advertisement

McHenry County could offer incentive for opting out of pension

Hoping to encourage future elected leaders to opt out of the state pension program, two McHenry County Board members have proposed offering them a private retirement plan with a matching contribution.

Under the plan created by board members John Reinert and James Kearns, nine countywide elected officials would be allowed to enroll in a 457 deferred compensation plan with a dollar-for-dollar county match of up to $8,000 per year - as long as they pledge to not participate in the Illinois Municipal Retirement Fund.

The plan was developed as an alternative to board Chairman Jack Franks' proposal to eliminate pension eligibility for future officeholders, the legality of which was called into question by IMRF leaders and other county officials last month.

Reinert says his and Kearns' proposal takes a different approach but has a similar goal: to save the county money in the long run while also giving elected leaders a more practical way to save for retirement. Rather than waiting 10 years to be eligible for an IMRF pension, he said, officeholders can begin participating in the 457 plan immediately, and can take that fund with them if they leave office.

"And when (the official) is done and out of office, we're done. We don't have to pay for a lifetime retirement plan," Reinert said, noting the state's attorney's office also vetted the proposal. "I think this is the perfect solution. ... It's a win-win."

The county board's human resources committee unanimously agreed to pass along the proposal to the full county board. If approved next month, the plan would go into effect when newly elected officials are sworn in Dec. 1, 2018.

"I think it's intriguing, and I think it'll work," Franks said. "I also think my (plan) would work as well, but I think they want to have the certainty of not having any legal challenges, and that's OK. I fully support their proposal here."

For employees enrolled in IMRF, the county contributes about 10 percent of their salaries to their pensions, County Administrator Peter Austin said. For the county clerk position with a salary of $109,466, for example, the employer contribution works out to be just under $11,000, he said.

Employees are also able to participate in a 457 plan - similar to a 401(k) but for public sector employees - but do not currently receive an employer match, Austin said.

Franks said he believes the enhanced retirement plan would provide an attractive option for elected officials. Eligible positions include the county clerk, board chairman, circuit clerk, treasurer, auditor, recorder, state's attorney, coroner and sheriff.

"This helps put McHenry County forward as a statewide model for good government," Franks said. "I'm impressed with these guys for coming up with it. I really appreciate it, and I know the taxpayers will appreciate it, too."

James Kearns
Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the "flag" link in the lower-right corner of the comment box. To find our more, read our FAQ.