                               Illinois Official Reports

                                      Appellate Court



        Board of Trustees of the Riverdale Police Pension Fund v. Village of Riverdale,
                                  2014 IL App (1st) 130416



Appellate Court          THE BOARD OF TRUSTEES OF THE RIVERDALE POLICE
Caption                  PENSION FUND, Plaintiff-Appellant, v. THE VILLAGE OF
                         RIVERDALE, Defendant-Appellee.



District & No.           First District, Sixth Division
                         Docket No. 1-13-0416


Filed                    June 27, 2014


Held                       In an action by the police pension fund of defendant village alleging
(Note: This syllabus that the village breached its statutory funding obligations under the
constitutes no part of the Pension Code, the trial court properly entered summary judgment for
opinion of the court but the village to the extent that the pension fund did not meet its burden
has been prepared by the of presenting any statutory language establishing that the fund had a
Reporter of Decisions contractual right to any specified level of funding, especially in the
for the convenience of absence of evidence that there was a risk that benefits would be denied
the reader.)               or an allegation that the fund was on the verge of default or imminent
                           bankruptcy, but the village was liable to the fund for the portions of
                           the taxes the village levied for the fund that were deposited instead
                           into the village’s “pooled account” and used for the village’s general
                           operations.



Decision Under           Appeal from the Circuit Court of Cook County, No. 11-CH-35736; the
Review                   Hon. Franklin Valderrama, Judge, presiding.



Judgment                 Affirmed in part and reversed in part; cause remanded for additional
                         proceedings.
     Counsel on                   Puchalski Goodloe Marzullo, LLP, of Libertyville (Richard J.
     Appeal                       Puchalski and Jeffrey A. Goodloe, of counsel), for appellant.

                                  Odelson & Sterk, Ltd., of Evergreen Park (Burton S. Odelson,
                                  Michael J. McGrath, Richard F. Bruen, Jr., and Sara Gallagher, of
                                  counsel), for appellee.

                                  Dobrovolny Law Offices, of Urbana (James L. Dobrovolny, of
                                  counsel), for amicus curiae Illinois Public Pension Fund Association.

                                  Illinois Municipal League, of Springfield (Brian Day and Roger
                                  Huebner, of counsel), amicus curiae.




     Panel                        JUSTICE LAMPKIN delivered the judgment of the court, with
                                  opinion.
                                  Presiding Justice Rochford and Justice Hall concurred in the judgment
                                  and opinion.




                                                    OPINION

¶1          Plaintiff, the Board of Trustees of the Riverdale Police Pension Fund (Pension Board),1
       appeals the order of the circuit court granting summary judgment in favor of defendant, the
       Village of Riverdale (Village),2 and denying partial summary judgment in favor of plaintiff.
       Plaintiff contends the circuit court erred in finding sections 3-125 and 3-127 of the Illinois
       Pension Code (Pension Code) (40 ILCS 5/3-125 (West 2008); 40 ILCS 5/3-127 (West 2010))
       did not provide plaintiff with a contractual right to a specified level of funding of the Riverdale
       Police Pension Fund (Pension Fund). Plaintiff additionally contends the circuit court erred in
       failing to find defendant liable for underfunding the Pension Fund. Based on the following, we
       affirm in part and reverse in part and remand for additional proceedings.

¶2                                            FACTS
¶3        Defendant Village is a municipality as defined by section 3-103 of the Pension Code. 40
       ILCS 5/3-103 (West 2010). In accordance with section 3-101 of the Pension Code, the Village

             1
           The Illinois Public Pension Fund Association filed a brief in support of plaintiff as an
       amicus curiae.

             2
              The Illinois Municipal League filed a brief in support of defendant as an amicus curiae.

                                                        -2-
     established the Pension Fund for the benefit of the municipality’s police officers, participants,
     and beneficiaries. See 40 ILCS 5/3-101 (West 2010). Plaintiff Pension Board is an
     administrative agency created by the Pension Code (40 ILCS 5/3-128 (West 2010)) with the
     exclusive authority to control and manage the Pension Fund (40 ILCS 5/3-132 (West 2010)).
     In addition, the Pension Board has the authority to order the payment of pensions and other
     benefits to beneficiaries. 40 ILCS 5/3-132 (West 2010). Section 3-143 of the Pension Code
     directs the Pension Board to “certify” in an annual report the estimated amount necessary in the
     calendar year to “meet the annual requirements of the fund as provided in Section 3-125 and
     3-127.” 40 ILCS 5/3-143 (West 2010).
¶4       Section 3-125 of the Pension Code provided:3
              “The city council or the board of trustees of the municipality shall annually levy a tax
              upon all the taxable property of the municipality at the rate on the dollar which will
              produce an amount which, when added to the deductions from the salaries or wages of
              police officers, and revenues available from other sources, will equal a sum sufficient
              to meet the annual requirements of the police pension fund. The annual requirements to
              be provided by such tax levy are equal to (1) the normal cost of the pension fund for the
              year involved, plus (2) the amount necessary to amortize the fund’s unfunded accrued
              liabilities as provided in Section 3-127. The tax shall be levied and collected in the
              same manner as the general taxes of the municipality, and in addition to all other taxes
              now or hereafter authorized to be levied upon all property within the municipality, and
              shall be in addition to the amount authorized to be levied for general purposes as
              provided by Section 8-3-1 of the Illinois Municipal Code, approved May 29, 1961, as
              amended. The tax shall be forwarded directly to the treasurer of the board within 30
              business days after receipt by the county.
                  The police pension fund shall consist of the following moneys which shall be set
              apart by the treasurer of the municipality:
                  (1) All moneys derived from the taxes levied hereunder;
                  (2) Contributions by police officers under Section 3-125.1;
                  (3) All moneys accumulated by the municipality under any previous legislation
              establishing a fund for the benefit of disabled or retired police officers;
                  (4) Donations, gifts or other transfers authorized by this Article.” 40 ILCS 5/3-125
              (West 2008).
¶5       Section 3-127 of the Pension Code provides:
              “The board shall establish and maintain a reserve to insure the payment of all
              obligations incurred under this Article excluding retirement annuities established under
              Section 3-109.3. The reserve to be accumulated shall be equal to the estimated total
              actuarial requirements of the fund.
                  If the pension fund has a reserve of less than the accrued liabilities of the fund, the
              board of the pension fund, in making its annual report to the city council or board of
              trustees of the municipality, shall designate the amount, calculated as a level
              percentage of payroll, needed annually to insure the accumulation of the reserve to the
              level of the fund’s accrued liabilities over a period of 40 years from July 1, 1993 for

        3
         The statute has since been amended.

                                                  -3-
             pension funds then in operation, or from the date of establishment in the case of a fund
             created thereafter, so that the necessary reserves will be attained over such a period.”
             40 ILCS 5/3-127 (West 2010).
¶6       Moreover, pursuant to section 22-403 of the Pension Code, the pension funds may only be
     expended for public purposes and not for any corporate purposes. 40 ILCS 5/22-403 (West
     2010).
¶7       On August 19, 2010, the Pension Board filed the underlying case seeking a declaratory
     judgment where it alleged the Village breached its statutory funding obligations under sections
     3-125 and 3-127 of the Pension Code (40 ILCS 5/3-125 (West 2008); 40 ILCS 5/3-127 (West
     2010)) by failing to levy the appropriate taxes for pension contributions from 2000 through
     2010. Plaintiff requested a judgment declaring that the Village’s tax levies and amounts
     contributed to the Pension Fund were insufficient and requiring the Village to annually assess
     taxes in concert with sections 3-125 and 3-127 of the Pension Code. Plaintiff further requested
     an order requiring the Village to turn over all pension contributions in its possession.
¶8       According to the Pension Board’s complaint, the Illinois Department of Insurance
     regulates public pension funds, such as the one at issue here. In that capacity, the Illinois
     Department of Insurance issues an annual report to the Pension Board indicating the tax
     amount, as determined by an actuary, necessary to meet the municipal contribution
     requirements provided by the Pension Code. The actuarial report then is forwarded by the
     Pension Board to the Village. According to the Pension Board’s complaint, the Village did not
     follow the recommendations of the Illinois Department of Insurance during certain fiscal years
     and, as a result, as of the end of the 2005 fiscal year, the Village owed the Pension Fund a sum
     of approximately $615,408.
¶9       On January 12, 2011, the Village filed its initial answer, and discovery ensued. In an
     interrogatory sent by the Pension Board to the Village, the Pension Board inquired:
                 “As of this date, is there any amount of money owed to the Riverdale Police
             Pension Fund, for annual pension fund contributions by Defendant from its General
             Fund, or any other Village Fund to the Pension Fund, and if so state:
                 (a) the exact amount owed to the Pension Fund;
                 (b) the specific reason why the defendant filed, refused or neglected to deposit
             property taxes levied, collected and received by the defendant on behalf of the plaintiff,
             with the Pension Fund;
                 (c) If the defendant admits that it failed, refused or neglected to deposit property
             taxes levied, collected and received by it, on behalf of the Pension Fund, state what the
             defendant did with those property taxes and if these funds were used by the Village,
             what the defendant used those funds for.”
     The Village responded that there was money owed to the Pension Fund due to an “accounting
     practices” oversight. The Village stated that the funds owed to the Pension Fund were
     deposited into the “Village pooled account” and used “for general operations.” Then, in
     response to the Pension Board’s request to admit facts, the Village stated that, from 2003 to
     2010, it did not follow the tax levy recommendations issued by the Illinois Department of
     Insurance and did not retain its own actuary to determine the appropriate tax levy amounts
     pursuant to section 3-125 of the Pension Code. In addition, the Village revealed the taxes
     levied in comparison to those recommended by the Illinois Department of Insurance, such that:


                                                 -4-
       (1) for 2003, the recommendation was $432,261 and the Village levied $420,000; (2) for 2004,
       the recommendation was $473,860 and the Village levied $262,940; (3) for 2005, the
       recommendation was $486,673 and the Village levied $262,940; (4) for 2006, the
       recommendation was $603,772 and the Village levied $280,000; (5) for 2007, the
       recommendation was $651,990 and the Village levied $440,000; (6) in 2008, the
       recommendation was $754,607 and the Village levied $440,000; (7) in 2009, the
       recommendation was $849,300 and the Village levied $440,000; and (8) in 2010, the
       recommendation was $1,018,396 and the Village levied $866,168.
¶ 10       In August 2011, the Pension Board filed a motion for partial summary judgment as to
       liability, arguing that it was entitled to summary judgment where it was undisputed that money
       was owed to the Pension Fund due to the Village’s failure to remit those property taxes
       received by the Village but not transferred to the Pension Fund and its failure to comply with
       the tax levy recommendations issued by the Illinois Department of Insurance. The Village
       responded that summary judgment was not proper because the Pension Code did not yet
       require the Pension Fund to be fully funded and such a finding was not proper pursuant to
       McNamee v. State of Illinois, 173 Ill. 2d 433 (1996). On February 17, 2012, the circuit court
       denied the Pension Board’s motion for partial summary judgment without expressing its basis
       for doing so and provided the Village with the opportunity to file affirmative defenses. In
       response, the Village filed the affirmative defense that the Pension Code did not require the
       Pension Fund to be fully funded yet.
¶ 11       On June 22, 2012, after the close of discovery, the Village filed a motion for summary
       judgment, arguing that it was not liable pursuant to McNamee because the Pension Board did
       not allege any Pension Fund participant had been denied benefits due to alleged underfunding
       and there was no evidence the benefits had been impaired. The Village additionally cited
       People ex rel. Illinois Federation of Teachers v. Lindberg, 60 Ill. 2d 266 (1975), and argued
       that section 5 of article XIII of the Illinois Constitution (Ill. Const. 1970, art. XIII, § 5) does not
       create a contractual basis for pension fund participants to expect a particular level of funding,
       but instead only provides the right to benefits upon retirement. The Village included its expert
       witness’ testimony that there was no measurable actuarial damage caused to the Pension Fund
       as a result of the alleged underfunding and no default on payments to beneficiaries of the
       Pension Fund. Additionally, the Village argued that the Pension Board failed to provide any
       evidence that the Pension Fund was on the verge of default or imminent bankruptcy. Attached
       to the motion was the deposition transcript of the Village’s actuary expert, Arthur Tepfer, a
       letter from Tepfer to the Village’s counsel dated April 16, 2012, 4 and a letter from the
       Village’s counsel to Tepfer dated May 22, 2012,5 as well as the Pension Board’s complaint
       and the Village’s affirmative defenses.

           4
            This letter advises the Village’s counsel as to the documents Tepfer reviewed in preparation of his
       actuarial opinion, which included, inter alia, the court pleadings, the Pension Fund’s actuarial reports
       for 1998-99 and 2007-08, the Pension Fund’s balance sheet, audit reports for the Village for 2000 and
       2002-10, the Illinois Department of Insurance actuarials, and property tax levy and distribution
       documents.

           5
            The letter advises Tepfer that his deposition testimony will be used to support the Village’s motion
       for summary judgment.

                                                       -5-
¶ 12       The Pension Board responded that there were contested issues of material fact as to the
       amount of damages in the case, which precluded the entry of summary judgment. The Pension
       Board cited testimony from its witnesses establishing that the Village had a net pension
       obligation of over $1 million due to the Village’s failure to submit pension contributions in
       satisfaction of the annual required amount and that the Pension Fund suffered resulting
       “financial damage.” The Pension Board further argued that McNamee was distinguishable
       because it did not involve underfunding of a municipality’s police pension fund and did not
       include an analysis of section 3-125 of the Pension Code. Instead, McNamee involved the
       constitutionality of an amendment to section 3-127 of the Pension Code. Moreover, in
       response to the Village’s repeated allegation that no beneficiary had been denied pension
       benefits and that there was no evidence the Pension Fund was on the verge of default or
       imminent bankruptcy, the Pension Board stated, “so what!”
¶ 13       On January 14, 2013, in a written order, the circuit court granted the Village’s motion for
       summary judgment. In doing so, the circuit court noted that the Village admitted it did not
       follow the Illinois Department of Insurance’s actuarial reports for the years 2003 through
       2010. The court determined that McNamee, as cited by the Village, was factually
       distinguishable from the case at bar “because it did not address the issue in this case, to wit:
       whether the Pension Board has a vested contractual right to the pension funding level in the
       Riverdale Police Pension Fund.” Finding this was a case of first impression wherein there was
       no case law determining whether statutory funding levels may be enforced under the Pension
       Code, the circuit court then relied on Illinois cases dealing with statutory funding under the
       pension protection clause of the Illinois Constitution (Ill. Const. 1970, art. XIII, § 5). After a
       thorough review of Lindberg and People ex rel. Sklodowski v. State, 182 Ill. 2d 220 (1998), the
       circuit court held:
                   “While Sections 3-125, 2-127 and 22-403 of the Pension Code are clearly designed
               to ensure the financial integrity of the pension funds, the Court notes that none of the
               sections mention any right to enforce certain statutory funding levels. Nor do any of the
               foregoing sections expressly give the Pension Board final decision making authority to
               determine the amount needed to ensure the police pension fund’s reserve. In construing
               [s]ections 3-125, 3-127 and 22-403 of the Pension Code in their entirety, based on the
               plain and ordinary language therein, the Court finds that the legislature could not have
               intended to remove all discretion from the municipality in determining the amount of
               tax levies and contributions to the pension funds in any particular year. Consequently,
               the Court finds no genuine issue of material fact precluding the entry of summary
               judgment in favor of the Village.”
       This appeal followed.

¶ 14                                            ANALYSIS
¶ 15        The Pension Board contends the circuit court erred in granting summary judgment in favor
       of the Village regarding the claim for breach of sections 3-125 and 3-127 of the Pension Code
       and in denying partial summary judgment in favor of the Pension Board as to the Village’s
       liability for all amounts of contributions due and owing the Pension Fund.
¶ 16        Summary judgment should be granted where the pleadings, depositions, and admissions on
       file, together with the affidavits, demonstrate that there is no genuine issue of material fact and
       the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2010).

                                                    -6-
       Summary judgment is a drastic measure that should only be granted if the movant’s right
       thereto is clear and free from doubt. Outboard Marine Corp. v. Liberty Mutual Insurance Co.,
       154 Ill. 2d 90, 102 (1992). We review a trial court’s decision granting summary judgment
       de novo. Id.

¶ 17                       I. Summary Judgment Regarding Statutory Funding
¶ 18       The Pension Board asserts that the circuit court erred in granting summary judgment on a
       legal theory not presented by the Village. The Pension Board argues the circuit court
       sua sponte found the Pension Board lacked standing to bring a claim against the Village where
       the Pension Code did not give the Pension Board a vested contractual right to statutory funding
       of the Pension Fund. In contrast, the Village sought summary judgment on the basis of the
       McNamee decision and because there were no measurable actuarial damages, proof that
       pension payments were not made to beneficiaries, or evidence that the Pension Fund faced
       bankruptcy.
¶ 19       In response, the Village argues that it raised the Pension Board’s lack of standing as an
       affirmative defense and as an argument in its motion for summary judgment where it argued
       that the Pension Code did not yet require full funding of the Pension Fund, the Pension Fund
       had not suffered any measurable actuarial damage and was not on the verge of default or
       imminent bankruptcy, and there was no evidence that any beneficiaries had been denied
       benefits due to the alleged underfunding of the Pension Fund. Consequently, the Village
       maintains that the Pension Fund’s injury is speculative and cannot form the basis of
       declaratory relief. In the alternative, the Village argues that standing is a matter of subject
       matter jurisdiction and can be considered by the court even if not raised by either party.
¶ 20       Our review of the pleadings at issue reveals that the Village did not expressly raise a lack of
       standing affirmative defense. Generally, the failure to raise standing as an affirmative defense
       results in waiver. Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217, 252-53 (2010).
       However, while not express, the pleadings demonstrate that the Village essentially raised a
       lack of standing defense by asserting that the Pension Board’s underfunding claim was
       speculative and lacked merit. Specifically, in its affirmative defenses, the Village argued that it
       did not breach its statutory duty to fund the Pension Fund where section 3-127 of the Pension
       Code does not require complete funding until 2033 and where numerous variables, e.g., the
       interest rate and the particulars of the participating officers in terms of length of service,
       number, etc., were not within the Village’s control.
¶ 21       Nevertheless, in its written order, the circuit court stated that it did not consider a standing
       or ripeness challenge because the Village did not expressly raise either as affirmative defenses.
       Notably, the cases relied upon by the circuit court to conclude that the Pension Board raised a
       meritless claim did not address the issue of standing. See Sklodowski, 182 Ill. 2d 220;
       McNamee, 173 Ill. 2d 433; Lindberg, 60 Ill. 2d 266 (considering whether there was a
       contractual right to funding based on the pension protection clause (Ill. Const. 1970, art. XIII,
       § 5)). Therefore, although the parties seemingly agree that summary judgment was granted
       based on the Pension Board’s lack of standing, no such finding was made by the circuit court.6



          6
           As a result, we need not address the parties’ additional arguments regarding standing.

                                                     -7-
¶ 22        As to the Pension Board’s argument that the circuit court’s basis for granting summary
       judgment was sua sponte and, therefore, improper, we disagree. The Village’s motion for
       summary judgment argued that judgment was proper as a matter of law because there were no
       proven injuries to beneficiaries and, pursuant to McNamee, there was no constitutional or
       contractual right to a particular level of funding. Review of the circuit court’s written order
       demonstrates that it considered McNamee at length and found it distinguishable where it did
       not deal with the “specific issue,” namely, “whether statutory funding levels may be enforced
       under the Pension Code.” The circuit court considered the issue before the court to be one of
       first impression and relied on cases dealing with the pension protection clause for guidance.
       Those cases included Lindberg and Sklodowski. Sklodowski relied upon Lindberg and
       McNamee, both cited by the Village as bases for granting summary judgment. Therefore, the
       circuit court did not grant summary judgment sua sponte but, rather, upon the grounds
       submitted by the Village.
¶ 23        We now turn to the question of whether the Village was statutorily required to provide a
       particular level of funding pursuant to the Pension Code, as alleged in the Pension Board’s
       complaint. Resolving the question on appeal requires our consideration of sections 3-125 and
       3-127 of the Pension Code. We are guided by the familiar principles of statutory construction.
¶ 24        The primary goal of statutory construction is to ascertain and give effect to the intent of the
       legislature. Metropolitan Life Insurance Co. v. Hamer, 2013 IL 114234, ¶ 18. The best method
       for determining legislative intent is the statutory language, which must be given its plain and
       ordinary meaning. Id. A court may not depart from the plain language by reading exceptions,
       limitations, or conditions into the statute that conflict with the clearly expressed legislative
       intent. Id. The language of the statute must be read in context and should be given a reasonable
       construction without being rendered superfluous. See Prazen v. Shoop, 2013 IL 115035, ¶ 21.
       In ascertaining the legislature’s intent, a court may also consider the reason and necessity for
       the law, the evils sought to be remedied, and the purposes to be achieved. Id. Where statutory
       language is clear and unambiguous, it will be given effect without resort to other aids of
       construction. Kunkel v. Walton, 179 Ill. 2d 519, 533-34 (1997). However, where the meaning
       of a statute is unclear from the language, the court may look to other sources such as legislative
       history to determine the legislature’s intent. Id. A statute is ambiguous when it is capable of
       being understood by reasonably well-informed individuals in two or more different manners.
       Gruszeczka v. Illinois Workers’ Compensation Comm’n, 2013 IL 114212, ¶ 16.
¶ 25        Section 3-125, at the relevant time, provided that the Village “shall annually levy a tax
       upon all the taxable property of the municipality” to produce a “sum sufficient to meet the
       annual requirements of the police pension fund.” 40 ILCS 5/3-125 (West 2008). The “annual
       requirements” included: “(1) the normal cost of the pension fund for the year involved, plus (2)
       the amount necessary to amortize the fund’s unfunded accrued liabilities as provided in
       Section 3-127.” 40 ILCS 5/3-125 (West 2008). Pursuant to section 3-127, the purpose of the
       “reserve” is to insure the payment of pension obligations. See 40 ILCS 5/3-127 (West 2010).
       The Pension Board must maintain a reserve to amoritize the fund’s unfunded accrued
       liabilities. See 40 ILCS 5/3-127 (West 2010); Board of Trustees of the Police Pension Fund v.
       City of Evanston, 281 Ill. App. 3d 1047, 1050 (1996). Based on the plain language of the
       statutes, the Village was required to levy taxes sufficient to cover the cost of the pension fund
       of the given year, as well as the amoritized amount to cover the fund’s unfunded accrued
       liabilities. Section 3-127, however, advised that, in the event the pension fund has a reserve of


                                                    -8-
       less than the accrued liabilities of the fund, the Pension Board must calculate the amount
       necessary to attain full funding over the course of 40 years from July 1, 1993, for those funds in
       existence at the time or 40 years from the creation of funds thereafter. 40 ILCS 5/3-127 (West
       2010).
¶ 26        The question before us is whether the plain language of the Pension Code created a
       contractual obligation under which the Village was required to remit funds to the Pension Fund
       in concert with that reported as necessary by the Pension Board. As stated, the Village moved
       for summary judgment on the bases that, pursuant to McNamee, there was no right to a
       particular level of funding, and the Pension Board did not provide evidence demonstrating any
       beneficiaries were denied benefits due to the alleged underfunding.
¶ 27        We first review McNamee. In McNamee, participants in police pension funds brought an
       action for declaratory and injunctive relief claiming an amendment to section 3-127 of the
       Pension Code violated the participants’ constitutional pension rights by making the funds less
       secure. McNamee, 173 Ill. 2d at 434. The amendment at issue changed the method of
       computing the annual amount necessary to amortize the unfunded accrued liability of police
       pension funds. Id. at 435-36. Specifically, the amendment changed the beginning date of the
       40-year amoritization period from 1980 to 1993 and changed the method of computing the
       annual amount required to amortize the unfunded accrued liability from a level dollar amount
       to a percentage of payroll. Id. at 436.
¶ 28        In holding that section 5 of article XIII of the Illinois Constitution (the pension protection
       clause) (Ill. Const. 1970, art. XIII, § 5) created a contractual right to receive benefits from a
       pension fund but did not control funding, the supreme court relied on the history of the
       provision and the evils it was intended to address by considering the debates from the
       constitutional convention. McNamee, 173 Ill. 2d at 439-44. Additionally, the supreme court
       cited Lindberg, wherein the supreme court also relied on the constitutional convention debates
       to conclude that the Pension Protection Clause did not require any particular level of funding.
       Id. at 444. Rather, in Lindberg, the supreme court stated that the pension protection clause
       “does not create a contractual basis for participants to expect a particular level of funding, but
       only a contractual right ‘that they would receive the money due them at the time of their
       retirement.’ ” Id. (quoting Lindberg, 60 Ill. 2d at 271). Ultimately, where the participants did
       not contend the amendment to section 3-127 diminished their right to receive pension benefits
       or that the new funding method placed the fund on the verge of “default or imminent
       bankruptcy,” the supreme court concluded there was no violation of the pension protection
       clause. (Internal quotation marks omitted.) McNamee, 173 Ill. 2d at 446-47.
¶ 29        The Pension Board argues that McNamee is distinguishable because the supreme court
       only considered section 3-127 of the Pension Code and not section 3-125. The Pension Board
       is correct that section 3-125 was not at issue in McNamee; however, the portion of section
       3-125 at issue here, namely, the funding directives for accrued liabilities, is defined by section
       3-127. Consequently, the supreme court’s analysis of the rights provided by the language of
       section 3-127 is relevant to the case before us.
¶ 30        We further consider Sklodowski, wherein the supreme court addressed pension funding and
       whether participants in various state employee retirement systems had a contractual right to a
       particular level of funding. In Sklodowski, the statute relevant to that case was Public Act
       86-273 (eff. Aug. 23, 1989), which, similar to section 3-127, described a method of amortizing
       the unfunded retirement system liability over the course of 40 years as a level percentage of

                                                    -9-
       payroll. Sklodowski, 182 Ill. 2d at 223. Based on McNamee and Lindberg, the supreme court
       concluded that the pension protection clause extended protection to pension benefits only. Id.
       at 231. Consequently, the supreme court similarly held that the beneficiaries did not have an
       enforceable contractual right to control funding vis à vis the pension protection clause. Id.
¶ 31        The supreme court, however, recognized that McNamee established that a beneficiary need
       not wait to bring a claim under the pension protection clause until benefits were actually
       diminished. Id. at 232. Rather, if a beneficiary could demonstrate that a pension fund was on
       the “verge of default or imminent bankruptcy,” a group action could be taken because such
       evidence would show that pension benefits were impaired. (Internal quotation marks omitted.)
       Id. However, in Sklodowski, where the beneficiaries there only alleged an opinion that the
       funding levels at the time were insufficient to meet future funding obligations, the allegation
       was insufficient to demonstrate an impairment of benefits. Id.
¶ 32        Finally, in Sklodowski, the supreme court dismissed the beneficiaries’ argument that, even
       if the pension protection clause was not intended to control pension funding, the legislature
       intended to create vested contractual rights by establishing specific contribution levels. In
       doing so, the supreme court relied on the presumption that “laws do not create private
       contractual or vested rights, but merely declare a policy to be pursued until the legislature
       ordains otherwise.” Id. at 231. The beneficiaries failed to overcome that presumption.
       Id. at 232. Moreover, the supreme court stated that “[t]he funding provisions contained in the
       Pension Code give no indication of a legislative intention to establish a contractual right.” Id.
¶ 33        In concluding that the beneficiaries had neither a contractual nor a constitutional right to
       enforce the level of pension fund contributions mandated by the statute at issue, the supreme
       court stated:
                “The framers of the Illinois Constitution were careful to craft in the pension protection
                clause an amendment that would create a contractual right to benefits, while not
                freezing the politically sensitive area of pension financing. In addition, the funding
                provisions contained in the Pension Code do not evince a legislative intent to create
                vested contractual rights in favor of beneficiaries.” Id. at 233.
¶ 34        Our analysis is further guided by cases wherein this court has considered whether it is
       within the city council’s discretion to determine the taxes to be levied in satisfaction of sections
       3-125 and 3-127. In City of Evanston, the city council levied a tax for the police pension fund
       that was less than the amount certified by the pension board as necessary to fund the pension
       fund. City of Evanston, 281 Ill. App. 3d at 1050. This court held that “a city council need not
       accept the dollar amount recommended to it by a police pension board, but that it must follow
       Illinois law in calculating the amount it selects as an alternative.” Id. at 1049. In so finding, this
       court concluded that sections 3-125 and 3-127 of the Pension Code do not contain language
       indicating that the city council would be bound by the pension board’s conclusion as to the
       amount required to fund the pension fund. Id. at 1052; see also Village of Spring Grove v.
       County of McHenry, 309 Ill. App. 3d 1010, 1015 (2000).
¶ 35        In Board of Trustees of the Police Pension Fund v. City of Rockford, 96 Ill. App. 3d 102
       (1981), the police and firemen’s pension boards petitioned for a writ of mandamus compelling
       the city council to levy taxes in conformity with their interpretations of sections 3-125 and
       3-127 of the Pension Code and the similar sections applicable to firemen. The city council
       refused to levy taxes for the full sum necessary to meet the obligations of the pension funds and
       their reserve requirements as reported by the pension board, which, as with the case at bar, was

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       based on the actuarial computations of the Illinois Department of Insurance. In analyzing the
       language of the statute, this court stated:
                     “While sections 3-125 and 3-127 *** of the Act are couched in mandatory
                language in that the word ‘shall’ is used, we find no specific reference to the actuarial
                findings of the Illinois Department of Insurance indicating that its calculations are
                binding on the city council. Since the tax levy requested by the pension boards is
                derived from the actuarial findings of the Illinois Department of Insurance, the question
                at issue is whether the city council has any discretion to depart from these findings in
                enacting the tax levy for the police and firemen’s pension funds.” City of Rockford, 96
                Ill. App. 3d at 106-07.
¶ 36       While recognizing the case was factually distinguishable, the City of Rockford court
       considered language found in Lindberg, wherein the supreme court held that compulsory
       participants in pension plans did not have a contractual right to funding. Id. at 107-08.
       Ultimately, this court affirmed the dismissal of the petition for the writ of mandamus, holding
       that:
                     “While the finance and reserve sections of the Illinois Pension Code (sections
                3-125 and 3-127 for police pensions and 4-118 and 4-120 for firemen’s pensions) are
                clearly designed to insure the financial integrity of these pension funds, we do not
                believe it was their purpose to remove all discretion from the city council in
                determining the dollar amount to be levied for these funds in any particular year and to
                require the city council to accept the Police Board and the Firemen’s Board reports as
                mandatory in that regard.” Id. at 108.
¶ 37       Overall, sections 3-125 and 3-127 of the Pension Code have been interpreted as not
       mandating that taxes be levied in strict concert with the funding recommended by a city
       council. Moreover, the supreme court has consistently held that a beneficiary is entitled to
       receive his pension benefits, but that the reserve portion of the “annual requirement” is not a
       fixed entitlement. We, therefore, find the McNamee, Lindberg, and Sklodowski interpretations
       of sections 3-125 and 3-127 are relevant to the Pension Code and not just the pension
       protection clause.
¶ 38       Turning to the case before us, the Pension Board has not satisfied its burden of citing
       specific language in the Pension Code that demonstrates a legislative intent to establish a
       contractual right to funding. See Sklodowski, 182 Ill. 2d at 231-32 (citing Fumarolo v. Chicago
       Board of Education, 142 Ill. 2d 54, 104 (1990)). “A party who asserts that a State law creates
       contractual rights has the burden of overcoming the presumption that a contract does not arise
       out of a legislative enactment.” Fumarolo, 142 Ill. 2d at 104. In fact, the Pension Board has not
       presented any argument to support its allegation that the Pension Code created a contractual
       right to funding. Review of sections 3-125, 3-127, and 22-403 of the Pension Code, which
       restricts the use of pension funds to public purposes and not corporate purposes, demonstrates
       the legislature’s intent to insure that beneficiaries “receive the money due them at the time of
       their retirement.” Lindberg, 60 Ill. 2d at 271. There is no language in the relevant statutes using
       the term “contract” in relation to funding or establishing anything more than statutory rights.
       See Fumarolo, 142 Ill. 2d at 104-05. A court may not depart from the plain statutory language
       by reading exceptions, limitations, or conditions into the statute that conflict with the clearly
       expressed legislative intent. Hamer, 2013 IL 114234, ¶ 18. Consequently, we conclude that the
       Pension Code does not create a contractual right to funding.

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¶ 39        Our conclusion is supported by the legislature’s recent enactment of Public Act 98-599,
       known as the Reform Act to the Pension Code, which, as of July 1, 2014, provides the pension
       boards of four of the State’s pension systems with the express right to file suit if the State does
       not maintain the funding levels called for by the Reform Act. See Pub. Act 98-599 (eff. July 1,
       2014) (adding 40 ILCS 5/2-125(c), 14-132(c), 15-156(b), 16-158.2(a)). The legislature’s
       action demonstrates that, contrary to the Pension Board’s argument, the Pension Code does not
       provide an implied right to enforce funding levels. See People v. Ellis, 199 Ill. 2d 28, 39 (2002)
       (“[i]f possible, the court must give effect to every word, clause, and sentence; it must not read
       a statute so as to render any part inoperative, superfluous, or insignificant; and it must not
       depart from the statute’s plain language by reading into it exceptions, limitations, or conditions
       the legislature did not express”).
¶ 40        We do recognize that the McNamee court established that a cause of action need not wait
       until benefits are actually diminished; however, the Pension Board did not provide evidence,
       nor even allege, the Pension Fund was on the “verge of default or imminent bankruptcy.”
       (Internal quotation marks omitted.) McNamee, 173 Ill. 2d at 446-47; Sklodowski, 182 Ill. 2d at
       232. Rather, the Pension Board has failed to establish that any beneficiary has been denied
       benefits. Consequently, the right to benefits has not been impaired.
¶ 41        In sum, where this court has found the statutes provide the Village with discretion in
       implementing the funding recommendations certified by the Pension Board, where the Pension
       Board failed to satisfy its burden of providing statutory language to establish a contractual
       right to specified funding, and where there is no evidence that the fund is currently at risk of
       denying benefits, the Village was entitled to summary judgment as a matter of law.
¶ 42        As a final note, it bears repeating that, because we have concluded that the circuit court
       properly considered whether the Pension Board was entitled to the pension funding alleged in
       its complaint or whether the Village was entitled to summary judgment on the bases submitted,
       it was unnecessary for this court to consider the additional arguments regarding standing.
       Simply stated, the statutes do not provide a cause of action for underfunding so long as there is
       no allegation or proof the fund at issue is on the verge of default or imminent bankruptcy.

¶ 43                         II. Partial Summary Judgment Regarding Liability
¶ 44       The Pension Board also appeals the circuit court’s denial of its motion for partial summary
       judgment as to liability. The Pension Board contends that sections 3-125 and 3-127 provide the
       basis for filing suit and requests an order requiring the Village to levy taxes to fully fund the
       Pension Fund where it is undisputed that the Village underfunded the Pension Fund. In
       addition, the Pension Board argues that the Village is liable for the Pension Fund’s portion of
       the property taxes levied and collected.
¶ 45       As previously determined, the Pension Code does not provide a contractual right to
       funding. Consequently, the circuit court did not err in denying the Pension Board’s partial
       motion for summary judgment where there was no basis for a finding of liability for
       underfunding.
¶ 46       Turning to the issue of the money collected by the Village as a result of taxes that were
       levied, yet not remitted to the Pension Fund, we find the Village was liable pursuant to relevant
       sections of the Pension Code. In response to an interrogatory, the Village admitted that
       “[b]ecause of accounting practices, there was oversight by the Village of Riverdale in paying


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       the Police Pension Fund its portion of property taxes received” and instead the money was
       deposited into the “Village pooled account and was used for general operations.”
¶ 47       The language of section 3-125, in relevant part, provided that “[t]he police pension fund
       shall consist of the following moneys which shall be set apart by the treasurer of the
       municipality: (1) All moneys derived from the taxes levied hereunder” and “[t]he tax shall be
       forwarded directly to the treasurer of the board within 30 business days after receipt by the
       county.” 40 ILCS 5/3-125 (West 2008). Moreover, section 3-132 of the Pension Code adds that
       the Pension Board has the power and duty to control and manage the Pension Fund, instructing
       that “[a]ll money received or collected shall be credited by the treasurer of the municipality to
       the account of the pension fund and held by the treasurer of the municipality subject to the
       order and control of the board.” 40 ILCS 5/3-132 (West 2010). Finally, section 22-403
       provides:
               “Any tax heretofore or hereafter levied for the benefit or purposes of any such pension
               fund by the tax-levying body authorized by the law creating such fund to levy such tax,
               and any payment or contribution to such fund made by the State, or by any county, city,
               town, municipal corporation or body politic and corporate located in the State, is
               hereby declared to be so levied or so contributed for governmental purposes under such
               law, and not for the corporate purposes of such tax-levying body, or of the State, or of
               any county, city, town, municipal corporation or body politic and corporate of the
               State, irrespective of the nature or character of the duties performed or services
               rendered by any employee member of any such pension fund.” 40 ILCS 5/22-403
               (West 2010).
¶ 48       Based on the language of these statutes, we conclude that, to the extent the Village
       exercised its authority in levying taxes for the benefit of the Pension Fund, the money collected
       by the Village must be forwarded to the treasurer of the Pension Board. Accordingly, although
       there is no contractual right to specified funding, a Pension Board is entitled to its portion of
       the monies actually received as a result of the taxes that were levied under the statute.
¶ 49       As stated, in the Village’s response to the Pension Board’s interrogatory, the Village
       admitted that money was owed to the Pension Fund. The Village further admitted that the
       amount was “to be determined in deposition of Maggie Britton and any possible actuarial
       expert deposition for the [Village] in addition to Ms. Britton’s testimony.” The record contains
       an excerpt of Britton’s deposition testimony; however, that excerpt does not establish the
       amount of tax money collected yet not remitted to the Pension Fund by the Village.
       Accordingly, we reverse, in part, the circuit court’s February 17, 2012, order denying the
       Pension Board’s motion for partial summary judgment as to the Village’s liability for the
       money collected on behalf of the Pension Fund. We remand for a determination of the amount
       of collected tax money that is owed to the Pension Fund.
¶ 50       We note that the Illinois Public Pension Fund Association has expanded the Pension
       Board’s argument beyond that raised in its appellate brief or in its memorandum of support for
       its motion for partial summary judgment. As a “friend” of the court, the sole function of an
       amicus is to advise or make suggestions to the court within the purview of the issues framed by
       the parties. In re J.W., 204 Ill. 2d 50, 73 (2003). We, therefore, need not consider whether the
       Village treasurer breached his fiduciary duty to the Pension Board or whether the Village
       engaged in fraud.


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¶ 51                                           CONCLUSION
¶ 52       We affirm the judgment of the circuit court granting summary judgment in favor of the
       Village on the issue of funding the Pension Fund. We also affirm, in part, the judgment of the
       circuit court denying partial summary judgment against the Pension Board where there is no
       basis for a finding of liability for underfunding. We, however, reverse, in part, the judgment of
       the circuit court denying partial summary judgment against the Pension Board regarding the
       tax money levied and collected on the Pension Fund’s behalf. We remand for a determination
       of the appropriate amount owed to the Pension Fund.

¶ 53      Affirmed in part and reversed in part; cause remanded for additional proceedings.




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