President Linda Ryan, of the Niles Public Library Board, said at a meeting Wednesday night that it was the board’s intention to “elevate” the library’s retirement offerings to employees.
Several residents in attendance expressed concerns to the board that changes to the current system may impact their tax bills.
Library district officials announced last month a plan to study alternative retirement options, including pension plans offered through the Illinois Municipal Retirement Fund (IMRF). Susan Lempke, the library’s director, said the board would also likely consider increasing the amount of money the district contributes to employee retirement plans currently.
Library officials have said the current retirement offerings fall short of what 114 other libraries surveyed in northern Illinois provide their employees and have made it a challenge to hire and retain qualified staff members.
Niles resident Bob Zalesny said a transition to a pension plan through the IMRF would raise residents’ taxes.
“I don’t believe the pension program would be a good program for the library and the people of Niles,” he said. “These (pensions) are failing left and right. They raise people’s taxes. People are on the brink of what they can afford living here.”
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Jerry Szczepanski, also a Niles resident, said the pension would be underfunded like several public pension plans offered by Chicago and Illinois.
Greg Pritz, the library district’s business manager, said IMRF financial statements 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 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.
Pritz said a total of 44 employees are eligible for the contribution plan program, and 28 actually use it to save money for retirement. 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, he said.
George Pantazis, a retirement plan specialist for ICMA-RC — the company that manages and administers the library district’s defined contribution program — said during a presentation at the meeting that the village of Niles, Park Ridge and the Niles Park District participate in the IMRF while also allowing employees to voluntarily put an additional portion of their salary into defined contribution plans. He said the library district is the only public organization he works with that does not offer employees a pension through the IMRF.
The current system, in which the library voluntarily contributes 7.5 percent of an employees salary to the defined contribution plan or as additional salary, serves as a substitute for a pension plan, Pantazis said.
If the district chose to switch over to the IMRF, employees would not longer be able to take home any contributions as part of their salaries, Pritz said. A district employee would instead be required to contribute 4.5 percent of their salary to the pension, he said, while the library district would provide an estimated 10 percent. The exact amount the district would be required to pitch in is undetermined, Pritz said, and if the board chose to go the IMRF route, the district’s future liability would be reassessed on a periodic basis.
Ryan said an IMRF representative would provide more information about the pension program at a future board meeting. She said the board will likely vote on the issue sometime after the end of this year and any changes to the retirement offerings would be implemented at the beginning of next July.
Lee V. Gaines is a freelance reporter for Pioneer Press.