As you are no doubt aware, an article appeared in Sunday's Tribune identifying an egregious pension spiking issue through the Park District of Highland Park. Click here to see the article.

As the newest member of the House Pensions Committee, I want you know that I have already taken action:

• I have asked the Chairman for hearings on the topic.
• I had a briefing with the Illinois Municipal Retirement Fund (IMRF) yesterday morning and had my first Pensions Committee meeting yesterday afternoon.

Nancy Rotering (Highland Park Councilman), Bonnie Shadid (IMRF Legislative Liaison), Louis Kosiba (IMRF executive Director), Karen May (State Rep. - 58th District) and Kathy O'Brien (IMRF General Counsel).

While we have already closed some loopholes, I intend to draft legislation to further tighten rules.

Sunday's Tribune story did not report that the pension reform bill that we passed this year has two important components that will stop abuses such as this case in the future. The new law affects the thirteen pension systems governed by the Illinois pension code, including IMRF. In addition, it provides that maximum pensionable salary will now be $106,800 and the final average salary will be based on the highest consecutive eight years (instead of four years) of the last ten years of service.

In yesterday's Tribune, the need for these reform actions is further detailed:

Lawmakers to Probe Local Government Pension Practices

By Joseph Ryan, Tribune Reporter

Two Illinois lawmakers on Monday called for hearings to look into local government pension practices after learning how officials with the Park District of Highland Park intentionally used large bonuses to hike the pension of a district executive by more than $50,000.

State Rep. Karen May, D-Highland Park, said she was "upset" to find out that salaries for executives at the Park District were far higher than the Chicago-area norm for similar posts - in part to boost pensions for those executives.

May sits on the House pension committee and called for hearings to delve into the Illinois Municipal Retirement Fund, which manages taxpayer-backed pensions for thousands of local government employees.

The pension committee's chairman, state Rep. Kevin McCarthy, D-Orland Park, said the panel will look at limiting the impact of large, late-career pay bumps on final pensions, among other issues. The hearings could start this fall.

A Tribune story on Sunday detailed how outgoing Park District Executive Director Ralph Volpe landed $270,999 in bonuses in 2008, boosting his compensation that year to $435,203.

Volpe, who retired at 57, receives a pension this year of $166,332. His pension likely would be about $110,000 had he received more typical annual salary hikes of 4 percent instead of the huge hike and bonus in 2008.

In another case, Park District finance director Kenneth Swan received a five-year contract that called for bonuses of about $75,000 a year. He has not yet retired.

Park board President Lorry Werhane has acknowledged that officials authorized large bonuses on top of salary hikes partly to pad pensions as a reward for a job well done. May and McCarthy said they might call in park commissioners from Highland Park to testify at this fall's hearings.

Officials in the North Shore suburb credit Volpe and Swan with greatly enhancing the amenity-rich Park District, doubling its property tax collections and overseeing the opening of a new recreation center.

I will do all that I can to put state-wide provisions in place to reduce this type of pension abuse, but in the end, the decisions lie with local Boards and Councils to make the right decisions in terms of reasonable and appropriate compensation for the administrators they employ. I have gotten some citizen input so far and encourage you to give me your thoughts and suggestions, for I really value your input on this important issue.

email: karen@repkarenmay.org

phone: (847) 433-9100

web: http://www.repkarenmay.org