CHAPTER 398
FORMERLY
SENATE BILL NO. 612
AN ACT TO AMEND CHAPTER 55, TITLE 29, DELAWARE CODE, RELATING TO THE ESTABLISHMENT OF A DELAWARE COUNTY AND MUNICIPAL PENSION PLAN.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Title 29, Delaware Code by adding thereto a new Chapter 55A to read as follows:
"CHAPTER 55A. DELAWARE COUNTY AND MUNICIPAL PENSION PLAN
SUBCHAPTER I. GENERAL PROVISIONS
§5551. Definitions
As used in this Chapter:
(a) 'Approved medical leave' means a leave of absence from employment, without pay, for a definite period of time, authorized by the employer, and necessitated by the employee's mental and/or physical condition. Approved medical leaves shall not exceed one year unless extended by the Board of Pension Trustees.
(b) 'Board' shall mean the Board of Pension Trustees established by §8308 of Chapter 83, Title 29, Delaware Code.
(c) 'Compensation, shall 'mean all salary, wages, and fees, including overtime payments and special payments for extra duties, payable to a member for service credited under paragraph (d)(I) and the value of any maintenance provided for him as part of such payments.
(d) 'Credited service' shall mean, for any individual,
(1) service as an employee after the date of affiliation with the Fund by his employer, excluding any period during which an employee is on an approved medical leave or approved sabbatical leave unless service credit for such period or periods of leave is purchased pursuant to subparagraphs (5) or (6) of this Section,
(2) service as an 'employee' as defined in Chapter 55, S5501(a)(1) and (2) of this Title, rendered subsequent to the service credited pursuant to subsection (1), provided that the Individual N not accruing nor collecting benefits under the State Employees Pension Plan for such service.
(3) restored credited service. If a member ceases to be an employee before he has acquired 10 years of credited service, his service credits to the date of termination shall be cancelled but shall be restored if: (i) his cessation of employment is due to absence on account of military service, disability or approved leave, under such rules as the Board may adopt, and he again becomes an employee within four (4) months after such absence, or (ii) he again becomes an employee within four (4) months after such
cessation of employment or (iii) he subsequently acquires five (5) years of credited service, provided that if he has withdrawn his contributions he repays them with interest at a rate determined by the Board.
(4) purchased service. A member may elect to purchase (i) up to five (5) years of credited service for full-time active duty in the Armed Services of the United States, and/or (ii) up to five (5) years of credited service for full-time employment performed for another state, a political subdivision of another state, or other service with the State of Delaware for which the employee will not receive pensionable credit in another Delaware State Pension Plan, a county or municipality of the State of Delaware, the Federal Government, or an accredited private school or college, provided that the member pays into the Fund, on or before the date of issuance of his first benefit check, a single lump sum payment equal to the actuarial value of the pension benefits to be derived from such service credits computed on the basis of actuarial assumptions approved by the Board and the member's attained age and final average compensation. Any credited service purchased under this paragraph (4) shall not be used to determine eligibility for benefits under this Chapter.
(5) Approved medical leave if the member subsequently accrues at least one (1) year of credited service under paragraph (1) of this subsection and pays into the Fund prior to the issuance of his or her first pension check, contributions determined by multiplying the rates in effect at the time of payment for member contributions and employer contributions times the average of the sixty (60) months of creditable compensation used to calculate the member's pension benefit times the months or fractions thereof so credited. Any credited service purchased for medical leave shall not be used to determine eligibility for benefits under this Chapter.
(1) Approved sabbatical leave if the member pays into the Fund, prior to the issuance of his or her first pension check, contributions equal to the sum of the employee contributions and employer contributions which would have been made to the Fund during such periods of sabbatical leave, with the amount of such contributions to be determined in accordance with rules and regulations adopted by the Board.
(e) 'Employee' shall mean: (1) an individual who is employed on a full time or annual basis or on a regular part time basis, as the terms 'full time or annual basis' and 'regular part time basis' are defined in rules and regulations adopted by the Board, by an employer; or (2) an elected or appointed official; or (3) a person defined in subparagraphs (1) or (2) of this subsection during the period he or she is on an approved medical or sabbatical leave.
(a) 'Employer' shall mean a county or municipality in Delaware which has affiliated with the Fund established by Chapter 55 as provided in 55555.
(b) 'Final average compensation' shall mean 1/60 of the compensation paid to an employee during any period of sixty (60) consecutive months or any sixty (60) months comprised of five (5) periods of twelve (12) consecutive months in his or her years of credited service in which his or her compensation was highest.
(c) The clause 'for which he or she Is eligible under the Federal Social Security Act' shall mean the old age insurance benefit or the disability insurance benefit for which a member is or will be eligible by virtue of age and his or her wage credits under the Federal Social Security Act, based on his or her final average compensation and the provisions of the Federal Social Security Act in effect when the member ceased to be an employee under this Chapter and computed in accordance with rules and regulations approved by the Board, regardless of any other factors such as, without limitation, whether the member has made application for Social Security benefits or is subsequently employed.
(i) 'Fund' shall mean the Fund established by Chapter 55, §5541 of this Title.
(j) 'Inactive member' shall mean a member who:
(1) has terminated service;
(2) is not eligible to begin receiving a service or disability pension; and
(1) has neither applied for nor received a refund of his contributions.
(k) 'Member' shall mean a person who is first hired as an employee on or after the date the employer affiliates with the Fund and who has not attained age 65 on the date of hire.
(1) 'Retired member' shall mean a member who has terminated service, other than an inactive member, who is eligible to receive a service or disability pension under this Chapter.
§5552. Employment of Pensioners
(a) An individual shall not receive a pension under this Chapter for any month during which he is an employee, unless he is:
(I) An official elected by popular vote at a regular or special election, or
(1) An official appointed by the Governor, or
(1) A temporary employee whose earnings from such temporary employment do not exceed the maximum allowed by Social Security without affecting Social Security benefits, or
(1) A registration or election official, or a juror. 55553. Attachment and Assignment of Benefits
The benefit provided by this Chapter shall not be subject to attachment or execution and shall be payble only to the beneficiary designated, and shall not be subject to assignment or transfer.
§5554. Waiver of Benefits
Any individual entitled to any benefits under this Chapter may decline to accept all or any part of such benefits by a waiver signed and filed with the Board. Such waiver may be revoked in writing at any time but no payment of the benefits waived shall be made covering the period during which such waiver was in effect.
§5555. Optional Participation of Counties and Municipalities
Any county or municipality may elect to participate in the State Employees' Pension Fund beginning July 1 of any year on or after July 1, 1981. Application to participate shall be by resolution approved by the governing body of the county or municipality and shall be submitted to the Board in such form as the Board shall determine, not later than ninety (90) days prior to the date participation Is to begin, except such time limit may be reduced by the Board. Any such application, upon approval by the Board, shall be irrevocable. Each participating county and municipality shall provide such information to the Board as it may require for the administration of this Chapter.
SUBCHAPTER R. ELIGIBILITY REQUIREMENTS AND BENEFITS
§5571. Mandatory Retirement
A member shall retire on his mandatory retirement date as established by the employer.
§5572. Eligibility for Service Pension
(a) A member shall become eligible to receive a service pension, beginning with the month after he has terminated employment, if:
(1) he has five (5) years of credited service, and has attained age sixty-five (65), or
(2) he has fifteen (15) years of credited service, and has attained age sixty (60), or
(3) he has thirty (30) years of credited service.
(b) An inactive member with a vested right to a service pension shall become eligible to receive such pension, computed in accordance with the provisions of this Chapter in effect when he or she ceased to be an employee, beginning with the first month after his or her attainment of age sixty-two (62).
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(e) A member shall become eligible to receive a reduced service pension beginning with the month after he or she has terminated employment, if he or she has fifteen (15) years of credited service, and has attained age fifty-five (55). The amount of the service pension shall be reduced by four-tenths percent (4/10%) for each month the member is under age sixty (60).
§5573. Vested Right to Service Pension
(a) A member who has ten (10) years of credited service shall have a vested right to a pension.
(b) An inactive member's vested right shall be forfeited upon his application for a refund of his accumulated contributions and his membership cancelled.
§5574. Eligibility for Disability Pension
(a) A member who has five (5) years of credited service, becomes disabled, and is no longer employed shall become eligible to receive a disability pension beginning with the month following the inception of his or her disability. Such member shall cease to be eligible at the end of the month in which he or she recovers from disability, if such recovery occurs before his or her attainment of age sixty (60).
(b) A member shall be deemed disabled who is unable to engage in any substantial gainful activity for which the employee is reasonably suited by training or experience by reason of any medically determinable physical or mental impairment which can be expected to result in death or to last for a period of not less than twelve (12) months.
§5575. Payment of Service Pension
Service pension payments shall be made to a retired member for each month beginning with the month in which he became eligible to receive such pension and ending with the month in which he dies.
§5576. Payment of Disability Pension
(a) Disability pension payments shall be made to a member for each month beginning with the month in which he becomes eligible to receive such pension and ending with the month in which he ceases to be eligible or dies.
(b) Any member receiving a disability pension who has not attained age sixty (60) shall report to the Board by February 15 each year, in a form prescribed by the Board, his total earnings from any gainful occupation or business in the preceding calendar year. The excess of such earnings over one-half of the annual rate of compensation received by him before he became disabled shall be deducted from his disability pension during the twelve (12) months beginning in March of the year following the calendar year for which earnings are reported, in a manner determined by the Board. If any person received a disability pension for less than twelve (12) months in the calendar year for which earnings are reported, the deduction, if any, shall be determined on a pro rata basis.
(c) Termination of a disability pension on account of recovery from disability shall not prejudice the right of the retired member to qualify subsequently for a service pension or another disability pension.
§5577. Amount of Service or Disability Pension
(a) The amount of the monthly service or disability pension payable to a retired member shall be 1/60 of his or her final average compensation multiplied by the number of years, taken to the nearest twelfth of a year, in his or her period of credited service subject to the following limitations:
(1) The service pension, beginning at age sixty-two (62) or, if later, at retirement, shall be in no case exceed seventy-five percent (75%) of final average compensation minus the old age insurance benefit for which he or she is eligible under the Federal Social Security Act at age sixty-two (62), the result to be multiplied by the ratio, not to exceed one, the numerator of which is his or her years of credited service and the denominator of which is thirty (30) years, and
(2) the disability pension, when combined with the disability insurance benefit or old age insurance benefit for which he or she is eligible under the Federal Social Security Act, without taking into account any increases in such benefit after payments commence, shall in no case exceed seventy-five percent (75%) of final average compensation.
§5578. Survivor's Pension
(a) Upon the death of a member in service who has five (5) years of credited service, a monthly survivor's pension shall be payable to his or her eligible survivor or survivors equal to one-half (1/2) of the service pension for which the employee would have been eligible if he or she had been sixty-two (62) years of age.
(b) Upon the death of a retired member, a monthly survivor's pension shall be payable to his or her eligible survivor or survivors equal to one-half (1/2) of such service or disability pension, provided that upon the death of a retired member who had not attained age sixty-two (62) and was receiving a service pension, a monthly survivor's pension shall be payable to his or her eligible survivor or survivors equal to one-half (1/2) of the service pension for which the retired member would have been eligible if he had been sixty-two (62) years of age.
(c) For the purpose of this Section, the eligible survivors of a member or retired member shall be as follows, provided that a member may change the priority of eligible survivors specified for herein by designating his or her priority of eligible survivors on a form prescribed by the Board and filed with the Board at the time of the member's death:
(1) the widow or widower, provided such person had been married to the deceased member for at least one (1) year before the date of death, or
(2) if there is no eligible widow or eligible widower, a child (or with the survivor's pension divided among them in equal shares, all such children if there are more than one), provided the child is unmarried and either:
(0 has not attained age eighteen (18),
(ii) has attained age eighteen (18) but not age twenty-two (22) and is attending school on a full time basis, or
(iii) has attained age eighteen (18) and is permanently disabled as the result of a disability which began before he attained age eighteen (18), or
(3) if there is no eligible widow, eligible widower, or eligible child, a dependent parent (or, with the survivor's pension divided between them in equal shares, both such parents if there are two [2]).
(d) The amount payable to a widow or widower who has not attained age fifty (50) at the time the survivor's pension begins shall be actuarially reduced, in accordance with actuarial tables approved by the Board, for each month the survivor is under age fifty (50) at such time, provided, however, that the actuarial reduction for any such widow or widower shall not apply for the period during which such widow or widower has in his or her care a son or daughter who is unmarried and either: (I) has not attained age eighteen (18), (ii) has attained age eighteen (18) but not age twenty-two (22) and is attending school on a full-time basis, or (iii) has attained age eighteen (18) and is permanently disabled as the result of a disability which began before he attained age eighteen (18).
(e) A parent shall be deemed to have been dependent on the member or retired member who was receiving at least one-half (1/2) of his or her support from the member at the time of the member's death.
(f) A survivor's pension shall begin with the month following the month In which the member or retired member dies. If payable to a widow or widower, it shall cease with the month in which the survivor dies or marries. If payable to a parent, it shall cease with the month in which the parent dies. If payable to a child, it shall cease with the month in which the child dies or fails to meet the conditions of eligibility in paragraph (c)(3) herein.
§5579. Death Benefit
Upon the death of a member, inactive member, retired member, or individual receiving a survivor's pension, there shall be paid to the designated beneficiary or beneficiaries or, in the absence of a designated beneficiary, to the estate of the member, inactive member, retired member, or survivor, a lump sum equal to the excess, if any, of the accumulated member contributions with interest over the aggregate of all pension payments made.
§5580. Withdrawal Benefit
Upon the withdrawal from service of a member who is not eligible for a service or disability pension, his accumulated contributions with interest shall be paid to him. There shall be a rebuttable presumption that a former member who fails to apply for a withdrawal benefit within five (5) years after the date he or she first becomes eligible to receive such benefits has waived his or her right to the withdrawal benefit.
§5581. Application of Benefits
(a) A service pension, disability pension, survivor's pension, death benefit, or withdrawal benefit shall be paid only upon the filing of an application in a form prescribed by the Board. A monthly benefit shall not be payable for any month earlier than the second month preceding the date on which the application for such benefit is filed. In no event shall a withdrawal benefit be paid to an individual whose application is filed more than five (5) years after the date he first becomes eligible to receive such benefit.
(b) The Board may require any member, inactive member, retired member, or eligible survivor to furnish such information as may be required for the determination of benefits under this Chapter, or to authorize the Board to procure such information including, but not limited to, information regarding benefits pursuant to the Federal Social Security Act. The Board may withhold payment of any pension under this Chapter whenever the determination of such pension is dependent upon such information and the member, inactive member, retired member, or eligible survivor does not cooperate in the furnishing or procuring thereof.
SUBCHAPTER III. FINANCING AND ADMINISTRATION
§5591. Member Contributions
Member contributions to the Fund shall be either (a) three percent (3%) of total monthly compensation in excess of Five Hundred Dollars ($500), plus two percent (2%) of that portion which exceeds the amount determined by dividing social security wage base by twelve (12); or (b) if any member receives annual compensation in fewer than twelve (12) months, three percent (3%) of total monthly compensation which exceeds the amount determined by multiplying the ratio of twelve (12) over the number of months which he receives annual compensation times Five Hundred Dollars ($500), plus two percent (2%) of monthly compensation which exceeds the amount determined by dividing the social security wage base by the number of months he or she receives annual compensation. In no event shall total compensation during any calendar year in excess of Six Thousand Dollars ($6,000) be exempt from contributions.
§5592. Employer Contributions
The contribution of an employer for each fiscal year shall be the percentage of covered payroll approved by the Board on the basis of the most recent actuarial valuation, and shall equal (1) the normal cost; plus (ii) adjustments for actuarial gains and losses or increases in benefits adopted on or subsequent to participation; plus (Ili) administrative costs."
Approved July 11, 1980.