CHAPTER 104
FORMERLY
SENATE SUBSTITUTE NO. 1
TO
SENATE BILL NO. 80
AN ACT TO AMEND CHAPTERS 55 AND 56, TITLE 29, OF THE DELAWARE CODE AND SUBCHAPTER III, CHAPTER 83, TITLE 11 OF THE DELAWARE CODE TO PROVIDE A MECHANISM TO FUND POST RETIREMENT INCREASES FOR RETIRED STATE EMPLOYEES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 55, Title 29, Delaware Code by adding a new §5548, to read as follows:
"§5548. Establishment Of Post Retirement Benefit Fund
(a)(1) There shall be established a State Post Retirement Benefit Fund, hereinafter referred to as the 'Post Retirement Fund,' separate and distinct from the Funds established under §5541 of this Chapter and §5601, Chapter 56 of this Title; §8393, Subchapter III, Chapter 83, Title 11 of the Delaware Code, to which state appropriations and other employer contributions shall be deposited monthly, and to which earnings on investments, refunds, and reimbursements shall be deposited upon receipt, and from which such post retirement benefits as the General Assembly may hereafter legislate shall be paid and any fees and expenses authorized by the Board shall be paid. No money shall be disbursed from this fund except for the purpose of providing funding for post retirement increases for employees retired under this Chapter; Chapter 56 of this Title; Subchapter III, Chapter 83, Title 11 of the Delaware Code.
(a)(2) The Board of Pension Trustees shall review the balance in the Post Retirement Fund at the end of each fiscal year and make any recommendations for adjustments in the funding rate for the succeeding fiscal year to ensure that the balance in this fund, net of liabilities, does not exceed 2.5% of the total projected covered payroll of the State Employees' Pension Plan (Chapter 55, Title 29, Del. C.), the State Judiciary Plan (Chapter 56, Title 29, Del. C.), and the new State Police Pension Plan (Subchapter III, Chapter 83, Title 11, Del. C.).
(b) In the event that the General Assembly shall introduce legislation proposing post retirement increases, the Board of Pension Trustees shall review each such proposal to determine if sufficient funds are projected to be available in the Post Retirement Fund to provide the funding necessary to fund the increase over a five (5) year period. If the Board determines that insufficient funds will be available to fund the increase, they will notify the Governor and the General Assembly that an additional appropriation will be required in order to provide the post retirement increase being proposed."
Section 2. Amend §5544, Chapter 55, Title 29, Delaware Code by deleting said section in its entirety and substituting in lieu thereof a new u§5544," to read as follows:
"§5544. Actuarial Valuations and Appropriations.
(a) The actuary shall prepare an actuarial valuation of the assets and liabilities of the Funds as of June 30, each year. On the basis of
reasonable actuarial assumptions and tables approved by the Board, the actuary shall determine the normal coat required to meet the actuarial cost of current service and the unfunded actuarial accrued liability.
(b) The state's appropriation to the Funds for the fiscal year 1994, and for each fiscal year thereafter, shall be the percentage of covered payroll approved by the Board on the basis of the most recent actuarial valuation, and shall equal the sum of the normal cost plus the payment required to implement the provisions of subsection (c) of this section plus the payment required to amortize the unfunded actuarial accrued liability over 40 years from July 1, 1975. The amortization payment shall be an amount computed as a level percentage of the prospective total covered payroll over the remainder of the amortization periods, with such prospective total covered payroll to be determined on the basis of a growth rate of 4% per year, compounded annually. Except as provided in subsection (c) of this section, all funds appropriated pursuant to this subsection shall be deposited into the Fund established by §5541, Chapter 55, Title 29, of the Delaware Code.
(c) In order to provide a fund for post retirement increases, the state shall include in its annual appropriation payments equal to 2.33% of covered payroll, subject to the limitations contained in §5548 (a)(2), Chapter 55, Title 29, Delaware Code. Beginning with the fiscal year 94 budget, .70% of covered payroll shall be appropriated; in fiscal year 95 1.11% of covered payroll shall be appropriated; in fiscal year 96, 1.52% of covered payroll shall be appropriated; in fiscal year 97, 1.93% of covered payroll shall be appropriated; in fiscal year 98 and each fiscal year thereafter 2.33% of covered payroll shall be appropriated. Funds appropriated to implement this subsection shall be deposited into the Post Retirement Fund established by §554B of this Chapter."
Section 3. Amend §8392, Subchapter III, Chapter 83, Title 11, Delaware Code by deleting said Section in its entirety and substituting in lieu thereof a new "§8392," to read as follows:
"§8392. Actuarial Valuations And Appropriations.
(a) The actuary shall prepare an actuarial valuation of the assets and liabilities of the Funds as of June 30, each year. On the basis of
reasonable actuarial assumptions and tables approved by the Board, the actuary shall determine the normal cost required to meet the actuarial cost of current service and the unfunded actuarial accrued liability.
(b) The state's appropriation to the Funds for the fiscal year 1994, and for each fiscal year thereafter, shall be the percentage of covered payroll approved by the Board on the basis of the most recent actuarial valuation, and shall equal the sum of the normal cost plus the payment required to implement the provisions of subsection (c) of this section plus the payment required to amortize the unfunded actuarial accrued liability over 40 years from July 1, 1980. The amortization payment shall be an
amount computed as a level percentage of the prospective total covered payroll over the remainder of the amortization periods, with such prospective total covered payroll to be determined on the basis of a growth rate of 4% per year, compounded annually. Except as provided in subsection (c) of this section, all funds appropriated pursuant to this subsection shall be deposited into the Fund established by §8393, Subchapter III, Chapter 83, Title 11, of the Delaware Code.
(c) In order to provide a fund for post retirement increases, the state shall include in its annual appropriation payments equal to 2.33% of covered payroll, subject to the limitations contained in §5548 (a)(2), Chapter 55, Title 29, Delaware Code. Beginning with the fiscal year 94 budget, .70% of covered payroll shall be appropriated; in fiscal year 95 1.11% of covered payroll shall be appropriated; in fiscal year 96, 1.52% of covered payroll shall be appropriated; in fiscal year 97, 1.93% of covered payroll shall be appropriated; in fiscal year 98 and each fiscal year thereafter 2.33% of covered payroll shall be appropriated. Funds appropriated to implement this subsection shall be deposited into the Post Retirement Fund established by §5548, Chapter 55, Title 29 of the Delaware Code."
Section 4. Amend §5616, Chapter 56, Title 29, Delaware Code by deleting said section in its entirety and substituting in lieu thereof a new "§5616," to read as follows:
"§5616. Actuarial Valuations And Appropriations.
(a) The actuary shall prepare an actuarial valuation of the assets and liabilities of the Funds as of June 30, each year. On the basis of reasonable actuarial assumptions and tables approved by the Board, the actuary shall determine the normal cost required to meet the actuarial cost of current service and the unfunded actuarial accrued liability.
(b) The state's appropriation to the Funds for the fiscal year 1994, and for each fiscal year thereafter, shall be the percentage of covered payroll approved by the Board on the basis of the most recent actuarial valuation, and shall equal the sum of the normal cost plus the payment required to implement the provisions of Subsection (c) of this section plus the payment required to amortize the unfunded actuarial accrued liability over 40 years from July 1, 1981. The amortization payment shall be an amount computed as a level percentage of the prospective total covered payroll over the remainder of the amortization periods, with such prospective total covered payroll to be determined on the basis of a growth rate of 4% per year, compounded annually. Except as provided in Subsection (c) of this section, all funds appropriated pursuant to this Subsection shall be deposited into the Fund established by §5601, Chapter 56, Title 29 of the Delaware Code.
(c) In order to provide a fund for post retirement increases, the state shall include in its annual appropriation payments equal to 2.33% of covered payroll, subject to the limitations contained in §5548 (a)(2), Chapter 55, Title 29, Delaware Code. Beginning with the fiscal year 94 budget, .70 % of covered payroll shall be appropriated; in fiscal year 95 1.11% of covered payroll shall be appropriated; in fiscal year 96, 1.52% of covered payroll shall be appropriated; in fiscal year 97, 1.93% of covered payroll shall be appropriated; in fiscal year 98 and each fiscal year thereafter 2.33% of covered payroll shall be appropriated. Funds appropriated to implement this Subsection shall be deposited into the Post Retirement Fund established by §5548, Chapter 55, Title 29 of the Delaware Code."
Section 5. This act shall become effective July 1, 1993, provided that appropriations to fund its provisions are included in the fiscal year 94 budget.
Approved July 8, 1993.