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DuPage forest district changes payouts to departing employees to save on pensions

A new approach to compensating departing employees could save the Forest Preserve District of DuPage County roughly $6 million over the next two decades, officials said.

Forest preserve commissioners this week approved a series of changes to the district's employee compensation policies that include eliminating the long-standing policy of providing retention incentives and lump-sum payments to retiring employees for accumulated sick leave.

Commissioner Jeff Redick said the changes, which take effect Jan. 1, will create a more stable and manageable long-term financial picture for the district.

“These changes will curb long-term spending, especially in the area of pension costs,” Redick said, “and allow us to responsibly serve the taxpayers and both our current and future employees.”

For decades, eligible employees were given payouts when they left based on how long they served the district. On average, the amount totaled $15,000 to $20,000 per employee.

Under the new plan, employees who don't already qualify for the payout won't be eligible for it in the future. Those who do qualify won't see their payout amount increase for the years they work beyond Dec. 31.

“Anyone who has accrued a financial value in the program at the end of the calendar year will receive that value when they leave, but it won't grow anymore,” said Jack Hogan, director of finance and administration.

The district also is freezing the monetary value of its sick time program.

Some employees are eligible to receive lump-sum payments when they retire based on how many sick days they have accumulated.

Under the new policy, those employees still will get a payment. But the amount they're eligible to receive won't increase beyond Dec. 31.

The district also moved to exclude both the bonus and sick time payouts from an employee's pension earnings.

Currently, retiring employees can spread out the payments over their final five months with the district, which boosts their pension. Under the new policy, they won't receive the payouts until after they leave the district.

“We will give them what they're owed,” Hogan said. “But it won't be made part of their pension calculation.”

By eliminating the retention incentive and sick time programs and capping them at their existing value, the district will eliminate $1.5 million of additional liability for payouts over the next five years.

Changing the pay date on all payouts so they don't affect pensions is expected to save about $4.5 million in pension costs over the next 20 years.

“The financial costs associated with the previous policies are significant over time,” forest preserve President Joe Cantore said.

Cantore said it was in the best interests of the district and taxpayers to make the changes.

Hogan said the changes give the district more predictability in its financial forecasting and operating budget.

“The existing policies are not financially sustainable,” Hogan said. “We believe addressing this matter is prudent and necessary to maintain the continued financial health of the agency.”

The forest preserve district has about 280 full-time employees and about 45 part-time employees.

Joe Cantore
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