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FIRST DIVISION
November 5, 2001

The Judges' Retirement System of Illinois (the System)terminated the retirement benefits of former judge David J.Shields when he was convicted of a felony in March 1992. Shieldssought a refund of all the contributions that he made into theSystem over the years, which totaled $113,222.04. The Board ofTrustees of the Judges' Retirement System (the Board) held thatShields was entitled to a refund of $37,873.27, which representshis contributions less benefits paid to him prior to thetermination of his benefits. Shields sought administrativereview. The circuit court reversed the decision of the Board. The System and the Board now appeal the circuit court's reversal. The primary issue upon appeal is whether the Board correctlydetermined that Shields is entitled to a refund of hiscontributions ($113,222.04) less benefits paid to him prior tohis conviction ($75,348.77), for a total refund of $37,873.27.

BACKGROUND

In June 1971, David J. Shields was appointed as a magistratein the 21st Judicial Circuit. Soon thereafter, the Judges'Retirement System notified Shields that he was eligible toparticipate in the System's pension plan. He elected toparticipate and made contributions in the form of salarydeductions beginning in August 1971.

In November 1990, Shields applied for retirement benefitsfrom the System, indicating that he was retiring from service inDecember 1990. As of December 3, 1990, Shields had contributed atotal of $113,222.04 to the System. He began receivingretirement benefits of approximately $5,100 per month, effectiveDecember 13, 1990.

On December 19, 1990, Shields was indicted on seven counts,including conspiracy to engage in extortion, attempted extortion,and knowingly making false statements of material fact to theFederal Bureau of Investigation. Shields was convicted on allseven counts of the indictment. He was sentenced to 37 months inprison plus 3 years' supervised release and was fined $6,000. The conviction was upheld upon appeal. See United States v.Shields, 999 F.2d 1090 (7th Cir. 1993).

In a letter dated March 17, 1992, the System notifiedShields that his benefits would be terminated, effective the dayof his conviction, March 2, 1992, pursuant to section 18-163 ofthe Illinois Pension Code (the Pension Code) (40 ILCS 5/18-163(West 1992)). The letter indicated that Shields was entitled toa refund of his contributions ($113,222.04) less benefits paid tohim prior to his conviction ($75,348.77), for a total refund of$37,873.27. The letter noted that Shields could appeal theSystem's decision to the Board.

In a letter dated August 19, 1999, the System asked theoffice of the Attorney General to review the indictments andcertified copies of Shield's conviction. The System requested an"unofficial opinion" as to whether Shields' conviction fellwithin the "Felony Conviction Forfeiture Provision, Section 18-163, of the Judges' Retirement System Pension Code, thereforeforfeiting Shields' right to receive pension benefits."

Senior Assistant Attorney General Michael Luke commented"informally" that each of Shields' offenses is a felony underfederal law and that the offenses for which he was convictedarose from and were connected to his service as a judge. It wasLuke's opinion that the Board "may properly find that Mr. Shieldsis prohibited from receiving any benefits from the Judges'Retirement System subsequent to the date upon which he wassentenced" because he was convicted of felonies relating to orarising out of his service as a judge. Moreover, the Board mayrefund to him his contributions to the System, to the extent thatthose contributions exceed benefits already paid.

At the December 1999 Board meeting, the Board reviewedShields' file along with the recommendation from the AttorneyGeneral's office. The Board held that, pursuant to section 18-163 of the Pension Code (40 ILCS 5/18-163 (West 1992)), Shieldsis prohibited from receiving any benefits from the Systemsubsequent to the date of sentencing as a result of the felonyconviction relating to and arising out of his service as a judge. A refund of $37,873.27 would be refunded to Shields.

Notice of the Board's findings and Shields' right to ahearing were provided to him on December 6, 1999. The Boardnotified Shields of its decision and stated that if he wished toappeal the decision, he must do so within 30 days from the dateof the letter.

Shields appealed the decision of the Board and a hearing washeard on his appeal in January 2000. A bystander's record oftestimony presented at the hearing is provided in the record. Shields argued that his retirement payments of $75,348.77 shouldnot be deducted from his total contributions when paying a refundto him. It was his position that he was entitled to a principalpayment of $113,222.04, plus interest on the refund at thestatutory rate of 5% per annum from the date of the terminationof pension payments until the refund is paid. Finally, Shieldspresented his intent to seek a federal pardon from the Presidentof the United States, and indicated that he did not want to waivethe rights to a pension should such pardon be granted.

At its meeting in April 2000, the Board held that Shieldswas entitled to a total refund of $37,873.27 and was not entitledto interest on that amount. The Board issued its writtenfindings and decision regarding Shields' appeal in April 2000. In its written findings, the Board noted that while Shields'felony conviction did not preclude him from receiving a refund,section 18-163 of the Pension Code (40 ILCS 5/18-163 (West 1992))did not offer instruction as to how to calculate the amount ofthe refund upon termination of his benefits.

Therefore, the Board relied on section 18-129(c) (40 ILCS5/18-129(c)(West 1992)) in calculating the amount of Shields'refund. The Board stated that "the statute should not be read tobenefit an annuitant whose pension benefits are terminated byfelony conviction over an annuitant whose benefits are terminatedby death." The Board further reasoned that if the System wererequired to follow Shields' rationale, future annuitants whosebenefits are terminated by a felony conviction will be entitledto a full refund of all contributions even if the retirementbenefits received by the annuitant far exceeded the contributionsmade by that annuitant. The Board held that the amount thatShields was entitled to equaled $37,873.27, representing$25,731.85 in contributions for survivor's benefits and$12,141.42 in contributions for retirement benefits and automaticincreases in excess of retirement benefits paid. Also, interestwould not be paid on the refund of Shields' contributions.

Shields appealed to the circuit court of Cook County foradministrative review of the Board's decision. After oralargument, the circuit court judge reversed the findings anddecision of the Board, stating:

"I do so almost exclusively based upon the language ofthe Jinada [sic] case, which I do not think isdistinguishable solely because of the fact that there is apoliceman involved. I think that that case takes intoconsideration language which is substantially identical tothe language contained in the Judges' Retirement System andin the statute.

* * *

With the same view in fact, though it has not beenbrought to my attention as of this time, I find that he isnot entitled to interest, and the reason he is not entitledto interest is because I think that the way the statuteshould be interpreted without his ever having made a demandfor the interest, I think it would be inappropriate for himto receive it under these circumstances."

The System was ordered to pay Shields "a full refund of allcontributions paid in by Plaintiff in the amount of $113,222.04less the sum of $37,873.27, for a net refund of $75,348.77." Thecircuit court's decision was stayed pending appeal.

ANALYSIS

Defendants assert that the Board correctly refunded Shieldsthe difference between the sum of contributions that he made tothe System and the sum of pension benefits he received from theSystem. Shields asserts that the plain language of the statutesprovide that he should receive a refund of his totalcontributions to the System, without deduction for benefitslawfully paid to him while in retirement status.

As the reviewing court, we review the decision of the Board,not that of the circuit court. AFM Messenger Service, Inc. v.Department of Employment Security, 315 Ill. App. 3d 308, 312, 733N.E.2d 749 (2000). Section 18-164 of the Illinois Pension Codeprovides that judicial review of a final decision of the Board isgoverned by the provisions of the Administrative Review Law (735ILCS 5/3-110 (West 1994)). 40 ILCS 5/18-164 (West 1992). Factual findings and factual conclusions of the Board shall beheld by the reviewing court to be prima facie true and correct(735 ILCS 5/3-110 (West 1992)) and will not be disturbed onreview unless they are against the manifest weight of theevidence. City of Belvidere v. Illinois State Labor RelationsBoard, 181 Ill. 2d 191, 205, 692 N.E.2d 295 (1998). The Board'sconclusions of law, however, are not entitled to the samedeference and are subject to de novo review. AFM MessengerService, Inc., 315 Ill. App. 3d at 312.

While conclusions of law are not entitled to the samedeference on review as is accorded to an agency's factualfindings and conclusions, substantial weight and deference aregiven to an interpretation of a statute by an agency that ischarged with administering the statute because that agency makesinformed judgments based on its experience and expertise. Abrahamson v. Illinois Department of Professional Regulation, 153Ill. 2d 76, 88, 606 N.E.2d 1111 (1992).

It is well settled in Illinois that public employee pensionsare a matter of contractual right. Stillo v. State RetirementSystems, 305 Ill. App. 3d 1003, 1007, 714 N.E.2d 11 (1999). However, the state legislature has the power to take action todeter felonious conduct in public employment by affecting thepension rights of public employees convicted of a work-relatedfelony. Stillo, 305 Ill. App. 3d at 1007. The underlyingpurpose of a pension forfeiture statute is to discourage officialmalfeasance by causing a forfeiture of benefits to which a publicofficial otherwise would be entitled. Kerner v. State Employees'Retirement System, 72 Ill. 2d 507, 513, 382 N.E.2d 243 (1978).

Section 18-163 of the Pension Code provides, in pertinentpart:

"None of the benefits herein provided shall be paid toany person who is convicted of any felony relating to orarising out of or in connection with his or her service as ajudge.

This Section shall not operate to impair any contract orvested right acquired before July 9, 1955 under any law orlaws continued in this Article, nor to preclude the right toa refund.

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

The plain language of section 18-163 (40 ILCS 5/18-163 (West1992)) indicates that a member of the pension fund who isconvicted of a felony shall thereafter receive no pensionbenefits, with only an entitlement to a contribution refund. What is lacking is the method for calculating that refund.

To ascertain the legislature's intent, we first look to theplain language of the statute. Cirignani v. MunicipalEmployees', Officers', & Officials' Annuity & Benefit Fund, 317Ill. App. 3d 732, 735, 739 N.E.2d 1063 (2000). Legislative intentmust be ascertained from a consideration of the entire act, itsnature, its object, and the consequences that would result fromdifferent constructions. Fumarolo v. Chicago Board of Education,142 Ill. 2d 54, 96, 566 N.E.2d 1283 (1990). The language ofpension statutes must also be liberally construed in favor of therights of the pensioner. Matsuda v. Cook County Employees' &Officers' Annuity & Benefit Fund, 178 Ill. 2d 360, 365-66, 687N.E.2d 866 (1997).

In its written findings, the Board stated:

"Section 18-163 (the felony forfeiture provision) onlyindicates that a felony conviction does not preclude theright to a refund but does not describe how to calculate ordetermine the amount of the refund to which Petitioner mightbe entitled[;] *** the System must look to Section 18-129,the refund of contributions section, in order to determinethe amount of the refund to which Petitioner is entitled."

Section 18-129(a) of the Code provides, in pertinent part:

"A participant who ceases to be a judge may, uponapplication to the board, receive a refund of his or hertotal contributions to the system including thecontributions made towards the automatic increase inretirement annuity and contributions for the survivor'sannuity without interest, provided he or she is not thenimmediately eligible to receive a retirement annuity."(Emphasis added.) 40 ILCS 18-129(a) (West 1992).

Section 18-129(c) of the Code states, in pertinent part:

"Upon death of an annuitant, where no spouse or otherbeneficiaries eligible for an annuity survive, thedesignated beneficiary or estate shall receive a refund ofthe contributions made for the survivor's annuity, withoutinterest. If the annuitant received annuity payments in theaggregate less than his or her contributions for retirementannuity and the contributions towards the automatic increasein the retirement annuity, the designated beneficiary orestate shall also be refunded the difference between thetotal of such contributions, excluding interest, and the sumof the annuity payments made." (Emphasis added.) 40 ILCS18-129(c) (West 1992).

It was the Board's determination that subsection (c) of section18-129 (40 ILCS 5/18-129(c) (West 1992)), as opposed tosubsection (a) (40 ILCS 5/18-129(a) (West 1992)), applied to thecalculation of a refund for an annuitant whose benefits areterminated as the result of a felony forfeiture.

In deciding that subsection (c) of section 18-129 (40 ILCS5/18-129(c) (West 1992)), as opposed to subsection (a) (40 ILCS5/18-129(a) (West 1992)), applied to the calculation of a refundfor an annuitant whose benefits are terminated as the result of afelony forfeiture, the Board reasoned:

"To determine otherwise would mean that a member of theSystem who has retired and is receiving a retirement annuityand whose benefits are terminated as the result of a felonyconviction would receive more in benefits than a member ofthe System who has received a retirement annuity for thesame length of time but whose benefits are terminated bydeath."

We agree with the Board's determination.

Shields contends that his conviction stops future pensionpayments but does not authorize the deduction of lawful pensionpayments made in the past from the total refund due. Shieldsrelies on Janata v. Police Pension Fund, 140 Ill. App. 3d 925,489 N.E.2d 498 (1986). In Janata, former police officer BrucePalumbo was indicted by a federal grand jury in September 1983for using his position as a police officer to commit violationsof Title 18, sections 371 and 1341 of the United States Code (18U.S.C.