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

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.

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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.

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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

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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

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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,

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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

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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

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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

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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

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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.)

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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

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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

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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

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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

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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.

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