Bensenville pension funding fight resolved

A three-year legal odyssey between Bensenville, its former fire department's pension board and a state agency appears to be over.

Bensenville sued the pension board and the Illinois Department of Financial and Professional Regulation's Division of Insurance in 2004 after the state's draft report stated village officials improperly controlled and managed pension funds.

But now a negotiated settlement, recently approved by a DuPage County judge, stipulates that Bensenville officials didn't violate any state law or department regulation by maintaining a consolidated cash account to keep funds from a variety of sources, including the pension fund.

The agreement also states Bensenville wasn't required to maintain a minimum balance in the consolidated accounts -- and that the village kept detailed fund account records.

"The village never did anything wrong, and it's taken us three years to get the vindication that we deserve," Bensenville village attorney Gerald Gorski said Wednesday. "That our name got cleared is gratifying. That we had to wait for three years to get it cleared is very troubling."

The draft report by the state department of insurance surfaced after allegations of fund mishandling were raised in May 2004 by former pension board attorney Michael Zimmermann.

Zimmermann pointed to an audit -- conducted by an independent accounting firm hired by the pension board -- that stated the village failed to transfer nearly $2.5 million into the pension fund between early 2002 and May 2004. That resulted in the state probe and the draft report, which was obtained by the Daily Herald in March 2005.

Pension board attorney Michael Roth said the recent settlement means the three-year legal battle over the handling of the pension fund is "a dead issue."

"The litigation is all behind us," Roth said. "It is over, and I believe both sides walked away satisfied with the outcome."

Zimmermann declined to comment, citing an outstanding defamation of character lawsuit filed against him by Bensenville Village President John Geils as a result of Zimmermann's allegations.

According to the settlement, the pension board also agrees to end its attempts to collect from the village an undetermined amount of interest it believes the nearly $2.5 million would have earned had it been invested properly.

Despite the settlement, the three parties still disagree on several issues, including whether the village transferred funds back to the firefighters' pension fund in a timely manner.

The settlement also prohibits all parties from referencing the state's 2004 draft report and declares the report's findings to be "declared void and shall have no legal force and effect with respect to the village of Bensenville and its officials."

Sue Hofer, a spokeswoman for the state agency, said the department did not presently wish to comment on the agreement.