147th
GENERAL ASSEMBLY
FISCAL
NOTE
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sponsor: Representative
J. Johnson DESCRIPTION: AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO
THE STATE EMPLOYEES' PENSION PLAN.
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ASSUMPTIONS:
1.
Assumes
the IRS Private Letter Ruling is received during calendar year 2013, with the
law becoming effective on January 1, 2014. Correctional Officers will be
eligible to retire at 25 years of service without penalty beginning January 1,
2016 – after the two year period specified in the legislation.
2. The Act would allow Correctional
Officers to retire at 25 years of service without penalty contingent upon a favorable
Private Letter Ruling or a favorable Determination Letter from the Internal
Revenue Service. The enhanced benefit
will be financed by higher employee pension contributions. Correctional
Officers hired before January 1, 2012 will pay 5% of their annual compensation above
$6,000 and Correctional Officers hired on or after January 1, 2012 will pay 7%
of their annual compensation above $6,000.
3. The Pension Office estimates an
additional 10 officers will retire annually.
4. Because Correctional Officers will be
able to begin retiring with 25 years of service on January 1, 2016, fiscal year
2016 cost estimates only include the State share of health insurance for 6
months for 10 Correctional Officers.
5. There will be a one-time cost of
approximately $79,987 for software adjustments to PHRST and the Pension
software system to account for this change.
Cost:
Fiscal Year 2014 $0
Fiscal Year 2015 $79,987 one-time expense for
software upgrade
Fiscal Year 2016 $32,130
Office of
Controller General (Amounts
are shown in whole dollars)
June 27,
2013
CAS:CAS
4431470024