Shields v. JUDGES'RET. SYSTEM OF ILLINOIS

• Citation: 274 Ill.Dec. 424,204 Ill.2d 488,791 N.E.2d 516
• Decision Date: 22 May 2003
• Docket Number: No. 94029.,94029.
• Court: Supreme Court of Illinois
• Parties: David J. SHIELDS, Appellant, v. The JUDGES' RETIREMENT SYSTEM OF ILLINOIS et al., Appellees.

791 N.E.2d 516

204 Ill.2d 488

274 Ill.Dec. 424

David J. SHIELDS, Appellant, v. The JUDGES' RETIREMENT SYSTEM OF ILLINOIS et al., Appellees.

No. 94029.

Supreme Court of Illinois.

May 22, 2003.

George B. Collins, Adrian Vuckovich, James Lessmeister, of Collins & Bargione, Chicago, for appellant.

James E. Ryan, Attorney General, Springfield (Joel D. Bertocchi, Solicitor General, and Jan E. Hughes, Assistant Attorney General, Chicago, of counsel), for appellees.

Justice KILBRIDE delivered the opinion of the court:

In this case, we are asked to decide whether a retired judge whose pension benefits were forfeited as a result of a felony conviction is entitled to a full refund of his contributions to the Judges' Retirement System (System) with no deduction for benefits he received as an annuitant after his retirement. We answer that question in the affirmative.

BACKGROUND

David J. Shields began his judicial career in 1971 as a magistrate judge in the Twenty First Judicial Circuit. In August of that year he elected to participate in the Judges' Retirement System. He made contributions in the form of salary deductions until his retirement in November 1990. He began receiving retirement benefits of approximately $5,100 per month beginning in December 1990. Less than a week later, he was indicted by a federal grand jury on seven felony counts, including conspiracy, extortion, and making false statements of material fact to the FBI. He was tried, convicted on all seven counts, and sentenced to 37 months in prison. The conviction was affirmed on appeal. See United States v. Shields, 999 F.2d 1090 (7th Cir.1993).

Shields continued to receive his retirement benefits until the date of his conviction, March 2, 1992. The System then notified him that his benefits would be terminated effective on that date pursuant to section 18-163 of the Illinois Pension Code (Code) (40 ILCS 5/18-163 (West 1992)). He had contributed $113,222 to the System and had received $75,349 in benefits. Although section 18-163 of the Code provides that it "shall not operate to * * * preclude the right to a refund," Shields did not immediately seek a refund of his contributions, as he intended to pursue an appeal and the possibility of a pardon.

In December 1999, however, upon notification by the System that he was entitled to a refund, he filed an application with the Board of Trustees of the Judges' Retirement System (Board) seeking a full refund of all of his contributions together with interest at 5% per annum from the date his benefits were terminated. Relying on the informal opinion of a Special Attorney General, the Board determined that Shields was entitled to a refund of $37,873. That sum represented the excess of Shields' contributions over the benefits already paid. Shields appealed that determination. The Board found that computation of the refund was governed by section 18-129 of the Pension Code (40 ILCS 5/18-129 (West 1992)). Subparagraphs (a) through (e) of that section deal with refunds due: (a) to a participant in the System who ceases to be a judge before benefits are payable; (b) to participants who die in office; (c) to annuitants who die without a spouse or other beneficiary; (d) to participants or annuitants whose marriages are terminated by death or dissolution; and (e) to the estate of the surviving spouse of an annuitant.

Subparagraphs (c), (d), and (e) of the section provide for a net refund only after paid benefits are subtracted from contributions. Conversely, paragraphs (a) and (b) contain no limiting language. In fact, no provision in section 18-129 of the Code relates to an annuitant whose rights to benefits are terminated by forfeiture resulting from a felony conviction. The only specific statutory reference to a refund is found in section 18-163 of the Code. Nevertheless, the Board reasoned that the statute should not be read to benefit an annuitant whose pension benefits are terminated by a felony conviction over an annuitant whose benefits are terminated by death.

Finding that section 18-129(c) should apply, the Board denied Shields' appeal and ordered a refund in the amount of $37,873. No interest was awarded since section 18-129(c) specifically provides that refunds should be computed "without interest."

Shields sought administrative review, and the circuit court of Cook County set aside the decision of the Board, finding that Shields was entitled to a full refund of all of his contributions totaling $113,222.

The appellate court reversed, with one judge dissenting. 329 Ill.App.3d 27, 263 Ill.Dec. 266, 768 N.E.2d 26. We granted leave to appeal (177 Ill.2d R. 315), and we now reverse the appellate court.

ANALYSIS

There are no contested issues of fact presented by the record. Resolution of this case depends on the interpretation of the statutory provisions governing a refund of contributions where retirement annuity benefits are terminated because of a judge's felony conviction. This is a question of law. Therefore, our review of the Board's decision is de novo. City of Belvidere v. Illinois State Labor Relations Board, 181 Ill.2d 191, 205, 229 Ill.Dec. 522, 692 N.E.2d 295 (1998)

. As a general rule, courts will accord deference to the interpretation of a statute by the agency charged with its administration. An agency's interpretation is not binding, however, and will be rejected when it is erroneous. City of Decatur v. American Federation of State, County, & Municipal Employees, Local 268, 122 Ill.2d 353, 361, 119 Ill.Dec. 360, 522 N.E.2d 1219 (1988).

Section 18-163 of the Code provides as follows:

"Felony conviction. None of the benefits herein provided shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his or her service as a judge.

This section shall not operate * * * to preclude the right to a refund.

All participants entering service subsequent to July 9, 1955 are deemed to have consented to the provisions of this Section as a condition of participation." 40 ILCS 5/18-163 (West 1992).

The section 18-163 reference to a refund is unconditional. However, since that section refers to a "refund" but does not further define that term, the Board looked to section 18-129 of the Code, dealing generally with refunds, to determine the amount of any refund due to Shields. Section 18-129(a) of the Code provides, in pertinent part:

"A participant who ceases to be a judge may, upon application to the board, receive a refund of his or her total contributions to the system including the contributions made towards the automatic increase in retirement annuity and contributions for the survivor's annuity without interest, provided he or she is not then immediately eligible to receive a retirement annuity." 40 ILCS 5/18-129(a) (West 1992).

Section 18-129(c) of the Code provides:

"Upon death of an annuitant, where no spouse or other beneficiaries eligible for an annuity survive, the designated beneficiary or estate shall receive a refund of the contributions made for the survivor's annuity, without interest. If the annuitant received annuity payments in the aggregate less than his or her contributions for retirement annuity and the contributions towards the automatic increase in the retirement annuity, the designated beneficiary or estate shall also be refunded the difference between the total of such contribution, excluding interest, and the sum of annuity payments made." 40 ILCS 5/18-129(c) (West 1992).

Neither section describes the circumstances applicable to Shields. Yet, even though Shields is alive, the Board applied section 18-129(c) because, as it reasoned in its written findings:

"To determine otherwise would mean that a member of the System who has retired and is receiving a retirement annuity and whose benefits are terminated as the result of a felony conviction would receive more in benefits than a member of the System who has received a retirement annuity for the same length of time but whose benefits are terminated by death."

The appellate court agreed with this determination. 329 Ill.App.3d at 34, 263 Ill. Dec. 266, 768 N.E.2d 26. The court reasoned that since section 18-163 of the Code did not prescribe a method for calculating the amount of any refund due, the intent of the legislature must be divined by resorting to the rules of statutory construction. The majority concluded that "the legislature intended to discourage malfeasance by public officials and did not intend that a judge whose pension terminates because of a felony forfeiture should be entitled under the Pension Code both to retain annuity payments already received and to receive a refund of his or her total contributions." 329 Ill.App.3d at 37, 263 Ill.Dec. 266, 768 N.E.2d 26.

Statutory construction requires courts to ascertain and give effect to the intent of the legislature. In re C.W., 199 Ill.2d 198, 211, 262 Ill.Dec. 802, 766 N.E.2d 1105 (2002). Where statutory language is clear, it must be applied as written; however, if the language is susceptible of more than one interpretation, the court may look beyond the language to consider the legislative purpose. Reda v. Advocate Health Care, 199 Ill.2d 47, 55, 262 Ill.Dec. 394, 765 N.E.2d 1002 (2002). Legislative intent must be ascertained from a consideration of the entire act, its nature, its object, and the consequences resulting from different constructions. Fumarolo v. Chicago Board of Education, 142 Ill.2d 54, 96, 153 Ill.Dec. 177, 566 N.E.2d 1283 (1990). The language of pension statutes must also be liberally construed in favor of the rights of the pensioner. Matsuda v. Cook County Employees' & Officers' Annuity & Benefit Fund, 178 Ill.2d 360, 365-66, 227 Ill.Dec. 384, 687 N.E.2d 866 (1997).

No case has yet addressed the precise issue presented here. Shields argues that some guidance may be found in Janata v. Police Pension Fund, 140 Ill.App.3d 925, 95 Ill.Dec. 277, 489 N.E.2d 498 (1986). In that case, a police...