Private-sector lobbyists stand to collect public-sector pensions
BY THE BETTER GOVERNMENT ASSOCIATION January 19, 2012 12:02AM
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Updated: February 21, 2012 8:26AM
Township Officials of Illinois is a private trade group, not a governmental agency, but its employees are eligible for public-sector pensions subsidized by taxpayers, the Better Government Association has learned.
No one from TOI is currently drawing a pension from the Illinois Municipal Retirement Fund. But TOI’s four full-time employees, two of whom are registered lobbyists, stand to draw the potentially lucrative retirement benefit down the road, according to interviews and records.
Besides lobbying to preserve the township form of government — which critics decry as antiquated and duplicative — TOI educates members on legislation, budgets and financing. All but three of the 1,432 township governments in Illinois belong to the Springfield-based group.
As a non-governmental body, TOI doesn’t levy taxes or comply with the Illinois Freedom of Information Act or the Open Meetings Act, both of which guarantee a level of government transparency and accountability.
“I’m really surprised,” Sam Yingling, the elected supervisor of Lake County’s Avon Township, says of the public pensions that TOI workers may someday collect.
Yingling, a Democratic candidate for the General Assembly, favors eliminating many of the state’s township operations.
“TOI is not a governmental organization,” Yingling says. “It’s a private organization that’s using taxpayer money to lobby. Lobbyists should not be receiving public pensions.”
Yet TOI’s executive director, Bryan E. Smith, says employees of his group deserve the public pensions they stand to gain.
“We represent governmental bodies so we’re tied [to IMRF] that way,” Smith says.
The Illinois General Assembly recently passed a bill aimed at curbing public pension abuses by some labor union leaders. But the reforms, signed into law on Jan. 5 by Gov. Pat Quinn, don’t address private groups such as TOI that lawmakers over the years have let into the system.
Similar groups include the Illinois Municipal League and Illinois Association of Park Districts. Like TOI, they work for and lobby on behalf of their governmental agency members – yet they aren’t public bodies and don’t directly serve taxpayers.
TOI was founded more than a century ago. But it wasn’t until 1971 that the General Assembly, for reasons not totally clear, amended the state pension code so TOI could participate in the pension plan. However, TOI didn’t join IMRF — the second-largest public-sector pension plan in Illinois, with $25 billion in assets — until 2001.
In an email to the BGA, IMRF spokeswoman Linda Horrell says IMRF considers TOI to be a governmental entity and therefore worthy of inclusion in the pension system in part because its “funding comes from township taxpayers and the TOI board is composed of elected township officials.”
Townships are funded through property taxes.
To become members, townships pay TOI between $80 and $1,300 a year, an amount based on their population and other criteria, Smith says.
In 2011, TOI represented 1,429 townships, which, among other things, maintain roads in unincorporated areas and offer social services, property tax advice and immediate assistance for the needy.
TOI had revenues of nearly $1.3 million in its fiscal year ending Aug. 31, 2011, according to documents filed with the Internal Revenue Service. That income helps pay for the group’s lobbying efforts. But Smith says those revenues were not used by TOI’s political action committee which, since 2000, has given $75,000 to legislative candidates, according to state campaign records. The PAC is funded by individual donations and only gives to legislators and legislative candidates, Smith says.
TOI, which is registered with the Illinois secretary of state as a non-profit, employs Smith and three other people, all of whom participate in IMRF, public records show. Smith declined to disclose their salaries but federal tax records show TOI paid him $101,720 last year.
TOI employees hired in 2010 or before become vested in IMRF after eight years and after 40 years can collect 75 percent of the average of their highest 48 consecutive months of salary in the decade leading up to retirement. Based on that formula, Smith would collect an annual pension of $76,000 if he worked the maximum number of years and his salary remained at its current level.
Participating IMRF employees contribute 4.5 percent of their annual salary to the pension fund. So for Smith, that amounted to $4,577 last year. Meanwhile, TOI paid $45,916 to cover pension obligations for him and three other employees, according to interviews and documents filed with the IRS.
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