200+ retired Chicago firefighters accuse pension board of shorting them owed COLA boosts

By Jonathan Bilyk | Apr 19, 2017

A group of more than 200, 60-62-year-old retired Chicago firefighters have filed suit against their retirement pension board, accusing the board of wrongly interpreting a state law intended to give them retroactive benefits increases, shorting them the automatic 3 percent annuity raises they say they are owed every year under the law.

On April 6, the firefighters filed a putative class action complaint in Cook County Circuit Court against the Retirement Board of the Fireman’s Annuity and Benefit Fund of Chicago, asking the court to order the fund to boost their annuities by 3-21 percent, depending on how long particular firefighters have been retired.

The complaint centers on actions the Retirement Board took in early 2017 in response to the passage of a new state law, known as Public Act No. 99-0905, which rewrote portions of the state pension code to allow certain retired firefighters to secure greater pension benefits, by recalculating their automatic annual cost of living adjustments (COLA) for their initial retirement years.

Under the previous law, the complaint noted, firefighters born in 1955 or later received an annual automatic COLA increase of 1.5 percent, beginning when they reached age 60. They were also subject to a maximum total increase of 30 percent.

However, under the new law, which the Democrat-dominated General Assembly passed in late 2016 over the veto of Illinois Gov. Bruce Rauner, retirees, who had been born before 1966, contended they were now entitled to receive a 3 percent automatic annual increase for each year they were retired after their 55th birthday, and were no longer subject to any cap, whether or not they had already received their initial automatic annual increase when they turned 60 years old.

The lawsuit, however, alleged the Retirement Board decided to interpret the law in such a way that it denied the benefits increase to retired firefighters who had already received their initial 1.5 percent increase, posting in a newsletter that the board had found “retirees born before Jan. 1, 1966, who had already received an initial annual automatic increase of 1.5 percent are not entitled to any additional retroactive increase for either the 3 percent initial increase or the 3 percent automatic increase for every year after age 55 that they had been retired.”

The firefighters were formally notified of that decision in March 2017.

The firefighters’ lawsuit indicated the board took that action despite receiving letters and messages from state lawmakers and lawyers for retired firefighters asserting the pension boosts were intended to apply retroactively to all retired firefighters born between 1955-1966, whether or not they had already received their initial 1.5 percent COLA increases.

The retired firefighters said the decision cost some retirees, who had been retired since 2005-06,  benefit increases of 18-21 percent, instead awarding the retirees automatic annual increases of 3 percent, beginning in January 2017.

The lawsuit asks the court to certify a class of all retired Chicago firefighters born in 1955-1956, who retired before Jan. 1, 2016. The lawsuit estimated that would include about 214 firefighter retirees.

The complaint asks the court to order the board to reverse its decision, and award the approximately 214 retirees affected by the decision “all… their losses suffered since Jan. 1, 2017,” with interest, plus attorney fees.

The retired firefighters are represented in the action by attorneys Patrick E. Deady and Robert S. Sugarman, of the firm of Hogan Marren Babbo & Rose Ltd., of Chicago.

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Hogan Marren Babbo & Rose, Ltd.

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