Brookfield trustees voted 5-0 on May 26 to pay $232,276 to the Service Employees International Union (SEIU) to wash its hands of a union pension perk the village had agreed to in a previous contract with its public works employees more than 10 years ago.
Together with four other payments this year totaling $12,468, the village of Brookfield has now settled its roughly $245,000 obligation to the SEIU, ending a three-year standoff between the two sides over what Village Manager Keith Sbiral called the union’s mismanagement of its pension fund.
Brookfield could have spaced out the amount over 10 years, but officials decided to avoid the interest costs and any unforeseen circumstances down the road.
“If there was another crisis with the pension fund, we didn’t want to be around for that,” said Sbiral.
Employees in the village Department of Public Works were represented by SEIU until 2014. At that time, public works employees joined the Teamsters Union. At one time SEIU represented not only public works, but also Brookfield firefighters and the clerical employees inside village hall.
Firefighters dumped SEIU in 2011 and clerical workers voted to decertify the union in the spring of 2014, ending SEIU’s relationship with all of Brookfield’s village employees.
At the center of the issue was a supplemental pension fund the SEIU offered public works employees, said Sbiral. The option was written into the union contract in the early 2000s and at first cost the village just a few cents per hour worked by the participating employee. SEIU would match the village contribution, Sbiral said.
By the mid-2000s, the village’s contribution had risen to about 10 cents per hour worked. But when the financial crisis hit shortly thereafter, that pension fund spiraled and the village was served with a demand to make “catch-up” payments to make good on the obligations the union owed employees participating in the pension plan.
Sbiral said that in some cases the village would have had to pay $20 per hour to keep catch up.
“In very short order, it would have gobbled up any increase we could give our employees in salary,” Sbiral said.
When public works employees switched union representation, the village was able to step out of the pension plan, but SEIU contended the village still owed it money for employees who had been part of the plan previously and who would still be drawing benefits from it.
“Those employees will still see that pension from SEIU,” Sbiral said.
The settlement approved May 26 will allow the village to shut the window on its obligations to the SEIU pension plan. While it means a sizeable hit to the village’s general operating fund in 2015, it’s a one-time expense and the village board had figured the expense into its annual budget.
The village contract with the Teamsters does not include a supplemental pension option. All public works employees, like its clerical workers, are part of the Illinois Municipal Retirement Fund (IMRF). The SEIU plan was merely a supplemental plan to pension benefits the village already provided to public works employees.
Firefighters and police officers have separate pension plans that the village contributes to annually.