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Kildeer-Countryside School District No. v. the Board of Trustees of the Teachers' Retirement

August 3, 2012

KILDEER-COUNTRYSIDE SCHOOL DISTRICT NO.
PLAINTIFF-APPELLANT,
v.
THE BOARD OF TRUSTEES OF THE TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS,
DEFENDANT-APPELLEE.



Appeal from 96, Circuit Court of Sangamon County No. 10MR755 Honorable John Schmidt, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Turner

PRESIDING JUSTICE TURNER delivered the judgment of the court, with opinion. Justices Appleton and Pope concurred in the judgment and opinion.

OPINION

¶ 1 In October 2010, defendant, the Board of Trustees (Board) of the Teachers' Retirement System of the State of Illinois (TRS), found plaintiff, Kildeer-Countryside School District No. 96 (District), owed TRS a $53,705.27 employer contribution under section 16-158(f) of the Illinois Pension Code (Pension Code) (40 ILCS 5/16-158(f) (West Supp. 2007) (eff. Aug. 21, 2007)). In assessing the contribution, the Board found the District's former employee, Barbara Emde, did not retire under the terms of an exempt collective-bargaining agreement. The District sought administrative review in the Sangamon County circuit court, which affirmed the Board's decision.

¶ 2 On appeal, the District contends it does not owe the employer contribution because Emde's pay increases were exempt under section 16-158(g) of the Pension Code (40 ILCS 5/16-158(g) (West Supp. 2007)). We reverse the trial court's judgment and the Board's order.

¶ 3 I. BACKGROUND

¶ 4 A. Collective-Bargaining Agreement

¶ 5 In October 2002, the District and Kildeer Education Association entered into a collective-bargaining agreement (Agreement) for the school years 2002-03, 2003-04, 2004-05, and 2005-06. According to the parties, the Agreement terminated on June 30, 2006. (The recommended decision stated an expiration date of June 30, 2008, which is clearly incorrect as the last school year covered was 2005-06.) Article XIII of the Agreement addressed retirement and contained sections 13.1 to 13.3. Section 13.1(b) addressed eligibility for retirement incentives and provided the following:

"To be eligible for any of the benefits provided in Section 13.2 below, the teacher shall have served at least ten (10) full years as a teacher in the District and be at least fifty-five (55) years of age as of the last day of the school term."

Subsection (b) of section 13.2 of the Agreement provided, in pertinent part, the following:

"During the final two (2) years of employment as a teacher, if a teacher has submitted an unqualified notice of retirement and completed a minimum of ten (10) years of employment in the District as a member of the certified staff, the Board will pay an additional ten percent (10%) increase in compensation over the prior year's compensation.

For each year of service in the District beyond ten (10) years, up to and including twenty (20) years of service as a teacher, the Board will pay an additional one percent (1%) to the prior year's compensation. ***

Any eligible teacher who wishes to retire with this benefit must submit an application in writing to the Superintendent not later than May 15 *** in the school year prior to accessing the District Retirement Program."

¶ 6 With the Agreement was a letter of agreement regarding retirement. The letter stated attached to it was a request-of-district-longevity form and an intent-to-retire notice. While the letter stated documents reflected the intent of article XIII of the Agreement, the letter expressly stated it was not part of the Agreement and was not precedential in nature. The intent-to-retire notice required the employee to acknowledge, inter alia, the following: "I will be at least fifty-five (55) years of age within six (6) months of the last day of the current school term as reported to Teachers' Retirement System."

¶ 7 B. Emde's Retirement

ΒΆ 8 Emde began teaching for the District in the 1984-85 school year. On April 13, 2006, Emde submitted her intent-to-retire notice, stating she intended to retire at the end of 2007-08 school year. The notice stated her salary would be increased by 20% over the prior year's compensation for the remaining two years. When Emde submitted her intent-to-retire notice, her salary was $88,675. For the 2006-07 school year, Emde received her first 20% increase under section 13.2(b), resulting in a salary of $107,482. The following ...


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