MAJOR PENSION REFORM DEVELOPMENT
The Illinois Supreme Court has just released its decision in the Kanerva vs.Weems.
The PBPA was involved in this case on behalf of state employees and retirees who had their retiree health insurance benefits reduced by the General Assembly. Many of the affected employees retired based upon the promise of continued health benefits as part of their pension plan. From the Court’s decision –
“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. . . .
[F]inally, 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.”
THIS CASE IS BEING REFERRED TO BY STATEHOUSE OBSERVERS AS THE FINAL NAIL IN PENSION REFORM’S COFFIN.
We will see. . . .