1. What do I contribute to my
pension?
As an employee of the State of Delaware, you contribute a certain percentage of
each paycheck to the State's pension fund. As of January 1, 2000, all employees
contribute at the same rate: 3% of that portion of your monthly compensation which
exceeds $6,000 per year.
2. What does my employer contribute
to my pension?
The State and your local district contributes the rest of your pension, each proportionate
to its share of your salary. The state and local school district contribute approximately
7.07% of its total payroll into the Pension Trust Fund as of July 1, 2006.
3. When can I retire? -What are
my retirement options?
You are eligible to receive a pension from the State of Delaware with any of the
following combinations of years of service and age:
1) with 30 years of service credit - at any age;
2) with 15 years of service credit - at age 60;
3) with 5 years of service credit - at age 62;
4) with 25 years of state service - with reduced pension, at any age (Your pension
will be reduced by 0.2% for each month under 30 years of creditable service.);
5) with 15 years of state service - with reduced pension, at age 55 (Your pension
will be reduced 0.2% for each month you are under age 60 when you retire.);
6) with 20 or more years of credited service, including 15 years of state service
- at age 60 if first employed prior to July 1, 1976;
7) with 10-19 years of state service, provided termination of employment occurred
between 7/1/76 and 6/30/88 - pension payable at age 62;
8) with five or more years of state service, provided termination of employment
occurred on or after 6/30/88 - pension payable at age 62; or
9) if you become disabled, and you haven't already chosen the new short-term insurance
disability program, you may draw a disability pension based on your years of service
if you have at least five years of state service, not counting any claimed or purchased
service other than service for sabbatical leave and military service (interrupting
employment).There are no penalties assessed with a disability pension.
A new Disability Insurance Program
was enacted into the Delaware
Code in the 144th General Assembly. This disability program provides 75% of salary
for short-term disability and 60% of salary for long-term disability. Each year
on disability gives a year of service credit toward a normal retirement. Disability
may continue until age 65 before a normal retirement takes place.
4. How do I accrue pension credit?
You accrue pension credit if you are employed in a full-time or regular part-time
job which requires at least 50 hours per month; or you earn at least $200 per month;
or you work at least two and a half hours per day.
Yes, school employees who are employed
for the school year do receive twelve months of pension credit if they complete
the entire school year. Substitute teachers, however, do not accrue pension credit
because they are considered casual and seasonal employees.
5. Can I get pension credit in
Delaware for the time I taught in another state?
Yes, but you have to buy it. If you were hired in Delaware AFTER 1976, then you
can only buy up to five years, and you pay the actuarial cost, which can be very
expensive.
If however, you were hired before July 1, 1976, the cost is 5% of your Final Average
Compensation for each month credited up to a maximum of 48 months, or four years.
For example, if your annual FAC is
$36,000, a "buy-in" of two years would be calculated as follows:
$36,000 (annual FAC) divided by 12
= $3,000 x .05 = $150 x 24 months = $3,600. Service credit buy-ins such as this
are payable at the time of retirement.
6. What about other governmental
service or credit for more than four years of out-of-state teaching? Can it count
towards my creditable service time?
Yes. But, like the above, it must
be purchased. You may purchase up to five years of credit for full-time employment
performed for another state, the federal government, an accredited private school
or college, or service with the State of Delaware for which you will not be receiving
another pension. The amount you pay is equal to the actuarial value of the credits
purchased. The State Pension Office will be able to counsel you on the cost of such
a purchase. This credit does not apply towards pension eligibility, only for additional
benefit.
7. Do I get credit toward a state
pension for my military service time? If you were hired before July 1, 1976,
you receive service credit, up to five years, for full-time active duty in the Armed
Forces of the United States during war or national emergency. However, you must
have become an employee within five years after completion of your tour of duty
or after completion of a course of professional or vocational training (if such
course was begun within five years of completion of your tour of duty.) The educational
program must be full-time, continuous and leading to a certificate, diploma or degree.
If you are called into active service
or volunteer for active service in the Armed Forces or the National Guard of the
state while you are an employee of the state, and if you return to your employment
in the state, you will receive full credited service for such continuous military
service.
If you do not qualify for the above,
you may purchase up to five years of credit for full-time duty in the Armed Forces
by paying into the Plan an amount equal to the actuarial value of the credits purchased.
The credits so purchased do not count for pension eligibility, only for extra pension.
8. Will I be able to buy service
credit for teaching time in a foreign school or a private school in Delaware?
You may purchase up to four years of pension credit for time as a full-time employee
of any accredited private school or college, i.e., one which is recognized by the
Department of Public Instruction when you come to Delaware and are put on the state
salary schedule at a level which recognizes the time spent in the foreign school.
This does not include part-time employment as a graduate teaching assistant or any
employment after you retire. To be eligible to purchase this credit, you must have
been hired before July 1, 1976.
Once again, the cost is 5% of your
monthly FAC for each month that you buy.
You may not purchase more than a
total of ten years of credit for military service, other governmental service or
professional educational employment.
9. Will I get pension credit for
a medical leave I took? Again, you may purchase credit for medical leave (including
maternity leave) of up to one year. For this credit you must pay an amount which
will be determined by the State Pension Office at the time you retire (the employee
and employer share of the pension contributions). Again, the credit purchased cannot
be used to determine eligibility for a pension.
10. Can I buy credit for a personal
leave? Yes, personal leave buy-ins are subject to the same conditions as medical
leaves described above.
11. Will I receive free pension
credit for sabbatical leave? Yes, if you are a professional educational employee
certified by the Department of Education.
12. Will I receive pension credit
while out on Worker's Compensation? Yes, generally. Please call the State Pension
office to discuss specific situations.
13. Can I use accrued vacation
toward my pension? Yes, if you are eligible to receive payment for your accrued
leave, you can elect to use the time for both eligibility and computation of your
pension benefit.
14. May I choose to get paid for
my accumulated sick days at retirement? You will be paid for half of up to 90
days of accumulated sick leave time. This money is paid to you through your school
district at the time of retirement. This money will only be paid at time of an actual
retirement and will not be paid at the time a vested person leaves state service.
This only involves the state share of salary unless the local has bargained for
the local share also. There is a provision to buy up to one year of service credit
for accumulated sick leave beyond 90 days by paying 5% of your FAC.
15. If I fail to complete the
entire school year, will I lose pension credit for the summer months? The percentage
of the summer lost will be proportionate to the amount of the school year worked.
If you worked half of the regular year, you would receive credit for half of the
summer.
16. How will a break in service
affect my creditable service? If you have less than five years of service with
the State when the break in service occurs, you will have to return to State service
and work at least five continuous years before your previous credit will be restored.
17. If I am "riffed," how will
this affect my pension? Assuming you don't apply to have your pension contributions
refunded to you, if you are released from employment for reasons other than cause
or voluntary withdrawal, you will have all your pension rights restored if you are
re-employed by the State or a local school district within two years. If you have
less than five years of service when riffed and you do not return to State or school
district service within two years, you will have to work for five continuous years
before your pension rights are restored.
18. When I am retired, am I guaranteed
regular post-retirement pension increases?
There is no statutory requirement for increases. As of 1993, the General Assembly established a fund for future pension
increases. Increases have been given for twelve out of the last thirteen years.
19. Is there a pension for my
surviving spouse? If you die while actively employed and have acquired five
years of credited service, not counting any claimed or purchased time other than
that which was purchased for sabbatical leave and military service (which interrupt
employment), your eligible survivor will be paid a survivor's pension beginning
the month following your death.
Your eligible survivor will receive
75% of your age 62 entitlement, based on the assumption that the larger benefit
would have been elected by the deceased, effective June 1, 1989.
If you die while receiving a service
or disability pension, the pension payable to your eligible survivor(s), beginning
the month following your death, will be equal to one-half of the pension you would
have been eligible for at age 62.
You may elect to decrease your own
state pension by 3% in order to increase your eligible survivor's pension to 75%
instead of 50% of your monthly pension amount (effective July 1, 1989). This is
a decision you must make at the time you retire. It is irrevocable.
Special rules apply if your surviving
spouse is under age 50. The survivor's pension will be actuarially reduced for each
month he or she is under 50. However, this reduction will not apply for any period
in which your surviving souse is caring for an unmarried child or children, either
under age 18 or between 18 and 22 and attending school on a full-time basis, or
over age 18 but permanently disabled before age 18.
The following lists the priority
of survivors unless you change the priority by filling out a form with the Pension
Office:
- surviving spouse;
- unmarried child or children either
under age 18 or between age 18 and 22, and attending school on a full-time basis,
or over age 18 but permanently disabled before age 18;
- dependent parent who was receiving
one-half of his or her support from you at the time of your death.
If there is no eligible survivor,
the balance of your contributions that have not been paid out in retirement benefit
will revert to your named beneficiary or your estate.
20. Are there any differences
in pension credit or eligibility for education support personnel?
Educational Support Personnel
accrue pension credit the same ways other state employees do.
There is a minimum pension
of one dollar per month per year of service.
If your pension is computed
under the old formula which was in place prior to July, 1976, including some service
time prior to June 1970, or you first entered State service after May 1970 - but
prior to July 1976 - the minimum pension payable (provided you have 15 years of
state service) is your monthly FAC or $150 per month, whichever is less.
If your pension is computed under
the old formula which was in place prior to July, 1976 and you do not have fifteen
years of state service, or you first entered state service after May 1970 but prior
to July 1976, the minimum pension payable is five dollars per month multiplied by
our years of service up to a maximum of thirty years.
If you are a regular part-time public
school cafeteria employee and you have at least fifteen years of earned credited
service, including some service before July 1971, you shall receive, beginning at
age 62, a minimum amount of $200 per month.
21. What benefits do I receive
as a retiree?
You will receive health and a death
benefit.
As a retiree you (or your beneficiary
receiving a pension) are eligible for the same health care choices as an active
state employee.Medicare eligible pensioners are entitled to Medicfill coverage,
which is the supplement to Medicare. Retirees must sign up for Medicare Parts A
& B to be eligible for free Medicfill coverage.
In 1991, the legislature passed a
prorated schedule for health care benefits for state employees hired after July
1, 1991: 50% for those employed 10-15 years; 75% for those employed from 15 to 20
years; and 100% for those employed 20 years or more. This new law does not affect
disability pensions.
If a pensioner moves out of state,
he or she will have to select Blue Cross Blue Shield Coverage.
Each pensioner is also covered by
a $7,000 (increased from $6,000 in 2001) free group life insurance policy. Survivors
who are drawing a pension are also covered by $7,000 of death benefit (effective
July 1, 2001).
22. How does Social Security work?
DSEA encourages you to seek definitive information about Social Security benefits
to which you are eligible directly from your local social security administration
office. In Wilmington call 573-6535; in Dover, 674-3610; and in Georgetown, 856-6301.
We are presenting here only generalized information.
The Social Security fund is financed
by equal contributions from employees and employers. Social Security tax (FICA)
is deducted from your pay. Your employer is required to match this contribution.
Your Social Security (SS) benefit
is based on the earnings of your whole working career with the lowest five years
of earnings dropped. Using Form SSA-7004PC, which is available from your local SS
office, you can request a computerized statement of earnings every three years.
DSEA encourages you to do this since you may not be able to have mistakes corrected
after the three-year period is over.
As you approach retirement, this
same form can be used to request an estimate of your SS benefit after retirement.
The spouse of an educational employee
covered under SS is eligible for one half of the SS benefit at age 62, unless the
spouse would make more by using his/her own SS account.
A non-employed spouse, for instance,
would be eligible for an amount equal to one half of the covered spouse's SS benefit.
Again, the covered employee must be 62 for the spouse to be eligible to draw on
his/her account.
If you are a disabled state retiree
and apply for a Social Security disability, you will find that the test is different:
for Social Security disability, you must not be able to perform any type of gainful
employment.
23. How does Medicare work?
Anyone who is eligible for Social Security (and over age 65) is eligible for Medicare.
Medicare is a Federal health insurance
program for people age 65 and older. The program has two parts, hospital insurance
(Part A) and medical insurance (Part B). Hospital insurance is free, having been
prepaid through part of your FICA tax contributions during your working years. It
pays for in-patient hospital care and follow-up care.
Medical insurance is financed by
monthly premiums from the retiree's SS check ($88.50/month in 2006). It pays for
doctors' services and many other medical services and items.
If you are drawing SS, you will automatically
be signed up for Medicare at age 65. If you are not yet retired, you should sign
up for Medicare three months before reaching age 65.
If you decline Part B of Medicare
(the medical insurance), you will only be able to sign up at future openings (January
1 through March 31 of each year) and, at that point, your monthly premium will be
higher.
Beginning January 1, 1989, Medicare
expanded to cover certain catastrophic health care costs. The new law limits the
amount you must pay for hospital care; physician services; medical supplies; outpatient
drugs; home-health, skilled nursing facilities; hospice coverage; breast cancer
screenings; and respite care.
Participation in Part D of Medicare
is not required of state employees because the state offers an equivalent or better
pharmacy benefit.
24. What should I know about taxes
during retirement? It's all good news... As noted in the beginning, after age
65 your personal exemptions on both state and federal taxes are increased whether
you're retired or not.
As a retiree under age 60, you are
eligible to receive a $2,000 exclusion from Delaware taxable income.
If you are a retiree age 60 or older,
you are eligible to receive a $12,500 exclusion from Delaware taxable income in
tax year 2000 and beyond.
If you are age 60 or older or disabled,
and have earned income less than $2,500, you are eligible for a $2,000 exclusion
from state income tax if your Federal and Delaware adjusted gross income does not
exceed $10,000. This exclusion is $4,000 for a married couple (when both are over
age 60) if earned income is less than $5,000 and the Federal and Delaware adjusted
gross income does not exceed $20,000. One spouse may qualify for this separately,
even if the other does not qualify and they use a joint return.
Your survivor is not subject to paying
Delaware estate taxes on your state pension.
If you file a federal tax return
as an "individual" and your combined income is between $25,000 and $34,000, you
may have to pay taxes on 50% of your Social Security benefit. If your combined income
is above $34,000, 85% of your Social Security benefit is subject to income tax.
If you file a joint return, you may have to pay taxes on 50% of your benefit if
you and your spouse have combined income that is between $32,000 and $44,000. If
your combined income is more than $44,000, 85% of your Social Security benefit is
subject to income tax.
25. If I leave state service,
can I get back the contributions to the pension system that were deducted from my
salary? Yes. You must call your local personnel office and ask them to send
you the appropriate form. Payment will not be made until four months following your
last pay period.
26. What interest will I be paid
on my pension contributions should I decide to withdraw them? 5%
27. If I leave state employment,
withdraw my contributions and subsequently return to state employment, can I have
my previous pension credit restored? Yes, but you must repay the contributions
withdrawn, plus interest, and, if not vested, you must work for five continuous
years.
28. Am I required to retire at
any age? No.
29. When is my pension vested?
Vesting means that you have invested time as an employee and therefore you are eligible
to receive a pension when you retire. Your pension will be vested when you have
accumulated five years of service time without any breaks in service. In other words,
you may leave state employment after five years and be eligible to receive some
prorated amount of pension at age 62.
info@dsea.org