Many tribal constitutions have provisions to compensate tribal council
members. What is the appropriate mix of cash and benefits?
Back in 1959, an Internal Revenue Service ruling specified that income
derived from services as tribal council members is not subject to federal
employment taxes. If this is the only job held by council members, they
will not receive any Social Security if they become disabled or when they
reach age 62.
Disability and retirement income may not be an issue with council members
of major gaming tribes, for there is adequate per capita for each tribal
member. Other tribal members must consider the personal and career
sacrifices made by their elected officials and provide a fair pension for
those who serve on tribal council.
As elected officials of the tribe, council members serve at the pleasure of
the general council. There is no job security.
Unlike elected officials in federal or state office, former council members
don't usually have opportunities for assignments as lobbyists or government
affairs officers (to sell services back to their tribes).
Upon retirement, tribal members who stayed with a career in the open job
market can expect to receive 60 to 80 percent of their employment income
In order to attract qualified candidates to serve in tribal offices, tribes
can adopt concepts from existing retirement plans and create their own
Social Security systems. Salary surveys from the labor market can provide
meaningful ratios of current wages to deferred income, regardless of a
WHAT TYPE OF BENEFITS?
In the past, tribal governments were meager with offering wages and
benefits because they did not have money. Sometimes, tribal councils simply
did not ask for indirect cost reimbursements; other times, grants did not
provide for such indirect items. Still, there are general members who are
vocally and adamantly against compensating their tribal council.
If tribes would consider the occupationally induced needs of their leaders,
they can better balance the mix of current pay and future benefits.
Take health insurance coverage as an example. Council members frequently
travel away from the reservation on official business. Even though council
members receive health care through the Federal Indian Health Program,
coverage such as emergency and contract care is not available when they
travel away from their own Indian Health Center.
A council member who is hurt while away would be unable to get health care
or would incur tremendous out-of-pocket expenses. Private doctors and
hospitals can refuse service to someone who is uninsured or does not carry
their insurance program. If hospital admission is necessary, the member
will be responsible for the entire bill.
If a council member should become permanently disabled, living expenses
still pile up every month. In fact, the member is likely to incur more
bills for living assistance and adoption of specialized equipment. Since
the tribe did not pay into Social Security, the member will not receive any
According to a 2004 MetLife Institute Study, the average cost of a private
room in a nursing home starts at $5,000 per month. The federal Medicaid
program may provide in-home or nursing home care, but only to people who
meet stringent income and resource guidelines.
Income guideline varies state by state, but resources like bank accounts
usually cannot exceed $2,000. Council members who make too much will simply
be denied benefits, while others in a borderline situation will have to
bear a very high share of the cost.
Furthermore, long-term care isn't just for elders: 40 percent of patients
in nursing homes are under age 65.
Finally, when this council member reaches age 62, physical conditions may
prevent further participation in work of any kind. Without Social Security
benefits, what source is available to provide income for the remaining
years, both for the council member and the surviving spouse and minor
Tribally paid private insurance and retirement funds can provide council
members with peace of mind when these life events arise.
A well-researched health insurance plan can provide a nationwide network of
doctors, hospitals and specialists.
If a council member can't work because of sickness or accident, disability
insurance provides a regular income to the council member. It also pays for
occupational training to help the member return to work. In comparison,
worker's compensation plans cover on-the-job disability and pay out
benefits for a limited time. Private disability insurance policies can
cover both on- and off-the-job disability, providing up to 60 percent of
income to age 65.
If a council member loses becomes incapable of caring for himself long-term
care health insurance can provide for in-home or nursing home care. Some
policies even allow hiring relatives to perform household chores.
The retirement section of the IRS code defines the retirement age at 59
or medical disability. At this age, tribal retirement funds can begin to
distribute income. Like Social Security, income streams can be adjusted to
provide a lifetime income for the council member or a certain number of
years for the survivors.
If a council member passes away, life insurance can help pay bills and
provide a replacement income for the family. This is especially important
for council members whose spouse is not entitled to per capita
distributions and families with minor children.
Burial insurance can help pay for funerals and other final expenses.
In order to attract the brightest and most capable tribal members to be
leaders, tribes must compete with employers in the open market. Besides
salaries and long-term benefits, tribes must consider the convenience and
attraction of an urban lifestyle for the tribal candidate.
Therefore, it is important to provide a competitive compensation package
for those who serve and foster a culture of public service within the tribe