Smith v. Board of Trustees of the Westchester Police Pension Board
940 N.E.2d 729
Ill. App. Ct.2010Background
- Smith retired as Westchester Police Chief on July 13, 2007 after 32+ years of service; pension computed from rank salary at last day or prior year with 75% cap.
- 2006 salary for Smith was grade 4 at $94,742; 2007 pay increases included a grade 6 Raise to $102,966, 1% merit pool, and 2007 holiday pay.
- Village did not adopt a 2007 appropriation ordinance until July 24, 2007, after Smith’s retirement; no line item reflecting grade 6 for chief in 2007 ordinance.
- Pension board treated the grade 4 salary as pension base, excluding the grade 4→6 upgrade, merit pay, and 2007 holiday pay from pensionable salary.
- Illinois Department of Insurance issued advisory opinions deeming the pay upgrade a retirement incentive and not pensionable; subsequent updated opinion kept that stance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May the grade 4→6 pay raise be pensionable? | Smith argues the grade 6 increase should be included as salary. | Board says no; increase not reflected in a formal appropriation ordinance. | Not pensionable; based on lack of appropriation ordinance amendment. |
| Should the 1% merit pay be included in pensionable salary? | Merit pay should be included as permanent pay when attached to rank. | Not included without appropriation and rank-based attachment. | Not pensionable; not tied to appropriation or rank. |
| Should 2007 holiday pay be included in pensionable salary? | Holiday pay for 2007 should be included as part of salary. | Inclusion would amount to double payment and requires appropriation basis. | Not pensionable; not supported by appropriation and would double count. |
Key Cases Cited
- AFM Messenger Service, Inc. v. Department of Employment Security, 198 Ill. 2d 380 (Ill. 2001) (clear erroneous standard for agency review in mixed questions)
- City of Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191 (Ill. 1998) (clearly erroneous standard in agency determinations)
- Policemen’s Pension Fund v. Department of Insurance, 42 Ill. App. 3d 155 (Ill. App. 1976) (merit pay/pension integration principles)
- Holland v. City of Chicago, 289 Ill. App. 3d 682 (Ill. App. 1997) (appropriation versus pay plan distinctions for pension)