Chicago Teachers pension fund wins appeal on shortchanged contribution
By Barry B. Burr | October 3, 2012 3:12 pm
Chicago Public School Teachers' Pension & Retirement Fund won its appeal in its lawsuit accusing the Chicago Board of Education of shortchanging a $307.4 million contribution it paid.
Illinois Appellate Court in Chicago ruled that the board should have made a contribution of $345 million, an increase of $37.5 million for the fiscal year ended June 30, 2010.
The Sept. 28 ruling, written by Judge Rodolfo Garcia, reversed the judgment of the Cook County Circuit Court in Chicago in favor of the board.
The litigation centered on whether the board's contribution should be based on an estimate of the state's share of the total contribution.
“BOE's contribution to the teachers' pension and retirement fund for fiscal year 2010 had to reflect the state's ($32.5 million) actual contribution rather than (the $65 million) estimates the fund provided” to the board, the ruling said. In addition, the state reduced by about $5 million another contribution to the pension fund.
As a result, the board contribution should have totaled $345 million.
“The fund's (contribution certification) letter of Feb. 19, 2009, made clear that the lower figure of the BOE's employer contribution was based on estimates of the state's contributions, which turned out to be highly inaccurate,” the ruling said. “The record establishes that the state did not make its first payment to the fund for fiscal year 2010 until July or August 2009. Because the state's contribution for fiscal year 2010 could not have been known by the fund before the (July 1, 2009) start of the fiscal year, the Legislature could not have intended the BOE's employer contribution, certified by the fund, to be set in stone for the upcoming fiscal year if not revised by Feb. 28, 2009.”
The $9.7 billion pension fund filed the complaint July 8, 2010.
Kevin R. Huber, the pension fund's executive director, and the board's media representatives couldn't be reached for comment.