Appeal from the Circuit Court of Cook County; the Hon. James
C. Murray, Judge, presiding.
JUSTICE LINN DELIVERED THE OPINION OF THE COURT:
This is an appeal from two rulings by the circuit court of Cook County, the first of which upheld the Schiller Park Police Pension Board's denial of Edward J. Borg's application for pension benefits and the second of which overturned the Board's denial of a refund of the money Borg had contributed to the pension fund. On appeal, Borg argues that the felony divestiture provision of the Illinois Pension Code (Ill. Rev. Stat. 1981, ch. 108 1/2, par. 3-147) relied on by the Board to deny him pension benefits is inapplicable to him because he became a policeman before July 11, 1955. The Board argues that because Borg does not meet the statutory requirements of the Illinois Pension Code (Ill. Rev. Stat. 1981, ch. 108 1/2, par. 3-124), he is not entitled to a refund of his contributions.
We reverse the denial of pension benefits to Borg, and, accordingly, we do not reach the issue of whether Borg would be entitled to a refund of his own contributions were we to affirm.
Edward J. Borg began service as a Schiller Park police officer on August 18, 1952. He was appointed chief of police on August 17, 1953. On April 16, 1957, the village of Schiller Park adopted the Fire and Police Commissioners Act, under which a police pension fund was established on August 20, 1959. Mandatory salary withholding of 7% for contribution to the pension fund began in April 1961. On January 20, 1975, Borg made an additional contribution to the police fund to make his participation in the fund retroactive to August 20, 1959. He has contributed $24,197.62 to the plan.
On April 7, 1981, Borg resigned from the Schiller Park police department and applied to the village's Police Pension Board for his pension benefits. On April 8, 1981, he pleaded guilty in Federal court to one count of an indictment charging him with extortion (18 U.S.C. § 1951), a service-related felony. On May 28, 1981, the Board denied Borg's application for pension benefits because they believed the felony divestiture provision of the Policeman's Pension Fund article of the Illinois Pension Code (Ill. Rev. Stat. 1981, ch. 108 1/2, par. 3-147) applied to Borg.
On June 9, 1981, Borg filed a complaint for administrative review in the circuit court of Cook County, arguing that the relief provision of section 3-147 applied to him and that the Board's decision to deny him pension benefits was therefore erroneous. On the authority of Kerner v. State Employees' Retirement System (1977), 53 Ill. App.3d 747, 368 N.E.2d 1118, aff'd (1978), 72 Ill.2d 507, 382 N.E.2d 243, the circuit court, on December 7, 1981, affirmed the Board's denial of pension benefits. Borg then applied for a refund of the contributions he had made to the pension fund, which the Board also denied. On December 18, 1981, the circuit court permitted Borg to amend his complaint to add a count seeking review of the denial of his refund. On January 22, 1982, the court held that Borg was entitled to a refund. A check in the amount of the refund was issued by the Board and tendered to Borg the following day. Borg returned the Board's check with a letter stating that he intended to appeal the trial court's decision affirming the denial of his pension.
The statute at issue in this appeal provides:
"None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as a policeman.
This section shall not operate to impair any contract or vested right heretofore acquired under any law or laws contained in this Article, nor to preclude the right to a refund.
All future entrants entering service subsequent to July 11, 1955 shall be deemed to have consented to the provisions of this section as a condition of coverage." (Ill. Rev. Stat. 1981, ch. 108 1/2, par. 3-147.)
The Board applied the first paragraph of this section to deny benefits to Borg because he had pleaded guilty to a service-related felony. Borg argues that the divestiture provision does not apply to him because the relief provision of the third paragraph is applicable to his situation. We agree.
Our research has disclosed no precedent decision in a factual situation like that presented here: the pension applicant was employed before July 11, 1955, but the pension fund to which he contributed was established after that date. The authorities cited by both parties are therefore distinguishable on their facts. In Kerner v. State Employees' Retirement System (1977), 53 Ill. App.3d 747, 368 N.E.2d 1118, aff'd (1978), 72 Ill.2d 507, 382 N.E.2d 243, the applicant was employed and acquired pension rights subsequent to the date specified in the saving clause of the section at issue (Ill. Rev. Stat. 1975, ch. 108 1/2, par. 14-199), which is essentially the same as the section at issue in the case at bar. In Shanahan v. Policemen's Annuity & Benefit Fund (1976), 43 Ill. App.3d 543, 357 N.E.2d 582, the applicants became participants in their benefit ...