CHAPTER 483

FORMERLY

HOUSE BILL NO. 1155

AS AMENDED BY HOUSE AMENDMENT NO. 3

AN ACT TO AMEND CHAPTER 55, TITLE 29, AND CHAPTER 39, TITLE 14, DELAWARE CODE, RELATING TO STATE EMPLOYEES PENSION PLAN AND TEACHERS' RETIREMENT AND DISABILITY PENSIONS.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. This Act shall be referred to as the 1976

Pension Act.

Section 2. Amend §5501, Chapter 55, Title 29,

Delaware Code, by designating subsections of §5501 by letters in lieu of numbers and be designating paragraphs of subsections of §5501 by numbers in lieu of letters.

Section 3. Amend §5501 (a) (1), Chapter 55, Title

29, Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) (1) to read as follows:

"(a) 'Employee' shall mean an individual who:

(1) 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:

(i) the State, including elected or appointed officials, or

(ii) the State Department of Public Instruction, a School District which is part of the State School System, the Univer-

sity of Delaware, Delaware State College, or Delaware Technical and Community College, or

(iii) a State agency that is supported wholly or in part by funds granted to the State by the Federal Government; and".

Section 4. Amend §5501 (b) (1), Chapter 55, Title

29, Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (b) (1) to read as follows:

"(b) 'Credited service' shall mean, for any individual,

(1) service as an employee, which may include periods during which an employee is on an approved sabbatical leave provided such employee elected to make contributions to the Fund equal to the sum of the employee contributions and State appropriations 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 approved by the Board,".

Section 5. Amend §5501 (b) (4) and §5501 (b) (5),

Chapter 55, Title 29, Delaware Code, by adding immediately at the beginning of each said subsection the following phrase:

"who first became an employee before July 1, 1976,".

Section 6. Amend §5501 (b) (6) by striking said

subsection in its entirety and substituting in lieu thereof a new subsection (b) (6) to read as follows:

"(b) (6) If an individual 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 4 months after such absence, or (ii) he again becomes an employee within 4 months after such cessation of employment, or (iii) he subsequently acquires 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."

Section 7. Amend §5501, Chapter 55, Title 29,

Delaware Code, by adding thereto a new subsection to be designated as subsection (b) (8) to read as follows:

"(b) (8) Any employe may elect to purchase (i) up to five years of credited service for full-time active duty in the Armed Services of the United States, and/or (ii) up to five 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 individual 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 individual's attained age and final average compensation. An individual may not accrue a total of more than ten years of credited service under this paragraph (8) and under paragraphs (4) and (5) of this subsection, and any credited service purchased under this paragraph (8) shall not be used to determine eligibility for benefits under this chapter."

Section 8. Amend §5501, Chapter 55, Title 29,

Delaware Code, by adding thereto a new subsection to be designated as subsection (b) (9) to read as follows:

"(b) (9) An employee who goes on medical leave (including maternity leave of up to one year) and who subsequently accrues at least one year of credited service under paragraph (b) (1) will receive credit for the period of medical leave provided that the employee pays to the fund contributions equal to the sum of the employee contributions and state appropriations which would have been made to the fund during such period of medical leave, with the amount of such contributions to be determined in accordance with rules and regulations approved by the Board."

Section 9. Amend §5501 (d), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (d) to read as follows:

"(d) 'Final average compensation' shall mean 1/60 of the compensation paid to an employee during any period of sixty consecutive months in his or her years of service credited under paragraphs (b) (1), (2) and (3) in which his or her compensation was highest, or the average monthly compensation paid to an employee during the period of his or her service credited under paragraphs (b) (1), (2), and (3) if such period is less than sixty consecutive months, provided that such amount shall not be less than the average monthly compensation paid to an employee during any calendar years in his/her years of service credited under paragraphs (b)(1), (2), and (3)."

Section 10. Amend §5501 (e), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (e) to read as follows:

"() 'Prior final average compensation' shall mean 1/60 of the compensation paid to an employee during any period of sixty consecutive months in his or her years of service credited under paragraphs (b) (1), (2), and (3) in which his or her compensation was highest, except that compensation in

excess of $24,000 during any calendar year or the sum of any partial calendar years in such period of sixty consecutive months shall be excluded and total compensation for such period of sixty consecutive months shall not exceed $120,000; provided, however, that for an employee who while an active employee pays to the fund contributions determined in accordance with the rules and regulations approved by the Board equal to the sum of (I) the additional employee contributions which would have been made to the fund if the maximum limit on employee contributions in effect prior to the 1976 Pension Act had not been applied, (2) an amount determined by applying the rate of state appropriations to the fund on or before December 1, 1976 to his or her earnings prior to December 1, 1976 in excess of $2,000 monthly and (3) interest compounded at the rate of 6° per annum on the sum of (1) and (2) from the end of the calendar year accrued to the date paid, 'prior final average compensation' shall then mean final average compensation as defined in paragraph (d)."

Section 11. Amend §5501, Chapter 55, Title 29,

Delaware Code, by designating subsections (e) and (f) in effect immediately prior to the effective date of the 1976 Pension Act as subsections (f) and (g), respectively.

Section 12. Amend §5501, Chapter 55, Title 29,

Delaware Code, by adding thereto a new subsection to be designated as subsection (h) to read as follows:

"(h) 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 an individual 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 individual 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 employee has made application for

Social Security benefits or is subsequently employed."

Section 13. Amend §5502 (a) (3), Chapter 55, Title

29, Delaware Code, by striking the figure "$2,000" as the same appears in said subsection and inserting in lieu thereof the figure "$3,000".

Section 14. Amend §5521 (c) (3), Chapter 55, Title

29, Delaware Code, by striking the figure "$2,000" as the same appears in said subsection and inserting in lieu thereof the figure "$3,000".

Section 15. Amend §5522(b), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (b) to read as follows:

"(b) A former employee 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 (1) age 60 if such pension is computed under §5527 (a) (1) (i) or (2) age 62 if such pension is computed under §5527 (a) (2)."

Section 16. Amend §5522, Chapter 55, Title 29,

Delaware Code, by adding thereto a new subsection to be designated as subsection (c) to read as follows:

"(c) An employee shall be come eligible to receive a reduced service pension, beginning with the month after he or she has terminated employment, if he or she has 15 years of credited service, exclusive of service credited under §5501 (b) (4) or (5), and has attained age 55; the amount of the service pension payable to such an employee shall be reduced by four-tenths percent for each month the employee is under age 60."

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

"(a) An employee who has ten (10) years of credited service exclusive of service under §5501 (b) (4) or (5) shall have a vested right to a pension, provided that such pension shall not be calculated under §5527 (a) (1) (i) unless the pension would have been payable under the provisions of this Chapter in effect immediately prior to the effective date of the 1976 Pension Act."

Section 18. Amend §5524 (a), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

"(a) An employee who has 5 years of credited service, exclusive of service credited under §5501(b) (4) or (5), and becomes disabled shall become eligible to receive a disability pension beginning with the fourth month following the inception of his or her disability provided that such pension shall not be calculated under §5527(a) (I) (i) unless a pension would have been payable under provisions of this Chapter in effect immediately prior to the effective date of the 1976 Pension Act. Such individual shall cease to be eligible at the end of the month in which he or she recovers from disability and is again offered employment as an employee, is such recovery and offer of employment occurs before his or her attainment of age 60."

Section 19. Amend §5527 (a), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

"(a) The amount of the monthly service or diability pension payable to an employee or former employee shall be:

(1) In the case of an employee or former employee whose credited service under §5501 (b) (1), (2), and (3) includes service before July 1976, and who would have also been eligible to receive a service or disability pension under the provisions of this chapter in effect immediately prior to the effective date of the 1976 Pension Act, the greater of (i) 1/60 of his or her prior 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 maximum and minimum limitations specified in paragraphs (b) and (c) herein, or (ii) the amount computed in accordance with paragraph (a) (2) herein.

(0) In the case of any employee or former employee who does not meet the requirements of paragraph (a) (1) herein, or in the case of any employee or former employee who meets the requirements of paragraph (a) (1) herein and is eligible for a larger amount under this paragraph (a) (2), 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 after 1976, plus 1/60 of his or her prior 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 before 1977, provided that:

(i) the maximum and minimum limitations specified in paragraphs (b) and (c) herein shall not apply with the exception that the maximum amount payable to a participant who does not make the additional contribution provided for in §5501 (e) for years of credited service before 1977 shall be $1,000, and

(ii) Beginning at age 62 or, if later, at retirement, the service pension payable shall in no case exceed seventy-five percent 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 62, the result to be multiplied by the ratio, not to exceed one, the numerator of which is his or her years of accredited service and the denominator of which is 30 years, and

(iii) 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 of final average compensation."

Section 20. Amend §5527(c) (2), Chapter 55, Title

29, Delaware Code, by striking the last sentence of said subsection beginning with the word "for" and ending with the figure "130".

Section 21. Amend §5527 (d), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and insert in lieu thereof a new subsection (d) to read as follows:

"(d) Notwithstanding provisions of this chapter to the contrary, an elected official shall receive a pension computed in accordance with this subsection. The service or disability pension payable to the elected official and the survivor's pension payable to the eligible survivor of such individuals shall be computed on the basis of compensation to the elected official as an elected official irrespective of other credited service, with contribution to be determined based upon compensation as an elected official. The minimum amount of pension payable to such an elected official shall be $15 multiplied by each year of service, taken to the nearest one-twelfth of the year and he shall be eligible to receive a pension beginning with the first month after the attainment of age 60, provided that he shall have served at least five years at the time of the termination of his service as an elected official. Any pension for credited service other than as an elected official shall be determined under the remainder of this chapter as a separate pension.

Notwithstanding any other provision of this chapter, elected officials and former elected officials who served for a minimum of five years which years were served before June 1970, or were served partly before June, 1970, and partly

after June, 1970, shall also be eligible for pensions under this chapter."

Section 22. Amend §5527 (e), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (e) to read as follows:

"(e) Any section of this chapter to the contrary notwithstanding, the amount of the monthly service or disability pension payable to any regular part time employee who is not employed on a full time or annual basis, as the term full time or annual basis is defined in rules and regulations adopted by the Board, shall be determined in accordance with paragraph (a) herein, provided that no minimum amount shall be payable to any such regular part time employee; provided, however, that for any public school cafeteria employee who entered State service on or before July 1, 1971, and who accrues 15 years of credited service as an employee under §5501 (b) (1) by the date of his retirement eligibility shall receive a minimum state benefit and primary Social Security benefit of not less than $200 per month."

Section 23. Amend §5528 (a), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

"(a) Upon the death of an employee who has five (5) years of credited service, exclusive of service credited under §5501 (b) (4) or (5), a monthly survivor's pension shall be payable to his or her eligible survivor or survivors equal to one-half of the service pension for which the employee would have been eligible if he or she has been 65 years of age provided that such pension shall not be calculated under §5527(a) (1) (i) unless a pension would have been payable under provisions of this chapter in effect immediately prior to the effective date of the 1976 Pension Act."

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (b) to read as follows:

"(b) Upon the death of an individual receiving a service or disability pension at the time of his or her death, a monthly survivor's pension shall be payable to his or her eligible survivor or survivors equal to one-half of such service or disability pension, provided that upon the death of an individual who had not attained age 62 and was receiving a service pension at the time of his or her death, a monthly survivor's pension shall be payable to his or her eligible survivor or survivors equal to one-half of the service pension for which the individual would have been eligible if he had been 62 years of age."

"(c) Section 25. Amend §5528(c), Chapter 55, Title 29,

"(d) Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (c) to read as follows:

Section 24. Amend §5528 (b), Chapter 55, Title 29, has not attained age 18,has attained age 18 but not age 22 and is attending school on a full time basis, or

() has attained age 18 and is permanently disabled as the result of a disability which began before he attained age 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)."

Section 26. Amend §5528(e), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (e) to read as follows:

"(e) A parent shall be deemed to have been dependent on the deceased employee, former employee, or pensioner if such individual was receiving at least one-half of his or her support from such deceased person at the time of death."

Section 27. Amend §5531, Chapter 55, Title 29,

Delaware Code, by striking said section in its entirety and substituting in lieu thereof a new §5531 to read as follows:

§5531. 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 forimprescribed 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 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. 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 furnishings or procuring thereof."

Section 28. Amend §5532, Chapter 55, Title 29,

Delaware Code, by striking the title of said section in its entirety and substituting in lieu thereof a new title to read as follows:

"Increases in pensions".

Section 29. Amend §5532, Chapter 55, Title 29,

Delaware Code, by adding thereto a new subsection to be designated as subsection (d) to read as follows:

"(d) Any service or survivor pension which became effective before 1975 and is payable on June 30, 1976 to an individual who is 60 years of age or older, and any disability pension which became effective before 1975 and is payable on June 30, 1976, shall be increased effective January 1, 1976 in accordance with the following schedule:

Year pension became Percent increase in pension

effective effective 1/1/76

prior to 1971 19010

1971 16%

1972 140/o

1973 11%

1974 50/0

Any pension which became effective before 1960 and is

payable on June 30, 1976 to an individual who is not also receiving or eligible for benefits under the Federal Social Security Act shall be increased by 35010 effective January 1, 1976, provided that such increase shall be in lieu of, and not in addition to, the increases provided in accordance with the above schedule.

The percentage increases in pensions provided for herein shall be applied to the correct amount determined as a result of audits made between May 1971 and June 1972, and shall only be paid to an individual if such correct amount, inclusive of such increase, exceeds the amount of any pension being paid in accordance with §5533(b)."

Section 30. Amend Chapter 39, Title 14, Delaware

Code, by adding thereto a new section to be designated as #3909 which shall read as follows:

"§3909. Increases in pensions.

Effective January 1, 1976, any pension being paid under this chapter to an individual 60 years of age or older shall be increased by either (a) $30 per month if such individual is also receiving or is eligible for benefits under the Federal Social Security Act, or (b) $50 per month if such individual is not also receiving or eligible for benefits under the Federal Social Security Act; provided that such increase shall be applied to the correct amount determined as a result of audits made between May 1971 and June 1972, and shall only be paid to an individual if such correct amount, inclusive of such increase, exceeds the amount of any pension being paid in accordance with §3908(b)."

Section 31. Amend §5543 (a), Chapter 55, Title 29,

Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

(1) in the case of any employee who first enters service after June 30 , 1976, three percent of that portion of his or her compensation during any calendar year which exceeds $6,000 and does not exceed the maximum annual amount subject to taxes under the Federal Insurance Contributions Act, plus five percent of his or her compensation during any calendar year which exceeds the maximum annual amount subject to taxes under the Federal Insurance Contributions Act, and

(2) in the case of any employee who first entered service before July 1, 1976, five percent of that portion of his or her compensation during any calendar year which exceeds $6,000."

Section 32. Amend §5544, Chapter 55, Title 29,

Delaware Code, by striking said section in its entirety and substituting in lieu thereof a new §5544 to read as follows:

"p5544. Actuarial valuations and appropriations.

(a) The State's appropriation to the Fund for the fiscal year 1975-76 shall be 11.3% of covered payroll.

(b) The State's appropriation to the Fund for the fiscal year 1976-77 shall be 11.3% of covered payroll.

(c) The State's appropriation to the Fund for the fiscal year 1977-78 shall be 11.6% of covered payroll.

(d) The actuary shall prepare an actuarial valuation of the assets and liabilities of the Fund as of December 31, 1976, and at least once every two years thereafter. On the basis of reasonable actuarial assumptions and tables approved by the Board, the actuary shall determine the normal cost required to meet the acturial cost of current service and the unfunded accrued liability.

year 1978-79, 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 amortize the unfunded 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 period, with such prospective total covered payroll to be determined on the basis of a growth rate of 4% per year, compounded annually."

Section 33. The 1976 Pension Act shall become ef-

fective July 1, 1976, provided that: (1) the increases in pensions provided by Sections 29 and 30 of this Act shall be payable retroactive to January 1, 1976; (2) Section 31 of this Act which amends §5543(a), Chapter 55, Title 29, Delaware Code, shall become effective on January 1, 1977 and the provisions of §5443(a) in effect immediately prior to the effective date of this Act shall remain in effect until January 1, 1977; and (3) Section 32 of this Act shall become effective retroactive to July 1, 1975.

Approved June 24, 1976