The Niles Public Library District has commissioned a study to determine how much it would cost the agency to offer pension plans to employees through the Illinois Municipal Retirement Fund.
The library district announced last fall that it planned to look into changing its current retirement offerings in an effort to attract and retain qualified staff members.
The actuarial cost study, for which the library paid about $1,400, will determine how much it would need to contribute to employees’ retirement funds were the library to join IMRF, said library district business manager, Greg Pritz.
Previous IMRF cost studies commissoned by prior library boards provide an idea of what the library will need to pay, but Pritz said current figures are needed if the board is going to make an informed decision. He estimates that the library will need to contribute around 10 percent of eligible employees’ salaries to the fund annually.
“What the study will show the board is how much it would cost to get us started on IMRF, what the percentage of a person’s salary overall is that we’d have to be paying,” said Susan Lempke, director of the Niles Public Library District. “This would give the figure to start with and it would change every year depending on the economy.”
Lempke said the amount employees would be required to pay into the fund is fixed at 4.5 percent of their annual salary.
The results of the cost study are expected back by the end of this month, Pritz said. He added that it’s likely an IMRF representative will be scheduled to speak to the board about the pension plan at their April meeting.
The library currently offers staff members a defined contribution plan for retirement, also known as a 457B, through ICMA-RC, the company that manages and administers the program. The library provides qualified employees 7.5 percent of their salary to be deposited each year into a defined contribution plan. Employees also have the option to deposit only a part or none of the contribution into the plan.
Of the 44 employees eligible for the program, only about 28 actually use it to save money for retirement, said business manager for the library district, Greg Pritz. 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. Both Pritz and library district director, Susan Lempke, said library board members have discussed whether or not to continue allowing employees to take home the retirement contribution, but have not yet made a decision on the matter.
Board president Linda Ryan did not return multiple requests for comment.
If the board chooses to switch over to the IMRF system, both Lempke and Pritz say its possible the change could increase library district residents’ tax bills. The hope, however, is that better retirement benefits will result in less turnover of library staff and higher quality, more consistent service for library patrons, Pritz said.
“Obviously, we do have a good staff here, but the new head of digital services, one of her questions to me was, ‘do you have IMRF?'” Lempke said. “I was able to hire her, but I may not be able to retain her.”
Residents who have criticized the potential switch to IMRF have cited underfunded local and state pension plans. Lempke said that unlike other pension funds, the IMRF “has never gotten into bad shape” and “it’s hard to help taxpayers understand that.”
The board is expected to make a decision at or before their meeting in June in order for any changes to become effective on July 1, Pritz said.
“It’s a significant change,” he said. “Once you join IMRF, you are an IMRF facility going forward no matter what, so it’s irreversible and that’s why were taking so long to study it.”
Lee V. Gaines is a freelance reporter for Pioneer Press.
