Month: May 2020

ILLINOIS APPELLATE COURT PROVIDES GUIDANCE AS TO WHEN MUNICIPALITIES MAY PARTICIPATE IN POLICE OR FIREFIGHTER PENSION BOARD HEARINGS

Court affirms Pension Board’s denial of City’s request to intervene in firefighter line of duty disability hearing.

By: Robert B. McCoy
robert.mccoy@mhtlaw.com

Illinois municipalities with a population of 5,000 or more are required to create a pension fund for firefighters or police officers in their employ. Those municipalities have a substantial financial interest in the disposition of disability pension claims, especially line of duty pension claims, made by the pension fund’s administering board. Not only do line of duty pensions pay greater benefits than “normal” disability pension (65% of a firefighter’s monthly salary for a line of duty disability versus 50% of the firefighter’s monthly salary for a non-line of disability, and up to 75% of a police officer’s monthly salary for a line of duty disability versus 50% of the police officer’s monthly salary for a non-line of disability), the award of a line of duty pension may preclude a municipality from being able to contest whether a firefighter or police officer claimant is entitled to a lifetime of health insurance benefits under the Public Safety Employee Benefits Act (PSEBA).

Local fire and police pension boards are charged with the fiduciary responsibility of administering their pension funds to ensure there are adequate financial resources to cover obligations to pay current and future retirement and disability benefits to qualified beneficiaries. To this end, pension boards are charged to hold hearings to screen out unqualified or fraudulent disability claims. But pension boards may not always adequately protect the financial interests of the cities or villages which underwrite the pension fund.

Despite their financial interest in the outcome of disability pension claims, there is no statutory right for municipalities to participate in pension board hearings. Instead, Illinois courts have ruled that pension boards have discretion to allow or disallow a municipality to intervene in a disability claim hearing.

A pension board’s discretion is not absolute. But, as recently reaffirmed by the Illinois Appellate Court in the case City of Peoria v. Firefighters’ Pension Fund of City of Peoria, 2019 IL App (3d) 190069, decided December 10, 2019, it is not error for a pension board to deny a municipality’s request to intervene in a disability claim hearing unless the municipality can show that is has something more at stake than the normal financial concerns inherent in all such cases. In the words of the Court, “[A] municipality’s interest in the proper expenditure of pension funds may warrant intervention in pension board proceedings when combined with another interest.”

In the City of Peoria case (in which this author represented the claimant firefighter), the City of Peoria argued that the Firefighters’ Pension Fund had wrongly denied it the right to intervene in the hearings to determine whether a firefighter was entitled to a line of duty disability pension. The City asserted, on administrative review of the decision before the Circuit and Appellate Courts, that the City’s potential liability for PSEBA was “another interest” which warranted it being allowed to intervene in the pension hearings.

Under the unique facts of the case, the Appellate Court disagreed. The Appellate Court noted that a pension board’s finding that a firefighter became disabled in the line of duty was conclusive as to the issue of whether a firefighter suffered a “catastrophic injury” for purposes of PSEBA eligibility. But, a duty-related disability is not all that is required for a firefighter or police officer to be eligible for PSEBA. PSEBA also requires that the injury “must have occurred as the result of the officer’s response to fresh pursuit, the officer or firefighter’s response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act.” In the City of Peoria case, the firefighter conceded that his injury did not occur as a result of an emergency (or any other PSEBA-qualifying event). Thus, because the firefighter was ineligible for PSEBA, the City could not rely on the threat of PSEBA liability as grounds to intervene in the pension case.

The City of Peoria also asserted that the City had an interest in developing a complete and accurate record in the pension board hearings. The Appellate Court acknowledged that this could be a sufficient reason for intervention by a municipality. But, under the facts presented, the pension board did not err in denying the City’s request to intervene, where the City was allowed to submit documentary evidence to the pension board, and the City failed to identify what additional evidence it would have presented had it been allowed to fully intervene, or how such evidence would have changed the outcome of the hearings.

Because it was not formally allowed to intervene in the pension hearings, the City of Peoria never became a “party” to those administrative proceedings. The Appellate Court noted that, because the City was not a party to the pension board hearings, there was an argument that the City lacked “standing” to even bring a lawsuit to challenge the pension board’s decision. The Court acknowledged that judicial review of an administrative decision (such as review of a pension board decision) is generally “limited and available only to (1) parties of record to the proceedings before the administrative agency (2) whose rights, duties, or privileges were adversely affected by the agency’s decision.” The Appellate Court declined to decide whether the City of Peoria lacked standing, where the firefighter did not file a cross-appeal on this issue, but the Court left open the possibility that, in future cases, municipalities who do not obtain party status will not have a right to seek review of adverse pension board decisions.

The chief lesson of the City of Peoria case is that municipalities cannot assume their voice will be heard when firefighters and police officers make disability claims. Municipal officers should work closely with their attorneys to identify each and every special circumstance that warrants their participation in a particular claimant’s pension board hearing. One special circumstance which may be relevant is avoidance of PSEBA liability, where doubts exist that a police officer or firefighter is really disabled, or whether the disability is really related to the employee’s duties, but PSEBA will not be an issue in all disability claims. If a municipality is denied the right to participate in a disability hearing, it needs to be prepared to describe what evidence or testimony it would have introduced at the hearing, had it been allowed to intervene. Failing to do so might result not only in an adverse pension board decision, it might result also in the municipality forfeiting its right to appeal the decision.