TITLE 29

State Government

Public Officers and Employees

CHAPTER 55. STATE EMPLOYEES' PENSION PLAN

Subchapter III. Financing and Administration


There shall be established a State Employees' Retirement Fund, hereinafter referred to as "Fund," to which state appropriations and other employer contributions shall be deposited monthly and to which employee contributions shall be deposited upon deduction from the employee's paycheck and to which earnings on investments, any other contributions, gifts, donations, grants, refunds and reimbursements shall be deposited upon receipt and from which benefits shall be paid and fees and expenses authorized by the Board shall be paid. Subject to Internal Revenue Code § 401(a)(24) [26 U.S.C. § 401(a)(24)], the assets of the Fund will be commingled in the Delaware Public Employees' Retirement System as provided for by § 8308 of this title. The assets of the Fund are held in trust and may not be used for or diverted to any purpose other than for the exclusive benefit of the employees and their beneficiaries.

29 Del. C. 1953, § 5541; 57 Del. Laws, c. 592, § 1; 58 Del. Laws, c. 180, § 2K; 71 Del. Laws, c. 121, § 3; 76 Del. Laws, c. 279, § 5.;

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.

29 Del. C. 1953, § 5542; 57 Del. Laws, c. 592, § 1; 58 Del. Laws, c. 180, § 2L.;

(a)(1) Effective January 1, 1998, employee contributions to the Fund shall be 3% of total annual compensation in excess of $6,000 provided, however, that post-2011 employees will pay an employee contribution rate of 5% of total annual compensation in excess of $6,000. In no event shall total compensation during any calendar year in excess of $6,000 be exempt from contributions.

(2) The employee contribution for a correction officer or specified peace officer shall be 5% of annual compensation in excess of $6,000 provided, however, that a correction officer or specified peace officer who is also a post-2011 employee will pay an employee contribution rate of 7% of annual compensation in excess of $6,000.

(b) Any section of this chapter to the contrary notwithstanding, any individual with 15 years of credited service who commenced receiving a service pension of $250 or less before 1971 shall be paid the accumulated contributions with interest; provided, that the individual would have been entitled to such payment under § 5553 of this title as in effect on May 31, 1970.

(c) Effective July 1, 1997, employee pension contributions made pursuant to this section shall not be subject to adjustment or recovery after the expiration of 3 full calendar years from December 31 of the year in which the contributions were made unless no contributions were paid during that calendar year.

(d) An employee can purchase service credit or repay a withdrawal benefit using a rollover distribution from:

(1) A direct rollover of an eligible rollover distribution from:

a. A qualified plan described in § 401(a) [26 U.S.C. § 401(a)] of the United States Internal Revenue Code;

b. An annuity contract described in § 403(b) [26 U.S.C. § 403(b)] of the United States Internal Revenue Code; or

c. An eligible plan under § 457(b) [26 U.S.C. § 457(b)] of the United States Internal Revenue Code.

(2) A participant contribution of an eligible rollover distribution from:

a. A qualified plan described in § 401(a) [26 U.S.C. § 401(a)] of the United States Internal Revenue Code;

b. An annuity contract described in § 403(b) [26 U.S.C. § 403(b)] of the United States Internal Revenue Code; or

c. An eligible plan under § 457(b) [26 U.S.C. § 457(b)] of the United States Internal Revenue Code.

(3) A participant rollover contribution of the portion of a distribution from an individual retirement account or annuity described in § 408 [26 U.S.C. § 408] of the United States Internal Revenue Code that is eligible to be rolled over and would otherwise be includible in gross income.

29 Del. C. 1953, § 5543; 57 Del. Laws, c. 592, § 1; 58 Del. Laws, c. 527, § 1D; 59 Del. Laws, c. 335, § 1; 60 Del. Laws, c. 483, § 31; 60 Del. Laws, c. 593, § 3; 61 Del. Laws, c. 454, § 13; 63 Del. Laws, c. 452, § 2; 65 Del. Laws, c. 522, § 1; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 524, § 6; 71 Del. Laws, c. 165, § 4; 71 Del. Laws, c. 354, § 37; 73 Del. Laws, c. 419, § 1; 78 Del. Laws, c. 14, § 14; 79 Del. Laws, c. 174, §§ 2, 5; 80 Del. Laws, c. 403, § 4.;

(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 Fiscal Year 2008, 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 using an open amortization period of 20 years. For plan amendments effective after Fiscal Year 2007 the unfunded actuarial accrued liability for such amendments shall be amortized over an open amortization period of 20 years. 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, as determined by the Board, 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 of this title.

(c)(1) 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) of this title. Beginning with the Fiscal Year 1994 budget, .70% of covered payroll shall be appropriated; in Fiscal Year 1995, 1.11% of covered payroll shall be appropriated; in Fiscal Year 1996, 1.52% of covered payroll shall be appropriated; in Fiscal Year 1997, 1.93% of covered payroll shall be appropriated; in Fiscal Year 1998 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 of this title.

(2) In order to provide a fund for post retirement health insurance premiums, the State shall include in its annual appropriation payments the sum of the anticipated cost of the State's post retirement health insurance premiums for that year, plus the greater of 5.00% of the normal cost or the difference of 2.00% of covered payroll less the amount appropriated for the normal cost and unfunded actuarial accrued liability in subsection (b) of this section. Funds appropriated to implement this subsection shall be deposited into the OPEB Fund as established by § 5281 of this title.

(d)(1) The State's obligation to the State Employees' Pension Trust Fund, the State Judiciary Retirement Fund and the State Police Retirement Fund to implement the provisions of § 5532(a) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from January 1, 1994.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(a) of this title in Fiscal Year 1994, shall be the lump sum actuarial liability of the benefits granted.

(e)(1) The State's obligation to the State Employees' Pension Trust Fund, the State Judiciary Retirement Fund and the State Police Retirement Fund to implement the provisions of § 5532(b) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from April 1, 1995.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provision of § 5532(b) of this title in Fiscal Year 1995, shall be the lump sum actuarial liability of the benefits granted.

(f)(1) The State's obligation to the State Employees' Pension Trust Fund, the State Judiciary Retirement Fund and the State Police Retirement Fund to implement the provisions of § 5532(c) and (d) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 1996.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(c) of this title in Fiscal Year 1997 shall be the lump sum actuarial liability of the benefits granted.

(g)(1) The State's obligation to the State Employees' Pension Trust Fund, the State Judiciary Retirement Fund and the State Police Retirement Fund to implement the provisions of § 5532(e) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 1997.

(2) The State's obligation to the Special Pension Fund authorized by Volume 61, Chapter 455, Laws of Delaware, to implement the provisions of § 5532(c) of this title in Fiscal Year 1998 shall be the lump sum actuarial liability of the benefits granted.

(h)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement § 5532(f) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 1998.

(2) The State's obligation to the Special Pension Fund authorized by Volume 61, Chapter 455, Laws of Delaware, to implement § 5532(f) of this title in Fiscal Year 1999 shall be the lump sum actuarial liability of the benefits granted.

(i)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(g) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 1999.

(2) The State's obligation to the Special Pension Fund authorized by Volume 61, Chapter 455, Laws of Delaware, to implement the provisions of § 5532(g) of this title in Fiscal Year 2000 shall be the lump sum actuarial liability of the benefits granted.

(j)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund and the New State Police Retirement Fund to implement the provisions of § 5532(h) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 2000.

(2) The State's obligation to the Special Pension Fund authorized by Volume 61, Chapter 455, Laws of Delaware, to implement the provisions of § 5532(g) of this title in Fiscal Year 2001 shall be the lump sum actuarial liability of the benefits granted.

(k)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund and the New State Police Retirement Fund to implement the provisions of § 5532(i)(1) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 2001, pursuant to § 5548 of this title.

(2) The State's obligation to the State Employees' Pension Plan to implement the provisions of § 5532(i)(2) of this title shall be treated as an actuarial loss during the next actuarial valuation process.

(3) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(i) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(l )(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(j) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from September 1, 2003, pursuant to § 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(j) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(m)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(k) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 2004, pursuant to § 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by Volume 61, Chapter 455, Laws of Delaware, to implement the provisions of § 5532(k) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(n)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(l) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 2005, pursuant to § 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(l) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(o)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(m) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 2006, pursuant to § 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(m) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(p)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(n) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from January 1, 2012, pursuant to § 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by Volume 61, Chapter 455, Laws of Delaware, to implement the provisions of § 5532(n) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(q)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(o) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from July 1, 2012, pursuant to § 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(o) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

(r)(1) The State's obligation to the State Employees' Pension Plan, the State Judiciary Retirement Fund, and the New State Police Retirement Fund to implement the provisions of § 5532(p) of this title shall be the payment required to amortize the unfunded accrued liability over 5 years from January 1, 2015, pursuant to 5548 of this title.

(2) The State's obligation to the Special Pension Fund authorized by 61 Del. Laws, c. 455, to implement the provisions of § 5532(p) of this title shall be treated as an actuarial loss during the next actuarial valuation process of the Special Pension Fund.

69 Del. Laws, c. 104, § 2; 69 Del. Laws, c. 105, § 3; 70 Del. Laws, c. 525, § 4; 71 Del. Laws, c. 165, § 3; 71 Del. Laws, c. 397, § 3; 72 Del. Laws, c. 152, § 3; 72 Del. Laws, c. 438, § 2; 72 Del. Laws, c. 447, § 3; 73 Del. Laws, c. 146, § 6; 74 Del. Laws, c. 183, § 3; 74 Del. Laws, c. 398, § 3; 75 Del. Laws, c. 136, § 3; 75 Del. Laws, c. 403, § 3; 76 Del. Laws, c. 70, § 7; 76 Del. Laws, c. 80, § 68; 78 Del. Laws, c. 116, §§ 3, 4; 78 Del. Laws, c. 289, § 2; 79 Del. Laws, c. 343, § 3.;

No laws establishing special pensions, whether they be service pensions, disability pensions, survivor's pensions or otherwise, shall be enacted by the General Assembly unless, at the time of enactment, an appropriation is passed that provides full actuarial funding for such special pensions.

61 Del. Laws, c. 336, § 1.;

(a) Upon the death of an individual receiving a pension under this chapter the sum of $7,000 shall be paid from the Fund to a designated beneficiary or in the absence of a designated beneficiary the amount of this benefit shall be paid to the deceased pensioner's estate.

(b) The benefit granted under this section shall not be construed as a contractual obligation of the State or of the Pension Fund and may be revised or terminated by an act of the General Assembly.

(c) Benefits granted under this section may be assigned to a licensed funeral home to cover the funeral and associated expenses of the deceased pensioner, subject to the signed consent of the beneficiary or his or her legal guardian using a form approved for such use by the Board of Pension Trustees.

63 Del. Laws, c. 362, § 1; 66 Del. Laws, c. 168, § 1; 68 Del. Laws, c. 150, § 1; 69 Del. Laws, c. 451, § 1; 70 Del. Laws, c. 186, § 1; 72 Del. Laws, c. 169, § 2; 73 Del. Laws, c. 146, § 5; 76 Del. Laws, c. 80, § 89; 78 Del. Laws, c. 115, § 2.;

(a) Each participating employer, pursuant to the provisions of § 414(h)(2) of the United States Internal Revenue Code [26 U.S.C. § 414 (h)(2)], shall pick up and pay the contributions which would otherwise be payable by the employees under § 5543 of this title. The contributions so picked up shall be treated as employer contributions for purposes of determining the amounts of federal income taxes to withhold from the employee's compensation.

(b) Employee contributions picked up by the employer shall be paid from the same source of funds used for the payment of compensation to an employee. A deduction shall be made from each employee's compensation equal to the amount of the employee's contributions picked up by the employer. This deduction, however, shall not reduce the employee's compensation for purposes of computing benefits under the retirement system pursuant to this chapter.

(c) Employee contributions shall be credited to a separate account within the employee's individual account so that the amount contributed prior to the effective date for the pickup of employee contributions may be distinguished from the amounts contributed on or after the effective date.

(d) The contributions, although designated as employee contributions, are being paid by the employer in lieu of the contributions by the employee. The employee will not be given the option of choosing to receive the contributed amounts directly instead of having them paid by the employer to the retirement system.

68 Del. Laws, c. 358, § 1.;

(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 and 5601 of this title; § 8393 of Title 11, 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; Chapter 83 of Title 11.

(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 of Title 29), the State Judiciary Plan (Chapter 56 of Title 29), and the new State Police Pension Plan (Chapter 83 of Title 11).

(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 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.

69 Del. Laws, c. 104, § 1.;

Benefits shall be due and payable under this chapter only to the extent provided in this chapter, and neither the State nor the State Employees' Pension Plan shall be liable for any amount in excess of such sums.

71 Del. Laws, c. 132, § 84.;

Repealed by 76 Del. Laws, c. 70, § 6, effective July 1, 2007.;