Board of Trustees of the Teachers' Retirement System of Illinois v. West ( 2009 )

Filed 10/15/09 NO. 4-08-0955
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
THE BOARD OF TRUSTEES OF THE TEACHERS’ ) Appeal from
RETIREMENT SYSTEM OF ILLINOIS and THE ) Circuit Court of
BOARD OF TRUSTEES OF THE STATE ) Sangamon County
EMPLOYEES’ RETIREMENT SYSTEM OF ) No. 07MR425
ILLINOIS, )
Plaintiffs-Appellees, )
v. ) Honorable
SCOTT H. WEST, ) Leo J. Zappa, Jr.,
Defendant-Appellant. ) Judge Presiding.
_________________________________________________________________
JUSTICE KNECHT delivered the opinion of the court:
In August 2007, plaintiffs, the Board of Trustees of
the Teachers’ Retirement System of Illinois and the Board of
Trustees of the State Retirement System of Illinois, filed a
complaint for declaratory judgment, seeking a ruling determining
whether defendant, Scott H. West, could combine service credits
from separate retirement systems to immediately qualify for his
pension. In November 2008, the trial court granted plaintiffs’
cross-motion for summary judgment and denied defendant’s summary
judgment motion.
Defendant appeals, arguing the trial court erred where
(1) it added a "legislative-enactment" limitation to section 20-
109 of the Retirement Systems Reciprocal Act (Reciprocal Act) (40
ILCS 5/20-109 (West 2006)), (2) it failed to consider all of the
section 20-109 language, and (3) its interpretation of the
Reciprocal Act is contrary to legislative intent. We agree and
reverse.
I. BACKGROUND
On April 15, 1986, the Illinois State Board of
Education (ISBE) hired defendant as a field auditor. As a
result, defendant participated in and contributed to the ISBE’s
State Employees’ Retirement System (SERS). Approximately six
months later, defendant learned his position as a field auditor
was considered an "executive." As an "executive" or
"professional" employee of the ISBE, defendant was eligible to
participate in the ISBE’s Teachers’ Retirement System of Illinois
(TRS) pursuant to section 16-106(3) of the Illinois Pension Code
(Pension Code). See Ill. Rev. Stat. 1985, Ch. 108 1/2, par. 16-
106(3).
In November 2006, the then superintendent of education,
Ted Sanders, "certified" to TRS defendant had an "executive"
employment classification with ISBE. This certification was
required by TRS for defendant to transfer from SERS to TRS.
Defendant transferred to TRS. ISBE began transmitting
defendant’s retirement contributions to TRS. Defendant continued
to participate in TRS until his 2006 retirement from the ISBE.
Following the transfer, SERS informed defendant it was
going to refund the pension contributions withheld from his pay
by SERS from April 15, 1986, through November 30, 1986.
- 2 -
Defendant maintained he did not want the refund. Nonetheless,
SERS sent defendant a refund check. Defendant eventually
redeposited his pension payments with SERS. In a July 25, 2006,
letter, SERS informed defendant it received his payment and
credited his SERS account with the appropriate eight months’
service credit. See 40 ILCS 5/20-118 (West 2006) ("Any employee
who shall have waived, by the acceptance of a refund, his pension
credit in any participating system, may have his pension credit
reinstated by repayment of the refund").
According to defendant’s complaint (1) his job duties
had expanded greatly from those for which he had been first
hired; (2) a difficult new function of his job was dealing with
the mandates of the "No Child Left Behind" law; (3) beginning in
November 2005, he began receiving unsatisfactory job performance
evaluations and was being threatened with discharge; and (4)
defendant was under duress to either resign or be fired.
According to defendant, he was continually pressured by
his supervisors to tender a letter of resignation by April 1,
2006.
Defendant checked the ISBE online attendance website
and determined he would have 20 years of service as of April 15,
2006.
On April 3, 2006, defendant signed an agreement to
retire from ISBE on June 30, 2006.
- 3 -
On April 7, 2006, defendant met with TRS retirement
consultant Michael Bracey. Bracey informed defendant if he
retired on June 30, 2006, he would fall approximately 72 days
short of the required 20 years’ service.
On April 19, 2006, defendant attempted to rescind his
retirement offer. Defendant cited the fact he learned he must
work an additional 73 days beyond June 30, 2006, to reach 20
years’ service. However, ISBE refused to allow defendant to
rescind his offer. In fact, ISBE informed defendant he would not
be permitted in ISBE offices beyond June 30, 2006.
On August 31, 2006, defendant filed for his retirement
benefits with TRS.
In October 2006, TRS notified defendant his monthly
benefit would not begin until June 6, 2011, his sixtieth
birthday, because he had 72 days less than 20 years’ service
credit with TRS. TRS did not include in its calculations the
eight months’ service credit defendant earned while participating
in SERS.
In a December 21, 2006, letter, defendant requested
SERS certify to TRS he had eight months’ service credit with SERS
and he transferred from SERS as part of a class. Defendant
maintained he was a member of SERS during 1986, after which time
he transferred as part of a class of ISBE employees to TRS. He
argued the combination of his SERS and TRS credit would give him
- 4 -
enough credit to immediately begin receiving his retirement
benefits.
In a January 17, 2007, letter, SERS responded to
defendant’s certification request. SERS informed defendant it
was unable to certify he was transferred as part of a class. As
a result, SERS denied defendant’s request to provide
certification to TRS. SERS notified defendant the denial was
temporary pending a review during a February 2007 meeting of the
SERS executive committee.
On March 12, 2007, SERS notified defendant of the
executive committee’s March 8, 2007, decision to ratify the
January 17, 2007, temporary denial of defendant’s certification
request and that a personal hearing would be scheduled. However,
no hearing was ever scheduled.
In June 26, 2007, letters, defendant again requested
TRS and SERS render a final administrative decision regarding
defendant’s ability to transfer his pension credits. TRS and
SERS did not issue a final administrative decision.
Instead, on August 1, 2007, plaintiffs filed a
complaint for declaratory judgment to determine whether defendant
could combine his service credits under section 20-109 of the
Reciprocal Act and immediately qualify for his pension.
Section 20-109 prevents transferring service credits to
another retirement system if the credits were earned in less than
- 5 -
one year. See 40 ILCS 5/20-109 (West 2006). However, the one-
year limitation "shall not apply to *** employees who transfer or
are transferred, as a class, from one participating system to
another." 40 ILCS 5/20-109(1) (West 2006).
On August 26, 2008, defendant filed a motion for
summary judgment, arguing he transferred to TRS within the
meaning of section 20-109.
On September 22, 2008, plaintiffs filed their cross-
motion for summary judgment arguing defendant was ineligible to
transfer his service credits pursuant to section 20-109 because
he was not transferred to TRS by a legislative enactment.
On November 13, 2008, the trial court issued an order
granting plaintiffs’ and denying defendant’s motion for summary
judgment. The court found defendant could not combine service
credits earned under the two retirement systems. Specifically,
the court found (1) section 20-109 required defendant to have
been forced to transfer to TRS by legislative action, (2) no
legislative enactment forced defendant’s transfer, (3) defendant
was just eligible to transfer, and (4) defendant voluntarily
chose to transfer.
This appeal followed.
II. ANALYSIS
On appeal, defendant argues the trial court erred in
granting plaintiffs’ motion for summary judgment. Specifically,
- 6 -
defendant contends the court’s order (1) is inconsistent with the
plain language of section 20-109 because it improperly adds a
"legislative-enactment" limitation, (2) fails to consider all of
the section 20-109 language, and (3) is contrary to the
legislative intent of the Reciprocal Act.
Defendant maintains the Reciprocal Act specifically
includes both "employees who transfer" and employees who "are
transferred." Defendant argues the trial court’s analysis
stopped at the employees who "are transferred" language and
neglected the "employees who transfer" language.
Plaintiffs argue defendant’s transfer to TRS (1) was
purely elective and did not fall within the exception to section
20-109, (2) was not mandated by any legislative action, and (3)
was not "as a class." Specifically, plaintiffs argue (1) the
trial court correctly interpreted section 20-109 to exclude
optional employee transfers from one system to another; (2)
defendant voluntarily transferred from SERS to TRS; and (3) as a
result, defendant is not included within the meaning of section
20-109.
A. Standard of Review
Summary judgment is appropriate only where "the
pleadings, depositions, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment
- 7 -
as a matter of law." 735 ILCS 5/2-1005(c) (West 2006). This
court reviews a trial court's grant of summary judgment de novo.
Bagent v. Blessing Care Corp., 224 Ill. 2d 154, 163, 862 N.E.2d
985, 991 (2007). This case involves a question of statutory
interpretation, which we also review de novo. Reppert v.
Southern Illinois University, 375 Ill. App. 3d 502, 504, 874
N.E.2d 905, 907 (2007).
B. Rules of Statutory Interpretation
When interpreting a statute, our duty is to ascertain
and give effect to the intent of the legislature. Hadley v.
Illinois Department of Corrections, 224 Ill. 2d 365, 371, 864
N.E.2d 162, 165 (2007). "Legislative intent is best derived from
the language of the statute itself, which, if unambiguous, should
be enforced as written." Taddeo v. Board of Trustees of the
Illinois Municipal Retirement Fund, 216 Ill. 2d 590, 595, 837
N.E.2d 876, 879 (2005). The court must give the language of a
statutory provision its effect when that language is clear, and
if the language is clear, the court must not resort to other aids
for construction. Solich v. George & Anna Portes Cancer
Prevention Center of Chicago, Inc., 158 Ill. 2d 76, 81, 630
N.E.2d 820, 822 (1994). A statute is ambiguous "if its meaning
cannot be interpreted from its plain language or when it is
capable of being understood by reasonably well-informed persons
in two or more different senses." People v. Purcell, 201 Ill. 2d
- 8 -
542, 549, 778 N.E.2d 695, 699-700 (2002). "If the statutory
language is susceptible to more than one interpretation ***
legislative intent may be ascertained by considering 'the entire
act, its nature, its object, and the consequences resulting from
different constructions.'" Taddeo, 216 Ill. 2d at 595-96, 837
N.E.2d at 879, quoting Shields v. Judges' Retirement System of
Illinois, 204 Ill. 2d 488, 494, 791 N.E.2d 516, 519 (2003).
Pension statutes are to be construed liberally in favor of the
rights of the pensioner. Taddeo, 216 Ill. 2d at 596, 837 N.E.2d
at 879.
C. Statute at Issue
Section 20-109 of the Reciprocal Act allows pension
credits totaling less than one year under one retirement system
to be combined with those under another system if the employee
was among those employees who transfer or are transferred as a
class from one participating system to another. See 40 ILCS
5/20-109 (West 2006). Section 20-109 defines pension credit, in
pertinent part, as follows:
"Credit or equities acquired by an
employee in the form of contributions,
earnings[,] or service as defined under the
law governing each of the systems in which he
has credits or equities, except credits or
equities (1) of less than one year in any one
- 9 -
system, except that this one-year limitation
shall not apply to *** employees who transfer
or are transferred, as a class, from one
participating system to another." (Emphasis
added.) 40 ILCS 5/20-109 (West 2006).
D. The Trial Court’s Order
Defendant argues the trial court erred in interpreting
the Reciprocal Act contrary to legislative intent. In its
November 2008 order, the court found section 20-109 prohibited
combining service credits of less then one year except where
employees were "transferred as a class." Specifically, the
court’s order stated the following:
"Under [a]rticle 20 of the Pension Code,
employees seeking to retire under the
Reciprocal Act can combine pension credits
they earned under two or more reciprocal
systems, assuming the pension credit
qualified. Section 20-109 of the Reciprocal
Act specifies that employees may retire
counting pension credits from more than one
system *** except credits *** of less than
one year in any one system.
An exception exists where an employee is
transferred *** as a class, from one
- 10 -
participating [s]ystem to another.
There is no dispute [defendant] had less
than one year of pension credits in SERS.
The question is whether he was [']trans-
ferred['] as defined under [a]rticle 20.
In the case at bar, there [were] no
legislative enactments transferring a class
of workers from one participating system to
the other. ISBE designated [defendant’s]
position as an ’executive’ giving him the
option to remain in SERS or transfer to TRS.
[Defendant] voluntarily chose to transfer
systems. No enactment of legislation was
undertaken to force the transfer. Several
employees of ISBE in [defendant’s]
classification of ’executive’ chose to stay
in SERS instead of transferring to TRS.
This court sympathizes with [defendant],
but under this [c]ourt’s interpretation of
[a]rticle 20, [defendant] needed one year of
pension credit in order to retire under the
Reciprocal Act, thus, [defendant] does not
have enough combined credits to retire under
the Reciprocal Act." (Emphases in original.)
- 11 -
F. Legislative Enactment
Defendant argues the trial court’s order is
inconsistent with the plain language of section 20-109 because it
improperly adds a "legislative-enactment" limitation.
Specifically, defendant contends the court erred in finding
section 20-109 required legislative action to transfer defendant
to TRS. We agree.
"A court’s only legitimate function is to
declare and enforce the law as enacted by the
legislature, to interpret the language when
necessary, and not to enact new provisions or
substitute different ones. [Citation.]
Courts are not free to engraft conditions not
within the purview of the statute.
[Citation.] Such action would plainly be a
forbidden judicial amendment to the statute.
[Citation.]" Ralston v. Plogger, 132 Ill.
App. 3d 90, 98, 476 N.E.2d 1378, 1383 (1985).
Here, the trial court found "[n]o enactment of
legislation was undertaken to force [defendant’s] transfer."
Plaintiffs argue defendant’s transfer to TRS was not "as a class"
because it was not mandated by any legislative action and thus
purely elective. While it is undisputed no legislative enactment
forced defendant to transfer pension systems, nowhere in section
- 12 -
20-109 does a valid transfer require an enactment of legislation.
If the legislature had intended to limit the ability to combine
service credits to instances resulting from statutory transfers,
it would have so stated. It did not. As a result, we find the
trial court misread an additional restriction into its
interpretation of section 20-109.
G. The Plain Language of Section 20-109
Defendant next argues the trial court’s order is
inconsistent with the plain language of section 20-109 because
the order fails to consider all of the section 20-109 language.
Specifically, defendant contends the Reciprocal Act includes both
"employees who transfer" and employees who "are transferred."
Defendant maintains the court’s analysis erroneously stopped at
employees who "are transferred" and neglected the "employees who
transfer" language. We agree.
"The primary objective of statutory interpretation is
to determine and give effect to the legislature's intent."
People v. Jones, 214 Ill. 2d 187, 193, 824 N.E.2d 239, 242
(2005). "Legislative intent can be ascertained from a
consideration of the entire [a]ct, its nature, its object[,] and
the consequences that would result from construing it one way or
the other." Fumarolo v. Chicago Board of Education, 142 Ill. 2d
54, 96, 566 N.E.2d 1283, 1302 (1990). Courts must not construe
words and phrases in isolation and, instead, should construe them
- 13 -
in light of other relevant portions of the statute so that--if
possible--no term is rendered superfluous or meaningless. Girard
v. White, 356 Ill. App. 3d 11, 17, 826 N.E.2d 517, 523 (2005).
In this case, plaintiffs argue section 20-109 is
limited to employees who are involuntarily transferred and thus
necessarily excludes defendant since he voluntarily transferred
from SERS to TRS. However, if the phrase "employees who transfer
or are transferred, as a class," is construed to mean "employees
who involuntarily transfer or are involuntarily transferred, as a
member of a class," the resulting construction is redundant and
renders one of the two phrases mere surplusage. See Arnold v.
Board of Trustees of the County Employees’ Annuity & Benefit
Fund, 84 Ill. 2d 57, 62, 417 N.E.2d 1026, 1028 (1981) (indicating
a "strong presumption against finding statutory language to be
mere ’surplusage’"). The legislature could not reasonably have
intended the two phrases to have the same meaning. Otherwise,
only one phrase would have been sufficient. The legislature must
have intended the phrases to refer to separate and distinct
groups of employees, i.e., those who voluntarily transfer as part
of an eligible class and those who are involuntarily transferred.
Moreover, the phrase "employees who transfer or are
transferred, as a class," is divided by the word "or." "The word
’or’ is disjunctive. As used in its ordinary sense, the word
’or’ marks an alternative indicating the various parts of the
- 14 -
sentence which it connects are to be taken separately."
Elementary School District 159 v. Schiller, 221 Ill. 2d 130, 145,
849 N.E.2d 349, 359 (2006), citing People v. Frieberg, 147 Ill.
2d 326, 349, 589 N.E.2d 508, 518 (1992) (holding that the
ordinary use of the disjunctive "or" indicates a choice between
alternatives).
Here, the use of the word "or" indicates a choice
between "employees who transfer as a class" and "employees who
are transferred as a class." If we construe "employees who are
transferred" to mean "employees who are made to transfer," then
the alternative choice of construction would be "employees who
voluntarily transfer." Accordingly, plaintiffs’ argument section
20-109 is limited only to employees who are involuntarily
transferred fails.
The stated purpose of the Reciprocal Act "is to assure
full and continuous pension credit for all service in public
employment which is covered by a retirement system." 40 ILCS
5/20-101 (West 2006). Section 20-109 allows service credits
totaling less than one year under one system to be combined with
those under another system if the employee was among those
employees who transfer or are transferred as a member of a class
from one participating system to another.
In this case, defendant--as a member of a class of
employees eligible to transfer--voluntarily transferred from SERS
- 15 -
to TRS. Defendant transferred within the meaning of the section
20-109 exception to the one-year pension-credit rule. As a
result, defendant should be allowed to combine his pension
credits to qualify for his retirement benefits retroactive to
July 1, 2006.
III. CONCLUSION
For the reasons stated, we reverse the trial court's
ruling granting plaintiffs’ motion for summary judgment and
denying defendant’s motion therefor.
Reversed.
TURNER and STEIGMANN, JJ., concur.
- 16 -