Background
Since 2014, Oak Park’s collective bargaining agreements with its firefighters’ union have provided both additional vacation time in lieu of listed holidays and a yearly lump-sum “holiday pay” equal to 1.5% of the Step F wage rate. The agreements state that the payment is subject to section 4-118.1(d) of the Illinois Pension Code. For roughly a decade, the Village, union, and firefighters’ pension board treated the payment as non-pensionable.
In November 2024, the Pension Board voted to prospectively treat the lump-sum holiday payment as pensionable salary and directed the Village to withhold pension contributions. The Village sought declaratory relief, and the Board counterclaimed, seeking a declaration that the payment was pensionable and mandamus compelling remittance of contributions. On cross-motions for summary judgment, the Cook County circuit court ruled for the Village.
The Court’s Holding
The appellate court affirmed. It held that the lump-sum holiday payment was not “salary” for firefighter-pension purposes under section 4-118.1(d), because the record did not establish that it was annual salary attached to a firefighter’s rank or class as established by the Village’s appropriation ordinance.
The court rejected the Village’s broader argument that holiday pay is categorically excluded from pensionable salary. But it found this payment excluded because Oak Park’s appropriation ordinance listed holiday pay separately from regular salaries, as a fringe-benefit expense, rather than including it in salary attached to rank. The Board’s arguments that the payment was fixed, unconditional, and appropriated were insufficient to satisfy the statute’s rank-and-salary requirements.
Key Takeaways
- Holiday pay is not categorically excluded from firefighter pensionable salary under section 4-118.1(d).
- To qualify as pensionable salary, compensation must be annual salary attached to rank or class as established in the municipal appropriation ordinance.
- A separate appropriations line item for holiday pay, distinct from regular salaries, supported the conclusion that the payment was not pensionable.
Why It Matters
The decision emphasizes that pensionability turns on the Pension Code’s statutory and appropriations-ordinance requirements, not simply on whether compensation is fixed, unconditional, or included somewhere in a municipal budget. Municipalities and pension boards should examine how compensation is classified and tied to rank or class in their appropriation ordinances.
This Rule 23 order is nonprecedential except in the limited circumstances permitted by Illinois Supreme Court Rule 23(e)(1).