CHAPTER 8
FORMERLY
HOUSE BILL NO. 88
AS AMENDED BY HOUSE AMENDMENT NOS. 1 AND 2
AND SENATE AMENDMENT NOS. 2, 3, 5, 7 AND 8
AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO AN EARLY RETIREMENT OPTION FOR STATE EMPLOYEES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Title 29, Delaware Code by deleting Chapter 53 in its entirety and substituting in lieu thereof a new Chapter 53 to read as follows:
"CHAPTER 53. EARY RETIREMENT OPTION FOR STATE EMPLOYEES
Subchapter 1. General Provisions
§ 5301. Early Retirement Option.
(a) This Chapter provides a one—time Early Retirement Option to State employees covered under Chapter 55 of this Title who were employees as defined in Chapter 55 of this Title between December 1, 1990 and the effective date of this Act.
(b) Elected officials shall not be eligible for this Early Retirement Option for the pension they are entitled to receive under § 5527(d) of this Title.
(c) Except as provided hereinafter, employees who meet the eligibility requirements as contained in § 5306 and § 5307 of this Chapter must make their election to retire under this option on the following schedule:
(1) Eligible employees of the State Department of Public Instruction, a school district which is part of the State school system, the University of Delaware, Delaware State College, or Delaware Technical and Community College must make their elections between March 15, 1991 and April 19, 1991.
(2) All other eligible employees must make their elections between February 1, 1991 and March 15, 1991, however, all members of the Delaware National Guard or members of the U.S. Armed Forces Reserves who have been called to active duty must make their elections within 45 days of the date they are no longer on active duty.
(3) These elections must be made in a form approved by the Board of Pension Trustees and shall be irrevocable.
(4) If it is determined by the State Pension Administrator that an employee is or was unable to make this election in a timely manner due to circumstances beyond the employee's control, the Administrator may extend the time period for making the election beyond the periods specified in this subsection.
(1) In the event an eligible employee, prior to February 15, 1991, requests a computation of such employee's prospective pension benefit by the State Pension Administrator, the election required in subsections (d)(1) and (d)(2) of this Section need not be made until ten (10) days after the State Pension Administrator has provided the employee, in writing, the amount of the pension benefit said employee will be entitled to receive.
(d) Employees who elect the Early Retirement Option must terminate their employment on the following schedule:
(1) Except as provided hereinafter, employees who elect the option under (c)(1) of this Section, must terminate their employment on June 30, 1991 and their pensions will be effective July 1, 1991. Payment for unused sick and vacation pay for these employees will not be disbursed until after June 30, 1991.
(2) Except as provided hereinafter, employees who elect the option under (c)(2) of this Section, must terminate their employment on May 31, 1991 and their pensions will be effective June 1, 1991. Payment for unused sick and vacation pay for these employees will not be disbursed until after June 30, 1991.
(3) Employees of the State Pension Office who meet the eligibility requirements under §§5306 and 5307 of this Chapter and who elect the
Early Retirement Option will be eligible to retire under the option not earlier than December 31, 1991 nor later than December 31, 1992 unless an earlier date is approved by the State Pension Administrator.
(4) Employees who elect the Early Retirement Option and who are deemed to be essential to the normal operation of state government shall have their termination date extended up to twelve months provided such extension is approved unanimously in writing, by a committee, herein referred to as the 'Early Retirement Option Delayed Retirement Committee', comprised of the Director of State Personnel, the State Budget Director, and the Controller General.
(e) Employees who elect the Early Retirement Option under this Chapter shall be considered to have also been eligible, for purposes of computing their pensions under §5527 of this Title, to receive a service or disability pension under the provisions of Chapter 55 of this Title which were in effect immediately prior to the effective date of the 1976 Pension Act.
(f) No employee whose pension under Chapter 55 of this Title is effective prior to January 1, 1991 shall be eligible for the Early Retirement Option contained in this Chapter.
(g) Notwithstanding provisions of this Chapter to the contrary, employees who retire under the Early Retirement Option contained in this Chapter may contract with the State for personal services, as an independent contractor, for a period not to exceed twelve (12) months provided such contractual arrangement is approved unanimously, in writing, by the 'Early Retirement Option Delayed Retirement Committee' established by this Chapter.
(h) The Director of State Personnel shall submit to the Controller General, Budget Director and the Secretary of Finance by December 1, 1991, a report containing the specific disposition of each former employee electing retirement under the provisions of this act and the disposition of each position so vacated. This report shall continue to be submitted on or before every December 1 through calendar year 1994.
The content of said report shall be comprised of the State employment status of each individual electing retirement under the provisions of this act, the position number of the position so vacated, the disposition of the position (deleted, transferred, reclassified, etc.), the actual budgetary savings associated with the vacated position, the original funding source for the vacated position and the actual budgetary savings net of the full retirement cost associated with the retired individual. The accounting period for the preceding actual statistics will be the prior fiscal year.
Further, the report shall, for each affected position for the current fiscal year, estimate the budgetary savings net of the full retirement cost regardless of funding source.
(a) 'Employee' shall mean an individual who meets the definition of an employee as defined in § 5501(a), Chapter 55, Title 29, Delaware Code, which is in effect on the date this Chapter is enacted into law.
(b) 'Credited Service' shall mean, for any individual, service as defined in §5501(b), Chapter 55, Title 29, Delaware Code, except that the provisions contained in § 5501(b)(8), (9), (10), and (11), requiring that the payment for service purchased under these subsections be made prior to the issuance of his or her pension check, may be waived by the State Pension Administrator for any individual for a period not to exceed two (2) months if such waiver is deemed by the Pension Administrator to be necessary to carry out the provisions of this Chapter.
(c) For purposes of this Chapter, those individuals who must terminate employment on May 31, 1991 in accordance with § 5301(d)(2) of this Chapter, will receive credited service for the month of June 1991 in determining their eligibility for the Early Retirement Option provided by this Chapter but that service will not be used in determining the amount of their pension benefits.
(d) The definitions contained in § 5501(c), (d), (e), (f), (g), (h), and (I), Chapter 55, Title 29, Delaware Code which are in effect on the date this Act is enacted into law shall apply to this Chapter
5303. Employment of Pensioners.
(a) An individual shall not receive a service or disability pension under this Chapter for any month during which he or she is an employee as defined in
5302(a) of this Chapter, nor may an Individual receiving a service pension under this Chapter be an employee as defined in § 5302(a) of this Chapter for a period of five (5) years from the date of retirement under this Chapter, unless he or she is:
(1) An official elected by popular vote at a regular State election; or
(2) An official appointed by the Governor; or
(3) A temporary employee whose earnings from such temporary employment do not exceed the amount of earned income allowable by the United States Social Security Administration without affecting social security benefits. If a temporary employee does exceed the allowable earned income, his or her State pension shall be reduced using the same formula as used by the United States Social Security Administration to reduce social security benefits for such excess earnings.
(4) An individual who has retired under this Chapter or Chapter 55 of this Title and who has been rehired by the Pension Office to work on the implementation of the Early Retirement Program shall not be subject to the earnings limitation as contained in § 5303(a)(3) of this Chapter or §5502(a)(3) of Chapter 55 of this Title until December 31, 1991.
(b) An individual who has retired under this Chapter shall not contract with the State for personal services, as an independent contractor, for a period of five (5) years from the effective date of his or her retirement, unless he or she qualifies for one of the exceptions contained in (a)(1) through (a)(4) of this Section.
§5304. Attachment and Assignment of Benefits.
The benefits provided by this Chapter shall not be subject to attachment or execution and shall be payable only to the beneficiary designated and shall not be subject to assignment or transfer.
§5305. University of Delaware.
For persons employed by the University of Delaware, the provisions contained in § 5505, Chapter 55, Title 29, Delaware Code, which are in effect when this Act is enacted into law, shall apply to this Chapter.
Subchapter II. Eligibility Provisions §5306. Eligibility for Service Pension.
In addition to the provisions of Subchapter I of this Chapter, an employee shall be eligible for the Early Retirement Option provided by this Chapter beginning with the month after he or she has terminated employment, if:
(a) He or she has fifteen (15) years of credited service under this Chapter as of June 30, 1991, exclusive of service credited under § 5501(0
(4), (5), and (12), Chapter 55 of this Title, and shall have attained age fifty (50) on or before June 30, 1991; or
(b) He or she has twenty—five (25) years of credited service under this Chapter as of June 30, 1991, exclusive of service credited under §5501(b) (4),
(5), and (12), Chapter 55 of this Title, regardless of age.
§5307. Eligibility for Disability Pension.
In addition to the provisions of Subchapter I of this Chapter, an employee shall be eligible for the Early Retirement Option provided by this Chapter beginning with the month after he or she has terminated employment, if:
(a) He or she has fifteen (15) years of credited service under this Chapter as of June 30, 1991, exclusive of service credited under § 5501(b) (4), (5), and (12), Chapter 55 of this Title, and shall have attained age Fifty (50) on or before June 30, 1991; or
(b) He or she has twenty—five (25) years of credited service under this Chapter as of June 30, 1991, exclusive of service credited under § 5501(b) (4), (5), and (12), Chapter 55 of this Title, regardless of age.
(c) In addition to meeting the credited service and age requirements contained in subsections (a) and (b) of this Section, an employee must meet the requirements for a disability pension contained in §5524, Chapter 55, Title 29, Delaware Code and his termination from employment shall be governed by §5524(b), Chapter 55, Title 29, Delaware Code.
§5308. Payment of Service Pension.
Service pension payments shall be made to a retired employee for each month beginning with the month in which he or she becomes eligible to receive such pension and ending with the month in which he or she dies.
§5309. Payment of Disability Pension.
(a) Disability pension payments shall be made to a retired employee for each month beginning with the month in which he or she becomes eligible to receive such pension and ending with the month in which he or she ceases to be eligible or dies.
(b) Any disability pensioner who has not attained age Sixty (60) shall report to the Board by April 30 each year, in a form prescribed by the Board, his or her total earnings from any gainful occupation or business in the preceding calendar year. One—twelfth (1/12) of the excess of such earnings over one half (1/2) of the annual rate of compensation received by him or her before he or she became disabled shall be deducted from his or her disability pension during each of the twelve (12) months beginning in July of the year following the calendar year for which earnings are reported. 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 pensioner to qualify subsequently for a service pension or another disability pension.
§5310. Amount of Service or Disability Pension
(a) The amount of the monthly service or disability pension payable to a former employee shall be computed in accordance with the provisions of § 5527(a), (b), (c), (e), and (f), Chapter 55 of this Title except that five (5) years shall be added to his or her credited service for purposes of calculating the amount of the monthly pension; and
(b) The amount of monthly pension payable to a former employee for the first three (3) months of retirement shall be double the amount calculated in subsection (a) of this Section, but in no case shall such amount exceed 100% of his or her final compensation in the last month of actual employment. Thereafter, the monthly pension payable shall be the amount calculated pursuant to subsection (a) of this Section.
(c) Individuals eligible for the Early Retirement Option and whose pensions are effective prior to the dates specified in §5301(d) of this Chapter shall have their pensions computed in accordance with the provisions of §5527(a), (b), (c), (e), and (f), Chapter 55 of this Title without taking into consideration subsections (a) and (b) of this Section until such time as they would have terminated in accordance with §5301(d) of this Chapter. Then, beginning with the month that their pensions would have been effective had they terminated in accordance with §5301(d) of this Chapter, their pensions shall be adjusted in accordance with subsections (a) and (b) of this Section.
§5311. Survivor's Pension.
For persons eligible for a survivor's pension, the provisions contained in §5528, Chapter 55 of this Title, which are in effect when this Act is enacted into law, shall apply to this Chapter, except that an individual who has elected the Early Retirement Option and whose death occurs prior to the date specified in § 5301(d) of this Chapter, shall have his or her pension computed in accordance with the provisions of §5310(c) of this Chapter, and eligible survivor or survivors shall receive a survivor's pension equal to Three-fourths (3/4) of the service pension for which the employee would have been eligible.
§5312. Application for Benefits.
The Board may require any employee, former employee, 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 [42 U.S.C. §301 et seq.]. The Board may withhold payment of any pension under this Chapter whenever the determination of such pension is dependent upon such information and the employee, former employee, or eligible survivor does not cooperate in the furnishing or procuring thereof.
§5313. Adjustment of Benefits.
Any pension that has been determined to have been incorrectly calculated after an individual begins receiving such pension shall be adjusted as follows:
(a) If an individual's pension is determined to be less than he or she is entitled to receive, it will be adjusted retroactively to the effective date of the pension.
(b) If an individual's pension is determined to be more than he or she is entitled to receive, it will be adjusted prospectively only.
(c) In no case shall a pension awarded under this Chapter which has been in effect for one (1) year be subject to reduction.
§5314. Board of Pension Trustees.
The Board of Pension Trustees, established by § 8308 of this Title, shall be responsible for the general administration of this Chapter in accordance with Chapter 83 of this Title.
§5315. Actuarial Valuations and Appropriations.
(a) The State appropriations to fund the benefits provided by this Chapter shall be deposited monthly into the State Employees' Retirement Fund established by § 5541, Chapter 55 of this Title.
(b) The State's appropriation to the Fund for the fiscal year 1991-92, and for each fiscal year thereafter, shall be the percentage of covered payroll approved by the Board on the basis of the actuarial valuation as of June 30, 1991, and shall be the payment required to amortize the added unfunded accrued liability over twenty-four (24) years from July 1, 1991. The amortization
payment shall be an amount computed as a level percentage of the prospective total covered payroll to be determined on the basis of a growth rate of 4% per year, compounded annually.
§5316. Group Life Insurance.
Upon the death of an individual receiving a pension under this Chapter, the sum of $3,000 shall be paid from the State Employees' Retirement Fund
established by § 5541, Chapter 55 of this Title to his or her designated beneficiary or in the absence of a designated beneficiary, the amount of this benefit shall be paid to the deceased pensioner's estate."
Section 2. Amend § 5201(b), Chapter 52, Title 29, Delaware Code by striking the phrase "Chapter 55" as it appears therein and substituting in lieu thereof the phrase "Chapters 53 and 55".
Section 3. Amend § 8308(b) (3), Chapter 83, Title 29 Delaware Code by striking the phrase "Chapters 55 and 56" as it appears therein and substituting in lieu thereof the phrase "Chapters 53, 55, and 56".
Section 4. If any provision of this Act, or of any rule, regulation, or order thereunder, or the application of such provision to any person or circumstances shall be held to be invalid, the remainder of this Act and the application of such provisions of this Act or of such rule, regulation, or order to persons or circumstances other than those to which it is held invalid shall not be affected thereby.
Section 5. This Act shall become effective upon the signature of the Governor.
Approved February 1, 1991.