Niles Public Library officials say the library’s current retirement offerings may be negatively impacting the number of talented employees the facility attracts and retains.
The library plans to study alternative options for retirement offerings, including pension plans offered through the Illinois Municipal Retirement Fund (IMRF), over the coming months, according to a release from the district published last week. The library’s director, Susan Lempke, said increasing the amount of money the district contributes to employee retirement plans under the current system in addition to other alternative retirement options will also likely be discussed by the board.
The library’s Board of Trustees president, Linda Ryan, requested the issue be examined, and “that is something I was strongly in agreement with,” Lempke said.
Ryan did not return a request for comment.
This isn’t the first time officials have debated changing the district’s retirement offerings, Lempke said.
Several years ago, Lempke said the library’s Board of Trustees rejected the IMRF option despite results of a staff survey indicating that two-thirds of the library’s employees favored pension plans through the IMRF.
Taxpayers expressed concern to library officials as recently as this summer that the pensions would be underfunded like several public pension plans offered by Chicago and Illinois.
But financial statements from the IMRF indicate that their pension plans were about 93 percent funded at the end of 2014 and 96 percent funded at the end of 2013, the library district’s business manager Greg Pritz said.
The administrators acknowledged fears that if the board chooses to offer a pension plan through the IMRF, taxes will increase.
Pritz said a tax increase is likely, however, something needs to be done to ensure employees are taken care of and the library remains competitive in the labor market.
The library district currently offers full-time employees 7.5 percent of their salary to be saved in a defined contribution plan. Employees also have the option to take part or all of that contribution as additional salary, according to the release.
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Of the nearly $168,000 the library paid to employees as part of the retirement plan last fiscal year, two-thirds was deposited in the plan while the remainder was taken home by employees, Pritz said.
In terms of retirement offerings, the library district “stands out by being different but not in a positive way,” he said.
Niles is one of seven of 114 surveyed libraries in northern Illinois that do not offer a defined benefit pension plan through the IMRF to their employees, according to the release.
Lincolnwood Public Library District and Schaumburg Township District Library, two libraries in the nearby area that do not offer plans through IMRF, provide a substantially higher contribution to their employee retirement than does Niles, Lempke said.
“That puts us literally at the bottom (of the libraries surveyed),” she said, adding that “that (contribution) number needs to change in any case.”
Both Pritz and Lempke said the library’s ability to hire and retain qualified candidates has been impacted by the district’s current retirement offerings.
Over the course of his two-year tenure at the library, Pritz said the district’s lack of a pension plan has been cited as a significant drawback in employee exit interviews “and essentially what (former employees) did was go to a library participating in IMRF.”
Unlike the library’s current contribution plan, a pension offered through the IMRF would not allow district employees to take home any contributions as part of their salaries, he said.
Employees would instead contribute 4.5 percent of their salary to the plan, while the library district would provide an estimated 10 percent, Pritz said. The actual amount the district would need to pitch in is still yet to be determined, he said. If the board chose to provide a pension plan through the IMRF, Pritz said the district’s future liability would be reassessed on a periodic basis.
Lempke said the board will have the ultimate say as far as retirement offerings are concerned.
“Staff input shouldn’t be the deciding factor because the board needs to decide what’s best for the future of the library,” she said.
Lempke said any board discussion of the issue will be listed on meeting agendas, though she does not expect any decisions regarding retirement plans to be made until sometime next year.
Lee V. Gaines is a freelance reporter for Pioneer Press.