Title: Shields v. Judges' Retirement System

State: illinois

Issuer: Illinois Supreme Court

Document:

Docket No. 94029-Agenda 12-March 2003.
DAVID J. SHIELDS, Appellant, v. THE JUDGES'
RETIREMENT SYSTEM OF ILLINOIS et al., Appellees.
Opinion filed May 22, 2003.
	JUSTICE KILBRIDE delivered the opinion of the court:
	In this case, we are asked to decide whether a retired judge
whose pension benefits were forfeited as a result of a felony
conviction is entitled to a full refund of his contributions to the
Judges' Retirement System (System) with no deduction for
benefits he received as an annuitant after his retirement. We
answer that question in the affirmative.

BACKGROUND
	David J. Shields began his judicial career in 1971 as a
magistrate judge in the Twenty-First Judicial Circuit. In August of
that year he elected to participate in the Judges' Retirement
System. He made contributions in the form of salary deductions
until his retirement in November 1990. He began receiving
retirement benefits of approximately $5,100 per month beginning
in December 1990. Less than a week later, he was indicted by a
federal grand jury on seven felony counts, including conspiracy,
extortion, and making false statements of material fact to the FBI.
He was tried, convicted on all seven counts, and sentenced to 37
months in prison. The conviction was affirmed on appeal. See
United States v. Shields, 999 F.2d 1090 (7th Cir. 1993).
	Shields continued to receive his retirement benefits until the
date of his conviction, March 2, 1992. The System then notified
him that his benefits would be terminated effective on that date
pursuant to section 18-163 of the Illinois Pension Code (Code) (40
ILCS 5/18-163 (West 1992)). He had contributed $113,222 to the
System and had received $75,349 in benefits. Although section
18-163 of the Code provides that it "shall not operate to ***
preclude the right to a refund," Shields did not immediately seek
a refund of his contributions, as he intended to pursue an appeal
and the possibility of a pardon.
	 In December 1999, however, upon notification by the System
that he was entitled to a refund, he filed an application with the
Board of Trustees of the Judges' Retirement System (Board)
seeking a full refund of all of his contributions together with
interest at 5% per annum from the date his benefits were
terminated. Relying on the informal opinion of a Special Attorney
General, the Board determined that Shields was entitled to a
refund of $37,873. That sum represented the excess of Shields'
contributions over the benefits already paid. Shields appealed that
determination. The Board found that computation of the refund
was governed by section 18-129 of the Pension Code (40 ILCS
5/18-129 (West 1992)). Subparagraphs (a) through (e) of that
section deal with refunds due: (a) to a participant in the System
who ceases to be a judge before benefits are payable; (b) to
participants who die in office; (c) to annuitants who die without a
spouse or other beneficiary; (d) to participants or annuitants whose
marriages are terminated by death or dissolution; and (e) to the
estate of the surviving spouse of an annuitant.
	Subparagraphs (c), (d), and (e) of the section provide for a net
refund only after paid benefits are subtracted from contributions.
Conversely, paragraphs (a) and (b) contain no limiting language.
In fact, no provision in section 18-129 of the Code relates to an
annuitant whose rights to benefits are terminated by forfeiture
resulting from a felony conviction. The only specific statutory
reference to a refund is found in section 18-163 of the Code.
Nevertheless, the Board reasoned that the statute should not be
read to benefit an annuitant whose pension benefits are terminated
by a felony conviction over an annuitant whose benefits are
terminated by death.
	 Finding that section 18-129(c) should apply, the Board
denied Shields' appeal and ordered a refund in the amount of
$37,873. No interest was awarded since section 18-129(c)
specifically provides that refunds should be computed "without
interest."
	Shields sought administrative review, and the circuit court of
Cook County set aside the decision of the Board, finding that
Shields was entitled to a full refund of all of his contributions
totaling $113,222.
	The appellate court reversed, with one judge dissenting. 329
Ill. App. 3d 27. We granted leave to appeal (177 Ill. 2d R. 315),
and we now reverse the appellate court.

ANALYSIS
	There are no contested issues of fact presented by the record.
Resolution of this case depends on the interpretation of the
statutory provisions governing a refund of contributions where
retirement annuity benefits are terminated because of a judge's
felony conviction. This is a question of law. Therefore, our review
of the Board's decision is de novo. City of Belvidere v. Illinois
State Labor Relations Board, 181 Ill. 2d 191, 205 (1998). As a
general rule, courts will accord deference to the interpretation of
a statute by the agency charged with its administration. An
agency's interpretation is not binding, however, and will be
rejected when it is erroneous. City of Decatur v. American
Federation of State, County, & Municipal Employees, Local 268,
122 Ill. 2d 353, 361 (1988).
	Section 18-163 of the Code provides as follows:
			"Felony conviction. None of the benefits herein
provided shall be paid to any person who is convicted of
any felony relating to or arising out of or in connection
with his or her service as a judge.
			This section shall not operate *** to preclude the right
to a refund.
			All participants entering service subsequent to July 9,
1955 are deemed to have consented to the provisions of
this Section as a condition of participation." 40 ILCS
5/18-163 (West 1992).
	The section 18-163 reference to a refund is unconditional.
However, since that section refers to a "refund" but does not
further define that term, the Board looked to section 18-129 of the
Code, dealing generally with refunds, to determine the amount of
any refund due to Shields. Section 18-129(a) of the Code
provides, in pertinent part:
			"A participant who ceases to be a judge may, upon
application to the board, receive a refund of his or her
total contributions to the system including the
contributions made towards the automatic increase in
retirement annuity and contributions for the survivor's
annuity without interest, provided he or she is not then
immediately eligible to receive a retirement annuity." 40
ILCS 5/18-129(a) (West 1992).
	Section 18-129(c) of the Code provides:
			"Upon death of an annuitant, where no spouse or other
beneficiaries eligible for an annuity survive, the
designated beneficiary or estate shall receive a refund of
the contributions made for the survivor's annuity, without
interest. If the annuitant received annuity payments in the
aggregate less than his or her contributions for retirement
annuity and the contributions towards the automatic
increase in the retirement annuity, the designated
beneficiary or estate shall also be refunded the difference
between the total of such contribution, excluding interest,
and the sum of annuity payments made." 40 ILCS
5/18-129(c) (West 1992).
	Neither section describes the circumstances applicable to
Shields. Yet, even though Shields is alive, the Board applied
section 18-129(c) because, as it reasoned in its written findings:
		"To determine otherwise would mean that a member of
the System who has retired and is receiving a retirement
annuity and whose benefits are terminated as the result of
a felony conviction would receive more in benefits than
a member of the System who has received a retirement
annuity for the same length of time but whose benefits are
terminated by death."
	The appellate court agreed with this determination. 329 Ill.
App. 3d at 34. The court reasoned that since section 18-163 of the
Code did not prescribe a method for calculating the amount of any
refund due, the intent of the legislature must be divined by
resorting to the rules of statutory construction. The majority
concluded that "the legislature intended to discourage malfeasance
by public officials and did not intend that a judge whose pension
terminates because of a felony forfeiture should be entitled under
the Pension Code both to retain annuity payments already received
and to receive a refund of his or her total contributions." 329 Ill.
App. 3d at 37.
	Statutory construction requires courts to ascertain and give
effect to the intent of the legislature. In re C.W., 199 Ill. 2d 198,
211 (2002). Where statutory language is clear, it must be applied
as written; however, if the language is susceptible of more than
one interpretation, the court may look beyond the language to
consider the legislative purpose. Reda v. Advocate Health Care,
199 Ill. 2d 47, 55 (2002). Legislative intent must be ascertained
from a consideration of the entire act, its nature, its object, and the
consequences resulting from different constructions. Fumarolo v.
Chicago Board of Education, 142 Ill. 2d 54, 96 (1990). The
language of pension statutes must also be liberally construed in
favor of the rights of the pensioner. Matsuda v. Cook County
Employees' & Officers' Annuity & Benefit Fund, 178 Ill. 2d 360,
365-66 (1997).
	No case has yet addressed the precise issue presented here.
Shields argues that some guidance may be found in Janata v.
Police Pension Fund, 140 Ill. App. 3d 925 (1986). In that case, a
police chief appealed an order of the Police Pension Fund Board
allowing an officer terminated for a felony conviction arising out
of his police duties to keep his pension benefits paid prior to his
conviction. The chief contended that no refund of the officer's
contributions should be made until the pension board first
deducted the pension payments he received after he was indicted,
but before he was convicted, because the forfeiture statute
mandated repayment in such a case. The statute in question was
identical to the one applicable to judges in the case before us. See
40 ILCS 5/3-147 (West 2000).
	The appellate court applied a plain language analysis in
rejecting the police chief's contention, holding:
			"The plain meaning of the statute in question is that a
member of the pension fund who is convicted of a felony
shall thereafter receive no pension benefits, with only an
entitlement to a refund of his contribution. The words
'[n]one of the benefits *** shall be paid to any person
who is convicted' [citation] clearly and unambiguously
focus on the person's conviction as the time when the
benefits cease. A pension board acquires only such
powers as are conferred on it by the statute, and there is
no language in the statute before us which would permit
a pension board to halt payments before the conviction or
to recoup payments made prior to that date. If the
legislature, as plaintiff suggests, had intended to authorize
pension boards to cut off benefits as of the date of the
commission of the felony, it could have so stated."
Janata, 140 Ill. App. 3d at 927.
Shields argues that the same result should obtain in his case. His
benefits were, in accordance with the statute, terminated
prospectively as of the date of his conviction. No language in
section 18-163 of the Code authorizes a recoupment of benefits
paid prior to his conviction. Therefore, since the statute provides
that it shall not operate to preclude the right to a refund, he
contends that he is entitled to recover all of his contributions.
	Janata was followed in People ex rel. Wright v. Board of
Trustees of the Teachers' Retirement System, 157 Ill. App. 3d 573
(1987). In that case, a teacher received pension benefits after his
guilty plea to a federal felony and before the imposition of
sentence. He sued to prohibit the Teacher's Retirement System
Board from terminating his pension benefits pursuant to the
applicable felony forfeiture statute. The Board, in turn,
counterclaimed for recoupment of the benefits paid after the guilty
plea. The trial court ruled against the plaintiff on his claim and
also dismissed the Board's counterclaim. The appellate court
affirmed the dismissal, rejecting the Board's argument that since
the paid benefits exceeded the plaintiff's contributions, it was
entitled to a recoupment of those benefits. Citing Janata with
approval, the court held that the trial court correctly concluded that
the statute contains no provision for recoupment of funds paid
prior to the plaintiff's conviction. Wright, 157 Ill. App. 3d at 579.
	The Board argues that the opinion in Janata does not make
clear how to calculate the refund. If the refund consisted of the
difference between contributions made and benefits paid, the
Board concedes that the opinion is correct because no statutory
authority exists to allow a recoupment of benefits from the amount
already offset. The opinion does not, however, set out the amount
of the refund, nor does it state whether any deductions were taken
from total contributions.
	The Board argues that, unlike the circumstances in Wright, the
benefits received by Shields did not exceed his contributions and
the Board has not sought repayment of any benefits he received
prior to his conviction.
	The Board also refers us to Phelan v. Village of LaGrange
Park Police Pension Fund, 327 Ill. App. 3d 527 (2001), decided
after the appellate court decision in this case. The Phelan court
relies on the reasoning of the appellate court in this case. Phelan
similarly held that the felony forfeiture section applicable to the
Police Pension Fund should not, as a matter of public policy, be
construed to favor an officer whose benefits are terminated by
felony conviction over an officer whose benefits are terminated by
separation or death. Phelan, 327 Ill. App. 3d at 536. Phelan offers
no further enlightenment on the issue.
	Neither Janata nor Wright attempts to refine or limit the term
"refund" as used in section 18-163 of the Code. We are not
persuaded that the Board's attempt to limit Shields' refund is
justified by resorting to the provision in the refund statute
applicable to deceased annuitants. See 40 ILCS 5/18-129(c) (West
1992). The terms of section 18-129 are clear and unambiguous.
This section appears to express a comprehensive legislative
scheme for the computation of refunds in various situations
involving system participants, annuitants and their beneficiaries or
estates. No provision in section 18-129 of the Code pertains to
annuitants whose benefits are subject to the felony forfeiture
statute. We will not presume that the legislature intended to define
rights or procedures where the statute is silent on the subject. It is
the dominion of the legislature to enact laws and it is the province
of the courts to construe those laws. We can neither restrict nor
enlarge the meaning of an unambiguous statute. Petersen v.
Wallach, 198 Ill. 2d 439, 448 (2002). Thus, we conclude that
section 18-129 of the Code has no application to refunds due
annuitants whose benefits have been forfeited. Most importantly,
we note that section 18-163 contains no limitation on the right to
a refund. In other words, the right to the refund is unconditional.
Accordingly, we will not impose any conditions that are not
clearly required by the statutory language.
	As we have noted, the Board concedes that, as held in Janata
and Wright, the statute does not allow recoupment of benefits paid
prior to conviction. However, if the Board were permitted to
deduct Shield's benefits from his total contributions, it would, in
effect, be recouping benefits rightfully paid to Shields prior to his
conviction. That result would be incompatible with our
determination that the right to a refund is unconditional.
	Although we have held that the purpose of the felony
forfeiture provision in the Code is "to discourage official
malfeasance by denying the public servant convicted of
unfaithfulness to his trust the retirement benefits to which he
otherwise would have been entitled" (Kerner v. State Employees'
Retirement System, 72 Ill. 2d 507, 513 (1978)), the result we reach
here does not frustrate that purpose. Shields contributed $113,222
of his own money to the pension fund. Since the forfeiture, he has
been denied benefits at the rate of approximately $5,000 per month
for more than 11 years. That loss, now totaling over $600,000, will
continue to grow until his death and the death of his spouse. The
imposition of such a penalty should have ample deterrent effect.
Further, to adopt the Board's construction would be inconsistent
with our obligation to construe pension statutes liberally in favor
of the pensioner. Matsuda, 178 Ill. 2d  at 365-66.
	Therefore, we reverse the judgment of the appellate court and
affirm the judgment of the circuit court.
Appellate court judgment reversed;
 circuit court judgment affirmed.
	CHIEF JUSTICE McMORROW took no part in the
consideration or decision of this case.