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Ill. State Employees' Assn. v. Mccarter

FEBRUARY 14, 1973.

ILLINOIS STATE EMPLOYEES' ASSOCIATION ET AL., PLAINTIFFS-APPELLEES,

v.

JOHN MCCARTER, DIRECTOR OF THE DEPARTMENT OF FINANCE, DEFENDANT-APPELLANT — (BOARD OF TRUSTEES OF THE STATE EMPLOYEES' RETIREMENT SYSTEM OF ILLINOIS ET AL., DEFENDANTS.) THE PEOPLE EX REL. COUNCIL 34, AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO, ET AL., PETITIONERS-APPELLEES,

v.

BOARD OF TRUSTEES OF THE STATE EMPLOYEES' RETIREMENT SYSTEM, RESPONDENT.



APPEAL from the Circuit Court of Sangamon County; the Hon. WILLIAM H. CHAMBERLAIN, Judge, presiding.

MR. PRESIDING JUSTICE CRAVEN DELIVERED THE OPINION OF THE COURT:

This appeal is from two consolidated causes: the first filed being a complaint for injunction in case No. 526-71, against John McCarter, Director of the Department of Finance of the State of Illinois and the Board of Trustees of the State Employees' Retirement System of the State of Illinois, and A.A. Weinberg individually and as its actuary, by the Illinois State Employees' Association, a voluntary not-for-profit corporation, and Dean W. Foltz and other individuals as participants in the State Employees' Retirement System of Illinois, individually and on behalf of all members of the Illinois State Employees' Association; the second filed being a mandamus proceeding in case No. 542-71 by Illinois State Employees' Union, People of the State of Illinois ex rel. Council 34 of American Federation of State, County and Municipal Employees, AFL-CIO, and several state employees praying that John W. McCarter as Acting Director of Finance of the State of Illinois be required to (1) immediately rescind a directive to state agencies to make contributions to the Illinois State Retirement System at 4.80% of payroll, rather than at 5.54%; (2) to discontinue any further efforts or actions to prevent state agencies from making contributions at 5.54% of payroll, the rate established by the actuary of the Illinois State Retirement System; and (3) to approve all vouchers submitted to him for approval based upon 5.54% contribution rate.

The Attorney General for the State of Illinois moved to consolidate the two actions, which motion of consolidation was granted by the trial court.

Thereafter, the Attorney General filed an answer for all defendants in No. 526-71, except for John McCarter, admitting all of the essential elements of the complaint. He also filed an answer for the defendants in No. 542-71, except for John McCarter, admitting all of the essential elements of the complaint.

John McCarter, Jr., individually and as Director of the Department of Finance of the State of Illinois and as member of the Board of Trustees of the State Employees' Retirement System by separate counsel filed a motion to dismiss the consolidated complaint.

A motion for summary judgment was granted against the Board of Trustees of the State Employees' Retirement System of the State of Illinois. An order was entered against the board to take all necessary action with sixty days to make effective its order that the amount of State contribution be in the amount of 5.54% of the employees' base pay.

In February 1972, a petition for rule to show cause for contempt against defendant was filed. This was denied and leave granted to file a mandamus action against McCarter. Petition for mandamus was filed. McCarter moved to strike the petition for mandamus. Upon hearing, the writ of mandamus was granted. Appeal here is from the order directing the writ of mandamus to issue.

Appellant McCarter contends that the State Finance Act imposes a discretionary duty upon him as Director of Finance, the exercise of which cannot be interfered with by mandamus, and that plaintiffs have no capacity or standing to initiate or pursue the mandamus proceeding.

Appellant contends that section 35.3 of the Civil Administrative Code of Illinois (Ill. Rev. Stat. 1971, ch. 127, par. 35.3) places the duty on the Director of Finance to "place financial responsibility on state agencies and to hold them accountable for the proper discharge of this responsibility." Thus, he contends the discretionary exercise of this statutory duty is not subject to judicial interference by mandamus. In support of this he cites the fact that after the enactment of the above statute, the legislature created the Bureau of the Budget, effective July 1, 1970, and gave it pre-appropriation responsibilities. Thus, he contends that since section 35.3 was not thereafter changed, it must have been intended by the legislature that the Director of Finance be left with a requirement to protect the cash flow characteristics of the general revenue fund against insolvency and to so order the priorities of state agencies that essential state services will not have to be summarily suspended because of the absence of funds (not appropriations).

An analysis and study of the applicable provisions of the Act creating the State Employee's Retirement System of Illinois (Ill. Rev. Stat., ch. 108 1/2, pars. 14-101, et seq.), shows a legislative intent to create a retirement and benefit system to provide retirement annuities and other benefits for employees of the State of Illinois. Its purpose, expressed in section 14-102, is to provide an orderly means whereby aged or disabled employees may be retired from active service, without prejudice or hardship, and to enable the employees to accumulate reserves for themselves and their dependents for old age, disability, death and termination of employment, thus effecting economy and efficiency in the administration of the State Government.

Section 14-169 of the Act provides for the funding of the retirement and benefit system. It requires the State to meet the requirements of the System by appropriations to each department, or from monies otherwise made available for its purpose, along with member contributions, interest income from investments and other income received by the System. It specifically requires that such sources of funds "shall be sufficient to meet the cost of maintaining and administering the system on a funded basis in accordance with actuarial reserve requirements." (Emphasis added.) Section 14-169 then sets up a formula for the State contributions required to be appropriated for any fiscal year as "at least be equal to the annual average of the projected expenditures for a period of 10 years next following the year for which a contribution is to be made" for certain thereinafter specified purposes. It then provides that such State contributions shall be determined by the actuary and approved by the board, based upon such sum formula. Other factors the actuary and board are to consider are set forth in the section.

Section 14-170 of the System Act specifically provides it is the obligation of the State of Illinois to pay the required department contributions, all allowance, annuities and benefits granted under the Act, and all expenses of administration of the System.

Section 14-186 of the System Act sets forth the duties of the actuary of the system, which include the annual determination of the amount of contributions required by the State under the Act, and certification of such amount to the Board. Section 14-182 of the System Act requires the Board to certify to each department in even numbered years the per cent of contribution, based upon employees' compensation, required to be paid to the System during the succeeding fiscal biennium, upon recommendation of the actuary.

Section 14-189 of the System Act requires the Director of Finance to approve the payrolls, if they are prepared in ...


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