Ex-DuPage County board members profit from pension loophole

  • John Case

    John Case

  • Kyle Gilgis

    Kyle Gilgis

  • Myrene Iozzo

    Myrene Iozzo

  • Bill Maio

    Bill Maio

  • Pension boost

    Graphic: Pension boost (click image to open)

 
 
Updated 2/1/2017 5:58 AM

Five former DuPage County Board members were able to take advantage of a quirk in pension rules that only benefitted elected officials to inflate their retirement benefits, costing taxpayers more money.

The Illinois Municipal Retirement Fund's now-defunct Elected County Officials pension program allowed county board members to convert tenure and salaries at other government jobs into the more lucrative benefit for elected officials.

                                                                                                                                                                                                                       
 

Though the program ended in 2011, taxpayers will be covering the added costs for decades, as long as current participants are alive.

Former DuPage board members John Case, Kyle Gilgis, Myrene Iozzo, Bill Maio and Dean Westrom took advantage of the program. Calls to some seeking comment were not returned and others could not be located. At least two have moved out of state and have unlisted numbers.

Most jobs eligible for IMRF public pensions require 40 years of work to maximize retirement benefits that start out at 75 percent of the average of an employee's salaries from the four consecutive highest-paid years. But ECO only requires 20 years of service to maximize pension benefits that start at 80 percent of an elected official's final salary, even if that salary isn't for work as an elected official.

ECO participants had to contribute 7.5 percent of their pay toward their pensions, rather than the 4.5 percent other IMRF participants pay.

Meanwhile, DuPage County taxpayers also had to pay more into the retirement system to keep up with the additional costs these pensions generate, IMRF officials said.

"The fact is that when regular IMRF service credit is converted to ECO credit, there is a resulting increased cost to those associated units of government," said John Krupa, an IMRF spokesman.

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The program began in 1997, and some participants had to pay catch-up amounts to be enrolled for previous years of work -- money they quickly recouped once benefits began. Legislators shut off ECO in 2011 to new participants. However, that didn't eliminate existing participants. Many current elected officials in DuPage County, as well as McHenry, Will and 68 other Illinois counties, will benefit from the program. Lake and Kane are among counties that chose not to participate when the program was created 20 years ago.

Such a perk is "not unique," said Keith Brainard, research director at the National Association of State Retirement Administrators, "but it's also not typical."

Calling the quirk that allows elected board members to transfer years worked elsewhere into a more lucrative pension program a "loophole," Brainard said he's not surprised legislators shuttered it. There is a move nationally to end pension programs for elected officials, he said.

"Part of the purpose for providing these retirement benefits is to attract and retain employees, so the question becomes does Illinois have a problem attracting elected officials?" Brainard asked.

                                                                                                                                                                                                                       
 

In recent years, IMRF has audited several governments that allow elected officials to participate in the pension program and kicked some people out after they weren't able to prove they met the 1,000-hour annual work mandate.

Case, Gilgis and Iozzo all had township jobs before their elected county board positions and transferred years worked there into ECO benefits.

It had a dramatic effect on their pensions.

For instance, Iozzo was on the DuPage County Board for less than two years in 1999 and 2000. But by enrolling in ECO and paying a $37,108 fee, she converted 19 years with Addison Township to maximize her pension payout.

Iozzo's pension started at a little more than $50,000 in 2000. Without ECO, Iozzo would have had a starting pension of a little more than $16,000, according to IMRF data. She now receives $65,000 annually. In all, Iozzo has received $968,814 in pension payments since 2001, according to IMRF records.

Maio and Westrom used their salaries from full-time nonelected DuPage County jobs to boost their pensions, according to IMRF figures. After serving on the board, Maio took a job lasting nearly six years with the circuit clerk that topped out at $125,000 a year. That's the salary his pension is based on, not the county board salary of less than $50,000 he was being paid when holding elected office for 21 years. His current annual pension is nearly $120,000 a year, according to IMRF records. He's received more than $720,000 in retirement benefits since 2010.

Westrom used his $97,000-a-year salary as the DuPage County Forest Preserve's golf operations director to boost his benefits when he retired in 2011. His pension is nearly $92,000 a year.

Combined, the five former county board members have been paid $3.5 million in retirement benefits for a combined 55-plus years of county board service.

Got a tip?

Contact Jake at jgriffin@dailyherald.com or (847) 427-4602.

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