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BOSCO v. CHICAGO TRANSIT AUTHORITY

October 18, 2001

RONALD T. BOSCO, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
V.
CHICAGO TRANSIT AUTHORITY, DEFENDANT.



The opinion of the court was delivered by: Morton Denlow, United States Magistrate Judge.

    MEMORANDUM OPINION AND ORDER

This case raises an important issue concerning pension rights of current or former employees of the Chicago Transit Authority ("Plaintiffs" or "Employees"). They claim that the Chicago Transit Authority ("Defendant" or "CTA") wrongfully denied their bridge of service applications which would entitle them to greater pension benefits upon retirement.

This case comes before the Court by means of a trial on the papers in which the parties have submitted trial briefs, affidavits, depositions, and supporting exhibits which constitute the record in this case. See Morton Denlow, Trial on the Papers: An Alternative to Cross Motions for Summary, Judgment, Federal Lawyer, August 1999, at p. 30. See also, May v. Evansville-Vanderburgh Sch. Corp., 787 F.2d 1105, 1115-16 (7th Cir. 1986); Allen v. United Mine Workers of America, 726 F.2d 352, 353 (7th Cir. 1984); Acuff-Rose Music Inc. v. Jostens, Inc., 155 F.3d 140, 142 (2nd Cir. 1998); Nolan v. City of Chicago, 125 F. Supp.2d 324, 325 (N.D. III. 2000). The parties have agreed to proceed in this manner and to waive their right to present in court testimony. Oral argument was held on September 25, 2001.

The issues presented arise out of Plaintiffs' Verified Class Action Complaint for Violation of Civil Rights. Plaintiffs allege they have a vested property interest in their retirement benefits from their first and second tour of duty with the CTA. The CTA does not dispute that Plaintiffs are entitled to retirement benefits stemming from the Plaintiffs' second tour of duty; however, the CTA does dispute that Plaintiffs are entitled to retirement benefits stemming from their first tour of duty with the CTA.

The following constitute the Court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. To the extent certain findings may be deemed to be conclusions of law, they shall also be considered conclusions. Similarly, to the extent matters contained in the conclusions of law may be deemed to be findings of fact, they shall be considered findings.

I. FINDINGS OF FACT

A. Parties

1. Plaintiffs are current or former employees of the CTA. Each Plaintiff had two periods of service with the CTA. Their first period of service was separated from the second period of service by a time period greater than one year. (Def. Resp. ¶ 1).*fn1

2. The CTA is a duly organized body politic and corporate and a political subdivision of the State of Illinois created and existing under the Metropolitan Transit Authority Act, 70 ILCS 3605/1. et seq. (1992). (Def. Resp. ¶ 2). The governing and administrative body of the CIA is the seven-member Chicago Transit Board. 70 ILCS 3605/19. (Pl. Resp. ¶ 2).*fn2

3. Plaintiffs are or were management employees of the CTA. Managerial employees are eligible to participate in two retirement plans, the first is called the Retirement Plan for Chicago Transit Authority Employees ("Retirement Plan") and the second is called the Supplemental Retirement Plan ("Supp. Plan"). Furthermore, Plaintiffs are or will be eligible to receive benefits under the Retirement Plan and the Supp. Plan. (Def. Resp. ¶ 3).

B. Retirement Plan

4. Pursuant to a collective bargaining agreement, the CTA adopted its Retirement Plan effective June 1, 1949. The Retirement Plan has been amended from time to time. The Retirement Plan presented to this Court reflects amendments through December 23, 1993. The Retirement Plan covers all CTA employees, whether union members or not, who meet its requirements. (Def. Ex. 3).

5. The Retirement Plan established a Retirement Allowance Committee consisting of ten members. Five members are appointed by the CTA Board, four are appointed by the unions, and one member is appointed to represent the non-union employees. (Def. Ex. 3, ¶ 5.1). The Retirement Plan grants the following powers to the Retirement Allowance Committee:

(1) to make and enforce such rules and regulations consistent with the provisions of this agreement as in its opinion may be necessary, or desirable, for the carrying out of its duties, and for the efficient administration of the Plan;
(2) to decide any question arising in the administration, interpretation and application of this Plan;
(3) to determine, according to the provisions herein set forth, the eligibility of an employee for old-age retirement and disability allowance under this Plan and, if eligible, his rights hereunder;
(4) to certify to the Trustee the name of each employee eligible for a refund or old-age retirement or disability allowance and the amount payable to him and to rescind such certification in accordance with the provisions of this Plan;
(5) to approve or deny any application for an optional form of payment or retirement allowances, and to formulate rules with respect to the election of, and payments under, any such optional form of payment, which rules, however, shall not be inconsistent with the provisions of this Plan.

(Def. Ex. 3, ¶ 5.6).

6. The Allowance Committee has both the continuing statutory and fiduciary obligations to administer the Retirement Plan pursuant to the Metropolitan Transit Authority Pension Fund Act. (Def. Resp. ¶ 7).

7. The Allowance Committee is responsible for the determination and issuance of retirement allowances, pursuant to the terms of the Retirement Plan. (Def. Resp. ¶ 8).

8. The Retirement Plan provides for a method of amendment as follows:

This Agreement, as amended, has been in effect from June 1, 1949 to date. This Agreement is part of the Wage and Working Conditions Agreement between the parties hereto. This Agreement can be changed only in accordance with the provisions of the aforesaid Wage and Working Conditions Agreement.

(Def. Ex. 3, ¶ 23.1).

9. Benefits under the Retirement Plan are calculated based on the employee's "continuous service" with the CTA only, with certain exceptions not relevant to this issue. (Def. Ex. 3, ¶¶ 3.3, 3.5, 3.6, 3.7, 4.1, 4.2, 4.3).

C. Supplemental Plan

10. In contrast to the Retirement Plan, the Supplemental Plan was created by ordinance to provide certain additional benefits for executive employees above a certain grade level. The Supplemental Plan was later amended and restated pursuant to later ordinances. (Def. Ex. 1, Pl. Ex. C). The most recent Restatement is dated January 24, 1991 and contains an undated First Amendment. (Pl. Ex. C).

11. The First Amendment to the January 24, 1991 Restatement creates a new paragraph 15 which provides for an Employee Retirement Review Committee. (Pl. Ex. C, ¶ 5).

12. The Employee Retirement Review Committee of the CTA ("Retirement Review Committee") is a committee of the CTA established to administer the Supp. Plan and the payment of the Supp. Plan benefits. (Def. Resp. ¶ 9).

13. The Retirement Review Committee has both the continuing statutory and fiduciary obligations to administer the Supp. Plan pursuant to the Metropolitan Transit Authority Pension Fund Act, 40 ILCS 5/22-101 (1992). (Def. Resp. ¶ 10).

14. The Retirement Review Committee is responsible for the determination and issuance of retirement allowances pursuant to the agreements that certain management employees, including Plaintiffs, entered into pursuant to the terms of the Supp. Plan. (Def. Resp. ¶ 11).

15. The Supp. Plan "is subject to the Rules and Procedures adopted by the Employee Retirement Review Committee from time to time heretofore and hereafter interpreting and administering the Supplemental Retirement Plan." (Pl. Ex. C, Supp. Plan 1st Am. ¶ 5).

16. Benefits under the Supp. Plan are generally based on continuous service with the CTA. (Pl. Ex. C, Rest. ¶ 5,*fn3 Supp. Plan 1st Am. ¶ 1; Def. Ex. 5, Rule No. 1,(b)). However, the Supp. Plan also provides benefits for previous "governmental service," meaning, service with the CTA and certain other governmental bodies giving reciprocal pension credit, but only if: 1) there is no more than a 12-month break between the employee's prior service with the governmental body and his service with the CTA and 2) the management employee who wishes to bridge prior governmental service under the Supp. Plan make a contribution to the CTA for the period of prior governmental service. (Pl. Ex. C, Rest. pg. 3, 5, 6, Supp. Plan 1st Am. ¶ 1). Furthermore, "governmental service" is to be "as interpreted by Rules adopted by the Employee Retirement Review Committee." (Pl. Ex. C, Supp. Plan 1st Am. ¶ 1).

17. The Retirement Review Committee has adopted at least three rules in regard to the Supp. Plan. (Def. Ex. 5). The Rule involving breaks in service provides as follows:

The employment must have been continuous service, which means that it must have been continuous paid full-time employment without interruption as said terms historically have been interpreted pursuant to the provisions of the Retirement Plan for Chicago Transit Authority Employees. All separations from employment which are not followed by reinstatement within one year or breaks in service between eligible governmental employers of more than one year shall interrupt continuous service and shall result in the loss of all prior employment credit. Service of less than one year at eligible governmental employers shall not be considered in the computation of continuous service with an eligible governmental employer and shall be viewed as a break in service.

(Def. Ex. 5, Rule No. 1,(b)). This Rule No. 1 was adopted on April 25, 1985 and was amended on August 14, 1985 and December 10, 1985.

D. Authorization of Amendments And Restatements of The Retirement Plan And Supplemental Plan

18. CTA Ordinance No. 90-232 is titled: "AN ORDINANCE AUTHORIZING THE AMENDMENT AND RESTATEMENT OF THE CHICAGO TRANSIT AUTHORITY SUPPLEMENTAL RETIREMENT PLAN AND THE CHICAGO TRANSIT AUTHORITY RETIREMENT PLAN FOR CHICAGO TRANSIT BOARD MEMBERS." (Def. Ex. 1).

19. The Chicago Transit Board of CTA ordained the Chairman of the Chicago Transit Board with the authority "to execute and effectuate amendments and restatements" of the Supp. Plan and Retirement Plan "to effectuate the following principles" in part:

To provide for the Authority to maintain a standard plan document setting forth the terms of each Plan and for individuals to participate in each such standard plan by the execution of a joinder agreement, in lieu of the Authority executing and maintaining an individual contract with ...

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