City Threatening Legal Action Over Firefighter Pension Issue

SPRINGFIELD, IL – The city of Springfield is preparing to take legal action against its fire pension board if it doesn’t comply with a state Department of Insurance opinion advising it to stop factoring double-time holiday pay into firefighter pension calculations, the city’s top attorney said Tuesday.

The board at a special meeting in November voted unanimously to stop the practice for all future hires, after the Department of Insurance advised that double-time holiday pay for firefighters “is not considered a pensionable salary,” which contradicted a 1998 advisory opinion from the same agency.

The board has not voted to make the same change for current employees, and there’s a fundamental difference of opinion among some top city officials and pension board members about whether that should happen.

Corporation Counsel Jim Zerkle, who attended Tuesday’s meeting, said city officials are also considering asking the Department of Insurance to conduct an audit and consider a possible enforcement action against the pension board for not entirely following the agency’s opinion.

For each holiday that isn’t worked, Springfield firefighters receive an additional eight hours of regular holiday pay, which factors into pension calculations. At issue, though, is the additional double-time pay firefighters receive if they work a holiday.

The department opinion, issued Nov. 6, says in order for holiday pay to be considered part of a firefighter’s salary and factor into the pension, every employee would have to receive the additional compensation, whether they work the holiday or not.

The board at its quarterly meeting on Tuesday went into executive session to discuss “possible, pending or probable litigation.” It did not take any action after emerging from the closed session.

City Budget Director Bill McCarty, one of the five pension board members, has at two different meetings made a motion to make the holiday pay change apply to all active pension members, not just new hires. McCarty’s motion died twice for lack of a second.

McCarty listened in on Tuesday’s meeting by phone, participating as a member of the public because the board doesn’t have rules allowing for members to participate in meetings remotely, and said if he’d been able to participate, he would have made another motion to stop approving holiday pay as part of pensionable salary for the time being.

If the board were to go that route, and if and when the Department of Insurance advisory opinion is found to be in error, the board would again approve holiday pay as pensionable salary for current employees, and they would receive holiday pay amounts owed to them during the time period that wasn’t included in the calculation.

“With this situation, I want to make it clear that I’m not trying to be a thorn in anyone’s side on this issue,” McCarty said. “…I think that the retirees, the firefighters, have a very strong concern for good reason, but I think that the board as the trustees of the fire pension should also have a strong concern for their responsibilities and what they could be legally liable for, potentially. And I think we can all agree that no matter what the board does, legal action is coming. No matter what.”

Attorney Don Craven, who represents the fire pension board, has said he believes making that holiday pay change for current employees would amount to a diminution of benefits, and would therefore be unconstitutional.

Craven said Tuesday he thinks McCarty’s suggestion about awarding pensions and then attempting to recalculate them could be problematic, as well.

McCarty, in a memo to Craven, asked for his legal written opinion “that trustees cannot and will not be held personally liable” for continuing to use holiday pay in pension calculations.

“I ask for this because trustees are relying on your professional legal opinion in the performance of their duties as trustees of the Springfield Fire Pension Board and to ensure that they or the board in general are not later held liable should your legal opinion turn out to be in error,” the memo reads.

McCarty also included a case from the Third District Appellate Court that found the Lockport Township Firefighters’ Pension Board breached its fiduciary duties by not suspending a former fire chief’s pension payments when his job title changed.

“So what I’m advocating for, and have been advocating for, is to take the most cautious approach that insulates the board members from a breach of fiduciary responsibility under the pension code,” McCarty said.

From The State Register-Journal

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