Comment Rescue: Retired Legislators To Get Windfall
Will the General Assembly act to stop this? They absolutely should. Mediawatch spotted this Karl Baker article for us:
This should clear up the mess we find ourselves in:
Last month, retired legislators received letters from Delaware Pension Administrator Joanna Adams that outlined a forthcoming change in their monthly pension payments. The letter stated that the change is happening because Delaware’s legal code “was never updated” following the apparent passage of a law in 1997 that altered how legislative pensions were calculated.
Prior to the change, lawmakers’ pensions payouts were anchored to that of the highest-earning retired legislator.
After the change, the pension office implemented a more standard system, whereby lawmakers who entered the General Assembly after 1997 received payments that were based on a percentage of their own highest years’ earnings.
Now, the legislative pension will revert back to pre-1997 format, Adams said in her letter.
One former lawmaker who shared Adams’ letter with Spotlight Delaware, and asked for anonymity to discuss the issue in-depth, said their pension check is likely to go up many hundreds of dollars each month, as a result of the change.
The lawmaker said another boost in their pension is likely to occur following the retirement at the end of this year of Rep. Peter Schwartzkopf (D-Rehoboth Beach), who served for a decade as Speaker of the House.
The cynicism of the members of the General Assembly back then cannot be overstated. In his final term in office, Sen. Herman Holloway Sr. was accorded the highly-unusual honor of serving both on the Joint Finance Committee and in Senate leadership. Since both involved payments over and above the normal legislative salary, Holloway’s pension ballooned, meaning that all other legislators with sufficient service time had their pensions balloon as well because, as Baker wrote, “Prior to the change, lawmakers’ pensions payouts were anchored to that of the highest-earning retired legislator.”
Senate rules had precluded someone in leadership from serving on the Joint Finance Committee or the Bond Bill Committee at the same time. The Senate changed the rule precisely so that everybody’s pension would balloon along with Sen. Holloway’s.
Which isn’t the end of the General Assembly’s perfidy in this matter.
It used to be that the Delaware Compensation Commission would recommend salary levels for non-Merit System employees, like judges, cabinet officials and legislators. The General Assembly would then vote on those recommendations. That changed somewhere around 1997 as well, as the General Assembly passed legislation specifying that the recommended salary increases would take place unless the General Assembly voted against the recommendations. In other words, they could increase their own salaries without ever having to vote on it.
Lawmakers are more than a little pissed off that this development was sprung on them. (BTW, it is now inescapable that legislators, particularly in the Senate, have lost patience with the ongoing incompetence and secrecy of the Carney Administration. Another story on this coming up, well, whenever I get around to writing it.) From the News-Journal story on the same issue:
Delaware Senate Majority Leader Bryan Townsend said lawmakers weren’t aware of the pension payout problems until local reporters reached out seeking clarity on the issue, and are still trying to gather information.
“My understanding is that the (pensions) office has been looking at this for 12 months now and to me, it defies statistical probability that there would not have been some kind of outreach to the legislature to let us know of some kind of discrepancy whether 27 years ago or 27 days ago,” Townsend said. “We should have been informed that something was amiss.”
After refusing to provide the total costs associated with the snafu, the Office of Pensions on Monday said the one-time payment amounted to $900,000 and the changes will add an additional $9,000 per month cost to the state pension plan.
This money comes out of the State Pensioners’ accounts, meaning more for retired legislators, less for everyone else.
The pensions office would not say how many legislators the change impacts, but indicated it affects those elected between Feb. 1, 1997 and Jan. 1, 2012. The office declined to provide a dollar figure on how much total is owed to pensioners citing state code that dictates that records maintained by the Office of Pensions “shall be confidential.”
Am I allowed to say this on the blog? BULL-FUCKING-SHIT. We’re talking about dollars that are public dollars. The Carney Administration has hid behind the Cloak Of Confidentiality on countless matters. I once thought it was just unwarranted caution on their part, but I now think they’ve been hiding rampant incompetence from the public.
The General Assembly must not allow this to stand. I await the first bill to right this wrong on the very first day the General Assembly gets back in session. Tuesday, April 16. We’ll be watching.
But do you expect them to right it in the publics favor or in theirs?
I think that this group of legislators, especially in the Senate, will do whatever they can to right this wrong.
It remains to be seen whether the ethically-challenged Speaker of the House will follow the Senate’s lead. I think so, if only b/c Our PAL Val is facing a legit challenge in the Democratic primary.
First a big thank you to Spotlight Delaware to bringing this to light. It is a little misleading though to say that this does not impact taxpayers.
The state is on the hook to fund earned pension benefits. While there are $12billion in pension assets set aside, there are more than that in the actuarial calculation of the liabilities, although DE is in much better shape than many places.
In addition to the $900K, the actuarial calculation of the benefits just went up since the state is liable to pay the increased amount. If the $900K is the retroactive lump sum, the actual cost is a larger number.
This will not change any of the other pensioners’ earned benefits but the taxpayers eventually must pay for this.