Controversial Retirement Plan Becomes Issue In Illinois Treasurer Race

Former House Republican Leader Tom Cross and Democratic Senator Mike Frerichs are both vying to become the next Treasurer of Illinois, and the race has gotten a little more interesting in the past few days.

Cross says that an early retirement incentive (ERI) plan, passed under Frerichs when he was the auditor of Champaign County, cost the county millions of dollars. But others say the plan saved the county millions.

Reported by WUIS:

Back in 2003, Mike Frerichs was the Champaign County Auditor when the County Board passed a plan that allowed some county employees to take early retirement.

An early retirement incentive, or ERI, is sometimes used by city or county governments, often as a way to cut payroll costs. At the time, Frerichs also served as the county’s agent to IMRF, the Illinois Municipal Retirement Fund.

Now, Cross, the former House Republican leader, said Frerichs put Champaign County in a financial hole by pushing the early retirement incentive on the county board.

“He ran (the numbers) and said let’s do it – it’s going to save us money,” Cross said. “We’ve now found out it costs $2-to-3 million – the county had to go sell bonds. So if you’re a rank and file county board member, you’re relying on this guy who’s the county board’s representative of IMRF, and you relied on that data and that information and recommendation.”

Frerichs fired back at Cross and said the accusations were inaccurate. From WUIS:

“Tom Cross’ campaign told lies about who instigated it, they told lies about how much it saved, and they told lies about the authorized agent,” [Frerichs] said.

Frerichs called the accusations from the Cross campaign, ‘revisionist history’.

The Senator said he was approached eleven years ago by Champaign County Administrator Deb Busey to prepare some numbers, and find out how many county employees might opt to retire early.

Tom Betz, a Democrat and a Champaign County Board member at the time, said a group of county employees pushed for the plan.

“A lot of people lobbied – because they wanted to retire,” he said. “And they wanted an incentive to retire.”

Frerichs said gathering data and presenting the information to the county administrator was the extent of his job as the county’s IMRF officer. After that, the proposal went to the full board for a vote, and passed 13-10, with bipartisan support.

The head of the pension fund backs Frerichs on that point. IMRF Executive Director Louis Kosiba said a city or county’s decision to implement the program — or not — has nothing to do with the authorized agent.

“To me it’s a kind of tempest in a teapot if you’re saying the authorized agent did something or didn’t do something vis a vis IMRF,” he said. “They’re just a communication conduit – they have no responsibility.”

ERI plans seek to replace highly paid employees with lower-paid employees. The plan is sometimes used by governments looking to downsize or cut costs.

WUIS further investigated the cost of the retirement program here.