Delaware compensation commission considers fix to legislator pension mess

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This story was supported by a statehouse coverage grant from the Corporation for Public Broadcasting.

Delaware’s Compensation Commission appears ready to recommend the state eliminate the current practice of tying future pension raises to the highest-paid retiring state lawmaker.

The state’s pension office retroactively boosted lawmakers’ pensions in March after it found a 1997 law change eliminating that calculation was never written into code. Pension payments are expected to rise again at the end of this year when former House Speaker Pete Schwartzkopf, D-Rehoboth Beach, retires. Schwarzkopf served as speaker for a decade.

Pension Administrator Joanna Adams said the one-time payments totaled $900,000 and added $13,000 to current monthly legislative pension payroll. The State Employee Pension fund is its largest and valued at $11 billion.

“What’s happening now is people who are retiring were never in leadership, their pension is the same as somebody who served 30 years, including years as speaker of the House or [Senate] president pro tem,” Human Resources Secretary Claire DeMatteis said. “That’s the inequity that’s been created because the code hasn’t kept pace.”

The commission reviewed language in the Delaware code that would keep current and retired lawmakers’ pensions anchored to the highest-paid retiring lawmaker, but remove it for anyone elected on or after Jan. 1, 2025. Those lawmakers’ pensions would receive monthly amounts based on their own earnings and years of service. DeMatteis said they are not recommending the change be made retroactive.

Eliminating the practice of anchoring pension payments to the highest-paid retiring state lawmaker was first recommended by the commission in 1997.

Typically, laws are made in Delaware by state lawmakers introducing and passing legislation, which is then signed into the law by the governor. But reports by the compensation commission automatically become law if the General Assembly doesn’t take affirmative action to reject the report the group issues every four years. The commission meets to recommend changes to salaries and other monetary benefits for the General Assembly, governor, his cabinet and the courts. In the case of the 1997 report, it was not rejected, but it never made it into the state’s legal code.

DeMatteis said a retired lawmaker contacted the pension office earlier this year to point out the 1997 compensation report changes were not in the state’s statutes, prompting the bump in pension payouts.

State lawmakers asked the commission to reexamine the pension issue after Gov. John Carney’s administration made the decision to operate the pension plan as if the 1997 recommendations had not been approved. Lawmakers raised the criteria for pension eligibility in 2012, but still no one caught the 1997 language missing from the code.

Senate Majority Leader Bryan Townsend said in June that they had decided to wait for the compensation group’s recommendations since it was already set to meet this winter.

“Although we are sort of at the mercy of the Carney administration’s decision to cut checks without our knowledge, the reality is, because the commission is about to convene, it makes most sense for us to give them this question again,” he said. “We figured it’s most appropriate to say, ‘Please study it. Please recommend what we should do,’ and then we’ll come back in 2025 and on the basis of those recommendations, then act.”

Pension benefits are calculated using a percentage called a minimum factor. The last time the minimum factor was raised was 2020, when Senate President Pro Tem David McBride lost his seat. He first took office in 1981.

The compensation committee is set to meet twice more before the end of the month and vote on a final report by Dec. 20.