                               2013 IL 115035

                            IN THE
                       SUPREME COURT
                              OF
                     THE STATE OF ILLINOIS


                           (Docket No. 115035)
     JOSEPH E. PRAZEN, Appellee, v. MARVIN SHOOP, JR., as
     President of the Illinois Municipal Retirement Fund, et al.,
                               Appellants.

                       Opinion filed October 18, 2013.

        JUSTICE THOMAS delivered the judgment of the court, with
     opinion.
        Chief Justice Kilbride and Justices Garman, Karmeier, and Theis
     concurred in the judgment and opinion.
        Justice Freeman dissented, with opinion, joined by Justice Burke.



                                  OPINION

¶1       The Illinois Municipal Retirement Fund (IMRF) Board of
     Trustees (Board) determined that plaintiff, Joseph E. Prazen, forfeited
     his early retirement incentives (ERI), which amounted to
     $307,100.50, by returning to work for an IMRF employer in violation
     of section 7-141.1(g) of the Illinois Pension Code (Pension Code) (40
     ILCS 5/7-141.1(g) (West 2010)). In reaching that determination, the
     Board found that the plaintiff’s corporation was created as a “guise”
     to avoid the return-to-work prohibitions contained in the statute. On
     administrative review, the circuit court of Sangamon County
     confirmed. The appellate court reversed, however, finding that the
     Board did not have the authority to determine that plaintiff’s actions
     were a guise for circumventing the forfeiture provisions found in
     section 7-141.1(g). 2012 IL App (4th) 120048, ¶ 37.
¶2       The Board filed a petition for leave to appeal with this court (Ill.
     S. Ct. R. 315 (eff. Feb. 26, 2010)), and we allowed the petition. For
     the reasons that follow, we affirm the appellate court’s judgment.

¶3                               BACKGROUND
¶4         On December 31, 1998, plaintiff retired from his position as
     superintendent of the electrical department of the City of Peru, Illinois
     (City), under the early retirement incentive plan (ERI plan) that had
     been adopted by the City pursuant to section 7-141.1 of the Pension
     Code. Prior to his retirement, plaintiff purchased five years of age
     enhancement credit that boosted his years of service to 32.833. At the
     time of retirement, his annual salary was $82,284.20.
¶5        Three years earlier, in 1995, plaintiff formed a business known as
     Peru Development Land Trust (PDLT) with the then-mayor of Peru,
     Donald Baker. The purpose of PDLT was to renovate and convert real
     estate. In 1995, PDLT purchased a vacant building with the intention
     of turning it into condominiums. The renovation required extensive
     electrical upgrades and modifications. Plaintiff planned to perform
     this work through his business, Electrical Consultants, Ltd. (ECL),
     which at that time was not yet incorporated.
¶6        On December 18, 1998, approximately two weeks before his
     retirement from his job with the City, plaintiff incorporated ECL. At
     the time of incorporation, he was the secretary and president of the
     corporation. Plaintiff’s wife later took over as secretary and president.
¶7        On December 21, 1998, three days after ECL’s incorporation and
     10 days prior to plaintiff’s retirement, ECL and the City entered into
     a management and supervision agreement for operation of the
     electrical department (the Agreement) to begin on January 1, 1999,
     one day after plaintiff retired. According to the affidavit of Mayor
     Donald Baker, who signed the Agreement on behalf of the City, it
     was the City’s intent in entering the Agreement to buy itself more
     time to find a replacement for plaintiff. It was also the intent of the
     City to have the liability for performance of the Agreement to be
     placed with ECL and not plaintiff personally.
¶8        Under the Agreement, ECL was to provide a full-time person to
     perform the contractor’s duties for the City for a term of three years,
     with the first year of compensation set at $89,816.74 to be paid on a
     biweekly basis to ECL. The Agreement stated that “[a]ll work,
     services, and other functions furnished or to be performed by [ECL)


                                       -2-
       for the City *** shall be in [ECL’s] position as an independent
       contractor and to no extent and in no manner shall either [ECL] or
       any of its personnel *** be regarded as an employee, servant, or agent
       of the City.” The Agreement gave the City the right to terminate it
       “upon reasonable cause determined within the City’s sole discretion”
       following a 30-day written notice to ECL. There was no
       corresponding right on the part of ECL to terminate, and the initial
       term of the Agreement was for a three-year period. The Agreement
       between ECL and the City was extended eight times following its
       initial execution. It was not until the parties executed an eighth rider
       to the Agreement in August 2008 that ECL was also given the right
       to terminate the Agreement with a 30-day written notice.
¶9          Once prior to the execution of the Agreement between ECL and
       the City and twice afterwards, plaintiff’s attorney, Douglas
       Schweickert, who was also outside legal counsel for the City,
       contacted IMRF on plaintiff’s behalf to inquire about any impact the
       structure of the Agreement might have on plaintiff’s IMRF pension.
       Schweickert documented these conversations with the IMRF in three
       letters that he wrote to plaintiff.
¶ 10        The first letter—dated September 15, 1998, which was over two
       months before ECL’s incorporation and plaintiff’s retirement from
       the City—stated that an IMRF representative had advised
       Schweickert that “a former employee who elected the Early
       Retirement Incentive may work for a non-IMRF employer.” It was
       explained to Schweickert that the City could contract with a
       corporation for certain services even though the corporation employs
       a former City employee who elected the early retirement incentive.
       According to Schweickert, the IMRF representative also told him that
       “a former City employee may also contract with an IMRF employer
       as an independent contractor.”
¶ 11        In the second letter dated March 21, 2002, Schweickert informed
       plaintiff that he had again contacted IMRF at plaintiff’s request. This
       time an IMRF representative confirmed that everything in the
       September 1998 letter still applied and that there had been no changes
       in IMRF regulations.
¶ 12        In the last letter dated November 19, 2002, Schweickert explained
       to plaintiff as follows:
                 “[The IMRF representative] confirmed that a retired ‘early
                 out’ IMRF employee may work for a separate corporation
                 which is then contracted to do work for the City from which

                                         -3-
                the IMRF employee retired. I specifically questioned whether
                that retired IMRF employee may be an owner of the
                corporation contracting with the City. She stated that was
                permiss[i]ble, but she added that the corporation cannot just
                be a guise to avoid the IMRF regulations. Specifically, if the
                corporation hires itself out to the general public in addition to
                the municipality for which it has contracted, that would be
                fine.”
       Schweickert suggested to plaintiff that he should advertise to expand
       ECL’s visibility and hire other employees, even if only for brief
       assignments.
¶ 13        ECL employed three people during its existence—plaintiff, his
       wife Diane, and their daughter Natalie. The City paid ECL biweekly,
       as called for by the Agreement. ECL then paid its employees.
       Plaintiff, Diane and Natalie received W-2 forms from ECL for each
       year they worked for the corporation.
¶ 14        On February 17, 2009, ECL informed the City in writing that it
       would be terminating the Agreement effective March 18, 2009, as
       allowed by the eighth rider extending the Agreement. ECL was
       voluntarily dissolved on November 30, 2009. After the Agreement
       between the City and ECL was terminated, the City continued to rely
       upon independent contractors to perform the duties described in the
       Agreement.
¶ 15        On November 5, 2010, nearly one year after ECL was dissolved
       and almost 12 years after plaintiff retired, general counsel for IMRF
       notified plaintiff by letter that the IMRF made a staff determination
       that plaintiff’s continued “relationship” with the City after his 1999
       retirement violated the provisions of section 7-141.1(g) of the
       Pension Code. Subsection (g) of section 7-141.1 prohibits an
       annuitant who has received any age enhancement or creditable service
       under ERI from later either accepting “employment with” or entering
       into a “personal services contract with” an IMRF employer. 40 ILCS
       5/7-141.1(g) (West 1998). Attached to the letter were new
       calculations based on plaintiff’s retirement at 27.333 years and
       showing a $307,100.50 overpayment as a result of plaintiff’s ERI
       violation. The letter did not state how IMRF would collect the
       overpayment from plaintiff.
¶ 16        Plaintiff timely appealed the staff determination to the IMRF
       benefit review committee. The IMRF benefit review committee
       conducted hearings on June 23, 2011, and July 21, 2011. The findings

                                          -4-
and conclusions of the IMRF benefit review committee stated in part
as follows:
            “The ability of the Board to determine whether or not
        [plaintiff] is an employee is irrelevant to this proceeding
        because no such determination is being made.
                                    ***
            Under the facts of this appeal, [plaintiff] violated the
        provisions of Section 7-141[.1](g) because EC[L] was created
        as a guise to avoid the return to work prohibitions contained
        therein. More specifically, [plaintiff’s] actions are contrary to
        the intent of the return to work prohibitions, which were
        enacted to offer an [sic] mechanism to allow individuals who
        are at least age 50 with 20 years of service to purchase service
        time and thus retire with a higher benefit at an earlier age. ERI
        was created as a financial incentive to employers (they could
        either not replace the retiree or hire younger employees at a
        lower salary). Allowing an employee to retire with a higher
        benefit and yet return to work under a contract was exactly
        what the General Assembly was trying to avoid when it
        enacted the ERI statute with the return to work prohibitions.
        Specifically the Committee took the following into
        consideration when making this determination:
            [1] The timing surrounding the creation and dissolution of
        EC[L].
            [2] The timing surrounding the Agreement with the City
        as it relates to [plaintiff’s] retirement.
            [3] The de minimis nature of EC[L]’s employment outside
        the agreement with the City.
            [4] The fact that [plaintiff], his wife, and his daughter
        were the only employees of EC[L].
            [5] The fact that [plaintiff], at the time of the original
        execution of the Agreement, was both secretary and president
        of EC[L].
            [6] The nature of the duties required under the Agreement
        and the fact that [plaintiff] alone fulfilled its requirement for
        a full-time staff person.”
On July 22, 2011, the IMRF Board voted to uphold the administrative
staff determination and adopted the findings and conclusions set forth
in the Board’s benefit review committee report. Plaintiff appealed to

                                  -5-
       the circuit court of Sangamon County. The circuit court confirmed the
       Board’s decision.
¶ 17       Plaintiff then appealed to the appellate court, which reversed,
       holding that an ERI annuitant must have accepted “employment with”
       or entered into a “personal services contract with” an IMRF
       participating municipality to be subject to the forfeiture provisions of
       section 7-141.1(g). 2012 IL App (4th) 120048, ¶ 38. Here, the
       Agreement was between the City and ECL—a distinct legal
       entity—not between the City and plaintiff. Id.
¶ 18       The appellate court also held that the legislature did not grant the
       IMRF Board power to find a corporation was created solely as a guise
       to circumvent the forfeiture criteria of section 7-141.1(g). Id. ¶ 37. In
       the appellate court’s view, finding a corporation to be a guise under
       the present circumstances created a new condition—of which an
       annuitant has no notice, and which is in direct conflict with the two
       conditions for forfeiture listed in section 7-141.1(g). Id. Finally, the
       appellate court found that a determination that a corporation is a guise
       is akin to a determination that the corporate veil can be pierced. Id.
       ¶ 38. The appellate court concluded that “[w]hile the legislature gave
       the IMRF Board the power to make administrative decisions on
       participation and coverage necessary for carrying out the intent of the
       Fund, this general power does not include equitable remedies
       generally reserved for the courts.” Id.
¶ 19       The Board filed a petition for leave to appeal with this court. We
       allowed that petition.

¶ 20                                  ANALYSIS
¶ 21       The outcome of this case turns on the interpretation of a statute,
       and therefore it presents a question of law that we review de novo.
       Board of Education, Joliet Township High School District No. 204 v.
       Board of Education, Lincoln Way Community High School District
       No. 210, 231 Ill. 2d 184, 194 (2008); Hooker v. Retirement Board of
       the Firemen’s Annuity & Benefit Fund, 2012 IL App (1st) 111625, ¶
       13. The primary objective in construing a statute is to ascertain and
       give effect to the intent of the legislature. Chicago Teachers Union,
       Local No. 1 v. Board of Education of the City of Chicago, 2012 IL
       112566, ¶ 15. The most reliable indicator and best evidence of
       legislative intent is the language used in the statute itself, which must
       be given its plain and ordinary meaning. Roselle Police Pension
       Board v. Village of Roselle, 232 Ill. 2d 546, 552 (2009). Additionally,

                                         -6-
       in determining the legislative intent of a statute, a court may consider
       not only the language used, but also the reason and necessity for the
       law, the evils sought to be remedied, and the purposes to be achieved.
       Williams v. Staples, 208 Ill. 2d 480, 487 (2004). Words and phrases
       should be construed in light of other relevant provisions of the statute
       and must not be interpreted in isolation. Id. Each word, clause and
       sentence of a statute must be given a reasonable meaning, if possible,
       and should not be rendered superfluous. Chicago Teachers Union,
       2012 IL 112566, ¶ 15.
¶ 22       At issue in this case is the ERI forfeiture provision of section 7-
       141.1(g) of the Pension Code. That section provides in relevant part
       as follows:
               “An annuitant who has received any age enhancement 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 forfeits that age
               enhancement and creditable service ***. A person forfeiting
               early retirement incentives under this subsection (i) must
               repay to the Fund that portion of the retirement annuity
               already received which is attributable to the early retirement
               incentives that are being forfeited, (ii) shall not be eligible to
               participate in any future early retirement program adopted
               under this Section, and (iii) is entitled to a refund of the
               employee contribution paid under subsection (f). The Board
               shall deduct the required repayment from the refund and may
               impose a reasonable payment schedule for repaying the
               amount, if any, by which the required repayment exceeds the
               refund amount.” (Emphases added.) 40 ILCS 5/7-141.1(g)
               (West 2010).
¶ 23       Before this court, the parties differ as to the proper interpretation
       to be given section 7-141.1(g). The Board argues that the terms
       “employment with” and “personal services contract with” are
       ambiguous. The Board acknowledges that it did not make any specific
       determination in the proceeding below that either of these two
       conditions were violated. Nonetheless, the Board argues here that
       those terms should be liberally construed to effectuate the intent of
       the statute. The Board contends that a look at section 7-141.1 of the
       Pension Code as a whole shows that it was enacted as a cost savings
       device to allow highly paid senior employees to retire early and either
       not be replaced at all or be replaced with employees earning a lower


                                          -7-
       salary. Therefore, the Board suggests that section 7-141.1(g) be read
       so as to take away any incentive for a worker to retire early, create a
       corporation, become employed by that corporation, contract with the
       former IMRF employer through that corporation and then simply go
       back to work at essentially the same job. Additionally, the Board
       argues that even if plaintiff did not specifically violate either of the
       two expressed conditions for forfeiture contained in the statute, the
       Board nonetheless had the authority to find a forfeiture based on the
       corporate arrangement set up by plaintiff.
¶ 24        We first reject the Board’s argument that the terms in question are
       ambiguous. Neither “employment” nor “personal services contract”
       are defined in the Pension Code, but we find the terms to be
       sufficiently plain and clear nonetheless. Even though the term
       “employment” is not defined, the term “employee” is defined in the
       Pension Code in relevant part as a person who (1) is paid “for the
       performance of personal services or official duties out of the general
       fund of a municipality” or a fund controlled by a municipality, or (2)
       “[u]nder the usual common law rules applicable in determining the
       employer-employee relationship, has the status of an employee with
       a municipality.” 40 ILCS 5/7-109 (West 2010). The appellate court
       found that to be “employed with” an IMRF employer, a person must
       first fit the definition of “employee.” 2012 IL App (4th) 120048, ¶ 29.
       We agree with that assessment. Here, plaintiff was not employed with
       the City after his retirement in 1998. Rather, plaintiff was employed
       by ECL, a separate legal entity.
¶ 25        The Board does not dispute that plaintiff was no longer an
       “employee” of the City once he retired in 1998. However, the Board
       resists application of the definition of “employee” found in section 7-
       109 of the Pension Code to inform the decision of what constitutes
       “employment with” under section 7-141.1(g). Instead, the Board
       relies upon a Black’s Law Dictionary definition of “employment,”
       which defines it as “[w]ork for which one has been hired and is being
       paid by an employer.” Black’s Law Dictionary 566 (8th ed. 2004).
       But this definition does not support the Board’s position either, as the
       Board hired and paid ECL, not plaintiff. Thus, even under the
       definition of employment supplied by the Board, plaintiff did not
       enter into “employment with” an IMRF employer following his
       retirement on December 31, 1998.
¶ 26        We also find the term “personal services contract” to be clear.
       Although the Pension Code does not define the phrase and there is a


                                         -8-
       dearth of Illinois case law discussing its parameters, courts in other
       jurisdictions have been almost uniform in defining it as “ ‘[a] contract
       which contemplates the performance of personal services involving
       the exercise of special knowledge, judgment, taste, skill, or ability.’ ”
       Doltz v. Harris & Associates, 280 F. Supp. 2d 377, 388 (E.D. Pa.
       2003) (quoting In re Compass Van & Storage Corp., 65 B.R. 1007,
       1011 (Bankr. E.D.N.Y. 1986)). Typical personal services contracts
       are ones that require a specific person to perform the contract with
       “rare genius and extraordinary skill” and are nontransferable,
       nonassignable and are therefore personal. Taylor v. Palmer, 31 Cal.
       240, 247-48 (1866); see also In re Herlan, No. 09-2665, 2010 WL
       56019, at *7 (Bankr. N.D. W. Va. 2010). That an agreement is
       between two corporations and does not identify any individual as
       being material to its performance are facts that weigh strongly against
       (if they are not indeed fatal) to construing the agreement as a
       “personal services contract.” Fransmart, LLC v. Freshii
       Development, LLC, 768 F. Supp. 2d 851, 860-61 (E.D. Va. 2011)
       (mem. op.).
¶ 27       Black’s Law Dictionary appears to be in full agreement with the
       above-noted principles culled from the case law. According to
       Black’s Law Dictionary, a “personal contract” is defined as “[a]
       contract that binds a person but not that person’s heirs or assignees
       because the contract requires a personal performance for which there
       is no adequate substitute.” Black’s Law Dictionary 347 (8th ed.
       2004).1
¶ 28       In the present case, the Board did not make a determination that
       plaintiff entered into a “personal services contract with” the City. But


           1
            Additionally, Black’s Law Dictionary simply defines a “service
       contract” as “[a] contract to perform a service.” Black’s Law Dictionary
       348 (8th ed. 2004). Moreover, we note that under certain federal
       regulations governing fairness in obtaining government contracts, the term
       “personal services contract” is a term of art that would be of no benefit to
       the Board’s position in the present case. Under federal regulation, a
       “personal services contract” is one in which the contractor’s employees are
       under the direction and supervision of the government, but a “[n]onpersonal
       services contract” is one under which the contractor is an independent
       contractor. See, e.g., 48 C.F.R. § 37.101 (2013); 32 C.F.R. §§ 107.1 to
       107.6 (2013); see also Horn v. United States, 98 Fed. Cl. 500, 502 (2011);
       Glen v. Performance Anesthesia, P.A., No. 5:09-CV00309-BR (Aug. 27,
       2010) (unpublished order).

                                           -9-
       the Board nevertheless now argues that the term is ambiguous and
       that plaintiff should be deemed to have entered such a contract. We
       conclude, however, that the term is clear and unambiguous and that
       any determination that plaintiff had entered such a contract based on
       the record before us would have been clearly erroneous given the
       undisputed facts. Here, we again note that the Agreement was
       between the City and ECL. More importantly, the Agreement did not
       require that plaintiff personally perform any of the services described
       in it. Rather, the Agreement expressly provided that ECL was an
       independent contractor and that ECL was simply responsible to
       “provide a qualified full time person to perform the duties” described.
       Again, nothing in the Agreement required plaintiff to perform any
       personal services. We further note that even though ECL only had
       three employees during its existence and plaintiff was the only one of
       those three qualified to perform the duties mentioned, there was
       nothing in the Agreement that would have prevented ECL from hiring
       another qualified contractor to perform the supervision and
       management services listed. Thus, plaintiff’s personal performance
       of the duties was not material to the contract. Under these
       circumstances, plaintiff did not enter into a personal services contract
       with the City.
¶ 29        We now turn to the Board’s argument that it had the authority to
       determine that plaintiff forfeited a portion of his pension because, in
       its view, ECL was a guise to circumvent the restrictions of section 7-
       141.1(g). In support of its argument, the Board relies upon the general
       grant of authority under section 7-200 of the Pension Code to make
       “administrative decisions on participation and coverage” to carry out
       the intent of the fund. See 40 ILCS 5/7-200 (West 2010). The Board
       also relies upon the general fiduciary duty on the part of the boards of
       all Illinois pension funds to act prudently in accordance with the
       provisions of the Pension Code. See 40 ILCS 5/1-109 (West 2010);
       see also Marconi v. Chicago Heights Police Pension Board, 225 Ill.
       2d 497, 544 (2006) (an important function of a pension board is to
       ensure adequate financial resources to pay benefits to those who
       qualify by screening unqualified or fraudulent claims).
¶ 30        We have no disagreement with the principles cited by the Board,
       but we find that the Board’s attempt to override the two specific
       conditions for forfeiture and find a third ground upon which forfeiture
       may rest is misplaced given the lack of any clear intent in the pension



                                        -10-
       statute to allow the Board to find a forfeiture under the present
       circumstances.
¶ 31       The legislative findings and declarations in subsection (a) of
       section 7-141.1 state as follows:
                   “(a) The General Assembly finds and declares that:
                         (1) Units of local government across the State have
                   been functioning under a financial crisis.
                         (2) This financial crisis is expected to continue.
                         (3) Units of local government must depend on
                   additional sources of revenue and, when those sources are
                   not forthcoming, must establish cost-saving programs.
                         (4) An early retirement incentive designed specifically
                   to target highly-paid senior employees could result in
                   significant annual cost savings.
                         (5) The early retirement incentive should be made
                   available only to those units of local government that
                   determine that an early retirement incentive is in their best
                   interest.
                         (6) A unit of local government adopting a program of
                   early retirement incentives under this Section is
                   encouraged to implement personnel procedures to
                   prohibit, for at least 5 years, the rehiring (whether on
                   payroll or by independent contract) of employees who
                   receive early retirement incentives.
                         (7) A unit of government adopting a program of early
                   retirement incentives under this Section is also
                   encouraged to replace as few of the participating
                   employees as possible and to hire replacement employees
                   for salaries totaling no more than 80% of the total salaries
                   formerly paid to the employees who participate in the
                   early retirement program.
                   It is the primary purpose of this Section to encourage units
               of local government that can realize true cost savings, or have
               determined that an early retirement program is in their best
               interest, to implement an early retirement program.” 40 ILCS
               5/7-141.1(a) (West 2010).
¶ 32       Furthermore, subsection (b) of the same statutory section then
       requires that in order to validly join the early retirement incentives
       program, a municipality must adopt an ordinance that, among other

                                         -11-
       things, requires the municipality to resolve to “use its best efforts” to
       limit the number of employees who replace employees who retire
       early, or limit the salaries paid to employees who replace the
       employees who retire early under the ERI program. 40 ILCS 5/7-
       141.1(b) (West 2010). Importantly, subsection (b) continues on to
       merely require that the municipality resolve that “a person who retires
       under the [ERI] program shall lose those incentives if he or she later
       accepts employment with any IMRF employer in a position for which
       participation in IMRF is required or is elected by the employee.”
       (Emphasis added.) 40 ILCS 7/5-141.1(b) (West 2010).
¶ 33        From the above-quoted provisions, it is clear that the legislature
       recognized that local governments have been operating under
       financial crisis, that the ERI program is designed to target highly paid
       senior employees, and that implementation of the program could
       result in cost savings. However, nothing in the legislative declarations
       evinces a clear intent that the ERI forfeiture prohibitions be
       interpreted so as to result in forfeiture in a situation like the present
       one. First, we note that subsection (a), which sets forth the intent and
       purpose of the statute, provides that a participating municipality is
       merely “encouraged” (not required) either to not replace a retiring
       employee or to replace him at a lesser salary. Also, while the
       legislature meant to encourage this, it also recognized that in some
       cases it would not be possible to get by without replacing the retiring
       employee at the same high salary. Second, we note that a participating
       municipality is merely “encouraged” to prohibit (and only for five
       years) the rehiring (by independent contract or payroll) of employees
       who receive ERI. Finally, in subsection (b), the participating
       municipality is simply required to resolve that a person who retires
       early forfeits his ERI if he accepts “employment with any IMRF
       employer in a position for which participation in IMRF is required or
       is elected by the employee.” 40 ILCS 5/7-141.1(b) (West 2010). Here,
       of course, plaintiff did not accept “employment with” an IMRF
       employer after his retirement on December 31, 1998, and it is
       undisputed that his position with ECL after his retirement did not
       require IMRF participation nor was such participation elected (and in
       fact it could not have been elected).
¶ 34        Thus, it appears that contrary to the Board’s argument, the intent
       of the legislature was actually fulfilled in this case. ECL’s contract
       with the City did not allow for plaintiff’s continued participation in
       the IMRF, as plaintiff was not an employee of the City. The City thus


                                         -12-
       did not have to make pension contributions as it would have had to
       do had it hired an employee. Undoubtedly, the City also saved by
       avoiding paying other employee benefits that would have been
       necessary in an employment context. We also note that ECL was
       bound by the Agreement for an initial three-year term without the
       same right to terminate that the City possessed upon 30 days written
       notice. This provision allowed the City the option of searching for an
       employee to fill the role needed or of simply continuing to rely upon
       ECL.
¶ 35        On the other hand, we realize that the arrangement effected in the
       present case was a lucrative one for plaintiff. He was allowed to retire
       early and was then able to earn significant income through ECL’s
       contract with the City. However, the fact that plaintiff may have taken
       advantage of a windfall or that the Board sees a loophole in the
       statute does not mean that this court may “sit as a superlegislature to
       weigh the wisdom of legislation [or] to decide whether the policy
       which it expresses offends the public welfare.” (Internal quotation
       marks omitted.) Roselle, 232 Ill. 2d at 557. We must construe and
       apply statutory provisions as they are written and cannot rewrite them
       to make them consistent with the judiciary’s view of orderliness and
       public policy. Id. at 558.
¶ 36        It is well settled that an administrative agency is a creature of
       statute and therefore any power or authority claimed by it must find
       its source in the provisions of the statute that created it. County of
       Knox ex rel. Masterson v. The Highlands, LLC, 188 Ill. 2d 546, 554
       (1999). Moreover, a determination of the scope of the agency’s power
       and authority is a question of law for the judiciary to resolve and is
       not an issue to be finally determined by the agency itself. Id.
¶ 37        Here, the legislature did not grant the Board power to find a
       corporation was a guise to circumvent the forfeiture provisions set
       forth in section 7-141.1(g) of the Pension Code. The legislature
       granted the Board the power to “carry on generally any other
       reasonable activities” necessary to carry out the intent of the IMRF.
       See 40 ILCS 5/7-200 (West 2010). We agree with the appellate court
       that creating a new condition for forfeiture—of which the annuitant
       has no notice from the clear terms of the statute itself—is not a
       reasonable activity. We also agree that had the legislature intended to
       give the Board discretion to invent new conditions to find forfeiture
       of ERI, it surely would have stated so. See 2012 IL App (4th) 120048,
       ¶ 37. It would be profoundly unjust to uphold the forfeiture in the


                                        -13-
       present case where the statute clearly lists only two conditions for
       forfeiture and neither was violated. If the legislature intended further
       conditions to apply, this would be a situation that would cry out for
       legislative line-drawing. The IMRF Board’s superimposed criteria
       appears to be vague, unworkable and evolving over time.
¶ 38       We will not presume that the legislature intended to create a
       condition for forfeiture of pension benefits where the statute is silent
       on the subject. See Shields v. Judges’ Retirement System of Illinois,
       204 Ill. 2d 488, 496-97 (2003). It is the dominion of the legislature to
       enact laws and the courts to construe them, and we can neither restrict
       nor enlarge the meaning of an unambiguous statute. Id. at 497.
¶ 39       Moreover, it is beyond dispute that to the extent there is any
       question as to legislative intent and the clarity of the language of a
       pension statute, it must be liberally construed in favor of the rights of
       the pensioner. Taddeo v. Board of Trustees of the Illinois Municipal
       Retirement Fund, 216 Ill. 2d 590, 596 (2005); Shields, 204 Ill. 2d at
       494; see also Roselle, 232 Ill. 2d at 552-53 (if the legislative intent is
       “obvious” from the language of the statute, it will be given effect
       regardless of the well-settled canon that statutory provisions of a
       pension statute should be liberally construed in favor of the
       pensioner). To adopt the Board’s construction in this case, then,
       would be inconsistent with both our obligation to construe pension
       statutes liberally in favor of the pensioner and to give effect to the
       plain meaning of the words used in the statute.
¶ 40       We also acknowledge the general rule that the interpretation of a
       statute by the agency charged with its administration is given some
       deference; but this rule is not binding and if the interpretation is
       erroneous, it will be rejected. Taddeo, 216 Ill. 2d at 595. Here, the
       Board’s interpretation is not only erroneous, but is one that appears
       to have been inconsistent and evolving over the years.
¶ 41       The IMRF’s inconsistency over the years is shown by the fact that
       in September 1998, two months before plaintiff retired, the IMRF
       advised plaintiff’s attorney that the City could contract with a
       corporation for services even though the corporation employs a
       former City employee who elected the ERI and also that a former City
       employee could contract with an IMRF employer as an independent
       contractor. This interpretation was confirmed by the IMRF a few
       years later in March 2002. Seven months later, however, the IMRF
       told plaintiff’s counsel that a retired IMRF employee may be the
       owner of the corporation contracting with the City, but the

                                         -14-
       corporation cannot just be a guise and would have to hire itself out to
       the general public also. This apparently represented a retreat from
       IMRF’s earlier position that the City could contract with a retired
       former IMRF employee on an independent-contractor basis. Then, in
       July 2011, when the IMRF Board made its determination that plaintiff
       forfeited a portion of his pension because his corporation was a
       “guise,” it relied upon a host of never-before-mentioned factors,
       including the nature and amount of the corporation’s non-City
       contracts, the number of employees in the corporation, and the timing
       surrounding its creation.
¶ 42       At any rate, we note that our determination of the outcome in this
       case would have been different if, from our reading of the statute as
       a whole, we were able to conclude that the legislature had a clear
       intent to inhibit the sort of corporate contract involved in this
       case—i.e., one that outsourced the supervision of the City’s electrical
       department to a legally valid corporation controlled by a retired IMRF
       employee—by making the retired employee’s ERI subject to
       forfeiture on account of the arrangement. But we can find no such
       intent in this case.
¶ 43       From our reading of the statute, we believe that it is possible that
       the General Assembly believed that prohibiting an annuitant from
       being employed by a corporation (regardless of the annuitant’s role
       in forming the corporation) that contracts with the annuitant’s former
       IMRF employer would hamper a local governmental entity’s ability
       to maintain a quality workforce. Or the General Assembly may have
       believed that such a bar was unnecessary because a municipality
       should be able to choose on its own whether entering into a contract
       with a self-incorporated annuitant through a corporation on an
       independent-contractor basis was a better fiscal option than hiring an
       employee to do the same work and having to pay the commensurate
       employee benefits.
¶ 44       We believe that had the General Assembly wanted to make a
       continued “relationship” with an IMRF employer through a
       corporation grounds for forfeiture under section 7-141.1(g), then the
       statute would have spoken directly to the matter. We therefore find,
       as the appellate court did, that if the ruling we reach here is
       “something the General Assembly wanted to avoid, then legislative
       action is required” to address the problem directly and provide
       sufficient guidelines for the Board to follow in making its
       determination. See 2012 IL App (4th) 120048, ¶ 40.


                                        -15-
¶ 45      Our resolution of the foregoing issues renders it unnecessary to
       address the remaining issues raised by the parties.

¶ 46                              CONCLUSION
¶ 47       For all of the above reasons, we conclude that the Board had no
       authority under the Pension Code to conclude that plaintiff’s legally
       valid corporation was a guise to circumvent the forfeiture provisions
       of section 7-141.1(g). Accordingly, we affirm the judgment of the
       appellate court.

¶ 48       Affirmed.

¶ 49       JUSTICE FREEMAN, dissenting:
¶ 50       The majority today holds that the Illinois Municipal Retirement
       Fund (IMRF) Board of Trustees (Board), a fiduciary under the Illinois
       Pension Code (Pension Code), had no authority to determine that
       plaintiff’s corporation was a guise to circumvent the forfeiture
       provisions of the Early Retirement Incentive (ERI) statute. In other
       words, under the majority’s decision the Board, a fiduciary, had no
       authority to perform its fiduciary function. I disagree, and therefore
       respectfully dissent.

¶ 51                                      I
¶ 52       On December 31, 1998, plaintiff retired from his position as
       superintendent of the electrical department of the City of Peru, Illinois
       (City), under the ERI program the City had adopted pursuant to
       section 7-141.1 of the Pension Code (40 ILCS 5/7-141.1 (West
       2010)). This program allowed participating employees to purchase
       age enhancement credits which in turn allowed the employee to retire
       early with a higher pension. Prior to his retirement, plaintiff
       purchased five years of age enhancement credit, so that, according to
       the record, his pension was based on 32.833 years of service credit
       rather than 27.333 years.
¶ 53       On December 18, 1998, about two weeks before his retirement,
       plaintiff incorporated Electrical Consultants, Ltd. (ECL). At the time
       of incorporation, plaintiff was the secretary and president of ECL.
       Plaintiff’s wife, Diane, later took over as secretary and president.



                                         -16-
       During its existence, ECL never had more than three employees:
       plaintiff, his wife, and their daughter Natalie.
¶ 54       On December 21, 1998, three days after ECL’s incorporation and
       10 days prior to plaintiff’s retirement, ECL and the City entered into
       a “Management and Supervision Agreement for Operation of the
       Electric Department” (Agreement). The three-year Agreement began
       on January 1, 1999, the day after plaintiff retired. It required ECL to
       provide a qualified full-time person to perform the contractor’s duties
       for the City, including electrical management and supervisory
       services. Plaintiff was the only one of ECL’s three employees
       qualified to perform these duties.
¶ 55       Under the Agreement, the City paid ECL $89,816.74 for the first
       year (about $7,000 more than plaintiff’s $82,284.20 annual salary
       when he retired), with increases in subsequent years based on the
       Consumer Price Index. The Agreement was extended eight times,
       with its final term ending in March 2009. The Agreement thus was in
       effect for approximately 10 years, during which the City paid ECL a
       total of $1,075,398.92. During this same period, plaintiff continued
       to receive his enhanced ERI pension. ECL was dissolved on
       November 30, 2009, approximately eight months after its Agreement
       with the City ended.
¶ 56       The Agreement and each of the eight riders extending it were
       executed on behalf of the City by then-Mayor Donald Baker, who was
       also plaintiff’s business partner.2 According to Baker’s affidavit, it
       was the City’s intent, in entering the Agreement, to contract with ECL
       “only until such time as a permanent replacement for the position of
       Superintendent of the Electrical Department could be located.” Baker
       averred, in addition, that the City intended to find such a replacement
       “as quickly as possible.”
¶ 57       On three occasions (one in September 1998, one in March 2002
       and the third in November 2002), plaintiff’s attorney, Douglas
       Schweickert, who was also outside legal counsel for the City,
       contacted IMRF on plaintiff’s behalf to inquire about any impact the
       Agreement might have on plaintiff’s pension. Schweickert
       documented these conversations with IMRF representatives in three
       letters he wrote to plaintiff. These letters generally indicate that the

           2
             In 1995, plaintiff and Baker, among others, created Peru Development
       Land Trust (PDLT) in order to renovate and convert real estate in Peru,
       Illinois.

                                         -17-
       IMRF representatives assured Schweickert that plaintiff’s corporate
       arrangement with the City was acceptable. In the third letter,
       Schweickert told plaintiff the IMRF representative specifically
       indicated that an ERI retiree could work for a separate corporation
       which contracted to do work for the City, even if the ERI retiree was
       an owner of that corporation. In that event, however, the corporation
       could not just be a guise to avoid IMRF regulations.
¶ 58       On April 5, 2009, a few weeks after the City’s Agreement with
       ECL ended, Scott Harl was elected the City’s new mayor. He was
       sworn in on April 27. According to his affidavit, he chose not to fill
       the position of superintendent of the electrical department, but named
       a department foreman “as Supervisor of the Electrical Department.”
       Mayor Harl averred, in addition, that for duties that typically fall
       under the purview of the superintendent, such as engineering tasks
       and management, the City relies on “outside vendors, engineering
       companies, and the like.”
¶ 59       On November 5, 2010, the IMRF general counsel notified
       plaintiff by letter that the IMRF made a staff determination that
       plaintiff’s continued relationship with the City after his retirement
       triggered the forfeiture provisions of section 7-141.1(g) of the
       Pension Code. Plaintiff appealed to the IMRF Benefit Review
       Committee, which concluded plaintiff forfeited his ERI benefits
       because ECL, plaintiff’s corporation, “was created as a guise to avoid
       the return to work prohibitions” of section 7-141.1(g). The IMRF
       Board confirmed the decision of the Benefit Review Committee,
       including the determination that plaintiff forfeited his early retirement
       incentives in the amount of $307,100.50, which was to be recovered
       by withholding a percentage of his retirement annuity (pension
       payments) over a reasonable period.3 The circuit court confirmed the
       Board’s decision, and the appellate court reversed, vacating the
       Board’s decision. 2012 IL App (4th) 120048. The majority today
       affirms the judgment of the appellate court.




           3
             According to the Board, from 1998-2010 plaintiff received pension
       payments totaling $668,349.95. IMRF sought to recover only that portion
       attributable to plaintiff’s early retirement, which was $307,100.50.

                                         -18-
¶ 60                                        II
¶ 61       Under subsection (g) of section 7-141.1 (40 ILCS 5/7-141.1(g)
       (West 2010)), an ERI annuitant such as plaintiff who “accepts
       employment with or enters into a personal services contract with” an
       IMRF employer thereby forfeits his age enhancement and creditable
       service benefits. In concluding plaintiff forfeited his ERI benefits, the
       Board made no specific determination that either of these two
       statutory conditions were met. Instead, the Board concluded that
       plaintiff’s corporation, ECL, was created as a guise to avoid the
       section 7-141.1(g) prohibitions against accepting employment with
       or entering into a personal services contract with an IMRF employer.
       In other words, the Board determined that plaintiff committed a fraud
       against the IMRF.
¶ 62       My colleagues in the majority reject this reasoning, holding that
       the Board “had no authority under the Pension Code to conclude that
       plaintiff’s legally valid corporation was a guise to circumvent the
       forfeiture provisions of section 7-141.1(g).” Supra ¶ 47. The majority
       emphasizes that an administrative agency such as the Board “is a
       creature of statute and therefore any power or authority claimed by it
       must find its source in the provisions of the statute that created it.”
       Supra ¶ 36 (citing County of Knox ex rel. Masterson v. The
       Highlands, LLC, 18 Ill. 2d 546, 554 (1999)).
¶ 63       The only two conditions for forfeiture listed in subsection (g) are
       (1) accepting employment with or (2) entering into a personal
       services contract with an IMRF employer. In the majority’s view, the
       terms “employment” and “personal services contract” are clear and
       unambiguous. Under the plain meaning of “employment,” plaintiff
       was not employed with the City after his retirement in 1998. “Rather,
       plaintiff was employed by ECL, a separate legal entity.” Supra ¶ 24.
       In addition, plaintiff clearly “did not enter into a personal services
       contract with the City.” Supra ¶ 28.
¶ 64       The majority finds no support in the statute for what it considers
       a “new condition” for forfeiture—the Board’s finding that ECL was
       a “guise” to avoid the return-to-work prohibitions of subsection (g).
       The majority states:
                    “We will not presume that the legislature intended to
               create a condition for forfeiture of pension benefits where the
               statute is silent on the subject. [Citation.] It is the dominion of
               the legislature to enact laws and the courts to construe them,


                                          -19-
                 and we can neither restrict nor enlarge the meaning of an
                 unambiguous statute.” Supra ¶ 38.
¶ 65        The majority thus holds that so long as there is literal compliance
       with subsection (g), there is no forfeiture of ERI benefits, regardless
       of the nature of the corporate or other arrangement utilized to reach
       that result. According to the majority, the Board has no authority to
       look into the arrangement to determine if it is fraudulent.
¶ 66        I disagree. The majority’s holding runs directly counter to section
       1-109 of the Pension Code, which applies to all pension funds created
       within the Pension Code. Section 1-109 charges the boards of these
       funds as fiduciaries to act prudently and in “accordance with the
       provisions of the Article of the Pension Code governing the
       retirement system or pension fund.” 40 ILCS 5/1-109 (West 2010).
¶ 67        This court has clearly described this fiduciary duty. In Marconi v.
       Chicago Heights Police Pension Board, 225 Ill. 2d 497 (2006),4 we
       stated:
                 “This fiduciary duty, however, is owed to all participants in
                 the pension fund, not just plaintiff. Perhaps the most
                 important function of a pension board is to ensure adequate
                 financial resources to cover the Board’s obligations to pay
                 current and future retirement and disability benefits to those
                 who qualify for such payments. An important part of this
                 responsibility involves the screening of unqualified or
                 fraudulent disability claims, so that funds are not unfairly
                 diverted to undeserving applicants.” (Emphasis in original
                 and added.) Id. at 544.
¶ 68        This section 1-109 fiduciary duty bears some semblance to, but is
       different from, the common law remedy known as piercing the
       corporate veil. Under this remedy, courts in some circumstances will
       disregard the corporate entity and find shareholders, directors, or
       officers personally liable for corporate obligations. Ted Harrison Oil
       Co. v. Dokka, 247 Ill. App. 3d 791, 795 (1993); Alpert v. Bertsch, 235
       Ill. App. 3d 452, 460 (1992); Gallagher v. Reconco Builders, Inc., 91
       Ill. App. 3d 999, 1004-05 (1980). Situations where a court may pierce
       the corporate veil include circumstances where adherence to the

           4
            Marconi was a per curiam opinion in which Justices Burke and
       Kilbride took no part. Justice Fitzgerald dissented, with opinion. Joining in
       the per curiam opinion were Chief Justice Thomas and Justices Freeman,
       Garman, and Karmeier.

                                           -20-
       fiction of a separate corporate existence would sanction a fraud,
       promote injustice, or promote inequitable consequences. Ted
       Harrison Oil Co., 247 Ill. App. 3d at 795; Alpert, 235 Ill. App. 3d at
       460; Gallagher, 91 Ill. App. 3d at 1004. The gist of the remedy of
       piercing the corporate veil is that “courts will not permit themselves
       to be blinded or deceived by ‘mere’ forms of law—they will penetrate
       behind the screen of a corporate entity to deal with the substance of
       the transaction and the relationship of the parties involved.” Ronald
       J. Broida, The History of the Development of the Remedy of “Piercing
       the Corporate Veil,” 65 Ill. B.J. 522, 523 (1977).
¶ 69        Just as courts sometimes encounter circumstances where it is
       necessary to disregard the corporate entity in order to prevent fraud
       or injustice, pension boards face similar circumstances. Courts draw
       their authority to pierce the corporate veil from the common law. In
       the case of pension boards, the fiduciary duty is established by statute.
¶ 70        In the case at bar, plaintiff’s corporate arrangement with the City
       presented a situation sufficient to authorize the Board, as a fiduciary,
       to examine the arrangement to determine whether it was fraudulent.
       Recall some of the details of plaintiff’s arrangement. About two
       weeks before he retired as superintendent of the City’s electric
       department, plaintiff incorporated ECL. Three days later, ECL
       entered into a management and supervision agreement with the City
       for operation of the electric department. The Agreement, which began
       on January 1, 1999, the day after plaintiff retired, required ECL to
       provide a qualified full-time person to perform the contractor’s duties
       for the City, including electrical management and supervisory
       services. Of ECL’s three employees—plaintiff, his wife, and their
       daughter—plaintiff was the only one qualified to perform these
       duties.
¶ 71        Under the Agreement, the City paid ECL $89,816.74 for the first
       year (about $7,000 more than plaintiff’s $82,284.20 annual salary
       when he retired), with increases in subsequent years based on the
       Consumer Price Index. The Agreement was extended eight times,
       with its final term ending in March 2009. The Agreement thus was in
       effect for approximately 10 years, during which the City paid ECL a
       total of $1,075,398.92. During this same period, plaintiff continued
       to receive his enhanced ERI pension. ECL was dissolved on
       November 30, 2009, approximately eight months after its Agreement
       with the City ended.



                                         -21-
¶ 72       The Agreement and each of the eight riders extending it were
       executed on behalf of the City by then-Mayor Donald Baker, who was
       also plaintiff’s business partner. On April 5, 2009, a few weeks after
       the City’s Agreement with ECL ended, Scott Harl was elected the
       City’s new mayor. He was sworn in on April 27.
¶ 73       The majority’s holding today essentially bars the Board from
       fulfilling its important fiduciary role of looking into or policing
       corporate arrangements such as plaintiff’s, or any other potentially
       fraudulent circumstance, in order to ensure that funds are not unfairly
       diverted to undeserving applicants. In other words, the Board, a
       fiduciary pursuant to section 1-109, has no authority to perform its
       fiduciary function. This cannot be what the legislature intended.
¶ 74       I strongly disagree with the majority’s holding that the Board had
       no authority under the Pension Code to conclude plaintiff’s
       corporation was a guise to circumvent the forfeiture provisions of
       section 7-141.1(g). I respectfully dissent.

¶ 75                                     III
¶ 76       While I would hold the Board has authority to police potentially
       fraudulent claims to ensure that funds are not unfairly diverted to
       undeserving applicants, the question remains whether the Board
       properly applied that authority in the instant case. For example,
       should the Board be estopped from finding forfeiture where, as here,
       IMRF representatives apparently assured plaintiff’s attorney,
       repeatedly, that plaintiff’s corporate arrangement with the City was
       acceptable? The majority does not address this question here.
       Accordingly, I do not address it in this dissent.

¶ 77      JUSTICE BURKE joins in this dissent.




                                        -22-
