By Igor Studenkov | Bugle Staff
nweditor@buglenewspapers.com
@NilesILNews
The Niles Public Library Board of Trustees is aiming to make a final decision about whether to change employee retirement benefits.
As previously reported by the Bugle, library employees currently get retirement benefits through 475(b) Plans – retirement plans similar to 401(k).
The library deposits 7.5 percent of the employees’ salaries into the retirement accounts, and employees have a right to ask the library to put some or all of that into their regular salaries.
As with 401(k) plans, employees can also put as much additional money as they want into the retirement account.
Board President Linda Ryan said she ultimately hopes to find a way to improve the current retirement benefits.
Illinois Municipal Retirement Fund, a pension fund widely used by municipal organizations throughout the state, has been suggested as one of the possible alternative, but Ryan has stated that other alternatives will be considered.
IMRF is currently in the process of calculating how much the library would have to pay if it joins the plan, and what the benefits will look like.
During the Jan. 20 board meeting, Greg Pritz, the library’s business manager, gave more details about what kind of benefits the employees currently get, and how much it costs the library.
In addition to the 475(b) plans, they get life insurance, and they are eligible for disability coverage.
The life insurance is equal to the annual salary or $50,000 – whichever is smaller.
The coverage end once the employee retires or if he or she is fired. The short-term disability insurance coverage equals to 60 percent of the earnings up to $5,000.
The long-term disability insurance coverage starts after 90 days, and the length of the coverage is determined based on age and capped up to one year.
The payments are set at 60 percent of the first $5,000 in earnings, minus deductible income, with the total amount capped at $3,000.
According to Gritz, in 2015, the library spent $18,000 on insurance.
As of Jan. 15, a total of 38 employees are enrolled in 457(b) plans. 20 employees deposited the library contribution in full, while five took some portion of it as salary and 13 took the entire contribution as additional salary.
In financial terms, a total of $4,187 wound up in 475(b) accounts, while a total of $2,370 went into extra pay. Because six more employees will be added to the plan later this year, those amounts are expected to go up.
During the meeting, trustee Karen Dimond asked if any employees asked the library to put in more than 7.5 percent of their salaries into 475(b).
Pritz said that some have, estimating that the library set aside a total of $3,600.
In 2015, the library contributed a total of $175,000 toward employee retirement. Pritz told the Bugle that, if the library switched to IMRF, the library employees would see several important changes.
“All employees that meet eligibility required will be automatically enrolled in it,” he said. “4.5 percent will be deducted from their paychecks, and the library will be putting in whatever comes out of the cost study.”
Until the IMRF cost study is complete, Pritz said, nobody would know how much the library would pay.
He also noted that, unlike some pension plans, library employees would still be eligible for Social Security.
They would also be free to enroll in non-pension retirement plans if they so choose, but there would be no way for them to un-enroll from IMRF.
According to library director Susan Lempke, IMRF will complete the cost study some time in March-April 2016.