People ex rel. Sklodowski v. State of Illinois Modified ( 1996 )

Nos. 1--93--2951)                               

    1--93--3171)                               

    1--93--3172)                               

    1--93--3173)(Cons.)

               PEOPLE ex rel. ROBERT SKLODOWSKI,       )         Appeal from the

THOMAS HANAHAN, SANDEE HANAHAN,         )         Circuit Court

of

            SUSAN LILLIS, ROBERT NEGRONIDA,              )         Cook

County.

       and MARK D. WARDEN,                 )

                                   )

    Plaintiffs-Appellants,              )

                                   )

              v.                   )

                                   )

THE STATE OF ILLINOIS, JIM EDGAR,        )

Governor, PHILIP P. ROCK, President of  )  

the Senate, MICHAEL J. MADIGAN, Speaker       )

of the House of Representatives, DAWN   )

CLARK NETSCH, Comptroller of the State  )

of Illinois, and PATRICK QUINN,          )

Treasurer of the State of Illinois,           )

                                  )      

    Defendants and Counterdefendants-  )

    Appellees,                          )

                                   )

              and                 )      

                                   )

THE JUDGES' RETIREMENT SYSTEM OF         )

ILLINOIS, THE STATE EMPLOYEES'           )

RETIREMENT SYSTEM OF ILLINOIS, THE            )

STATE UNIVERSITIES RETIREMENT SYSTEM,   )

THE TEACHERS' RETIREMENT SYSTEM OF THE      )

STATE OF ILLINOIS, THE GENERAL ASSEMBLY       )

RETIREMENT SYSTEM, and the TRUSTEES OF      )

EACH FUND,                               )

                                   )

    Nominal Defendants and              )

    Counterplaintiffs-Appellants.       )

__________________________________________)

                                   )

THE ILLINOIS RETIRED TEACHERS            )

ASSOCIATION,                        )

                                   )

    Intervenor-Appellant,              )                           

                                       )      

         v.                        )

                                   )

THE STATE OF ILLINOIS, JIM EDGAR,        )

Governor, PHILIP P. ROCK, President of  )  

the Senate, MICHAEL J. MADIGAN, Speaker       )

of the House of Representatives, DAWN   )

CLARK NETSCH, Comptroller of the State  )

of Illinois, and PATRICK QUINN,          )

Treasurer of the State of Illinois,          )         The

Honorable

                                         )         Lester D. Foreman,

    Defendants-Appellees.              )         Judge

Presiding.      

    JUSTICE BURKE delivered the modified opinion of the court upon

denial of partial rehearing:

    This case involves an action based on an alleged failure to

contribute to, and on the alleged impairment of, retirement pension

benefits and contractual rights by the State of Illinois and

certain State officials.   

    Plaintiffs Robert Sklodowski, Thomas Hanahan, Sandee Hanahan,

Susan Lillis, Robert Negronida and Mark D. Warden,

counterplaintiffs, the State Employees' Retirement System (SERS),

the State Universities' Retirement System (SURS), the Teachers'

Retirement System of the State of Illinois (TRS) (retirement

systems), and intervenor, the Illinois Retired Teachers Association

(intervenor) appeal from an order of the circuit court dismissing

plaintiffs' second amended complaint, counterplaintiffs SURS' and

TRS' amended counterclaim, counterplaintiff SERS' counterclaim and

intervenor's complaint for a writ of mandamus against defendants,

the State of Illinois and its officials, Jim Edgar (Governor),

Philip Rock (President of the Senate), Michael Madigan (Speaker of

the House of Representatives), Dawn Clark Netsch (Comptroller) and

Patrick Quinn (Treasurer) based on the separation of powers

doctrine.   

    On appeal, plaintiffs, counterplaintiffs and intervenor argue

that (1) the constitutional separation of powers doctrine does not

prevent the judiciary from ordering State officials to perform

nondiscretionary duties; (2) they have a contractual interest under

the State constitution in the financial integrity of the State

retirement systems; and (3) the federal and State contracts clauses

prohibit impairment of pension contract rights.  Counterplaintiffs

SERS, SURS and TRS also contend that the constitutional legislative

supremacy clause does not prohibit their claims.  Plaintiffs also

contend that their second amended complaint stated (1) a valid

claim against defendants for breach of fiduciary duty and (2) a

viable claim for a civil rights violation.  For the reasons set

forth below, we affirm in part and reverse in part.     

    In 1963, the State of Illinois created five retirement

systems: SERS, SURS, TRS, the General Assembly Retirement System,

and the Judges Retirement System of Illinois.  Each retirement

system is governed by a separate section of the Illinois Pension

Code (Pension Code) (40 ILCS 5/1--101 et seq. (West 1993)).  In

1989, Illinois Public Act 86-273, effective August 23, 1989, added

the following language to sections 2--124, 14--131(f), 15--155(a),

16--158(b) and 18--131(2) of the Pension Code (Ill. Rev. Stat.

1991, ch. 108 (now 40 ILCS 5/1--101 et seq. (West 1993))), which

pertain to the five retirement systems:

         "Starting with the fiscal year which ends in

         1990, the State's contribution [to the

         retirement systems] shall be increased

         incrementally over a 7-year period so that by

         the fiscal year which ends in 1996, the

         minimum contribution to be made by the State

         shall be an amount that when added to other

         sources of employer contributions, is

         sufficient to meet the normal cost and

         amortize the unfunded liability over 40 years

         as a level percentage of payroll, determined

         under the projected unit credit actuarial cost

         method.  The State contribution, as a

         percentage of the applicable employee payroll,

         shall be increased in equal increments over

         the 7 years period until the funding

         requirement specified above is met."

              Plaintiffs subsequently filed a class action in behalf of the

participants of the retirement systems against defendants, and

naming as nominal defendants the board of trustees of the

retirement systems, seeking a writ of mandamus, declaratory

judgment and an enforcement order based on defendants' alleged

failure to comply with Public Act 86-273.  Plaintiffs alleged in

their second amended complaint that defendants' "actions

(specifically the State's failure to contribute as required under

P.A. 86-273) and the individual Defendants' past and continuing

improper budgeting (Governor) and appropriation (President of

Senate and Speaker of the House), contrary to that required by P.A.

86-273, constitute unlawful impairment of the participants'

contractual rights under Article 13, 5 of the 1970 Illinois

Constitution [pension protection clause]."  Ill. Const. 1970, art.

XIII, 5.  Plaintiffs further alleged that the State, in failing

"to act in accordance with P.A. 86-273," breached its fiduciary

duties under the Illinois Pension Code (40 ILCS 5/1--109(d) (West

1992)) and that defendants' "actions in budgeting, appropriating

and contributing different lesser amounts than those required by

P.A. 86-273 constitute the passage of law impairing obligations of

contract, in violation with the Contract Clause of the United

States Constitution" (U.S. Const., art. I, 10) "and/or an invalid

attempt to grant the State freedom from making its contribution

required by P.A. 86-273," thereby violating article I, section 16,

of the Illinois Constitution (Ill. Const. 1970, art. I, 16).  

Plaintiffs' second amended complaint also included a count against

the individual defendants alleging that they deprived plaintiffs of

property under color of State law in violation of 42 U.S.C. 1983.  

    Intervenor's motion to intervene was granted on October 2,

1992.  On December 21, 1992, counterplaintiffs SURS and TRS

answered plaintiffs' second amended complaint and filed an amended

counterclaim against the Governor, Comptroller and Treasurer

alleging impairment of pension benefits and impairment of

contractual rights in violation of article I, section 10, of the

United States Constitution (U.S. Const., art. I, 10) and article

I, section 16, of the Illinois Constitution (Ill. Const. 1970, art.

I, 16).  On the same day, intervenor filed a three-count complaint

against the State, Governor, Comptroller and Treasurer alleging

that they impaired the pension benefits and contractual rights to

benefits of participants in SURS and TRS in violation of the

federal and State constitutions.       

    On February 19, 1993, the State, Governor, Senate President

and House Speaker moved to dismiss plaintiffs' second amended

complaint, arguing that the trial court lacked jurisdiction over

the State pursuant to the doctrine of sovereign immunity; the

doctrine of separation of powers prevented the court from

compelling the General Assembly to appropriate public funds; the

doctrine of separation of powers prevented the trial court from

compelling the Governor to budget a certain amount of money because

budgeting is an executive function; and a writ of mandamus was not

available because "plaintiffs do not seek to compel State officials

to perform ministerial duties."  On the same day, the Governor

moved to dismiss the amended counterclaim filed by

counterplaintiffs SURS and TRS, and the Governor and the State

moved to dismiss intervenor's complaint.  Both motions were

substantially similar in content to the Governor's and State's

motion to dismiss plaintiffs' second amended complaint.      

    On August 6, 1993, the trial court granted the motions to

dismiss plaintiffs' second amended complaint, SURS' and TRS'

amended counterclaim and intervenor's complaint, finding that the

separation of powers doctrine prevented the trial court from

"directing the Legislature to take any specific conduct."   

    On August 23, 1993, counterplaintiff SERS filed a motion for

leave to answer plaintiffs' second amended complaint and to file a

counterclaim and motion to substitute counsel.  On August 31, the

trial court granted SERS' motion, but dismissed its answer and

counterclaim based on the separation of powers doctrine.    On

September 2, 1993, SERS, SURS and TRS moved for reconsideration of

the August 6 and August 31 orders dismissing SURS' and TRS' amended

counterclaim and SERS' counterclaim, respectively.  On September 3,

intervenor moved for reconsideration of the trial court's August 6

order dismissing its complaint.  On the same day, the trial court

denied all of the motions for reconsideration.  These appeals

followed.  

    On April 16, 1996, defendants filed a "Renewed Motion to

Dismiss Appeals as Moot" with this court, arguing that Public Act

86-273, upon which complainants rely, was repealed by Public Act

88-593.  Public Act 88-593 provides for continuing automatic

appropriations of required State contributions to the retirement

systems to bring the pension systems to a 90% funding ratio by the

end of fiscal year 2045.  In response, plaintiffs,

counterplaintiffs and intervenor argued that all beneficiaries who

entered their respective retirement systems between August 23,

1989, the date Public Act 86-273 became effective, and August 22,

1994, the date it was repealed, have a vested contractual right to

enforce the terms of Public Act 86-273 pursuant to article XIII,

section 5, of the Illinois Constitution.  Plaintiffs,

counterplaintiffs and intervenor further argue that the public

interest exception to the mootness doctrine permits this court to

review the dismissal of their complaints and counterclaims despite

the fact that Public Act 86-273 has been repealed.   

    In addition, plaintiffs and counterplaintiff TRS argue that

Public Act 88-593 became effective on August 22, 1994, and was

therefore in effect when this court first denied defendants'

original motion to dismiss as moot and, therefore, this court

should again deny the motion because the circumstances have not

changed.  We have taken defendants' renewed motion to dismiss with

this case.     The standard of review of a trial court's order

dismissing a complaint is de novo.  Anastos v. Chicago Regional

Trucking Ass'n, 250 Ill. App. 3d 300, 618 N.E.2d 1049 (1993).  In

considering the dismissal of an action, a reviewing court must

interpret the allegations of the complaint in a light most

favorable to the plaintiff and, if it appears that no set of facts

from the pleadings could be proved which would entitle the

plaintiff to relief, the dismissal must be affirmed.  Turner v.

Rush Medical Hospital, 182 Ill. App. 3d 448, 537 N.E.2d 890 (1989),

appeal denied, 127 Ill. 2d 643, 545 N.E.2d 133.  

       I.

                                 Before reaching plaintiffs', counterplaintiffs' and

intervenor's arguments, we first address the State's contention

that the trial court lacks subject matter jurisdiction over it

pursuant to the State Lawsuit Immunity Act (745 ILCS 5/1 (West

1992)) and that "[t]o the extent *** that the pleadings attempt to

assert a cause of action against the State of Illinois, they had to

be dismissed."   Plaintiffs counter that they sought "by mandamus

to compel public officials to perform clear and mandatory duties

and that is not an action against the State."  Plaintiffs further

maintain that since "the Court of Claims has no equity jurisdiction

and cannot award the mandamus and declaratory relief Plaintiffs

seek," the trial court is the proper forum to grant this relief.  

Counterplaintiffs SERS and SURS argue that questions involving the

constitutionality of the State defendants' actions are not barred

by the doctrine of sovereign immunity.   

    Pursuant to the State Lawsuit Immunity Act (745 ILCS 5/1 (West

1992)), "[e]xcept as provided in the 'Illinois Public Labor

Relations Act' *** or '[an act] to create the Court of Claims ***,'

the State of Illinois shall not be made a defendant or party in any

court."  The Illinois Court of Claims Act (705 ILCS 505/8(a) (West

1992)) provides that the Court of Claims shall have exclusive

jurisdiction to hear "[a]ll claims against the state founded upon

any law of the State of Illinois, or upon any regulation thereunder

by an executive or administrative officer or agency."    

    In Board of Trustees of Community College District No. 508 v.

Burris, 118 Ill. 2d 465, 472, 515 N.E.2d 1244 (1987), a community

college district's board of trustees brought an action against the

State Comptroller and the Director of the Department of Commerce

and Community Affairs seeking reimbursement from the Comptroller

for the cost of providing veterans' scholarships or declaratory

judgment requiring the Director to notify the General Assembly of

the State's failure to fully fund the veterans' scholarship

program.  Plaintiff there argued that it was entitled to

reimbursement under the State Mandates Act for funds expended on

veterans' scholarships.  The District 508 court found that because

plaintiff's action "challenges the defendants' interpretation of

their obligations under the Mandates Act," plaintiff's "suit is not

one against the State, but is one that contests the conduct of

State officials in allegedly proceeding in violation of the law."  

District 508, 118 Ill. 2d at 473.

    Here, as in District No. 508, plaintiffs' cause of action, by

their own admission, is not against the State but is one against

the other named defendant officials regarding their interpretation

and performance of statutory obligations.  Accordingly, the claims

against the State itself are barred.  We find, however, that the

proper basis for dismissal of the State as a party is the doctrine

of sovereign immunity and not, as the trial court found, separation

of powers.  Williams v. Board of Education of the City of Chicago,

222 Ill. App. 3d 559, 584 N.E.2d 257 (1991).

                                  II.

    Plaintiffs, counterplaintiffs and intervenor first contend

that the trial court erred in dismissing their complaints and

counterclaims based on the separation of powers doctrine because

defendant officials' obligations under Public Act 86-273 to fund

the retirement systems are mandatory and it is the judiciary's

responsibility to ensure compliance with the law by the executive

and legislative branches.  Counterplaintiffs SERS and SURS assert

further that, without judicial oversight, Public Act 86-273 is

meaningless and unenforceable.     Defendants argue that the relief

plaintiffs, counterplaintiffs and intervenor seek can be

accomplished only through enacting appropriations, which is a

legislative prerogative, and the preparation of a budget, which is

an executive prerogative; therefore, the judiciary cannot compel

the exercise of these functions in a particular manner because of

the separation of powers doctrine.            

    "The legislative, executive and judicial branches are

separate.  No branch shall exercise powers properly belonging to

another."  Ill. Const. 1970, art. II, 1.  Once rights are created

by the constitution or statute, "[i]t is within the realm of

judicial authority to assure that the action of the members of the

executive branch does not deprive [individuals] of an institution

of rights conferred by statute or by the Constitution."  Dixon

Ass'n for Retarded Citizens v. Thompson, 91 Ill. 2d 518, 533, 440

N.E.2d 117 (1982).  A writ of "mandamus is discretionary and is

appropriate only where there is a clear right to the requested

relief, a clear duty of the [defendant] to act, and clear authority

in the [defendant] to comply with the writ."  Orenic v. Illinois

State Labor Relations Board, 127 Ill. 2d 453, 467-68.  "[W]hile

mandamus will not lie to direct the manner in which the discretion

is to be exercised, it is available to compel the performance of an

action which requires the exercise of discretion or even compel the

exercise of discretion itself."  Rock v. Thompson, 85 Ill. 2d 410,

417-18, 426 N.E.2d 891 (1981) (opinion of Goldenhersh, C.J., joined

by Ward and Clark, JJ.); see also Fergus v. Marks, 321 Ill. 510,

517-18 (1926) (finding that where an officer "may be compelled by

mandamus to act, the court in such a case is simply compelling

action and not the manner of action").  

    Here, plaintiffs, counterplaintiffs and intervenor sought to

have the judiciary order defendant officials by mandamus to comply

with Public Act 86-273, which already provides, as enacted by the

legislature, a level of funding of the retirement systems over a

seven-year period.  Plaintiffs do not seek to have the judiciary

compel the manner or means in which defendants perform their duties

to achieve compliance.  In fact, "where a statute categorically

commands the performance of an act, so much money as is necessary

to pay the command may be disbursed without explicit

appropriation."  Antle v. Tuchbreiter, 414 Ill. 571, 581, 111

N.E.2d 836 (1953).  Additionally, as more fully discussed below,

plaintiffs, counterplaintiffs and intervenor have a clear

contractual right to the State contributions provided by Public Act

86-273, which is thus a mandatory rather than a discretionary duty

upon the State, and defendant officials thus have a duty and

authority to act to comply with that Act; as plaintiffs point out,

section 2(a) of article VIII of the Illinois Constitution (Ill.

Const., art. VIII, 2(a)) requires the Governor to submit a budget

in accordance with State law and section 8 of article IV (Ill.

Const., art. IV, 8) requires "defendants Speaker of the House and

President of the Senate to certify that the procedural requirements

for passage have been met for each bill that passes both houses.  

Because it is the responsibility of the judiciary to assure that

the actions of the executive and legislative branches do not

deprive individuals of rights conferred by statute or the

constitution (Dixon Ass'n, 91 Ill. 2d 518), the trial court

therefore was not barred by the separation of powers doctrine from

considering, based on the merits of plaintiffs', counterplaintiffs'

and intervenor's claims, whether to issue a writ of mandamus to

compel defendant officials to comply with Public Act 86-273.  

Accordingly, we find that the trial court erred in dismissing

plaintiffs' second amended complaint, counterplaintiffs SURS' and

TRS' amended counterclaim, counterplaintiff SERS' counterclaim and

intervenor's complaint.  

                                 III.

    Plaintiffs, counterplaintiffs and intervenor next maintain

that defendants' failure to adequately fund the State retirement

systems violates the pension protection clause of the Illinois

Constitution.  Ill. Const. 1970, art. XIII, 5.  They further argue

that Public Act 86-273 became part of the State's contract with the

retirement system participants when the legislature amended the

Pension Code.  Defendants counter that the pension protection

clause does not "endow" beneficiaries "with a contractual right to

enforce the funding mechanism" of Public Act 86-273, which they

assert does not provide continuing appropriations, but protects

them only from the State's failure to pay benefits to beneficiaries

"when they are due."

    Section 5 of Article XIII of the Illinois Constitution of 1970

(Ill. Const. 1970, art. XIII, 5) provides that "[m]embership in

any pension or retirement system of the State, any unit of local

government or school district, or any agency or instrumentality

thereof, shall be an enforceable contractual relationship, the

benefits of which shall not be diminished or impaired [pension

protection clause]."  This clause has been interpreted as creating

"contractual protection for all pension plans."  (Emphasis added.)  

Buddell v. Board of Trustees, State Universities Retirement System

of Illinois, 118 Ill. 2d 99, 102, 514 N.E.2d 184 (1987).  The

provisions of the Pension Code are "actual terms" of the

contractual relationship established in section 5.  Kerner v. State

Employees' Retirement System of Illinois, 72 Ill. 2d 507, 514, 382

N.E.2d 243 (1978).  In construing a statute, a court's "objective

is to ascertain and give effect to the legislative intent as

determined from the necessity or reason for the enactment and the

meaning of the words employed.  Kerner, 72 Ill. 2d at 512.  It is

well settled that the legislature in passing a law is presumed not

to have "intended a meaningless act."  Niven v. Siquiera, 109 Ill.

2d 357, 367, 487 N.E.2d 937 (1985).  The law assumes that the

legislature in enacting new law is "aware of judicial decisions

concerning prior and existing law and legislation."  Kozak v.

Retirement Board of the Firemen's Annuity & Benefit Fund of

Chicago, 95 Ill. 2d 211, 218, 447 N.E.2d 394 (1983).

    Here, in 1989 the legislature was aware of the magnitude of

the retirement systems' underfunding and, as a result, enacted

Public Act 86-273.  It is clear that the legislature, by enacting  

Public Act 86-273, intended to bind itself to the obligation of

paying these funds to the retirement systems.  Moreover, when the

legislature amended the Pension Code to add the requirement of an

increase in State contributions over a seven-year period to each of

the five retirement systems pursuant to Public Act 86-273 in order

to attain full funding, those requirements became part of the

State's contract with the pension beneficiaries.  Beneficiaries in

each system provided consideration for this added term of the

contract by continuing to render their services to the State and to

pay their own contributions.

    This is not a situation like that in People ex rel. Federation

of Teachers v. Lindberg, 60 Ill. 2d 266, 326 N.E.2d 749 (1975),

upon which defendants rely, where participants in several teachers'

pension funds challenged the governor's item reduction of fiscal

appropriations to the funds, arguing that the Pension Code

establishing a contractual relationship between themselves and the

State obligated the State to fulfill its funding commitments.  The

Lindberg court found that the statutory language relied upon by the

plaintiffs was made a part of the Pension Code before the adoption

of the 1970 Constitution, at a time when such pensions were

uniformly not considered as creating any contractual right, and

which, the Lindberg court determined, did not evidence the

legislature's intent to establish a vested contractual right.  

Lindberg, 60 Ill. 2d at 275.  In so finding, the Lindberg court

concluded that "had the legislature wished to establish a

contractual right, it would have been a simple matter to so state."  

Lindberg, 60 Ill. 2d at 275.  The court lastly stated:  "Plaintiffs

have asserted that the respective pension systems are inadequately

funded.  The question of the specific fiscal appropriations

necessary to meet these deficiencies is one which *** should be

directed to the legislature."  Lindberg, 60 Ill. 2d at 277.

    In the present case, the legislature, pursuant to section 5 of

article XIII which established an enforceable contractual

relationship between pension beneficiaries and the State, did in

fact do just as the Lindberg court indicated it had the power to do

by specifically enacting Public Act 86-273 which promised pension

beneficiaries an increase in State contributions over a seven-year

period for the specific purpose of fully funding the admittedly

underfunded retirement systems.  In other words, the legislature

provided for the "how much" and "when" as to funding the retirement

systems.  Plaintiffs here did not claim that the legislature must

make specific appropriations, but rather that, by enacting Public

Act 86-273, the legislature failed to make contributions pursuant

to the formula it established to require it to make contributions

to the funds during a seven-year period in order to fully fund the

pension systems.  We further observe that Public Act 86-273 does

not contain any limiting language, as possibly Public Act 88-593

(40 ILCS 5/1--103.3) does which defendants cite to in support of

their motion to dismiss these appeals as moot, to indicate that the

legislature's commitment expressed in Public Act 86-273 is a

"goal."  Like the situation in Lindberg, the legislature could have

included some limiting language to indicate that its intent was not

to obligate itself to a level of funding over the seven-year

period, but it did not do so.  To accept defendants' position would

result in allowing the legislature to unilaterally change the terms

of its contract once the time for compliance with the former terms

is required.  Such a practice could continue indefinitely, thus

making each law (contract) meaningless.

    We further note that our supreme court's recent decision in

McNamee v. State of Illinois, No. 79592 (October 18, 1996), upon

which defendants rely and which was filed subsequent to the

issuance of the opinion in this case, is distinguishable from the

case at bar.  In McNamee, the plaintiffs alleged that an amendment

changing the method of computing the annual amount required to

amortize the unfunded accrued liability of police pensions

diminished and impaired their pension benefits because the new

method would "allow municipalities to contribute lower initial

annual contributions to the funds, thereby making the funds less

secure" (slip op. at 3) and that they had a "protected contractual

right [pursuant to section 5, article XIII] to the 'benefit' of the

more secure fund created by the prior funding method" (slip op. at

5).  The McNamee court, in interpreting the intent of the framers

of our constitution, found that section 5 of article XIII creates

an enforceable contractual right to pension benefits, but does not

"control the manner in which the state and local governments fund

their pension obligations" (slip op. at 12).  Because the

plaintiffs did not allege that the amendment diminished their right

to receive pension benefits, the McNamee court held that the

amendment did not violate section 5, article XIII.  The court also

found that "[t]the word 'impaired' is meant to imply and to intend

that if a pension fund would be on the verge of default or imminent

bankruptcy, a group action could be taken to show that these rights

should be preserved" (slip op. at 12), and that the plaintiffs had

not alleged that the new funding method would impair their benefits

by placing the fund on the verge of default or imminent bankruptcy.

    In the present case, however, the legislature, by enacting

Public Act 86-273, has imposed upon itself a greater obligation

beyond its contractual obligation set forth in section 5, article

XIII, by in fact requiring that it incrementally increase its

contributions to the pension funds over a seven-year period to

fully fund the pension funds--to pay its outstanding debt to the

pension funds--rather than to be obligated only to pay benefits to

participants as they become due, just as the Lindberg court

indicated the legislature had the power to do.  In other words,

although the intent of the framers of the constitution was not to

control the funding of the pension funds, the legislature, by

enacting Public Act 86-273, promised the pension funds a level of

funding, notwithstanding that the Act itself does not set forth the

means by which the legislature was to perform its promise.  Thus,

it is this obligation that the plaintiffs here seek to compel

defendants to perform; plaintiffs do not seek to dictate the

specific means by which defendants are to comply with the promised

funding under Public Act 86-273.  See Dadisman v. Moore, 181 W. Va.

779, 384 S.E.2d 816 (1988) (holding that the Governor has a

ministerial duty to prepare a budget consistent with the West

Virginia Constitution and statutes) and Weaver v. Evans, 80 Wash.

461, 495 P.2d 639, 649 (1983) (holding that the legislature's

adoption of a systematic method of funding "becomes one of the

vested contractual pension rights flowing to members of the

system").  We additionally note that unlike the plaintiffs in

McNamee, plaintiffs, counterplaintiffs and intervenor here have all

in one form or another alleged that the financial status of their

separate pensions funds is in a precarious state and that there

will be no funds from which to pay benefits by 2008, 2009.  Whether

this status is the equivalent of "on the verge of default or

bankruptcy" must be determined by the trial court, but as pleaded,

plaintiffs, counterplaintiffs and intervenor have stated a

recognized cause of action.

    Here, Public Act 86-273 provided a formula for contributions

to the pension funds.  Plaintiffs, counterplaintiffs and intervenor

had a vested contract right in the funding provisions under Public

Act 86-273 from the date Public Act 86-273 became effective until

August 22, 1994, when it was repealed by Public Act 88-593.  It is

clear from McNamee, that beneficiaries need not wait until they

have been denied benefits before they can make a claim that their

benefits have been impaired.  Plaintiffs, counterplaintiffs and

intervenor adequately alleged in their respective complaints and

counterclaims that, through defendants' underfunding of the

retirement systems, their benefits have been impaired.  

Accordingly, the trial court erred in dismissing plaintiffs' second

amended complaint, counterplaintiffs SURS' and TRS' amended

counterclaim, counterplaintiff SERS' counterclaim and intervenor's

complaint.   

                                   IV.

    Plaintiffs, counterplaintiffs and intervenor also contend that

defendants' failure to budget, contribute and appropriate the

proper amounts to the systems, as required by Public Act 86-273,

impaired their contract rights and violated article I, section 10,

of the federal constitution (U.S. Const., art. I, 10) and article

I, section 16, of the State constitution (impairment of contracts

clauses) (Ill. Const. 1970, art. I, 16).    

    Article I, section 10, of the United States Constitution

provides that "[n]o State shall *** pass any *** Law impairing the

Obligation of Contracts."  U.S. Const., art. I, 10.  Article I,

section 16, of the Illinois Constitution provides that "[n]o ***

law impairing the obligation of contracts or making an irrevocable

grant of special privileges or immunities, shall be passed."  Ill.

Const. 1970, art. I, 16.  

    We first note that the trial court did not make any finding on

this issue.  However, based on our determination above, that

plaintiffs, counterplaintiffs and intervenor have a contractual

right in the funding provision of Public Act 86-273, as well as

their allegations in their respective complaints and counterclaims

that through defendants' underfunding of the retirement systems, by

failing to budget, appropriate and contribute funds, their benefits

have been impaired, we find that they have stated a recognized

cause of action.  Accordingly, the trial court erred in dismissing

plaintiffs' second amended complaint, counterplaintiffs SURS' and

TRS' amended counterclaim, counterplaintiff SERS' counterclaim and

intervenor's complaint.

    Lastly, the parties' following arguments need not be addressed

by this court for the reasons stated:  (1) Plaintiffs argue that

they have standing to bring this action even though all retirement

system benefits are presently being paid by the State because

"system bankruptcy is not a predicate for standing."  Defendants,

however, do not challenge plaintiffs on this "issue" on appeal; (2)

Counterplaintiffs SERS, SURS and TRS argue that they have a

responsibility to act in behalf of their members and that they are

entitled to bring claims in favor of their participants and

beneficiaries.  Defendants do not challenge counterplaintiffs on

this "issue" on appeal and, moreover, the trial court did not

address this issue; (3) Plaintiffs contend that defendants breached

their fiduciary duties under the Pension Code and (4) that they

also violated plaintiffs' property rights protected by 42 U.S.C.

1983 when they budgeted, appropriated and contributed lesser

amounts to the retirement systems than required by law.  The trial

court did not make any finding regarding these two claims and we

therefore do not address them.  

    For the reasons stated, we affirm the circuit court's

dismissal of plaintiffs', counterplaintiffs' and intervenor's

claims against the State of Illinois based on sovereign immunity;

we reverse the court's dismissal of plaintiffs', counterplaintiffs'

and intervenor's claims against all other defendants; and we remand

this cause for further proceedings consistent with the views

expressed herein.  We also deny defendants' renewed motion to

dismiss this case as moot.

    Affirmed in part and reversed in part; cause remanded.

    HARTMAN, P.J., and SCARIANO, J., concur.