An Illinois appellate court on Tuesday affirmed an earlier court ruling that two new consolidated investment funds combining the assets of the state's municipal police and firefighters' pension funds are constitutional.
In the order affirming the May 2022 decision by Kane County Circuit Court Judge Robert K. Villa, the Appellate Court of Illinois, Second District in Elgin, said "while plaintiffs have a constitutional right to receive pension benefits … they have no right to the investments held by the funds; rather, they are entitled only to present or future payments from the funds."
The February 2021 lawsuit filed in Kane County by the boards of 16 municipal police pension funds and two firefighters pension funds, along with some participants from each fund, alleged the law had violated Illinois Constitution clauses by terminating "plaintiffs' authority to exclusively manage and control their investment expenditures and income," according to the original court filing.
The lawsuit against Illinois Gov. J.B. Pritzker, the consolidated police and fire pension fund boards and others, was in response to Mr. Pritzker signing a law in December 2019 consolidating municipal police and fire pension plans outside the city of Chicago into the Illinois Firefighters' Pension Investment Fund and Illinois Police Officers' Pension Investment Fund.
In May, Mr. Villa said the law was not unconstitutional under the Illinois Constitution's pension and takings clauses.
The constitution's pension clause states "membership in any pension or retirement system of the state, any unit of local government, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."
Plaintiffs argued that the pension clause defined "benefits" as more than the monetary benefit retirees and beneficiaries received, but also included board voting rights.
In a statement on Thursday, the $9 billion Illinois Police Officer's Pension Investment Fund said it was "pleased" by the decision, noting it is awaiting the plaintiffs' decision on making one final appeal to the Illinois Supreme Court. A statement from the $7.4 billion Illinois Firefighters' Pension Investment Fund said: "We appreciate the appellate court's attention to the case. FPIF closed the Transition Period on June 30, 2022, as required by statute. Approximately 99% of local firefighter pension funds have successfully completed the transition process. FPIF is committed to working with the remaining funds to do the same."
Daniel F. Konicek of Konicek & Dillon, attorney for the plaintiffs, could not be immediately reached for comment.