Raines v. Bd. of Trs. of Illinois State Teachers' Pension

• Decision Date: 13 April 1937
• Docket Number: No. 23974.,23974.
• Citation: 365 Ill. 610,7 N.E.2d 489
• Parties: RAINES v. BOARD OF TRUSTEES OF ILLINOIS STATE TEACHERS' PENSION AND RETIREMENT FUND.
• Court: Illinois Supreme Court

365 Ill. 610

7 N.E.2d 489

RAINES

v.BOARD OF TRUSTEES OF ILLINOIS STATE TEACHERS' PENSION AND RETIREMENT FUND.

No. 23974.

Supreme Court of Illinois.

Feb. 18, 1937.

As Modified on Denial of Rehearing April 13, 1937.

Appeal from Circuit Court, Sangamon County; Lawrence E. Stone, Judge.

Action by S. E. Raines against the Board of Trustees of the Illinois State Teachers' Pension and Retirement Fund. From an adverse judgment, plaintiff appeals.

Judgment reversed, and case remanded, with directions. A. M. Fitzgerald, of Springfield (Walter T. Day, of Springfield, of counsel), for appellant.

Otto Kerner, Atty. Gen., and John B. Harris, of Springfield, for appellee.

JONES, Justice.

This case involves the interpretation and constitutionality of the 1935 amendment to section 26 of “An act in relation to an Illinois State Teachers' Pension and Retirement Fund” (Laws 1915, p. 656, § 26, as amended, Smith]Hurd Ill.Stats. c. 122, § 604), and the right of appellant, S. E. Raines, thereunder. The cause is here by appeal from the judgment of the circuit court of Sangamon county dismissing appellant's petition for a writ of mandamus requiring appellee to comply with the law, as amended, so as to make the benefits of the amendment available to him. The facts are not in dispute.

Appellant is seventy]three years of age. He taught in the public schools at Freeport,Ill., for over thirty years and retired in 1927, at the age of sixty]four. Prior to his retirement, he paid all the amounts into the fund provided for by the act and complied with all its provisions. Since then, he has received the annuity of $400 provided for in such cases prior to the 1935 amendment of section 26 (Laws 1915, p. 656, § 26, Smith]Hurd Ill.Stats. c. 122, § 604). After the amendment he paid into the fund the sum of $200 and interest as required by its terms and requested appellee to certify his name and take the other necessary steps to increase his annuity from $400 to $600 as provided by the amendment. The request was refused and he instituted this proceeding. Upon appellee's motion the trial court dismissed the petition.

Appellee claims that the amendment was not intended to apply to teachers already retired when the amendment was adopted, but only to those then retiring, or afterwards retired, who had attained the age of seventy years and had completed twenty]five years of service, and that a construction of the amendment in accordance with the prayer of the petition would render such amendatory act unconstitutional.

The act amended (S.H.A. 122, § 578 et seq.; Ill.Rev.Stat.1935, c. 122, par. 211 et seq.) provides for a fund to be derived from teachers' contributions, such sums as shall be provided by law, donations, legacies, and other moneys from any legal source or increment. By the terms of the act, any person employed as a teacher at the public schools coming under its provisions when it took effect, or who has so previously taught and resumes teaching, may, at any time, elect to come within its provisions by written notice of such election to the board of trustees of the fund, and to the local school board or managing body of the school taught; which notice shall authorize such school board or managing body to deduct from such teacher's salary certain sums per month for the first five months in each year taught after the effective date of the act. The total amount paid into the fund by each teacher shall be based upon twenty]five years of service and the deductions shall cease after that time. By paragraph (a) of section 25 (Laws 1915, p. 655, § 25(a), amended in 1921, Smith]Hurd Ill.Stats. c. 122, § 602(a), as in force at the time appellant retired, any person complying with the provisions of that section may retire and receive an annuity after reaching the age of fifty years and having taught twenty]five years, provided that if his contributions have not aggregated $400 he shall pay into the fund the deficiency, with interest, before receiving the annuity.

Prior to the amendment of 1935, section 26 (Laws 1915, p. 656, § 26, Smith]Hurd Ill.Stats. c. 122, § 604) provided: “Each teacher retiring from service of said public schools under the provisions of clauses a, b, c, d, and e of Section 25 shall annually and for life be entitled to receive as annuity $16 for each year of service as teacher: Provided, that said annuity shall not exceed $400 in any one year, subject, however, to all the provisions of this section.” The 1935 amendment (Smith]Hurd Ill.Stats. c. 122, § 604) added the following: “When any such person who has served as a teacher for twenty]five years or more as provided in section 25 of this Act and is seventy years of age, or hereafter reaches seventy years of age and has completed the twenty]five years of service, shall, upon payment into the Illinois State Teachers' Pension and Retirement Fund the sum of Two Hundred Dollars, with accrued simple interest at four per cent (4%) per annum from July 1, 1935, until the date it is paid if paid after July 15, 1935, but no interest if paid before July 1, 1935, be entitled annually and for life to an annuity of $600, but in no event shall any teacher coming under the provisions of this Act receive more than $600 annually regardless of the number of years of service he or she may have had.”

Section 14 (Smith]Hurd Ill.Stats. c. 122, § 591) provides that persons becoming teachers after the act takes effect shall be conclusively deemed to undertake and agree to pay such amounts and have them deducted from his or her salary. Section 15 (amended in 1923, Smith]Hurd Ill.Stats. c. 122, § 592) permits those who began teaching before the effective date of the act to elect to come within its provisions by giving notice in writing to the said board of trustees, and section 12 (Smith]Hurd Ill.Stats. c. 122, § 589) expressly provides that the requirement for compulsory contributions shall not apply to persons who began teaching before that effective date. It will be seen that the contributions are compulsory as to persons who began teaching since July 1, 1915, but voluntary and optional as to those who began teaching prior to that date. Raines commenced teaching before July 1, 1915.

The whole difficulty in this case arises from a failure to distinguish between a pension fund and an annuity fund derived in part from voluntary contributions made under a statutory option to contribute or refrain from contributing. A “pension” is in the nature of a bounty springing from the appreciation and graciousness of the sovereign, and may be given, withheld, distributed, or recalled at its pleasure. People v. Retirement Board, 326 Ill. 579, 158 N.E. 220, 54 A.L.R. 940;Porter v. Loehr, 332 Ill. 353, 163 N.E. 689;Pecoy v. City of Chicago, 265 Ill. 78, 106 N.E. 435. For this reason it is held that a pensioner has no vested right in a pension fund. It has also been held that the character of a pension fund is not changed by compulsory contributions by way of exactions from the salaries or wages of public officers and employees. It is said that such payments into the fund are not...