What Types of Delaware State Pensions are offered?
The state of Delaware administers all of its pension plans through the Delaware Public Employees’ Retirement System. The state currently offers nine separate defined benefit programs for its employees, although the main pension plan is the State Employees general fund, which supports the majority of government employees.
As of 2013, the state pension plans were funded at a level of 90.7%. Although this ratio decreased dramatically from the 98% ratio reached in 2012, it is still well above the federal recommended level of 80%. Future pension plan reform aims to keep the Delaware state pension at above 100% in the near future.
State Employees Member Eligibility and General Benefits
The State Employees plan is available for all government employees who are not members of the other specialized pension plans offered by the state of Delaware.
Employees hired prior to January 1, 2012 contribute 3% of their pretax income to their pension plan. All other employees and future hires contribute 5% of their pretax income to their plan.
Employees may retire based on the following age and service year requirements.
- Employees with at least 5 years of creditable service may retire at age 62.
- Employees with at least 15 years of creditable service may retire at age 60.
- Employees with at least 30 years of creditable service may retire at any age.
- Employees become vested at age 62 with 5 years of creditable service or at any age with 20 years of creditable service.
Delaware provides health, dental, and vision insurance plans for members of its State Employees pension plan. These options can be selected through the Delaware Office of Management and Budget.
There is no mandated Cost of Living Adjustment for Delaware pension plans. An additional COLA may be added, but it is up to legislative approval.
Purchasing Service Credit
Additional service credit may be purchased for the following situations.
- One month of credited service may be purchased in exchange for 21 accumulated sick days.
- Medical leave and leave of absence for personal reasons may be converted into service credit. However, the Office of Pensions must approve these specific situations prior to purchasing the service credit.
- Military service may be converted into service credit. State employment must be within 5 years of the military service in question. If an employee is called into active military duty during state employment, the resulting leave of absence can be converted into full service credit.
- Up to 3 months of consecutive Workers Compensation leave may be converted into service credit.
Breaks in employment do not result in forfeiture of service credit if the employee resumes state employment within 4 months of termination. If the employee was involuntarily terminated, resuming state employment within 2 years will not result in any forfeiture of service credit.
In the event of an employee’s death, their surviving spouse is entitled to receive a monthly retirement benefit, provided that the employee had accumulated at least 5 years of service credit prior to their death. The monthly benefit for a surviving spouse is equal to 75% of the employee’s calculated retirement benefit.
If an employee was already receiving their retirement benefit, their spouse will continue to receive 75% of this monthly retirement benefit.
The traditional order of survivor benefits is spouse, dependent children, then dependent parent. Employees may opt to change the priority order by contacting the Office of Pensions. If there is no surviving spouse, child, or parent, the employee’s benefits will be paid to their next named beneficiary.
Employees with at least 5 years of creditable service are eligible for disability pension if they become disabled during their term of employment. Applying employees must submit a physician report as proof of their disability.
Disability pension continues on a monthly basis until an employee is able to return to normal employment service.
Employees who receive a disability pension are also eligible to receive their normal retirement benefit at a later date.
Early Retirement and Employment Termination
Employees who are at least 55 years old and have at least 15 accumulated years of credited service are eligible for early retirement.
An employee’s monthly retirement benefit is calculated according to the normal formula, but it will be reduced by 0.2% for every month under the age of 60 in the employee’s age.
Employees with at least 25 accumulated years of credited service are eligible for early retirement at any age. In this case, an employee’s monthly retirement benefit will be reduced by 0.2% for every month that the employee is under 30 years of credited service.
Employees who opt to terminate employment with the state may choose to withdraw their contributions and will also be paid interest for their years of credited service. Employees who are vested may opt to leave their pension accounts intact and will receive their normal monthly retirement benefits at the above-mentioned retirement age.
Other State Pension Plans
Although the majority of Delaware state employees are part of the State Employees plan, the Delaware Office of Pensions also administers several other specialized employee pension plans.
- The state offers individual pension plans for State Police officers. There is also a closed pension plan for State Police offers employed before the amended pension date of 2004.
- The state offers judicial retirement plans for judges and justices employed in the state court system. This includes both appointed and elected judges. There is also a closed pension plan for judges employed before the amended pension date of 2003.
- Members of the Delaware Volunteer Fire Department have their own separate pension plan which allows for retirement at age 60 with 10 years of credited service.
- The Diamond State Port Corporation plan serves employees of Delaware’s Port of Wilmington. This pension plan also offers a credit union.
In addition to these plans, Delaware also administers several municipal pension plans for local firefighting and law enforcement bodies. More information on all of these plans is available through the Office of Pensions.