’s decision was “clearly erroneous” in including a “one-time, one-day award” that was awarded under a CBA, and was not paid under an appropriations ordinance enacted by the Chicago Ridge village board.

In court, the pension board argued the buyout should have been included because the 20 percent buyout was “a longevity award,” based on Bricker’s length of service, under the CBA, and the Illinois Pension Code “does not bar end-of-the-year longevity bonuses.”

The courts, however, sided with the village, particularly agreeing that, to be calculated in a pensionable salary, such buyouts must be approved by in an appropriations ordinance enacted by a village board or city council, and not just a CBA.

The pension board argued the CBA, which was approved by a board resolution, should have the same authority as an appropriations ordinance for the purposes of satisfying requirements under Illinois pension law. But first Jacobius and then the appellate justices said the law’s text is quite clear: An ordinance is required to allow such buyouts to be included in calculating pensionable salary.

“When an act is required to be done by ordinance, anything less, such as a resolution or referendum, is not sufficient,” the justices wrote.

According to Cook County court records, the village of Chicago Ridge was represented in the action by attorney Nicholas Cetwinski, of Woodridge. The pension board was represented by attorney Cary J. Collins, of the firm of Collins & Radja, of Hoffman Estates.

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Collins & Radja Illinois First District Appellate Court Law Office of Nicholas Cetwinski Village of Chicago Ridge

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