Welcome to The Illinois State
Our Mission Statement
The Association is constituted to promote the welfare of public employees who have retired from service with the State of Illinois in all ways compatible with the public interest and to support and promote improvements in the public employee’s retirement systems of Illinois.
Retirement is when you spend less time worrying and more time enjoying
the “golden years”. ISEA Retirees can help eliminate your
worries by letting you discuss them with a live person rather than a
machine each weekday between 8:30 am and 4:30 pm. We can help eliminate
tax and retirement issues, insurance problems, long-term care questions
and rates, home safety with security systems and even help you get fresh
hearing aid batteries at blue light special prices. Our staff pledges
to help make your retirement truly a pleasant one.
Pension Reform Law will NOT go to Supreme Court
Wednesday, September 9, 2015, the state attorney general’s office said “ the Illinois Supreme Court’s May ruling finding the state’s 2013 pension reform law unconstitutional will not be appealed to the U.S. Supreme Court.”
The May unanimous ruling by the Illinois Justices was based on a provision in the state constitution which prohibits impairment or diminishment of public worker retirement benefits.
Their ruling was against the state’s argument that the state needed to invoke police powers and cut pension benefits in order to deal with the fiscal emergency.
This is a good day for all state retirees!
Rudy J. Kink, Jr.
ISEA Retirees Executive Director
Report on Attorneys Fees in the Retiree Laws Suits
by John Coady, ISEAR Board President
Questions about attorneys’ fees and how they will be paid surround the two recent court cases concerning retirees’ benefits. This report may help in explaining how attorneys’ fees were determined and how they are being paid.
The two cases
The older case, usually referred to as the “Kanerva case,” is nearing completion. Kanerva involved the legislation and the lawsuit that followed on the State’s attempt to require retirees and their survivors to pay for health insurance. The Illinois Supreme Court found this attempt to be unconstitutional. The State is now enjoined from collecting health insurance premiums for retirees and their survivors.
The more recent case, usually referred to as the “pension reform case,” involved legislation and the lawsuit that followed on the State’s attempt to modify pension law, including slashing the annual 3% adjustment on pensions. This case has fully concluded with the Illinois Supreme Court finding the attempted pension reform unconstitutional.
Why shouldn’t the State pay attorney fees?
In both cases, it was the position of ISEAR, along with other retiree groups, that if retirees won the lawsuits, then the State of Illinois should be forced to pay the retirees’ attorneys’ fees. Many retirees personally testified in that regard in the Kanerva attorneys’ fees hearing held in April in Sangamon County Circuit Court.
The contention that the State should pay the attorneys fees of the retirees was, in his words, “philosophically” shared by the trial court judge in the Kanerva case. But the judge indicated in his written ruling that Illinois law provided no legal basis for that kind of fee shifting.
ISEAR’s attorneys have told us that they believe the judge was correct on the status of Illinois attorneys’ fees law and that this legal principle applies to both cases.
Attorneys’ fees in the pension reform case
In the pension reform case, the attorneys required the groups that hired them to pay fees as contractually agreed upon. Early investigation by ISEAR raised fears that our association’s attorneys’ fees in the case could approach $200,000. ISEAR took action to reduce those potential fees.
First, in the process of hiring attorneys Don Craven of Springfield and Mike Reagan of Ottawa, both with excellent reputations in the legal area in question, ISEAR negotiated capped fees that could not exceed a set amount regardless of the length and complexity of the case.
Second, ISEAR sought the agreement of another retiree group to share the more expensive costs of an appellate lawyer.
These two steps have kept ISEAR’s share of attorneys’ fees in the now-concluded pension reform case under $100,000, that is, at $87,500. Payment of those attorneys’ fees is coming from two sources.
The first source for ISEAR’s payment of attorneys’ fees in the pension reform case came from the ISEAR membership’s wonderful and generous response to ISEAR Executive Director Rudy Kink’s appeal for contributions to a litigation fund in the summer of 2014. This fund was for the pension reform case only. The response of the membership was extraordinary and exceeded expectations. Those contributions for the pension reform case total $31,0052.19 as of May 19, 2015, with moneys still coming in.
The remaining attorneys’ fees were paid from ISEAR’s reserves that were created for this kind of contingency. The reserves have been slowly built over the years from our members’ faithful payment of dues.
Attorneys’ fees in the Kanerva case
Most of the lawsuits – in what is collectively called the “Kanerva case” – were brought by individual retirees, with one additional suit brought by a union, and another suit brought by a retiree group (other than ISEAR) who entered the case much later in the litigation.
The attorneys in the union’s case and the attorneys in the one retirees’ group case will be paid according to any contractual agreement entered into between the clients and the attorneys.
The attorneys for the individual retirees agreed to take the case on a “contingency fee basis.” This means that the attorneys would have been paid nothing if they lost the case and that they would receive a percentage of the money recovered if they won.
Those individual retirees, such as Roger Kanerva whose name is used to identify the case, and their attorneys, such as Roger Kanerva’s attorney Don Craven, deserve retirees’ genuine gratitude for battling to preserve retirees’ rights and benefits. They did so at a time many so-called legal experts predicted retirees would lose the battle of convincing the Illinois courts of the unconstitutionality of the State’s new practice of assessing retirees and survivors for health insurance premiums.
After the Illinois Supreme Court decided the Kanerva case in favor of the retirees, the trial judge held a hearing on attorneys’ fees. In a written decision that was issued in mid-April, the trial judge determined that the “winnings” were $63,172,600. Attorneys fees were set at $1,494,300 plus costs of $7,711.10. The court ordered payment first from the $134,600 interest earned on the health insurance monies withheld by the State. The remaining attorneys fees and costs are to be paid by a 2.37% deduction from retirees’ and survivors refunds of health insurance premiums.
Each retiree and survivor who chose to remain in the Kanerva case will have 2.37% deducted from their health insurance premium refund, currently scheduled for payment in late June. That means for every $1,000 refunded, the retiree or survivor will pay $23.70 towards attorneys’ fees.
ISEAR has been informed that the 2.37% may be the lowest percentage for attorneys’ fees in a class action suit that has ever been awarded in Illinois. While the cash amount is large, ISEAR recognizes that fees must be set in a high enough amount to induce attorneys to take these kinds of risky cases or the rights of retirees would be wrongly taken away without anyone stepping forward to advocate for their restoration. Most importantly, ISEAR believes Illinois law should be changed to make the State pay for the attorneys’ fees when the State unconstitutionally takes retirees’ rights and benefits away and not require the retirees to pay those fees.
ISEAR did not hire attorneys in the Kanerva case, but with Board approval did pay $5,000 to Attorney Craven towards his costs and fees at a time there was no certainty he would receive any fees whatsoever. With the court’s order for payment of attorneys’ fees from the refunds of retirees’ health insurance premiums, Attorney Craven is returning the $5,000 to ISEAR.
Unfortunately, ISEAR is told that there is wide skepticism in government and legal circles that this is the end of legislation that erodes retirees’ and survivors’ rights and benefits to health insurance and pensions. More lawsuits may be necessary, and with more lawsuits, there will surely be more attorneys’ fees to pay.
Questions may be directed to ISEAR Board President John Coady at email@example.com.
Friday, May 8, 2015 the Illinois Supreme Court struck down the 2013 pension reform law as unconstitutional.
Pension Reform Law Struck Down by Springfield Judge
On November 21, 2014, the pension reform law climbed another step closer to the Illinois Supreme Court. Sangamon County Circuit Court Judge Belz agreed with arguments by ISEA-R and others and declared the law unconstitutional. In a six-page ruling, Belz determined that the State of Illinois made a constitutionally protected promise to its employees. The state’s inability to pay the pensions promised to its employees should not become the problem of those employees. They are still owed their benefits, and the state must find a way to pay for them.
Belz disagreed with the state’s argument that pension benefits can be changed because the state’s fiscal condition qualifies as an emergency and enables the state to do things it is not ordinarily allowed to do under the Constitution. Belz ruled that the state presented an invalid defense. Belz explained that pension benefits must be protected and there are no allowable exceptions.
In a separate case earlier this year, Kanerva v. Weems, the IL Supreme Court ruled retiree health care benefits are constitutionally protected, even though they aren’t specifically mentioned in the Constitution’s pension clause. By extension, ISEA-R is hopeful that pension benefits, including the 3% compounded automatic annual increases (AAIs), will receive the same protection.
IL Attorney General Lisa Madigan has filed an appeal with the Illinois Supreme Court. She indicated she will also ask the court to expedite the appeal of the pension case. ISEA-R has hired a very respected appellate attorney, Mike Reagan, to represent us in that appeal.
Official Kanerva Class Action Site
Kanerva -Health Care Lawsuit
As of October, health insurance premiums are no longer being deducted from pension checks. On November 22, the state and attorneys for retirees met in court for a status conference. The parties continue to work on logistics and a timeline to reimburse retirees for health insurance premiums wrongfully taken by the state since July 2013. More than 100,000 retirees are due refunds after the Illinois Supreme Court struck down a law that sought to eliminate the fully subsidized premiums earned by retirees. The next hearing to finalize the payment schedule and to get all the necessary documentation in order is scheduled for December 18, 2014.
Supreme Court Ruling Update
By this time, most of you have heard or read about the Kanerva decision of the Illinois Supreme Court. ISEA-R was not a party to the case, but we did financially support the legal cost in the case. Therefore ISEA-R and its members should share in claiming credit for the very favorable ruling of the court.
The Supreme Court ruled that the promised health care for retirees without cost to the retirees is a pension right protected by the Illinois Constitution. Further the court ruled that to require retirees to pay for their health care is a diminishment and impairment and therefore unconstitutional. The result is very good for retirees and provides a window into what the supreme court might do with cases in Sangamon County that object to the law that reduces the annual income adjustment.
However, the Kanerva case is far from over. The Supreme Court will return the case to Sangamon County for further proceedings. The process in Sangamon County could take several months. We expect that withholding from pension payments will continue unless ordered by the court. The good news is that all of the funds that have been withheld each month have been deposited into a special account. Therefore when the court orders the withholding to stop and the refunds to issue, there is no issue as to the availability of the money.
ISEA-R is proud to have been a part of this very important decision, but it is just one skirmish in an ongoing fight. We continue to battle to protect the interest of our members and retirees as the Kanerva case and the pension case continues.
On January 3, 2014, ISEAR filed a lawsuit in Sangamon County Court that challenged the constitutionality of the Pension Reform Act. That lawsuit is called Illinois State Employees Association Retirees vs the Board of Trustees of the State Employees Retirement System, et al and is case number 2014 CH 3.
On May 14, 2014 a Sangamon County Judge stopped the Pension Reform Act from going into effect on July 1, 2014. The Illinois Supreme Court previously consolidated four other similar lawsuits to Sangamon County joining the lawsuit filed by ISEAR, which in essence challenges the changing of the 3% automatic annual increase as a violation of contractual law and the Illinois constitution. The temporary injunction issued by the Sangamon County Judge only prevents the Pension Reform Act from going into effect on July 1 until the case is finalized in his court.
In addition to our own pension lawsuit, ISEAR contributed funds to help defray attorney’s fees in the case entitled Kanerva v Weems. On July 3rd the Illinois Supreme Court ruled that state retirees’ health insurance is a pension benefit that cannot be diminished or impaired by the Illinois General Assembly. While that is just a preliminary ruling in the case, it greatly increases the chances that state retirees will not have to pay toward health insurance, which is what most state retirees believe they had been promised all along.
The Board understands that the assaults upon State Retirees’ benefits are unprecedented and, if successful, will financially impact retirees and their survivors for decades. The stakes are too high to sit on the sidelines and do nothing. Our constitutional guarantee for our pension is just too important. For those reasons, the Board has established a special fund within ISEAR to accept contributions to help with the costs of this legal battle.
Please feel free to contact me if you have any questions.
Medicare Advantage Information
Medicare-eligible retirees and survivors have received information regarding the Total Retiree Advantage Illinois (TRAIL) Enrollment Period. The informational kits are mailed to Medicare retirees enrolled in the State Employees Group Insurance Program, the Teachers’ Retirement Program (TRIP) and the College Insurance Program (CIP).
If the member has a dependent on his/her coverage who is not enrolled in Medicare Parts A and B, the member will not be included in the group of members set to be offered a Medicare Advantage plan. The member and dependents will all remain in the current health plan.
What happens to a member’s other State-offered plan benefits, like dental, vision and life insurance? Will a member still have them when changing to a Medicare Advantage plan?
Yes, members will continue to have the same dental, vision, and life plan benefits from the same plan administrators that they are currently enrolled.
Will a member be able to make changes to his/her coverage during the annual Benefit Choice Period held in May each year?
No. Retirees who become part of the State-sponsored Medicare Advantage group of members have a new annual enrollment period in the fall of each year to coincide with the federal Medicare calendar plan year.
Do the State-sponsored Medicare Advantage plans include prescription coverage?
Yes, all of the Medicare Advantage plans being offered have prescription drug coverage included with no gap (i.e., donut hole).
Are there any special programs being offered through these Medicare Advantage plans?
Yes, each Medicare Advantage plan offers a variety of wellness/clinical programs, such as the Silver Sneakers® fitness program. Although the programs vary by health plan vendor, some examples include various wellness programs, disease management programs, case management programs, discount programs, medication therapy management and meal programs.
Members enrolled in any of the four group insurance programs administered by the State of Illinois are provided health and prescription drug benefits. Some programs offer additional benefits of vision, dental and life insurance coverage. The four groups include State employees and retired State employees; retired community college employees; retired Illinois teachers; and active employees and retired employees of Illinois' local governments. Use the CMS address - cms.il.gov to visit the Benefits Choice website for more information.
To ISEA Retirees
Subject: ISEA Retirees to support Retiree’s case before Supreme Court
As the Executive Director of the Illinois State Employees Association Retirees, I have never seen a more frustrating time for our retirees.
On July 1, the State of Illinois begins imposition of health insurance premiums upon State of Illinois retirees. As I write this to you, the General Assembly is considering various proposals for drastic pension reform that will affect these same retirees.
Many retirees resent the unilateral denial in their retirement years of what they believed the State had previously promised them. Many others feel it is profoundly unfair for retirees to hear the financial consequences that resulted from legislators repeated failures to properly fund the pension systems, despite being told many times to do so. The state’s retiree’s pleas to the General Assembly for fairness seem to be falling on deaf ears.
The ISEA Retirees’ Board of Directors has carefully considered litigation on both the health insurance matter (that is already law) and on pension reform (should it become law). Our informal advisors tell us that our legal arguments are stronger on the pension reform matter than on health insurance costs. Due to the large costs of litigation, some consideration was given by the Board to use our limited funds for a potential pension reform lawsuit only rather than suits on both health insurance premiums and pension reform.
But the ISEA Retirees’ Board of Directors has determined that ISEA Retirees cannot remain on the sidelines any longer on the health insurance case. While our finances are insufficient to maintain our own case against the State of Illinois, the Board has decided to support the legal efforts of the retirees who filed in Sangamon County in the case of Kanerva v. Weems, Sangamon Co. Case No. 2012-MR-582. State of Illinois retirees in that particular suit have retired from the Illinois Environmental Protection Agency, the Illinois Department of Human Services, the Illinois Department of Nuclear Safety, and the Illinois Department of Corrections. Many legal observers believe that it is probable if these retirees prevail in their case, all retirees will benefit from that court victory.
With other State of Illinois retirees’ law suits around the State, the Kanerva case was consolidated into one case in Sangamon County Circuit Court under the case name of Maag v. Quinn, Sangamon Co. Case No. 2012-L-162. Last month, all of the retirees’ cases were dismissed by a ruling that allows the State to assess retirees with the cost of health insurance. The Illinois Supreme Court has made a rare move by accepting a direct appeal of that dismissal decision.
By agreement with the Kanerva case retirees’ attorneys, ISEA Retirees is contributing to their cost of the appeal before the Illinois Supreme Court. ISEA Retirees will not be a party to that suit, but the attorneys will communicate with me as the ISEA Retirees Executive Director and keep me informed on the progress of that appeal. I will, likewise, keep our membership advised of the developments.
The ISEA Retirees Board is satisfied that while some legal interests of the Kanerva case retirees are different from some of our retirees, there are sufficient similar legal interests to warrant $5,000 financial support in the attempt to seek fairness from the Illinois Supreme Court in the treatment of State of Illinois retirees. Regardless of the odds of success, the alternative is to give up without a fight. In the Board’s review, the stakes are too high and the consequences are too long-term not to join the legal battle.
Spending your ISEA Retirees’ dues are decisions that are never made frivolously by your Board. Paying for legal efforts to protect retirees’ health insurance benefits is, in the Board’s opinion, a proper expenditure of the ISEA Retirees’ funds. While our accounts are not large, they are sufficient to cover this payment without any appeal for contributions from members.
If pension reform eventually becomes law (as has health insurance matters), ISEA Retirees’ Board of Directors will consider litigation options at that time.
Feel free to contact me if you have questions.
Rudy J. Kink, Jr.
As many of you are aware, there has been a lot of talk and criticism over the benefits State Employees receive upon retirement. This has been the reason for several committee meetings andproposed legislation to make changes in a retiree’s benefits.
The Retirees Coalition, made up of the Illinois State Employees Association Retirees (ISEA/R), the State University Annuitants Association (SUAA) and the Retired State Employees Association (RSEA) and their lobbyists, have attended each committee meeting to voice opposition to any change in benefits. The Coalition has held meetings with Senate President John Cullerton, Senate Minority Leader Christine Rodagno and House Minority Leader Tom Cross to discuss our position.
The Coalition plans additional meetings with these leaders as well as other legislative leaders in our effort to protect retiree’s benefits.
Coalition for Retirees Rights
From Left: Bill Curry, RSEA President; Linda Brookhart, SUAA Executive Director; Rudy J. Kink, Jr. ISEA/R Executive Director
State University Retirement System
Teachers Retirement System
State Employees Retirement System
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