The executive director of the Illinois Municipal Retirement Fund is questioning the legality of a McHenry County proposal to eliminate pension eligibility for countywide elected officials.
Introduced last month by County Board Chairman Jack Franks, the measure would attempt to remove eight elected positions from the state pension program, effective at the end of their current terms. It would not affect any IMRF credit already accrued by officeholders.
IMRF Executive Director Louis Kosiba says the county board does not have the power to decide which employees can receive a pension. Per the Illinois Pension Code, he said, only the IMRF board has control over who qualifies for enrollment in the program -- a point he made clear in an Oct. 2 letter to Franks.
"I'm pretty emphatic about this because now we're talking about the Illinois constitution," Kosiba told the Daily Herald. "The county board does not have the authority to do that."
Franks, however, said he believes the board, which sets elected officials' salaries, has a right to also terminate their pension benefits. His proposal, expected to save the county about $111,000 per year, is simply an extension of the county board's decision to end its participation in the IMRF last year, he said.
"I do not believe Mr. Kosiba is correct, and if we get challenged, we'll let a court decide," Franks said. "He's not the judge, jury and executioner."
Kosiba said there's a difference between eliminating pension eligibility for board members versus full-time elected department heads. When the county board ended its participation in the pension fund, he said, the IMRF interpreted the resolution as saying board members were not expected to work the 1,000 hours per year required by state law.
"(That) resolution is about hours of work expected and nothing else," Kosiba said in the letter to Franks. "Participation in IMRF is a protected constitutional right. It cannot be abrogated by a belief that a certain segment of IMRF participants should not participate."
Echoing Kosiba's concerns with Franks' proposal, board member Craig Wilcox has proposed a second resolution that would create a two-tiered salary structure for elected officials. Under his proposal, those who decide to take the pension would receive a lower salary than those who do not enroll in the program.
For the county clerk position, the county offers a $109,465 annual salary, plus a $11,275 IMRF contribution, Wilcox said. His resolution would set the new salary at $104,750 for a clerk who does not enroll in IMRF, and $90,000 for one who does.
"I agree we have a pension problem and that if we're going to start fixing it, we've got to start with elected officials," Wilcox said. "Ideally, this is an incentive for elected officials to opt not to enroll in IMRF."
If both his and Franks' proposals pass, Wilcox added, the county would have a backup plan if one resolution is found to be unviable.
During a committee of the whole meeting Thursday, Franks said he would prefer to move forward with his proposal and, if problems arise, reevaluate Wilcox's resolution at a later date.
"It's worth fighting for," he said. "There's no downside to this."
Elected leaders who do not enroll in IMRF are still able to participate in a separate deferred compensation retirement plan. Board member John Reinert suggested offering officials a larger contribution to that plan if they remove themselves from the state program.
Several board members requested the state's attorney's office offer an opinion on each pension proposal. The county board is expected to continue discussions at Tuesday's regular meeting.