About 6,350 former CTA workers, or in some cases, their surviving heirs, could be in line for payouts worth thousands of dollars apiece, while their lawyers could collect about $27 million, under an $80 million settlement to end a class action accusing the transit agency’s pension plan administrators of violating the Illinois state constitution’s pension protection clause for government workers by making retirees pay for some of their health insurance.
On Oct. 23, a Cook County judge is scheduled to hold a hearing on whether to grant final approval to the settlement deal.
Cook County Judge Cecelia A. Horan granted preliminary approval to the deal in May.
Anyone who believes the deal should not be approved has until Sept. 25 to lodge an objection with the court.
The settlement would end the class action lawsuit that has moved throughout every level of the state courts in the past 12 years, including a stop at the Illinois Supreme Court.
The case first landed in Cook County Circuit Court in 2011, when two groups – one, including former CTA workers who retired before 2007 and another including current CTA workers and more recent retirees – filed suit against the CTA’s retirement plan administrators. The lawsuit claimed the CTA retirement board violated retirees’ rights under both the collective bargaining agreement (CBA) under which they had retired and the Illinois state constitution by moving to require CTA retirees to pay for a portion of their health insurance premiums, when previously they did not.
A Cook County judge initially tossed the actions, ruling that their benefits could still be governed under the terms of a CBA negotiated by their union, and finding that the state constitution’s pension protection clause should not stop the CTA from being able to modify retirees’ health benefits.
The case landed before the Illinois Supreme Court four years later. In 2016, the state high court came down heavily in favor of the CTA retirees. The high court ruled the health benefits should be protected under the state constitution’s language forbidding public bodies, like the CTA, from altering the terms of public workers’ retirement benefits in ways that would “diminish or impair” those benefits.
In that decision, the court’s majority indicated collective bargaining could be used to defend benefits changes which may otherwise conflict with current workers’ constitutional pension rights.
But the high court said retirees who begin to collect benefits before a CBA is altered hold constitutionally protected “vested” benefits which cannot be changed by a past employer or retirement board.
With that decision in hand, the case returned to Cook County court, where the court refused further attempts by the CTA retirement plan administrators to dismiss the class action.
In 2020, over the objections of the CTA plan administrators, a Cook County judge certified a class of plaintiffs that would include all CTA retirees who were hired before Sept. 5, 2001, and retired before Jan. 1, 2007.
The court also appointed attorneys from the firm of Robinson Curley P.C., of Chicago, as class counsel, leading the case on behalf of the retirees.
According to court documents, those attorneys for the retirees presented the settlement agreement to the court in early May 2023, after eight months of settlement negotiations.
Under the deal, the Retirement Plan for Chicago Transit Authority Employees and the Retiree Health Care Trust agreed to pay $80 million to settle the lawsuit.
The deal would allow the retirees’ lawyers to request attorneys’ fees worth one-third of the total settlement funds, or about $26.7 million. The settlement agreement asserted this would compensate the lawyers for “their work on the case for 15 years.”
The lawyers are also requesting $480,000 more to reimburse them for their costs.
That would leave about $53 million to be divided among the CTA retirees and the surviving heirs of those who died while the lawsuits worked through the courts.
Using simple math, retirees could be in line for an average payout of about $8,000 each. However, the settlement said the actual payout would be calculated under a plan of distribution contained in the settlement agreement.
That distribution plan would allow retirees to collect for the amounts they paid in health insurance premiums under the plan since 2009, as well as lesser sums, if they, at any point, elected not to pay the premiums, but could have.
Once total claims are collected, actual payments will be weighed against the $53 million net settlement fund. For instance, if total claims are worth $90 million, a retiree with a total claim valued at $25,000 would receive about $14,000 from the net settlement.
According to the settlement, retirees do not need to submit any documentation to back their claims, as the total will be determined based on CTA retirement plan records.
The retirees have been represented by attorney C. Philip Curley, of Robinson Curley PC.
The CTA Retiree Health Care Trust has been represented by attorney Kathleen A. Erhart, of Smith Gambrel & Russell, of Chicago.
The CTA Employees Retirement Plan has been represented by attorney Victoria R. Collado, of Burke Warren MacKay & Serritella, of Chicago.