mean associate general counsel for the illinois municipal retirement fund and i am representing the defendants appellants in this case this matter involves the interpretation of section seven nash one forty one one of the illinois pension code that's the section that provides impertinent part and a new attend who has received any agent handsome and or creditable service under this section and thereafter accepts employment with or enters into a personal services contract with an employer under this article thereby well that's the issue in this case judges the appellate court has decided that those two terms should be strictly construed personal services contract and employment with the appellate court says employment with is the same thing as employee under the pension co i am ref didn't make a specific finding that the plaintiff in this case entered employment with or personal services contract the finding of my amref under this case was that what plaintive did by retiring and reaping the benefits of an early retirement incentive he was able to retire prior to each reaching the standard retirement age for members which is fifty five the plaintiff actually retired at fifty two and during the ten year period in question his pension was increased by more than three hundred thousand dollars  what it would have normally been under the pension code i am i didn't find that he entered into either because i am raf believes that those terms are they what i am or f m and is that what the actions in creating the corporation contracting with the city and the timing surrounding that it was thirteen days before he retired the corporation was created and then three days later it entered into a contract with the city the timing surrounded that made it look would have to find him to do it and i think there is an ambiguity in the statute if you look at the terms employment with and personal services contract employment with isn't defined in the pension code and neither is personal services contract the appellate court said well will apply the term employee because that necessarily is implied with employment with and that that is not the case the statute says employment with it doesn't say employee if the general assembly had intended it to mean employee it would have said employee because that term is defined in the pension instead it said employment with and that's under find however if you look at black's law dictionary definition of employment with its work for which one has been hired and is being paid by an employer that doesn't necessarily imply a common law employer employee relationship and that there in lies the question is what is meant by employment with the same thing with personal services contract the appellate court said well it's not vague we can look to the simple little case which is a missouri court of appeals case and that that case said a personal services contract you look at the nature of the contract what does it call for does it does it have to be fulfilled by the promise or only the sanfilippo case isn't really instructive because if it doesn't say do you look at the the legal status of the contracting party in this case the legal status of the contracting party was a corporation could that still be a personal services contract if you look at the agreement itself that u c l had with the city i think it could but i am arrest didn't term in this they determined it was a guys because they really felt that there was an ambiguity the pension code that provides that i am on earth has the power to make administrative decisions on participation and coverage and this is the important part which are necessary for carrying out the intent of the fund in accordance with the provisions of this article and because i am or i found an ambiguity i am rough looked to the legislative intent of the e r i reached retirement statute the statute as a whole you know it's intended to provide a benefit for retiring early the whole goal behind the statute is to get the senior employees off of the municipal payroll local government payroll in order to bring in either nobody or someone to hold or salary to save money the court in subsection a of the statute sets out i think it's seven findings and declarations which are specific they say you know what we're operating our local governments are operating under financial crisis here's a mechanism for you to go in and you know get rid of the top heavy well paid people and bring in some either not not bring anyone in or bring in someone at a lower salary and the court  yes i think it does judge i think the legislative intent is very the statute is unique because it actually does set forth the findings and declarations of the general assembly and saying hey you know what this is a cost savings  mechanism for local governments it's intended that most of the people that take this incentive really should retire if you're going to be getting an added bonus or you retire early for in an in exchange for  additional amounts added to your pension you don't in the case of in this particular case mr payson was fifty two he brought five years he was able to retire at fifty two although the standard retirement age is fifty five  and for every year over twenty years you get an additional percentage added on to your pension so he was able to retire at a higher rate of pension than he normally would have been  within personal services contract well what was the general assembly thinking when they put those terms within the statute well i think that they were thinking we don't really want these people to retire and we don't really want them coming back to work but if they do in some capacity whatever that is and even if it is incorporating yourself as a corporation and returning to work but in that event they shouldn't benefit from the incentive that they got under the statute and that should be forfeited right has never argued that mr prison wasn't entitled to his pension he is definitely entitled to his pension what i am rest position is is that mr prison is not entitle to the portion of the pension that's attributable to his  retirement that three hundred thousand dollars in change that was added onto his pension for taking the early retirement because when you look at the facts of this case it seems abundantly clear that he created this corporation the life of the corporation was in essence the life of the contract with the city it seems clear from the facts of the case that the whole reason that u c l was incorporated was to get around the return to work provisions of the muse or the pension   the dates of us reloaders very one was i believe at the beginning of his retirement and another one was sometime in the middle when his wife then took control of the corporation and then there was  one very near that exact same time i think it was in two thousand and eight or two thousand and nine i can't remember the dates but those are their own brief where there was the final letter that was written to mr praise and from schweiker said that i am rather didn't tell him that the corporation could not just be a guys to avoid the i m f regulations and that mr patient should try to run some ads or maybe hire an employee for however long and he had to come out and say in order to avoid looking like it's a guy's but that seems to be the intent of that final letter but those letters you know they are one side  there's no evidence that was emitted regarding what mr schweiker actually told the customer service representatives that he talked to on the phone the questions that were asked the scenarios that were presented there was nothing in the record regarding that so i am  took a lot of those letters with a grain of salt but the final letter does refer and it refers to the work guys which is what i am i found even though it was several years later and that shows that i am  has consistently interpreted i'm going back to my first question of the is first technically i mean if we just look at the language you know the plaintiff was not employed with the suit you would agree that case i mean you three i would if i would agree with that but when you add the facts to of this case yeah i'm just you know i'm just trying to understand so your basic position is we find an ambiguity we go to the legislative intent and even under the way right that i am i was attempting to do what i thought the legislature intended with this section and it seems absurd that a person could retire and create a corporation and then the the words are ambiguous no one it's not employee as defined in the pension code although that's what the appellate court says nowhere within that statute does it say employee it says employment with that could mean something other than that if you look at the legislative intent that set forth clearly in subsection a of the statute which says you know the general assembly here by fines and declares and it goes through seven different things talking why they're passing this guy legislation that when you look at that and you look at what happened with the plaintiff you you can't help but come to the conclusion that even though the general assembly didn't specifically say within the statute hey you know what we don't want people to self incorporate and then the next day go back to their same employer in this case pretty much the same job and collect an incentive for retiring early it's absurd it doesn't make any sense so i think if you look at the statute as a whole and the intent of the general assembly which talks about you know providing this economic incentive for financially distress and getting these people off the payroll the intent is that they really expected them to retire and in this case if the facts i believe are very clear that what happened is it was a way for him to collect a it's obviously not held to the same standard as the judiciary when it makes the decision i think they looked at it you know well he's a corporation is he employment with a personal services contract we don't know but we think what he did is a guy's and he you know we violated the intent of the provision so i don't think it matters the city cli that i am around didn't find one of those two things i think under if you look at section seven two hundred which gives the general authority to i am are after make administrative decisions on participation and coverage which are consistent with the intent of the fund in accordance with the provisions of this article that that gives them the authority to say hey but you know what we do think that this is what the general assembly want court decision should also be overturned because it results in an absurdity the statute statutes are to be construed to avoid absurdities and in this case the of certain result is that it provides for it in and hands financial incentive to retire  yet allows an individual to self incorporate and return to full time work with the same employer while receiving an enhanced pension the appellate court decision also creates a loophole that is contrary to public policy there's approximately six thousand i am or retirees across the state of illinois currently this case creates a loophole and it basically shows them how to go back to work while collecting their enhanced incentive without losing that incentive public policy is defined as you dish out decisions legislation and constitutions as well as customs morals and notions of justice that prevail in a state i believe that reasonable persons would find that to collect an enhanced pension and return to full time work under contract with your former employer is fundamentally unfair and the public the appellate court's decision is against public policy thank you thank you m please the court for the record the gym for him behalf of joe praising this matter because before you today a simple case of administrative review the decision at issue is i am or if finding the job pays them by lated article seven of the illinois pension code thereby forfeiting a substantial portion of his pension without a finding of either he was employed with or had a personal services contract with ltd shortly before he retired as a purported guys to circumvent the return to work provision so the immediate issue before this court is really quite quite simple petition application of the forfeiture provisions are supported by law and that's subject to the noble review as a sub issue of that this court also has to decide whether i am raf has the necessary equitable powers ok let's talk about the intent they cite section want to nine five one zero nine which is the journal a lot of tory provisions if you will the pension code then what the intent is under section seven and then they jump all the way down to two hundred and say well if you read those intense and you read section two hundred we have this authority but that makes everything else in the statutes are perfect with their legislatively created entity they only have limited powers those limited powers are here's the end of your ballpark if you're going to fairfield someone decided the person was employed if they were to say didn't show present was employed with or had a personal services contract then i think we get into a tent debate because what did the legislature intend when they use as to what is required to criteria for you to forfeit they even use either one of them and they put their sleeve decided not to use either one of up and they said instead intent we're going to divine tea leaves if you well we think this is really what is required what good does that retiree merely has to retire and incorporate him so and move on from there and let me confess right away is this statue a problem for i am raf oh yeah and i fully recognize that but two more specifically address your question their argument is hey if you rule and show praises favor you're going to create a road map on how to get out how to get away with this all you have to do is self incorporate really  incorporation that easy you fall your six hundred bucks you become incorporation but that's not what happened in this case what happened in this case is he followed every corporate for melody there was there was a whole  himself obligated to perform any of those obligations they say there is only three employees in the corporation that is true but only three employees but that presumes corporations don't actually hire people as contract workers to perform problems with the statute night just want to go back to my initial question if we agree with the appellate court in your position will it stand for the proposition following dotting the i's and crossing the t except me the fact is that if someone goes out in formally incorporate some sort of keeps the minutes those everything that they're required to do does a retiree merely have to do that in cold can go back to their same exact that they retired from and collect the enhanced pension as well as working in the same capacity now incorporate it creates what i would call a factual absurdity it creates a political absurdity but in no way shape or form does it create a legal absurdity when the legislature enacted this early retirement probation they explicitly picked two criteria the rules of state story construction are they expression of some specific factors means they we have to presume they contemplated other factors and didn't not include those so you sure as i sit here today i will not ever deny that as i look at it from a factual standpoint it's something that requires a remedy but you can't remedy it through administrative fee yet when you don't have the authority to do so you can't remedy it through e g through judicial figure there's a remedy it's over th pass legislation and here's why it has to be legislation exactly where in the continuum of the business let's say it's a decision and rule by a decision when exactly do you draw the line and as does it just apply if you self incorporate a meal before you retire does it just apply if it's a family business ok let's say it applies to family businesses fine i go get someone else to be my straw man you get a stipend here's the deal they're going to hand me back but you create the corporation let's say it's commonwealth are talking about a public utility here i work in a public utility i go to commonwealth edison if you hire me to do this job that i used to do well fine you get a stipend we did not please this line being drawn  but you can look at those factors but there's a lot of other things that i think take priority over that for example pension statutes are supposed to be construed in favor of the pension or penal statutes this is a forfeiture have to be strictly constructed also from this court accounting not sources mansion versus silent the words they must be given their effect by the courts even though the consequences may be harsh unjust absurd or unwise such consequences can be to the beginning of your argument you said this is a simple case of administrative review i think that was in your opening sentence right but he said yes this record comes to us and maybe perforates but this record comes to us out of that administrative review proceeding correct correct under the  how the facts that the board relied upon are against the manifest would be evidence thank you the primary one is this whole case is bad then built about the contemporaneous creation of the record in fact when you look at their decision they have a voice and they just say he returned to work there because when he was superintending he had powers to hire fire train supervisor performance appraisals prepare budget things like that when he became c l took over superintendent i'm sorry strike that when e c l took over contract functions only some of those are what the superintendent previously performed and though some of those were technical consulting as they related to public utility in other words you have a guy who had certain knowledge or there are other people in the industry who have certain knowledge and we're going to hire out for that and if the goals of this administration i'm sorry if the goals of the pension hold were to eliminate that position mission accomplished if the goal was to eliminate that position and save money good mission accomplished we got rid of the highest paid salary we got rid of the position we now don't have to pay attention benefits health benefits vacation we can terminate in thirty days notice we have no employee employer relationship how is that my beneficial and consistent with the statutory ten the real problem here and again i don't dismiss it it's a political one they have a guy who went to work for corporation he formed who were turned the corporation entered into a contract with the city they don't like it it seems unfair you don't disagree with it is it unlawful no would someone do it today i think they couldn't or the existing law i'm sorry no no i was just and i know it's not dispositive of your argument because you don't care if they call the guys or not you're saying they're not allowed to do that but can you go he retired in december several months before i retired saying hey i'm around what can i do what can't i get into i am raf's defense they're trying to figure it out he then sends a second letter hasan's attorney on three two thousand  saying hey i'm just trying to double check and you know now the laws been in effect in a little while anything new that i need to worry about and then you see the results of the letter and then finally in november i think it was one thousand two thousand and two there's a third letter from iraq for the first time they use some language they don't use it just like trying to strike that uses of the words he can't be a guy's so now we're talking about four years after he entered into the contract they're saying oh by the way can't be a guy and take legal advice from your attorney i mean he did what everyone should do he would get legal advice to take that is your attorney's teaching you how to beat the system one got what what else are you supposed to do  that's exactly and his attorneys advising him well you know what i taught the i m f again and you know these are things that make sure you stay compliant with the law but these are all the things you do to keep your corporation in perfect working order he did all those things and then when he opposes the corporation and he literally retires from all where i think it's seven months later i am or if sends him a letter and they don't say hey you create you create a corporation as a guys what are they saying their letter and please look at this we find you forfeited your pension because you have a continued relationship with your former employer we go into the hearing saying well you know we've read the statute i don't see continued relationship anywhere and so what is it and we go through the administrative hearing now they don't and never make this mistake again they don't transcribe you know so literally you're just dumping in paper and there's no evidence presented by amroth except for a single letter i'm sorry except for single article which they tell us about orally in american energy weekly saying that joe prays in a just retired as superintendent now they tell us that really but they don't give us anything or even the basis for it other than to continue relationships it's a you know what you're right you're entitled to that we're going to have another here and then how is it you're going to put a room place the reason why you put rules in statute in place is to advise people on how to conduct their lay there is no way that he would have ever thought looking at the statute or any attorney would have thought looking at the statute that somehow i m f could come back later and just say you know what we get this side of what the intent of the legislature  in even though the legislature specifically articulated employed with a personal services contract we think there are other exceptions and eyes are consistent with those they look like those so this should  is that advising any of those other new attends how they're supposed to conduct themselves you're literally guessing confess i don't quite understand i am our strikers i don't see how this isn't piercing the corporate veil and by way of example let me explain to you if the city of peru had an issue with e c l of e c l breached the contract there is them even though it is the corporation that entered into the contract we're going to go straight after the person who cooperated again i conclude with there's a problem ok but they have to solve the problem legislatively and based on the stand she added as it currently exists there is no way they have the authority to ignore well to ignore the explicit provisions that are in the forfeit your code and come up with the roman idea of what the content is and there's no way thank you very much thank you with regard to the liberal construction canon that was cited by the plaintiffs which says that pension statutes should be liberally construed to favor the pensioner this case is definitely a different situation than those this involves a voluntary choice by a member and the receipt of an enhanced pension in exchange for the enhancement the member must abide by the certain rules relating to retirement if the rules are broken they forfeit only the enhancement and not their entire pension in addition the liberal construction can and does not trump the rules of statutory construction if the legislative intention is obvious from the language used in a pension act the pension should be made effective that's the result police pension fund versus the village of rosedale case by this court and in those hour a widow was deemed not entitled to an annual benefit increase because nothing went within article three clearly allowed it this court found that there was no legislative intent to provide that benefit increase to the widows in that case in addition with regard to the fact that the plaintiff deems that this is a penal statute this is not a penal statute and the rule that says that penal statutes must be strictly construed is wrong for two reasons first this isn't a penal statute is just nonsense most of the cases that talk about penal statutes and strikes strict constructions are cases that interpret the criminal code the plaintiff cited one case in his brief six versus kemel which was a penalty case that dealt with a fine for failure to release a mortgage this is different from a fine it's a forfeiture of a benefit it was voluntarily entered into but even if this court were to say that the forfeiture provisions of seven dish one forty one g are penal in nature there's a case people versus branch or which dealt with the aggravated battery statutes there was a inconsistency between a sentencing provision that was contained within that statute in the general sentencing provisions for class three felonies the sentencing provision within the statute so that was a one to three year sentence but the general sentencing provision provided that it was a one to ten year sentence the court found that the proper tense the proper sentence was one to ten years despite the clear indication otherwise they ignored the legislative intent and the statute was constrict leigh was strictly construed in favor of the accused in that case despite it being a penal statute with regard to plaintiff's argument regarding piercing the corporate veil i think that's a red herring in this case  piercing the corporate veil is when you seek to hold an individual liable for the acts of a corporation in this case it's not the acts of the corporation that are the problem it's the acts of the pensioner it's the acts of mr craig present mr prison created this corporation e c l for the purpose of allowing him to go back to his old job and i know the plaintiffs disputes that he didn't go back to the same job but i think if you look at the the agreement the agreement for the management and supervision of the electrical department of the city of peru and you look at the duties under that agreement it is in the nature of what a supervisor of the electrical department would do now we would never know that because i am i have contacted the city of crew in the city prudence does not have a job description for the superintendent of the electrical department with regard also to plaintiff's argument that the that the i am i should pass legislation there are plenty of statutes in this case in this state that  does there's no need to pass legislation what the plaintiff did was clearly bent intended by the general assembly to be a violation of the section and the amaranth s that you up hold the decision of their board of trustees