IL TRS Asks Court to Throw Out Chicago Schools Funding Lawsuit

April 24, 2008 (PLANSPONSOR.com) - The Teachers' Retirement System of the state of Illinois (TRS) is asking the Cook County Circuit Court to throw out a lawsuit brought by the Board of Education of the Chicago Public Schools (CPS) that challenges how the state funds CPS pensions.

In a news release, TRS said a 1995 state statute set a funding goal to provide the CPS pension fund an annual amount between 20% and 30% of the annual state appropriation mandated for the TRS. TRS asserted that the amount is only a goal and the law makes it clear that the level of state funding provided to the CPS system is determined each year at the discretion of the Illinois Legislature.

In its motion to dismiss the suit, TRS says the General Assembly has a rational basis to fund the two systems differently, according to the release. TRS is a state entity while the CPS system is not and the Chicago Board of Education has tax mechanisms that are unavailable to TRS. The law allows CPS to levy local taxes to meet funding mandates.

In addition, the TRS pointed out in its motion that the Chicago public school system is large enough to oversee and fund its own teacher pension system while other districts in the state require a centralized and mandatory state funding mechanism.

In its lawsuit filed in March, CPS said the state has failed to fund Chicago teacher pensions at the 20% to 30% of TRS appropriation level, with fiscal 2008 funding amounting to only 5.3%. The lawsuit seeks a declaratory judgment that the 1995 law which requires the CPS to maintain a 90% funded level is unconstitutional (SeeChicago Schools Sue State over Pension Funding).

In its news release, the TRS said the “Illinois courts have consistently upheld the constitutionality of the state funding formulas for the two separate teacher retirement systems and soundly rejected similar court challenges.”

«