Appeal from the Circuit Court of Cook County No. 92 CH 4216 The Honorable Bernetta Bush Thomas A. Hett Dorothy K. Kinnaird Mary Jane Theis, Judges Presiding.
The opinion of the court was delivered by: Justice Cousins
Released for publication.
OPINION MODIFIED UPON DENIAL OF REHEARING
The plaintiffs, a class of Chicago police officers who worked past age 63, brought a civil rights action pursuant to 42 U.S.C. §1983 (1994) against the Retirement Board of the Policemen's Annuity and Benefit Fund of the City of Chicago (the Board). Plaintiffs alleged that the Board's application of Public Act 86-272 (Pub. Act 86-272, eff. August 23, 1989), which amended the Illinois Pension Code (the Code) (Ill. Rev. Stat. 1989, ch. 108 ½, par. 5-101 et seq.), deprived them of a constitutionally protected property interest in pension benefits without due process of law.
On October 1, 1998, the trial court entered an order granting in part and denying in part plaintiffs' motion for summary judgment. Specifically, the trial court found in plaintiffs' favor by ruling that the Board's application of Public Act 86-272 unconstitutionally deprived plaintiffs of their property interest without notice or hearing. The trial court ruled against plaintiffs by holding that Public Act 86-272 was unconstitutional as applied to all members of the plaintiff class, even though some plaintiffs received increased benefits under the Act.
Plaintiffs filed a motion seeking clarification or reconsideration of the trial court's decision. The trial court denied plaintiffs' motion. Plaintiffs appealed and the Board cross-appealed.
On appeal, plaintiffs argue that: (1) the trial court erred in refusing to adopt a construction of Public Act 86-272 that would increase plaintiffs' pension benefits for service after age 63 and thereby avoid an unconstitutional interpretation of the amendment; and (2) the trial court erred by failing to limit the application of its ruling to only police officers whose benefits had been reduced.
On cross-appeal, the Board contends that: (1) the plaintiffs were not deprived of a constitutionally protected property interest; and (2) the plaintiffs were not denied the right to a hearing.
Plaintiff Robert F. Miller represents a certified class of 61 retired Chicago police officers and police officers' widows. Plaintiffs allege that in 1991, the Board decreased the amount of plaintiffs' pensions and/or failed to give plaintiffs credit for the full amounts of their earned pensions without due process of law, as guaranteed by the Fourteenth Amendment (U.S. Const., amend. XIV), in violation of 42 U.S.C. §1983 (1994).
The Policemen's Annuity and Benefit Fund of the City of Chicago is created by the Illinois Pension Code (Ill. Rev. Stat. 1989, ch. 108 ½, par. 5-101 et seq.) and provides benefits to retired Chicago police officers. The retirement Board, composed of eight trustees, is responsible for the administration of the fund.
Prior to 1983, the mandatory retirement age for Chicago police officers was 63. In 1983, the United States Supreme Court decided that the Age Discrimination in Employment Act (ADEA) (29 U.S.C. §621 (1982)) applied to state law enforcement officials. Equal Employment Opportunity Comm'n v. Wyoming, 460 U.S. 226, 75 L. Ed. 2d 18, 103 S. Ct. 1054 (1983). Chicago's retirement age rose from 63 to 70. In 1986, Congress amended the ADEA to allow state and local governments to reinstitute mandatory retirement ages. 29 U.S.C. §623(j) (Supp. 1991). In January 1988, Chicago restored the mandatory retirement age of 63 for police officers. See McCann v. City of Chicago, 968 F.2d 635, 636 (7th Cir. 1992). Thus, for a period of approximately five years from 1983- 88, Chicago police officers were permitted to work beyond age 63. This five-year period is the focus of the controversy at bar. Preamendment Calculations
In May 1985, plaintiff Robert Miller reached 63 years of age but continued working as permitted by law at the time. Prior to 1989, the Pension Code fixed retirement benefits at age 63. Thus, as of 1983, the Board was faced with the situation of police officers, like Robert Miller, working past the age of 63 when the Pension Code fixed their pension benefits at age 63. Ill. Rev. Stat. 1983, ch. 108 ½, par. 5- 128. The Board decided that it would calculate benefits by fixing an officer's base monthly benefit at age 63, as was still required by the Code. Police officers were also entitled to an automatic statutory increase to be applied annually to the base annuity commencing the year after their pension was "fixed" at age 63. Ill. Rev. Stat. 1983, ch. 108 ½, par. 5-128. *fn1 For purposes of pension calculations, the Board treated each officer as if he had retired when he reached the age of 63, but officers who elected to keep working did not begin collecting a pension until actual retirement. As a result, the Board did not permit further payroll contributions to the fund and did not give credit for added service or salary increases for work performed after age 63. Postamendment Calculations
When the City restored the mandatory retirement age to 63 in January 1988, officers like Robert Miller who had worked past 63 were forced to retire by March 1988. They began collecting pension benefits where the base annuity had been fixed at age 63 and an automatic annual 3% increase was applied as the officer turned 64, 65, etc.
In August 1989, the Illinois General Assembly enacted Public Act 86-272, amending several sections of the Code. An officer's annuity was no longer fixed at age 63 but, rather, was changed to the date the officer withdrew from service. Ill. Rev. Stat. 1989, ch. 108 ½, par. 5- 128. No contributions were required of officers for the period between the date the employee attained age 63 and January 1, 1988. Ill. Rev. Stat. 1989, ch. 108 ½, par. 5-169. The effective date of the amendments was made retroactive to January 1, 1988. Ill. Rev. Stat. 1989, ch. 108 ½, par. 5-229.1.
In February 1991, the Board informed plaintiffs by letter that, due to the amendment, their annuities would now be fixed as of the date they withdrew from service rather than at age 63. The letter did not state that a participant's pension might be lowered as a result of the amendment, only that contributions might be required. In September 1991, the Board notified class members by letter that officers who worked past age 63 would be credited with additional service from January 1, 1988 (the retroactive effective date of the amendments), and their actual retirement date (in most cases, the forced retirement date of March 1988). The Board demanded that the officers make contributions to the fund for this period of time. The Board also determined that the 3% automatic annual statutory increases previously calculated from age 63 should be recalculated from the actual retirement date and further demanded that the 3% increases already distributed be paid back to the fund by the officers.
Thus, in the case of Robert Miller, for example, his pension benefits were affected as follows:
(1) monthly benefit reduced by $142.41 (due to cancellation of 3% increase);
(2) must repay $6,180.13 (return previously paid 3% increase); and
(3) pay $975.26 in additional employee contributions (from January 1, 1988, to March 27, 1988).
According to the plaintiffs, although their base annuities were increased slightly, the monthly annuities and total benefits of many of the class members had been reduced after the amendment.
In a letter dated December 18, 1991, Miller's attorney wrote to the Board and asked it to reconsider its position. The Board responded by letter dated March 24, 1992, stating that it would not reconsider and that its interpretation would "in fact increase [Mr. Miller's benefits] by virtue of these changes."
In 1992, class representative Miller filed a three-count lawsuit against the Board. Count I alleged that the Board's application of Public Act 86-272 deprived them of a constitutionally protected property interest in pension benefits without due process of law in violation of 42 U.S.C. §1983 (1994). Count II alleged violations of the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 1992)), and count III alleged that Public Act 86-272 was unconstitutional on its face. The court subsequently dismissed counts II and III, and they are not part of this appeal.
On April 14, 1994, the trial court certified plaintiffs' class action with respect to count I. In the spring of 1998, both sides filed cross-motions for summary judgment. On October 1, 1998, the trial court held that the Board's interpretation of Public Act 86-272 was unconstitutional as applied to plaintiffs because it "directly impacted the formula for ...