Court of Appeals of Illinois, First District, First Division
from the Circuit Court of Cook County, No. 14 CH 17951
Honorable Sophia H. Hall Judge Presiding
JUSTICE SIMON delivered the judgment of the court, with
opinion. Presiding Justice Connors and Justice Mikva
concurred in the judgment and opinion.
1 This case concerns the Village of North Riverside's
failure to meet its statutory contribution obligations to its
police and firefighter pension funds. At an administrative
hearing, the Village argued that its noncompliance should be
excused because it had good and sufficient cause for failing
to meet its obligations. The administrative hearing officer
rejected the Village's arguments, and the hearing
officer's recommendation was accepted by the Director of
the Public Pension Division. The Village sought
administrative review in the circuit court which affirmed the
decision. The Village now seeks review here, and we confirm
the administrative ruling and affirm the circuit court's
3 The Illinois Pension Code (40 ILCS 5/1-101 et seq.
(West 2012)) requires municipalities to contribute to the
police and firefighter pension funds. See 40 ILCS 5/3-125
(West 2012) (police); 40 ILCS 5/4-118 (West 2012)
(firefighters). The municipalities are required to pay the
amount to cover the "normal cost" that remains
after the employees' contributions are factored in.
4 The General Assembly enacted legislation to create the
Public Pension Division which is charged with administering
and enforcing the provisions of the Pension Code. 40 ILCS
5/1A-101 (West 2012). Whenever the Division determines that a
government unit has failed to comply with the law, the
Director of the Division may hold a hearing where the
government must show cause for its noncompliance. 40 ILCS
5/1A-113(d)(3) (West 2012). If, at the conclusion of the
hearing, the Director determines that "good and
sufficient cause" for noncompliance has not been shown,
the Director is entitled to order compliance and assess
penalties. 40 ILCS 5/1A-113(d)(4)-(5) (West 2012). The
General Assembly mandated that the Director develop standards
and criteria to be used to administer the penalty provision
set forth in section 1A-113. 40 ILCS 5/1A-113 (West 2012).
5 The Public Pension Division used its rulemaking authority
by issuing certain regulations. See 50 Ill. Adm. Code 4435.10
(1998). The relevant regulation in this case states that, at
the hearing, in determining whether the government has met
its burden of showing "good and sufficient cause"
"the Director may consider, but is not limited to, the
1) Evidence that, due to no fault of the pension fund,
governmental unit or elected or appointed official of a
governmental unit, there was an unforeseeable or unexpected
delay or occurrence;
2) Evidence of an uncontrollable circumstance; and
3) Evidence pertaining to Acts of God." 50 Ill. Adm.
Code 4435.80(c) (1998).
6 Defendant Illinois Department of Insurance determined that
plaintiff Village of North Riverside violated the Illinois
Pension Code when it failed to make full, actuarially
designated annual contributions to its police pension fund
from 2008 to 2012 and its firefighter pension fund from 2009
to 2012. The Village acknowledged that it had not met its
contribution obligations but asserted that there were
mitigating circumstances and that it intended to take
remedial action in the coming years. The Director of the
Public Pension Division called a hearing to give the Village
an opportunity to show "good and sufficient cause"
for its violations.
7 At the hearing, the Village offered evidence through its
finance director, Sue Scarpiniti. Scarpiniti testified that
North Riverside is a village with a small residential
community, but that it has a relatively large commercial
base. As a result, the Village has a larger police and
firefighter force than most communities of similar
population. Scarpiniti explained that the Village's
inability to meet its contribution obligations was a result
of the recession occurring ...