(The Center Square) — Retired Delaware lawmakers will be getting a boost in their pension payments because the state failed to make changes to a retirement law more than two decades ago.
In March, Delaware Pension Administrator Joanna Adams informed retired lawmakers that the change is needed because Delaware’s legal code was “never updated” after the passage of a 1997 law that changed how legislative pensions were calculated. She said the agency will “retroactively” update the pension law as intended, but that could cost the state about $1 million.
A 1997 state commission report recommended changes to eligibility and pension calculations for legislative retirement plans, which were set to become law unless the state Legislature rejected the recommendations. While lawmakers at the time didn’t reject the plan, the code was never updated, according to the pension agency.
“This report was not rejected by the General Assembly and ultimately became law, but the Delaware Code was accordingly never updated with the changes to eligibility and pension calculations,” Adams wrote in the March letter.
Under Delaware statutes, an official recommendation made by a state commission automatically becomes law if it is not rejected by a vote in the state Legislature.
Adopting the 1997 changes will reinstate a “minimum factor” pension calculation, where years of service are “multiplied” by the factor of the highest-paid retired lawmaker, which the pension agency said will result in higher payments to retired lawmakers, according to the agency. Under the previous pension rules, the payments were pegged to the highest-earning retired lawmaker.
The recalculations are expected to cost the legislative pension system about $1 million in payouts to about 30 retired lawmakers. Those lump sum payments to retired lawmakers aren’t expected to impact taxpayers but will reduce the amount of money available to pensioners from the state’s $12 billion retirement system.
Legislative leaders, who say they were unaware of the oversight, are mulling over a response to the pension office’s directive and pledging to investigate why the changes were never implemented.
“We should have been notified that something was wrong,” Delaware Senate Majority Leader Bryan Townsend, a Democrat, told reporters earlier this week.
“It is important to emphasize that the Legislature had no idea this was happening. This is nothing the Legislature has done to increase its own pensions.”