As Chicago Pension Reforms Head to Supreme Court, Two Justices Face Conflicts of Interest

Chicago’s recent pension overhaul law – struck down this summer by a lower court – is bound for the state Supreme Court sometime this fall.

With the hearing looming, two of the high court’s justices have disclosed conflicts of interest with the lawsuit; one justice has already recused himself from the hearing, but the other hasn’t.

More from Crain’s Chicago:

The high court is considering whether to uphold a state law that requires the employees and retirees in two city pension funds to bear 30 percent of the cost to stabilize a retirement plan for city workers, which has $7.29 billion in unfunded liabilities. The Emanuel administration is appealing a trial judge’s ruling in July that struck down the 2014 law as unconstitutional.

Justice Charles Freeman decided he had a conflict of interest and recused himself. Justice Anne Burke did not.

[Freeman] recused himself because he receives an annuity as the surviving spouse of a city worker, according to Joseph Tybor, a Supreme Court spokesman. Marylee Freeman, a former Department of Buildings employee, died in 2013, according to records of the Municipal Employees’ Annuity and Benefit Fund of Chicago, one of the retirement plans involved in the case.

Freeman receives a flat payment of nearly $2,300 a month before taxes, pension fund records show.

Anne Burke’s husband is chairman of the City Council Finance Committee and is covered by the same pension fund. Edward Burke, who has represented the Southwest Side 14th Ward since 1969, is 71 years old and has expressed no interest in stepping down. Yet if he were to retire this year, his pension would be $7,269 per month or $87,228 per year, according to a Crain’s estimate.

If the court upholds the law, he would have to contribute about $8,250 more toward his retirement from 2015 to 2019, and his pension would be reduced by an estimated $8,223 from 2016 to 2020, Crain’s estimates.

Anne Burke declines to comment, Tybor says. Judges are not required to give reasons either when they recuse themselves or decide not to do so.

Freeman’s recusal could benefit the city, although it’s hard to say. Last summer, Freeman delivered the opinion that the state couldn’t alter retirement health care benefits of state workers – an opinion that set the state for the ultimate overturning of the state’s pension reform law.

Photo by bitsorf via Flickr CC License