New health retirement plan?

Elgin officials are taking another run at providing a health retirement benefit for police officers.

City council members on Wednesday will consider a new plan that would pay officers for some unused sick and vacation time.

The city council approved a similar plan in 2005, under the terms of a police union contract that ran from Jan. 1, 2004, to Dec. 31, 2006.

But the old plan was voluntary and therefore violated U.S. Tax Code, according to the Internal Revenue Service.

"The IRS ruled against the plan, not just for Elgin," City Manager Femi Folarin said.

City officials say public employers nationwide were forced to cancel the old plan.

Only one police officer in Elgin had enrolled in the plan, city officials said.

Now the city and its police union have worked out a new, mandatory health retirement plan that they say complies with U.S. Tax Code.

Under the new plan, police officers would receive annual payments for anything beyond 90 unused vacation and sick days.

The money for unused sick and vacation time would be deposited into a tax-free, interest-bearing account.

Police officers could then withdraw the money for health-related expenses after retirement.

"Participation in the plan is mandatory, thereby passing IRS scrutiny," city officials said in an internal memo to city council members.

Police union officials could not be reached for comment Monday on the new benefit.