Do Duty Disability Benefits Require Prejudgment Interest ?
In Kouzoukas v. Retirement Board of the Policemen's Annuity & Benefit Fund, 234 Ill. 2d 446, 917 N.E.2d 999, 334 Ill. Dec. 924 (2009), the Illinois Supreme Court held that duty disability benefits under public pension agreements do not require prejudgment interest.
In Kouzoukas, the court addressed the split of authority within the appellate court regarding prejudgment interest. Kouzoukas, 234 Ill. 2d at 473-74, 917 N.E.2d at 1015.
In turn, the court clarified our understanding that, absent any suggestion of purposeful wrongdoing by the Board which would warrant an award of prejudgment interest on equitable grounds, a statute must authorize the award.
Additionally, in analyzing section 2 of the Interest Act, the court concluded that public pension agreements under the Pension Code are not "other instruments of writing" within the meaning of the Interest Act. Kouzoukas, 234 Ill. 2d at 477, 917 N.E.2d at 1017.
Accordingly, the court held that the plaintiff was not entitled to prejudgment interest on the duty disability benefits paid under the public pension agreement.