Illinois Appellate Court, 3rd District – Decided June 26, 2025
Kenneth Teppel, a former police chief for the Village of Bolingbrook, retired in 2020 and applied for a pension based on a total salary of $173,148.12, which included his base salary plus “pick-up” payments for his employee pension and retiree insurance contributions. Initially approved, his pension was later reduced by the Pension Board to $154,262.50, excluding the pick-up payments as non-pensionable “fringe benefits.” Teppel challenged this decision in court.
The issue in the case involved whether the Village’s “pick-up” payments for pension and retiree insurance contributions were considered pensionable salary under the Illinois Pension Code (40 ILCS 5/3-125.1)? The appellate court affirmed the circuit court’s ruling in favor of Teppel, holding that the Board erred in excluding the pick-up payments. The court found the pick-up payments were predetermined, fixed, and issued regularly as wages, not reimbursements or fringe benefits. These payments were approved in the Village’s budget ordinance and tied to the police chief’s rank, satisfying the legal definitions of “salary” under the Pension Code and relevant administrative rules.
The legal reasoning of the Court was based in part on Section 3-125.1, which establishes that pensionable salary includes any salary attached to rank and approved through appropriation. In addition, Administrative Rule 50 Ill. Adm. Code 4402.30 defines “salary” as fixed compensation, and the court found the pick-up payments met that definition. The Board’s characterization of the payments as “fringe benefits” was rejected because the Village itself classified them as wages, and the payments were made consistently, not based on performance or eligibility factors.
In conclusion, the Court held Teppel’s pensionable salary included the pick-up payments, bringing his total to $173,148.12.