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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsApril 2013

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The Delaware Public Employees Pension System ("DPERS") hereby give notice of its intention to adopt amended regulations pursuant to the General Assembly's delegation of authority to adopt such measures found at 29 Del.C. §8308(c)(1) and in compliance with Delaware's Administrative Procedures Act, 29 Del.C. §§10115 and 10117. The proposed regulations delete obsolete language, bring the regulations into compliance with changes in Federal Law, and clarify the definitions of casual/seasonal, regular part-time, substitute, and temporary employee. Identical update and formatting changes are made in each set of regulations. A chart outlining the nature of each change made to each section within each set of regulations follows each set of proposed regulations.
Accredited Private School or College”. The term "accredited private school or college" as used in Section 5501(b)(5), Chapter 55, Title 29 Del.C. §5501(b)(5) shall be interpreted to mean a private school or college which, during the time the pension applicant was employed there, was accredited by its Regional States Association of Colleges and Secondary Schools or whose students were routinely able to transfer to a school or college accredited by one of the aforesaid Regional Associations without loss of academic credit.
"Application for Benefits" The term "date on which the application for such benefit is filed" as used in Section 5531, Chapter 55, Title 29 Del.C. §5531, shall mean the date on which the written documentation is received by the Office of Pensions or by the employee's agency/school district.
"Casual/Seasonal" The term "casual or seasonal employee" as used in 29 Del.C. § 5502(a)(3) shall mean an employee employed by an agency under 29 Del C. §5903(17) who works less than thirty (30) hours per week, who works thirty (30) hours or more per week for a duration of not longer than twelve (12) months, or who works in a position not defined as a Full-time or Regular Part-Time pension creditable position according to the Rules & Regulations contained herein. Prior to a retiree who is under the age of 65 obtaining employment as a casual/seasonal employee, independent contractor, an employee of an independent contractor, or as a leased employee by the State of Delaware, there must have been a termination of employment for a period greater than six (6) months.
Course of Professional or Vocational Training”. The term "course of professional or vocational training" as used in Section 5501(b)(4), Chapter 55, Title 29 Del.C. §5501(b)(4) shall mean one leading to the attainment of a certificate, diploma or degree, and offered by a public or private, non-profit or proprietary institution as approved or accredited by an appropriate State agency or National/Regional organization. A person engaged in such course of instruction shall have been enrolled on a full-time basis, under regulations of the institution in effect at the time of attendance, and shall have completed the course of instruction in which enrolled, by continuous attendance, so as to complete the course of instruction on a scheduled date. Interruption of attendance may be occasioned only by reason of personal medical problems which militate against regular attendance or full-time military duty during war or other declared emergency.
Disability" as used in Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(b)(4), shall refer to that period of time during which an individual:
Is on a properly granted medical leave of absence from an employing State agency or school. Up to twelve (12) consecutive calendar months of leave may be granted by the employing agency or school. To extend the leave beyond twelve (12) consecutive calendar months, the employing agency or school must apply to the Medical Committee of the Board of Pension Trustees for an extension. Such application must be received by the Medical Committee of the Board of Pension Trustees not less than thirty (30) days prior to the expiration of said twelve (12) month period. Upon returning to State employment following a period of approved medical leave, an individual may secure restoration of his or her previously canceled pension credits by submitting medical evidence, of a nature satisfactory to the Executive Secretary to the Board of Pension Trustees, indicating that his or her disability terminated or that he or she was authorized to return to employment not more than four (4) months prior to the date of his or her actual return, or
Disability”. The term "physical or mental disability" as used in Section 5524(c), Chapter 55, Title 29 Del.C. §5524(c) shall mean a condition which causes an employee to be out of work for a least ninety (90) consecutive days from the inception of the disability to the date he or she returns to work.
“Disability”. REPEALED EFFECTIVE 11/21/74.
Full-Time or Annual Basis”. The term "employed on a full-time or annual basis" as used in Sections 5501(a)(1) and 5527(e), Chapter 55, Title 29 Del.C. §§5501(a)(1) and 5527(e), shall mean, for those employees hired:
Through July 31, 1973 employed for at least sixty-five (65) hours per month for at least 9 months during a period of twelve (12) consecutive months, and
On and after August 1, 1973 employed in a position which requires at least One-hundred thirty (130) hours per month for at least nine (9) months during a period of twelve (12) consecutive months.
Gubernatorial Appointment”. The term "An official appointed by the Governor" as used in Section 5502(a)(2), Chapter 55, Title 29 Del.C. §5502(a)(2), shall mean an official appointed directly by the Governor and confirmed by the Senate.
"Military Service Credit" The term "during time of war or national emergency" as used in Section 5501(b)(4), Chapter 55, Title 29 Del.C. §5501(b)(4), shall include all months commencing with the month of September, 1940 and continuing until the Board of Pension Trustees decides that a period of war or national emergency has ceased.
"Professional Educational Employment" The term "professional educational employment" as used in Section 5501(b)(5), Chapter 55, Title 29 Del.C. §5501(b)(5), shall mean full-time employment for another State, a municipality in another State, the Federal Government, or an accredited private school or college anywhere in the world, and shall not include part-time employment such as employment as a graduate teaching assistant. A school is accredited within the meaning of this Rule if the Delaware Department of Public Instruction allows teaching credit for service as a teacher in such school.
Regular Part-time Employee”. The term "regular part-time employee" as used in Sections 5501(a)(1) and 5527(e), Chapter 55, Title 29 Del.C. §§5501(e)(1) and 5527(e), shall mean an employee who either:
is employed in a position which requires at least fifty (50) hours per month for at least 9 months during a period of twelve (12) consecutive months, or
is employed in a position where the part-time rate for the position is at least $200 per month fifty (50) times hourly minimum wage for at least nine (9) months during a period of twelve (12) consecutive months.
In determining the period of nine (9) months during twelve (12) consecutive months in the case of a regular part-time teacher or other school employee who has worked for less than twelve (12) months and whose work year is established as September through June the school year, if such employee worked before and after any school breaks or vacations, the summer break time or vacation (July and August) said 2 months time would be considered as if the employee had worked.
"Substitute" The term "substitute employee" as used in 29 Del.C. §5502(a)(4) shall mean an employee in a school who is compensated on a daily basis pursuant to 14 Del.C. §1326. Prior to a retiree who is under the age of 65 obtaining employment as a substitute employee, independent contractor, an employee of an independent contractor, or as a leased employee by the State of Delaware, there must have been a termination of employment for a period greater than six (6) months.
Temporary Employee”. The term "temporary employee" as used in Section 5502(a)(3), Chapter 55, Title 29 Del.C. §5502(a)(3), shall mean:
Defining "year" for Employment of Pensioners. DELETED
an employee employed in a position for a specific project or task and for a finite period of time that will not exceed twelve (12) months duration. The twelve (12) month period includes employment pursuant to a temporary employment services agreement. Prior to a retiree who is under the age of 65 obtaining employment as a temporary employee, independent contractor, an employee of an independent contractor, or as a leased employee by the State of Delaware, there must have been a termination of employment for a period greater than six (6) months.
2.1 Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a plan participant which exceeds $150,000 (as indexed under section 401(a)(17)(B) of the Internal Revenue Code of 1986) shall be disregarded for purposes of determining benefits or employee contributions. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration, under this plan section the Rules of Section 414(g)(6) of the Internal Revenue Code of 1986 shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the year.
2.2 Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan participant which exceeds $200,000, as adjusted for cost-of-living increases in accordance with Internal Revenue Code section 401(a)(17)(B) of the Internal Revenue Code of 1986, may not be taken into account in determining benefits or employee contributions for any plan year. Annual compensation means compensation during the plan year or such other consecutive twelve (12) month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve (12) months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If the compensation for any prior determination period is taken into account in determining a plan participant's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period.
2.3 The limits referenced in paragraphs rules 2.1 and 2.2 above apply only to years beginning after December 31, 1995, and only to individuals who first become plan participants in plan years beginning on and after January 1, 1996. Individuals who become plan participants of before plan years beginning on and after January 1, 1996, are not subject to the limits of Internal Revenue Code section 401(a)(17) of the Internal Revenue Code of 1986. Instead, pursuant to section 13212(d)(3)(A) of the Omnibus Budget Reconciliation Act of 1993 (OBRA ‘93), and the regulations issued under that section, the annual compensation in effect under Internal Revenue Code section 401(a)(17) of the Internal Revenue Code of 1986 does not apply to any such plan participant in any plan year.
This section rule applies to distributions made on and after January 1, 1993. A distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a transfer made from the Pension Fund.
3.1 Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Internal Revenue Code section 401(a)(9) of the Internal Revenue Code of 1986; the portion of any distribution that is not includible in gross income; and any other distribution that is reasonably expected to total less than $200 during the year. Effective January 1, 2002, a portion of a distribution will not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such non-taxable portion may be transferred only to an individual retirement account or annuity described in Internal Revenue Code section 408(a) or (b) of the Internal Revenue Code of 1986, or to a qualified defined contribution plan described in Internal Revenue Code section 401(a) of the Internal Revenue Code of 1986, or, in addition, on or after January 1, 2007, to a qualified defined benefit plan described in Internal Revenue Code section 401(a) of the Internal Revenue Code of 1986 or to an annuity contract described in Internal Revenue Code section 403(b) of the Internal Revenue Code of 1986, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible.
3.2.1 An individual retirement account described in Internal Revenue Code section 408(a) of the Internal Revenue Code of 1986,
3.2.2 An individual retirement annuity described in Internal Revenue Code section 408(b) of the Internal Revenue Code of 1986,
3.2.3 An annuity plan described in Internal Revenue Code section 403(a) of the Internal Revenue Code of 1986,
3.2.4 A qualified trust described in Internal Revenue Code section 401(a) of the Internal Revenue Code of 1986,
3.2.5 Effective January 1, 2002, an annuity contract described in Internal Revenue Code section 403(b) of the Internal Revenue Code of 1986,
3.2.6 Effective January 1, 2002, a plan eligible under Internal Revenue Code section 457(b) of the Internal Revenue Code of 1986 that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into the plan from the Pension Fund, or
3.2.7 Effective January 1, 2008, a Roth IRA described in Internal Revenue Code section 408A of the Internal Revenue Code of 1986.
3.4 Distributee: A distributee includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Internal Revenue Code section 414(p) of the Internal Revenue Code of 1986. Effective July 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Internal Revenue Code section 401(a)(9)(E) of the Internal Revenue Code of 1986. However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.
4.2 For purposes of applying these limits only and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a limitation year, except as noted below and as permitted by Treasury Regulation Section §1.415(c)-(2), or successor regulation. Specifically, compensation will be defined as wages within the meaning of Internal Revenue Code section 3401(a) and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Internal Revenue Code sections 6041(d), 6051(a)(3) and 6052 of the Internal Revenue Code of 1986. Compensation will be determined without regard to any rules under Internal Revenue Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Internal Revenue Code section 3401(a)(2) of the Internal Revenue Code of 1986.
4.2.1 However, for limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for the an election under Internal Revenue Code sections 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) of the Internal Revenue Code of 1986. For limitation years beginning after December 30, 2000, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of Internal Revenue Code section 132(f)(4) of the Internal Revenue Code of 1986.
4.2.2 The definition of compensation will exclude employee contributions picked up under Internal Revenue Code section 414(h)(2) of the Internal Revenue Code of 1986.
4.3 Before January 1, 1995, a plan participant may not receive an annual benefit that exceeds the limits specified in Internal Revenue Code section 415(b) of the Internal Revenue Code of 1986, subject to the applicable adjustments in that section. On and after January 1, 1995, a plan participant may not receive an annual benefit that exceeds the dollar amount specified in Internal Revenue Code section 415(b)(1)(A) of the Internal Revenue Code of 1986, subject to the applicable adjustments in Internal Revenue Code section 415(b) of the Internal Revenue Code of 1986.
4.4 On and after January 1, 2009, for purposes of applying the limits under Internal Code section 415(b) (Limit) of the Internal Revenue Code of 1986, the following will apply:
4.4.3 Thereafter, in any subsequent limitation year, the plan participant's annual benefit including any automatic cost of living increase applicable shall be tested under the then applicable benefit limit including any adjustment to the Code section 415(b)(1)(A) of the Internal Revenue Code of 1986 dollar limit under Code section 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder.; and
4.5 In no event shall a plan participant's annual benefit payable from the Pension Fund in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Code section 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder. If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity or a qualified joint and survivor annuity, then the preceding sentence is applied by reducing the Code section 415(b) limit applicable at the annuity starting date adjusting the form of benefit to an actuarially equivalent amount (determined using the assumptions specified in Treasury Regulation § 1.415(b)-1(c)(2)(ii)) that takes into account the death additional benefits under the form of benefit as follows:
4.6.2 If payment pursuant to paragraph 4.6.1 will not avoid a contribution in excess of the limits imposed by Internal Revenue Code section 415(c) of the Internal Revenue Code of 1986, the Board may either reduce the plan participant's contribution to an amount within the limits of that section or refuse the plan participant's contribution.
4.7.1 The requirements of Internal Revenue Code section 415(b) of the Internal Revenue Code of 1986 are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Internal Revenue Code section 415(b) of the Internal Revenue Code of 1986, or
4.7.2 The requirements of Internal Revenue Code section 415(c) of the Internal Revenue Code of 1986 are met, determined by treating all such contributions as annual additions for purposes of Code section 415(c) of the Internal Revenue Code of 1986.
For purposes of applying subparagraph Rule 4.7.1 the Pension Fund will not fail to meet the reduced limit under Internal Revenue Code section 415(b)(2)(C) of the Internal Revenue Code of 1986 solely by reason of this paragraph 10.16.7 Rule 4.7, and for purposes of applying subparagraph Rule 4.7.2 the Pension Fund will not fail to meet the percentage limitation under Internal Revenue Code section 415(c)(1)(B) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7.
4.7.3 For purposes of this paragraph (g) Rule 4.7 the term "permissive service credit" means service credit.
Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term may include service credit for periods for which there is no performance of service, and, notwithstanding clause Rule 4.7.3.3, may include service credited in order to provide an increased benefit for service credit which a plan participant is receiving under the Pension Fund.
4.7.4.1 More than five (5) years of nonqualified service credit are taken into account for purposes of this paragraph Rule 4.7.4, or
4.7.4.2 Any nonqualified service credit is taken into account under this paragraph Rule 4.7 before the plan participant has at least five (5) years of participation under the Pension Fund.
4.7.5 For purposes of paragraph Rule 4.7.4, effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:
4.7.5.2 Service (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in clause (i)) of an education organization described in Internal Revenue Code section 170(b)(1)(A)(ii) of the Internal Revenue Code of 1986 which is a public, private, or sectarian school which provides elementary or secondary education (through Grade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed,
4.7.5.4 Military service (other than qualified military service under Internal Revenue Code section 414(u)) of the Internal Revenue Code of 1986 recognized by such governmental plan.
In the case of service described in clause Rules 4.7.5.1, 4.7.5.2, or 4.7.5.3, such service will be nonqualified service if recognition of such service would cause a plan participant to receive a retirement benefit for the same service under more than one plan.
4.7.6 In the case of a trustee-to-trustee transfer after December 31, 2001, to which Internal Revenue Code section 403(b)(13)(A) or 457(e)(17)(A) of the Internal Revenue Code of 1986 applies (without regard to whether the transfer is made between plans maintained by the same employer):
4.7.6.1 The limitations of subparagraph 10.16.7.5 Rule 4.7.4 will not apply in determining whether the transfer is for the purchase of permissive service credit, and
4.7.7 For an eligible plan participant, the limitation of Internal Revenue Code section 415(c)(1) of the Internal Revenue Code of 1986 shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of the Delaware Code as in effect on August 5, 1997. For purposes of this subparagraph Rule 4.7.7, an eligible plan participant is an individual who first became a plan participant in the Pension Fund before January 1, 1998.
4.8 For purposes of Internal Revenue Code section 415 of the Internal Revenue Code of 1986, the limitation year is the calendar year January 1 through December 31.
5.1 Effective December 12, 1994, notwithstanding any other provision of law, contributions, benefits and service credit with respect to qualified military service are governed by Internal Revenue Code Section 414(u) of the Internal Revenue Code of 1986 and the Uniformed Services Employment and Reemployment Rights Act of 1994. The Military Service credit provisions of this section are to be interpreted in accordance Section 5501(d), Chapter 55, Title 29 Del.C. §5501(d), so as not to diminish the rights granted under that section.
The plan year for the Pension Fund is the twelve (12) month period beginning July 1.
Deferral Committee. DELETED
Review of Disability Pensioners by Medical Committee. The frequency or review of disability pensioners under the age of sixty (60) shall be determined by the Medical Committee based on the relevant facts in individual situations.
8.1.1 If a former employee, who withdrew his or her accumulated contributions upon termination of service before January 1, 1986 again becomes an employee, his or her service credits to the date of termination shall be restored in accordance with the provisions of Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(b)(6) if he or she repays the total amount withdrawn within ninety 90 days after notification from the Office of Pensions.
8.1.2 If a former employee, who withdrew his or her accumulated contributions upon termination of service on or after January 1, 1986 again becomes an employee, his or her service credits to the date of termination shall be restored in accordance with the provisions of Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(b)(6) if he or she repays the total amount withdrawn, plus an interest rate charge as adopted by the Board, compounded annually, within ninety 90 days after notification from the Office of Pensions.
8.1.3 If the repayment occurs subsequent to ninety 90 days after notification from the Office of Pensions, the repayment shall be equal to the amount in (a)(1) or (a)(2) Rules 8.1.1 and 8.1.2 plus, for each full month or fraction thereof following the last day of the ninety 90 day period, interest rate charge as adopted by the Board.
8.1.5 Prior to January 1, 1986, the withdrawal form signed by the employee stated that there would be no interest rate charge upon repayment. This exemption was deleted effective January 1, 1986.
8.2 Repayment of Withdrawn Benefits by Employees in Active Service on May 1, 1972. DELETED RESERVED
8.3 Credit for Vacation and Accrued Sick Leave. An employee or his or her survivor may elect to use accrued periods of vacation and/or accrued sick leave as credited service under Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(d)(1), provided that an employee or his or her survivor may not receive a pension for any month during the periods of vacation and/or sick leave so used. Service so credited may be used to establish eligibility for a service, disability, survivor or vested pension.
8.4 Educational Employment Credited Service. Service rendered for the regular school year shall be equivalent to one year's credited service, but in no case shall more than one (1) year of service be creditable for all employment services in one (1) year. Employees who render service for a lesser period of time than that which is established for the regular school year shall receive credited service based upon the actual time employed as a percentage of the time established for a regular school year. A regular school year shall be based upon the period of time established by the State Board of Education or any institution of higher education in the State. This Rule and Regulation 8.4 is applicable to all retirements after June 30, 1985. In the case of a vested service pension, this Rule and Regulation 8.4 shall be applicable to those employees who terminated employment after June 30, 1985.
8.5.1 Report for and work in an official work place of the State or must report for and attend a school or course of instruction in the manner required by the school or other institution pursuant to the direction or authorization of his or her employer, and be directly accountable to the employer who supervises his or her work or course of instruction; or
8.5.2 Become eligible for Worker's Compensation in the course of employment as defined in subsection (a) Rule 8.4 hereof, in which event the employee's accrual of credited service shall continue only so long as he or she shall remain eligible for and be receiving Worker's Compensation and remains an employee as defined under Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(e).
8.6 Leave of Absence Without Pay. Any employee on an agency approved leave of absence without pay as of June 1, 1970, who again became an employee or pensioner under Chapter 55, Title 29 Del.C. Ch. 55 before June 1, 1971, shall not incur a break in service under Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(d)(6). Any employee granted a leave of absence without pay on or after June 1, 1971, shall not incur a break in service under Section 5501(b)(6), Chapter 55, Title 29 Del.C. §5501(d)(6), provided that the leave of absence without pay must be approved in writing by the employing agency or school board, and a copy thereof must be immediately filed with the Office of Pensions and provided further that the leave of absence without pay may not exceed a period of twelve (12) consecutive calendar months.
8.7 Credited Service. In no case shall more than one (1) year of credited service be granted for any employment services during any twelve (12) month period.
9.1 Erroneous Payments. Any overpayment of benefits to a pensioner shall be recovered by the State Pension Administrator who, after written notice to the pensioner, shall withhold the amount due from the pensioner's monthly pension benefit within a twelve (12) month period, provided that the amount of monthly withholding may not exceed 15% of the monthly pension benefit. If repayment of any overpayment amount will require more than twelve (12) months, the withholding shall be made at the rate of 15% of the monthly pension benefit until the overpayment has been recovered in full.
9.2 Recovery of Disability Pensioners. In the event a disability pension is terminated because of recovery prior to age sixty (60), the disability pensioner shall become eligible for a vested pension if his or her period of credited service, including the period for which he or she received disability pension payments, meets the service requirements for a vested pension specified in Section 29 Del.C. §5523 of the State Employees' Pension Plan at the time the disability pension commenced. Pensioner's period for which he or she received disability pension payments shall be used for eligibility purposes only and not for computation of monetary pension benefit.
9.3 Deductions on Terminal Pay. DELETED RESERVED
9.4 Effective Date of Pensions. Beginning with the month of May 1972, all pensions shall become effective on the first day of the month. Under Section 5531, Chapter 55, Title 29 Del.C. §5531, a monthly benefit shall not be payable for any period earlier than the first day of the second month preceding the date on which application for such benefit is filed as defined in Rule and Regulation 10.2.
9.4.1 Deceased Pensioner Monthly Benefit and Survivor's Effective Date of Pension. Beginning with the month of May, 1972, the full pension benefit shall be payable for the month in which a pensioner's death occurs and shall be payable to the pensioner or his or her estate. Survivor's monthly pension benefit, if any, shall become effective the first day of the next month following the month in which a pensioner's death occurs.
9.5 Reduction Factors for Survivor's Pensions Payable Under Section 5528, Chapter 55, Title 29 Del.C. §5528 The Reduction Factors for Survivor's Pensions shall be adopted by resolution of the Board. Such benefits will not be subject to employer discretion.
9.6 Rights of Pensioners, other than disability pensioners, who return to active employment. Apensioner, other than a disability pensioner, who again becomes an employee under Section 5501, Chapter 55, Title 29 Del.C. §5501, shall be eligible for an additional pension for each month of credited service during his or her period of re employment, with such additional pension computed as follows:
9.6.1 Employees who return for subsequent terms of employment which equal or exceed five (5) years and who waive the pension benefits accepted upon initial retirement and repay all benefit monies received from the prior retirement(s) shall be eligible for a pension computed in accordance with all provisions of Chapter 55, Title 29 Del.C. Ch. 55
9.6.2 Employees who return for subsequent terms of employment which total less than 5 years or employees who elect not to re-retire under (a) 9.6.1 above shall be eligible for an additional pension for each month of credited service during his or her period of re-employment, with such additional pension computed in accordance with all provisions of Chapter 55, Title 29 Del.C. Ch. 55, provided, however, that the original pension payable before he or she again became an employee shall not be recomputed and shall be payable in the same amount on the date of his or her subsequent retirement plus any post retirement increases he or she would have been eligible to receive during his or her period of active employment.
9.7 Rights of Disability Pensioners who return to active employment. A disability pension constitutes an individual's involuntary retirement; therefore, a disability pensioner who is reinstated as an employee under Chapter 55, 29 Del.C. §5501(e), shall be eligible for his or her subsequent retirement to be considered as a regular retirement under the provisions of the pension law in effect at the time of his or her subsequent retirement.
9.8 Application of Minimums. The minimum pension amounts in Sections 5527(b) and (c), Chapter 55, Title 29 Del.C. §5527(b) and (c), shall only apply to an employee who is employed on a full-time or annual basis. The minimum pension amounts payable under Section 5527(b) and (c) 29 Del.C. §5527(b) and (c) to an employee who is employed on a full-time or annual basis for less than sixty (60) months during the period of sixty (60) consecutive months used to determine his or her final average compensation shall be determined by multiplying the applicable minimum by the ratio of the number of months employed on a full-time or annual basis to sixty (60).
9.10 Integration with Social Security Service and Survivor Pensions. In applying the 75% maximum benefit limitation established in Section 5527(a)(2)(b), Chapter 55, Title 29 Del.C. §5527(g)(1) the old age insurance benefit under the Federal Social Security Act, shall be the lesser of the member's imputed benefit using the applicable Social Security benefit table adopted by the Board of Pension Trustees, the member's actual age sixty-two (62) Social Security benefit or if the member is receiving Survivor benefits from Social Security, the age sixty-two (62) benefit based on the member's work history as estimated by Social Security.
9.11 Integration with Social Security Disability Pensions. In applying the 75% maximum benefit limitation established in Section 5527(a)(2)(c), Chapter 55, Title 29 Del.C. §5527(g)(2), the disability insurance benefit or the old age insurance benefit under the Federal Social Security Act shall be the lesser of the member's imputed benefit using the applicable Social Security benefit table adopted by the Board of Pension Trustees or the member's initial Social Security disability benefit.
9.12 Buy-In Cost Factors For Computing Lump Sum Payments To Purchase Credit Under Section 5501(b)(8), Chapter 55, Title 29 Del.C. §5501(d)(8). The Buy-In Cost Factors shall be adopted by the Board of Pension Trustees. If a disabled employee desires to purchase service credit under this Rule and Regulation 9.12, his or her actual age will be increased by ten (10) years (but not to more than age 65).
Inception of Benefits. DELETED
10.3.2 The plan participant's entire interest must be distributed over the plan participant's life or the lives of the plan participant and a designated survivor under state law, or over a period not extending beyond the life expectancy of the plan participant or of the plan participant and a designated survivor under state law. Death benefits must be distributed in accordance with Internal Revenue Code section 401(a)(9) of the Internal Revenue Code of 1986, including the incidental death benefit requirement in Internal Revenue Code section 401(a)(9)(G) of the Internal Revenue Code of 1986, and the regulations implementing that section.
10.3.5.1 Distributed (in accordance with federal regulations under section 401(a)(9) of the Internal Revenue Code of 1986) over the life or life expectancy of the designated survivor under state law, with the distributions beginning no later than December 31 of the calendar year immediately following the calendar year of the plan participant's death, or
11.1 Plan Terminations. In the event of a full or partial termination of, or a complete discontinuance of employer contributions to, the Delaware State Retirement Fund, all accrued benefits which have been vested according to the provisions of Ch. 55, Title 29 Del.C. §5523, shall be 100% vested and nonforfeitable to the extent funded and to the extent required by federal law.
In conformity with Internal Revenue Code section 401(a)(g)(8) of the Internal Revenue Code of 1986, forfeitures of benefits by members or former members of the Plan will not be used to pay benefit increases. However, such forfeitures shall be used to reduce employer contributions.
13.2 Normal retirement age for purposes of Internal Revenue Code section 457(b) of the Internal Revenue code of 1986 to the extent this plan's normal retirement age is referenced in a deferred compensation plan will be the earliest date when the employee has satisfied the requirements of Section 5522(a)(1), (a)(2), or (a)(3), Chapter 55, Title 29, Del.C.
13.3 For purposes of Internal Revenue Code section 402(l) of the Internal Revenue code of 1986, normal retirement age will be the earliest date when the employee has satisfied the requirements of Section 5522(a)(1), (a)(2), or (a)(3), Chapter 55, Title 29 Del.C. §5522(a)(1), (a)(2), or (a)(3)
The board may not engage in a transaction prohibited by Internal Revenue Code section 503(b) of the Internal Revenue code of 1986.
15.0 QEBA Qualified Excess Benefit Arrangement.
Pursuant to the enactment of any necessary legislative authority, the Board may establish a qualified excess benefit arrangement (QEBA) under Internal Revenue Code section 415(m) of the Internal Revenue code of 1986 pursuant to the terms of a separate plan document adopted by the Board.
In applying the provisions of 13 Del.C. §§212 and 214, the Board shall interpret the term "spouse" in the provisions of Delaware law that apply to each state pension and benefit set forth in 29 Del.C. §8308(b) in accordance with the federal Defense of Marriage Act to the extent required by that law, federal preemption principles, and guidance issued by the Internal Revenue Service and to the extent necessary in order to preserve the qualified governmental plan status of each such state pension plan and benefit under sections 401(a) and 414(d) of the Internal Revenue Code of 1986 or such other provision of the Internal Revenue Code as applicable. This provision shall apply in the same manner to the terms husband, wife, surviving spouse, survivor, widow, widower, and other terms, whether or not gender-specific, that denote or depend upon a spousal relationship.
Application for Benefits”. The term "date on which the application for such benefit is filed" as used in Section 5606, Chapter 56, Title 29 Del.C. §5606 shall mean the date on which the written documentation is received by the Office of Pensions or the Office of the Court of jurisdiction.
Compensation”. The word term "compensation" as used in Chapter 56, Title 29 Del.C. Ch. 56 shall mean total compensation prior to any payroll deductions, including but not limited to, deductions for contributions to the State's Deferred Compensation Program pursuant to Section 6055, Chapter 60, Title 29 Del.C. §6055 Compensation shall not include payments, which are in the nature of reimbursements or allowances for expenses.
2.1 Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a plan participant which exceeds $150,000 (as indexed under Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986) shall be disregarded for purposes of determining benefits or employee contributions. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration under this plan section the Rules of section 414(gq)(6) of the Internal Revenue Code of 1986 shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the year.
2.2 Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan participant which exceeds $200,000, as adjusted for cost-of-living increases in accordance with Internal Revenue Code section 401(a)(17)(B) Internal Revenue Code of 1986, may not be taken into account in determining benefits or employee contributions for any plan year. Annual compensation means compensation during the plan year or such other consecutive twelve (12) month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve (12) months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If the compensation for any prior determination period is taken into account in determining a plan participant's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period.
2.3 The limits referenced in paragraphs Rules 2.1 and 2.2 above apply only to years beginning after December 31, 1995, and only to individuals who first become plan participants in plan years beginning on and after January 1, 1996. Individuals who become plan participants of before plan years beginning on and after January 1, 1996, are not subject to the limits of Internal Revenue Code section 401(a)(17) Internal Revenue Code of 1986. Instead, pursuant to section 13212(d)(3)(A) of Omnibus Budget Reconciliation Act of 1993 (“OBRA ‘93”), and the regulations issued under that section, the annual compensation in effect under Internal Revenue Code section 401(a)(17) Internal Revenue Code of 1986 does not apply to any such plan participant in any plan year.
This section Rule applies to distributions made on and after January 1, 1993. A distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a transfer made from the Pension Fund.
3.1 Eligible rollover distribution:. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Internal Revenue Code section 401(a)(9) Internal Revenue Code of 1986; the portion of any distribution that is not includible in gross income; and any other distribution that is reasonably expected to total less than $200 during the year. Effective January 1, 2002, a portion of a distribution will not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such non-taxable portion may be transferred only to an individual retirement account or annuity described in Internal Revenue Code section 408(a) or (b) Internal Revenue Code of 1986, or to a qualified defined contribution plan described in Internal Revenue Code section 401(a) Internal Revenue Code of 1986, or, in addition, on or after January 1, 2007, to a qualified defined benefit plan described in Internal Revenue Code section 401(a) Internal Revenue Code of 1986 or to an annuity contract described in Internal Revenue Code section 403(b) Internal Revenue Code of 1986, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible.
3.2 Eligible retirement plan:. An eligible retirement plan is any of the following that accepts the distributee's eligible rollover distribution:
3.2.1 aAn individual retirement account described in Internal Revenue Code section 408(a) Internal Revenue Code of 1986,
3.2.2 aAn individual retirement annuity described in Internal Revenue Code section 408(b) Internal Revenue Code of 1986,
3.2.3 aAn annuity plan described in Internal Revenue Code section 403(a) Internal Revenue Code of 1986,
3.2.4 aA qualified trust described in Internal Revenue Code section 401(a) Internal Revenue Code of 1986,
3.2.5 effective January 1, 2002, an annuity contract described in Internal Revenue Code section 403(b) Internal Revenue Code of 1986,
3.2.6 eEffective January 1, 2002, a plan eligible under Internal Revenue Code section 457(b) Internal Revenue Code of 1986 that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into the plan from the Pension Fund, or
3.2.7 eEffective January 1, 2008, a Roth IRA described in Internal Revenue Code section 408A Internal Revenue Code of 1986.
3.4 Distributee:. A distributee includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Internal Revenue Code section 414(p) Internal Revenue Code of 1986. Effective July 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Internal Revenue Code section 401(a)(9)(E) Internal Revenue Code of 1986. However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.
4.2 For purposes of applying these limits only and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a limitation year, except as noted below and as permitted by Treasury Regulation section §1.415(c)-2), or successor regulation. Specifically, compensation will be defined as wages within the meaning of Internal Revenue Code section 3401(a) Internal Revenue Code of 1986 and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Internal Revenue Code section 6041(d), 6051(a)(3) and 6052 Internal Revenue Code of 1986. Compensation will be determined without regard to any rules under Internal Revenue Code section 3401(a) Internal Revenue Code of 1986 that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Internal Revenue Code section 3401(a)(2) Internal Revenue Code of 1986.
4.2.1 However, for limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for the an election under Internal Revenue Code sections 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) Internal Revenue Code of 1986. For limitation years beginning after December 30, 2000, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of Internal Revenue Code section 132(f)(4) Internal Revenue Code of 1986.
4.2.2 The definition of compensation will exclude employee contributions picked up under Internal Revenue Code section 414(h)(2) Internal Revenue Code of 1986.
4.2.46 “Back pay”, within the meaning of Treasury Regulation. §1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.
4.3 Before January 1, 1995, a plan participant may not receive an annual benefit that exceeds the limits specified in Internal Revenue Code section 415(b) Internal Revenue Code of 1986, subject to the applicable adjustments in that section. On and after January 1, 1995, a plan participant may not receive an annual benefit that exceeds the dollar amount specified in Internal Revenue Code section 415(b)(1)(A) Internal Revenue Code of 1986, subject to the applicable adjustments in Internal Revenue Code section 415(b) Internal Revenue Code of 1986.
4.4 On and after January 1, 2009, for purposes of applying the limits under Internal Code section 415(b) (Limit) Internal Revenue Code of 1986, the following will apply:
4.5 In no event shall a plan participant's annual benefit payable from the Pension Fund in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Code section 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder. If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity or a qualified joint and survivor annuity, then the preceding sentence is applied by reducing the Code section 415(b) limit applicable at the annuity starting date to adjusting the form of benefit an actuarially equivalent amount [determined using the assumptions specified in Treasury Regulation §1.415(b)-1(c)(2)(ii)] that takes into account the death benefits under the form of benefit as follows:
4.6.2 If payment pursuant to paragraph 4.6.1 will not avoid a contribution in excess of the limits imposed by Internal Revenue Code section 415(c) Internal Revenue Code of 1986, the Board may either reduce the plan participant's contribution to an amount within the limits of that section or refuse the plan participant's contribution.
4.7.1 The requirements of Internal Revenue Code section 415(b) Internal Revenue Code of 1986 are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Internal Revenue Code section 415(b) Internal Revenue Code of 1986, or
4.7.2 The requirements of Internal Revenue Code section 415(c) Internal Revenue Code of 1986 are met, determined by treating all such contributions as annual additions for purposes of Code section 415(c) Internal Revenue Code of 1986.
For purposes of applying subparagraph Rule 4.7.1 the Pension Fund will not fail to meet the reduced limit under Internal Revenue Code section 415(b)(2)(C) Internal Revenue Code of 1986 solely by reason of this paragraph 4.7, and for purposes of applying subparagraph Rule 4.7.2 the Pension Fund will not fail to meet the percentage limitation under Internal Revenue Code section 415(c)(1)(B) Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7.
4.7.3 For purposes of this paragraph (g) Rule 4.7 the term "permissive service credit" means service credit:
Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term may include service credit for periods for which there is no performance of service, and, notwithstanding clause Rule 4.7.3.3, may include service credited in order to provide an increased benefit for service credit which a plan participant is receiving under the Pension Fund.
4.7.4.1 More than five (5) years of nonqualified service credit are taken into account for purposes of this paragraph Rule 4.7.4, or
4.7.4.2 Any nonqualified service credit is taken into account under this paragraph Rule 4.7 before the plan participant has at least five years of participation under the Pension Fund.
4.7.5 For purposes of paragraph Rule 4.7.4, effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:
4.7.5.2 Service (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in clause (i)) of an education organization described in Internal Revenue Code section 170(b)(1)(A)(ii) Internal Revenue Code of 1986 which is a public, private, or sectarian school which provides elementary or secondary education (through grade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed,
4.7.5.4 Military service (other than qualified military service under Internal Revenue Code section 414(u)) Internal Revenue Code of 1986 recognized by such governmental plan.
4.7.6 In the case of service described in clause Rules 4.7.5.1, 4.7.5.2, or 4.7.5.3, such service will be nonqualified service if recognition of such service would cause a plan participant to receive a retirement benefit for the same service under more than one plan.
4.7.6.1 In the case of a trustee-to-trustee transfer after December 31, 2001, to which Internal Revenue Code section 403(b)(13)(A) or 457(e)(17)(A) Internal Revenue Code of 1986 applies (without regard to whether the transfer is made between plans maintained by the same employer):
4.7.6.1. The limitations of subparagraph Rule 4.7.5 will not apply in determining whether the transfer is for the purchase of permissive service credit, and
4.7.6.2 For an eligible plan participant, the limitation of Internal Revenue Code section 415(c)(1) Internal Revenue Code of 1986 shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of the Delaware Code as in effect on August 5, 1997. For purposes of this subparagraph Rule 4.7.6.2 4.7.7, an eligible plan participant is an individual who first became a plan participant in the Pension Fund before January 1, 1998.
4.8 For purposes of Internal Revenue Code section 415 Internal Revenue Code of 1986, the limitation year is the calendar year January 1 through December 31.
5.1 Effective December 12, 1994, notwithstanding any other provision of law, contributions, benefits and service credit with respect to qualified military service are governed by Internal Revenue Code section 414(u) Internal Revenue Code of 1986 and the Uniformed Services Employment and Reemployment Rights Act of 1994. The Military Service credit provisions of this section are to be interpreted so as not to diminish any other rights relating to military service that may be granted under state law.
The plan year for the Pension Fund is the twelve (12) - month period beginning July 1.
Appeals from Predecessor Boards or Commissions. DELETED RESERVED
8.1 Erroneous Payments. Any overpayment of benefits to a pensioner shall be recovered by the State Pension Administrator who, after written notice to the pensioner, shall withhold the amount due from the pensioner's monthly pension benefit within a twelve (12) month period, provided that the amount of the monthly withholding may not exceed 15% of the monthly pension benefit. If repayment of any overpayment amount will require more than twelve (12) months, the withholding shall be made at the rate of 15% of the monthly pension benefit until the overpayment has been recovered in full.
8.2 Effective Date of Pensions. All pensions shall become effective on the first (1st) day of the month. Under Section 5606(a), Chapter 56, Title 29 Del.C. §5606(a) a monthly benefit shall not be payable for any period earlier than the first (1st) day of the second (2nd) month preceding the date on which application for such benefit is filed as defined in Rule and Regulation 10.2.
8.5 Inception of Benefits. DELETED RESERVED
9.3.5.1 Distributed (in accordance with federal regulations under section 401(a)(9) of the Internal Revenue Code of 1986) over the life or life expectancy of the designated survivor under state law, with the distributions beginning no later than December 31 of the calendar year immediately following the calendar year of the plan participant's death, or
10.1 Plan Terminations. In the event of a full or partial termination of, or a complete discontinuance of employer contributions to, the Delaware State Judiciary Retirement Fund, all accrued benefits which have been vested according to the provisions of Chapter 56, Title 29 Del.C. Ch. 56 shall be 100% vested and nonforfeitable to the extent funded.
In conformity with Internal Revenue Code section 401(a)(g)(8) Internal Revenue Code of 1986, forfeitures of benefits by members or former members of the Plan will not be used to pay benefit increases. However, such forfeitures shall be used to reduce employer contributions.
12.3 For purposes of Internal Revenue Code section 402(l) Internal Revenue Code of 1986, normal retirement age will be the earliest date when the employee has satisfied the requirements of Section 5602(a) or 5612(a), Chapter 56, Title 29 Del.C. ch. 56 §5602(a) or 5612(a)
The board may not engage in a transaction prohibited by Internal Revenue Code section 503(b) Internal Revenue Code of 1986.
14.0 Qualified Excess Benefit Arrangement QEBA.
Pursuant to the enactment of any necessary legislative authority, the Board may establish a qualified excess benefit arrangement (QEBA) under Internal Revenue Code section 415(m) Internal Revenue Code of 1986 pursuant to the terms of a separate plan document adopted by the Board.
In applying the provisions of 13 Del.C. §§212 and 214, the Board shall interpret the term "spouse" in the provisions of Delaware law that apply to each state pension and benefit set forth in 29 Del.C. §8308(b) in accordance with the federal Defense of Marriage Act to the extent required by that law, federal preemption principles, and guidance issued by the Internal Revenue Service and to the extent necessary in order to preserve the qualified governmental plan status of each such state pension plan and benefit under sections 401(a) and 414(d) of the Internal Revenue Code of 1986 or such other provision of the Internal Revenue Code as applicable. This provision shall apply in the same manner to the terms husband, wife, surviving spouse, survivor, widow, widower, and other terms, whether or not gender-specific, that denote or depend upon a spousal relationship.
"Application for Benefits" The term "date on which the application for such benefit is filed" as used in Section 8376(a), Subchapter III, Chapter 83, Title 11 Del.C. §8376(a) shall mean the date on which the written documentation is received by the Office of Pensions or the Office of State Police.
"Gubernatorial Appointment" The term "An official appointed by the Governor" as used in 8323(c), Subchapter II and Section 8352(2), Subchapter III, Chapter 83, Title 11 Del.C. §§8323(c)(2) and 8352(2) shall mean an official appointed directly by the Governor and confirmed by the Senate.
"Salary" The word term "salary" as used in Chapter 83, Title 11 Del.C. Ch. 83 shall mean total salary prior to any payroll deductions, including but not limited to, deductions for contributions to the State's Deferred Compensation Program pursuant to Chapter 60, Title 29 Del.C. Ch. 60A. Salary shall not include payments in the nature of reimbursement or allowance for expenses.
2.1 Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a plan participant which exceeds $150,000 (as indexed under Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986) shall be disregarded for purposes of determining benefits or employee contributions. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration under this plan section, the Rules of Section 414(gq)(6) of the Internal Revenue Code of 1986 shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the year.
2.2 Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan participant which exceeds $200,000, as adjusted for cost-of-living increases in accordance with Internal Revenue Code Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986, may not be taken into account in determining benefits or employee contributions for any plan year. Annual compensation means compensation during the plan year or such other consecutive twelve (12)-month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve (12) months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If the compensation for any prior determination period is taken into account in determining a plan participant's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period.
2.3 The limits referenced in paragraphs 10.14.1 2.1 and 10.14.2 2.2 above apply only to years beginning after December 31, 1995, and only to individuals who first become plan participants in plan years beginning on and after January 1, 1996. Individuals who become plan participants of before plan years beginning on and after January 1, 1996, are not subject to the limits of Internal Revenue Code Ssection 401(a)(17) of the Internal Revenue Code. Instead, pursuant to Ssection 13212(d)(3)(A) of OBRA ‘93 Omnibus Budget Reconciliation Act of 1993, and the regulations issued under that section, the annual compensation in effect under Internal Revenue Code Ssection 401(a)(17) of the Internal Revenue Code of 1986 does not apply to any such plan participant in any plan year.
This section Rule applies to distributions made on and after January 1, 1993. A distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a transfer made from the Pension Fund.
3.1 Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Internal Revenue Code Ssection 401(a)(9) of the Internal Revenue Code of 1986; the portion of any distribution that is not includible in gross income; and any other distribution that is reasonably expected to total less than $200 during the year. Effective January 1, 2002, a portion of a distribution will not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such non-taxable portion may be transferred only to an individual retirement account or annuity described in Internal Revenue Code Ssections 408(a) or (b) of the Internal Revenue Code of 1986, or to a qualified defined contribution plan described in Internal Revenue Code Section 401(a), or, in addition, on or after January 1, 2007, to a qualified defined benefit plan described in Internal Revenue Code Section 401(a) or to an annuity contract described in Internal Revenue Code Section 403(b), that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible.
3.2 Eligible retirement plan:. An eligible retirement plan is any of the following that accepts the distributee's eligible rollover distribution:
3.2.1 aAn individual retirement account described in Internal Revenue Code Ssection 408(a) of the Internal Revenue Code of 1986,
3.2.2 aAn individual retirement annuity described in Internal Revenue Code Ssection 408(b) of the Internal Revenue Code of 1986,
3.2.3 aAn annuity plan described in Internal Revenue Code Ssection 403(a) of the Internal Revenue Code of 1986,
3.2.4 aA qualified trust described in Internal Revenue Code Ssection 401(a) of the Internal Revenue Code of 1986,
3.2.5 eEffective January 1, 2002, an annuity contract described in Internal Revenue Code Ssection 403(b) of the Internal Revenue Code of 1986,
3.2.6 eEffective January 1, 2002, a plan eligible under Internal Revenue Code Ssection 457(b) of the Internal Revenue Code of 1986 that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into the plan from the Pension Fund, or
3.2.7 eEffective January 1, 2008, a Roth IRA described in section 408A of the Internal Revenue Code Section 408A of 1986.
3.4 Distributee: A distributee includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Internal Revenue Code Ssection 414(p) of the Internal Revenue Code of 1986. Effective July 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Internal Revenue Code Ssection 401(a)(9)(E) of the Internal Revenue Code of 1986. However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.
4.2 For purposes of applying these limits only and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a limitation year, except as noted below and as permitted by Treasury Regulation Section §1.415(c)-(2), or successor regulation. Specifically, compensation will be defined as wages within the meaning of Internal Revenue Code Ssection 3401(a) of the Internal Revenue Code of 1986 and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Internal Revenue Code Ssection 6041(d), 6051(a)(3) and 6052 of the Internal Revenue Code of 1986. Compensation will be determined without regard to any rules under Internal Revenue Code Ssection 3401(a) of the Internal Revenue Code of 1986 that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Internal Revenue Code Ssection 3401(a)(2) of the Internal Revenue Code of 1986.
4.2.1 However, for limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for the an election under Internal Revenue Code Ssections 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) of the Internal Revenue Code of 1986. For limitation years beginning after December 30, 2000, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of Internal Revenue Code Ssection 132(f)(4) of the Internal Revenue Code of 1986.
4.2.2 The definition of compensation will exclude employee contributions picked up under Internal Revenue Code Ssection 414(h)(2) of the Internal Revenue Code of 1986.
4.2.4 “Back pay”, within the meaning of Treas. Reg. Treasury Regulation §1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.
4.3 Before January 1, 1995, a plan participant may not receive an annual benefit that exceeds the limits specified in Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986, subject to the applicable adjustments in that section. On and after January 1, 1995, a plan participant may not receive an annual benefit that exceeds the dollar amount specified in Internal Revenue Code Ssection 415(b)(1)(A) of the Internal Revenue Code of 1986, subject to the applicable adjustments in Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986.
4.4 On and after January 1, 2009, for purposes of applying the limits under Internal Code Ssection 415(b) (Limit) of the Internal Revenue Code of 1986, the following will apply:
4.4.1 aA plan participant's applicable Limit will be applied to the plan participant's annual benefit in the first limitation year without regard to any automatic cost of living increases;
4.4.2 tTo the extent the plan participant's annual benefit equals or exceeds the Limit, the plan participant will no longer be eligible for cost of living increases until such time as the benefit plus the accumulated increases are less than the Limit; and
4.4.3 tThereafter, in any subsequent limitation year, the plan participant's annual benefit including any automatic cost of living increase applicable shall be tested under the then applicable benefit limit including any adjustment to the Code Ssection 415(b)(1)(A) of the Internal Revenue Code of 1986 dollar limit under Code Ssection 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder; and.
4.5 In no event shall a plan participant's annual benefit payable from the Pension Fund in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Code Ssection 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder. If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity of a qualified joint and survivor annuity, then the preceding sentence is applied by reducing the Code Section 415(b) limit applicable at the annuity starting date adjusting the form of benefit to an actuarially equivalent amount ([determined using the assumptions specified in Treasury Regulation §1.415(b)-1(c)(2)(ii))] that takes into account the death additional benefits under the form of benefit. as follows:
4.6.2 If payment pursuant to paragraph Rule 4.6.1 will not avoid a contribution in excess of the limits imposed by Internal Revenue Code Ssection 415(c) of the Internal Revenue Code of 1986, the Board may either reduce the plan participant's contribution to an amount within the limits of that section or refuse the plan participant's contribution.
4.7.1 tThe requirements of Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986 are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986, or
4.7.2 tThe requirements of Internal Revenue Code Ssection 415(c) of the Internal Revenue Code of 1986 are met, determined by treating all such contributions as annual additions for purposes of Code Ssection 415(c) of the Internal Revenue Code of 1986.
For purposes of applying subparagraph Rule 4.7.1 the Pension Fund will not fail to meet the reduced limit under Internal Revenue Code Ssection 415(b)(2)(C) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7, and for purposes of applying subparagraph Rule 4.7.2 the Pension Fund will not fail to meet the percentage limitation under Internal Revenue Code Ssection 415(c)(1)(B) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7.
4.7.3 For purposes of this paragraph (g) Rule 4.7 the term "permissive service credit" means service credit:
Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term may include service credit for periods for which there is no performance of service, and, notwithstanding clause Rule 4.7.3.3, may include service credited in order to provide an increased benefit for service credit which a plan participant is receiving under the Pension Fund.
4.7.4.1 More than five (5) years of nonqualified service credit are taken into account for purposes of this paragraph Rule 4.7.4, or
4.7.4.2 aAny nonqualified service credit is taken into account under this paragraph Rule 4.7 before the plan participant has at least five (5) years of participation under the Pension Fund.
4.7.5 For purposes of paragraph Rule 4.7.4, effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:
4.7.5.2 Service (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in clause (i) Rule 4.7.5.1) of an education organization described in Internal Revenue Code Ssection 170(b)(1)(A)(ii) of the Internal Revenue Code of 1986 which is a public, private, or sectarian school which provides elementary or secondary education (through gGrade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed,
4.7.5.4 Military service (other than qualified military service under Internal Revenue Code Ssection 414(u) of the Internal Revenue Code of 1986) recognized by such governmental plan.
In the case of service described in clause Rules 4.7.5.1, 4.7.5.2, or 4.7.5.3, such service will be nonqualified service if recognition of such service would cause a plan participant to receive a retirement benefit for the same service under more than one plan.
4.7.6 In the case of a trustee-to-trustee transfer after December 31, 2001, to which Internal Revenue Code Ssection 403(b)(13)(A) or 457(e)(17)(A) of the Internal Revenue Code of 1986 applies (without regard to whether the transfer is made between plans maintained by the same employer):
4.7.6.1 tThe limitations of subparagraph 4.7.5 Rule 4.7.4 will not apply in determining whether the transfer is for the purchase of permissive service credit, and
4.7.6.2 tThe distribution rules applicable under federal law to the Pension Fund will apply to such amounts and any benefits attributable to such amounts.
4.7.7 For an eligible plan participant, the limitation of Internal Revenue Code Ssection 415(c)(1) of the Internal Revenue Code of 1986 shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of the Delaware Code as in effect on August 5, 1997. For purposes of this subparagraph Rule 4.7.7, an eligible plan participant is an individual who first became a plan participant in the Pension Fund before January 1, 1998.
4.8 For purposes of section 415 of the Internal Revenue Code Section 415 of 1986, the limitation year is the calendar year January 1 through December 31.
5.1 Effective December 12, 1994, notwithstanding any other provision of law, contributions, benefits and service credit with respect to qualified military service are governed by Internal Revenue Code Ssection 414(u) of the Internal Revenue Code of 1986 and the Uniformed Services Employment and Reemployment Rights Act of 1994. The Military Service credit provisions of this section are to be interpreted so as not to diminish any other rights relating to military service that may be granted under state law., including 11 Del.C., ch. 88 §8369 and 11 Del.C., ch. 88 §8375.
The plan year for the Pension Fund is the twelve-month twelve (12) -month period beginning July 1.
Administration
Appeals from Predecessor Boards or Commissions. DELETED
If a former employee, who withdrew his or her accumulated contributions upon termination of service again becomes an employee, his or her service credits to the date of termination shall be restored in accordance with the provisions of Section 11 Del.C., ch. 83 §8364(b)(3), Subchapter III, Chapter 83, Title 11, Del.C., if he or she repays the total amount withdrawn, plus an interest rate charge as adopted by the Board, compounded annually, within ninety (90) days after notification from the Office of Pensions.
If the repayment occurs subsequent to ninety (90) days after notification from the Office of Pensions, the repayment shall be equal to the amount in (a) Rule 7.1.1 plus, for each full month or fraction thereof following the last day of the ninety (90)-day period, interest rate charge as adopted by the Board.
8.1 Erroneous Payments. Any overpayment of benefits to a pensioner shall be recovered by the State Pension Administrator who, after written notice to the pensioner, shall withhold the amount due from the pensioner's monthly pension benefit within a twelve (12) month period, provided that the amount of monthly withholding may not exceed 15% of the monthly benefit. If repayment of any overpayment amount will require more than twelve (12) months, the withholding shall be made at the rate of 15% of the monthly pension benefit until the overpayment has been recovered in full.
Commencing July 27, 1983, all pensions awarded under Subchapter II, Chapter 83, Title 11, Del.C., ch. 83 shall become effective on the date of the individual's retirement.
All pensions awarded under Subchapter III, Chapter 83, Title 11, Del.C., ch. 83 shall become effective on the first day of the month. Under Section 11 Del.C., ch. 83 §8376(a), a monthly benefit shall not be payable for any period earlier than the first (1st) day of the second (2nd) month preceding the date on which application for such benefit is filed as defined in Rule and Regulation 10.2.
9.2 The Pension Fund will pay all benefits in accordance with a good faith interpretation of Ssection 401(a)(9) of the Internal Revenue Code of 1986 and the regulations under that section.
9.3.2 The plan participant's entire interest must be distributed over the plan participant's life or the lives of the plan participant and a designated survivor under state law, or over a period not extending beyond the life expectancy of the plan participant or of the plan participant and a designated survivor under state law. Death benefits must be distributed in accordance with Internal Revenue Code Ssection 401(a)(9) of the Internal Revenue Code of 1986, including the incidental death benefit requirement in Internal Revenue Code Ssection 401(a)(9)(G) of the Internal Revenue Code of 1986, and the regulations implementing that section.
9.3.5.1 dDistributed (in accordance with federal regulations under section 401(a)(9) of the Internal Revenue Code of 1986) over the life or life expectancy of the designated survivor under state law, with the distributions beginning no later than December 31 of the calendar year immediately following the calendar year of the plan participant's death, or
9.3.5.2 dDistributed by December 31 of the calendar year containing the fifth (5th) anniversary of the plan participant's death.
9.4 The amount of an annuity paid to a plan participant's Bbeneficiary may not exceed the maximum determined under the incidental death benefit requirement of section 401(a)(9)(G) of the Internal Revenue Code of 1986.
10.1 Plan Terminations. In the event of a full or partial termination of, or a complete discontinuance of employer contributions to, the Delaware State Retirement Pension Fund, all accrued benefits which have been vested according to the provisions of Ch. 83, Title 11, Del.C., ch. 83 shall be 100% vested and nonforfeitable to the extent funded and to the extent required by federal law.
In conformity with Internal Revenue Code Ssection 401(a)(g)(8) of the Internal Revenue Code of 1986, forfeitures of benefits by members or former members of the Plan will not be used to pay benefit increases. However, such forfeitures shall be used to reduce employer contributions.
12.2 Normal retirement age for purposes of section 457(b) of the Internal Revenue Code Section 457 of 1986 to the extent this plan's normal retirement age is referenced in a deferred compensation plan will be the earliest date when the employee has satisfied the requirements of Section 11 Del.C., ch. 83 §§8323(a) or 8363(a), Chapter 83, Title 11, Del.C.
12.3 For purposes of Internal Revenue Code Ssection 402(l) of the Internal Revenue Code of 1986, normal retirement age will be the earliest date when the employee has satisfied the requirements of Section 11 Del.C., ch. 83 §§8323(a) or 8363(a), Chapter 83, Title 11, Del.C.
The board may not engage in a transaction prohibited by Internal Revenue Code Ssection 503(b) of the Internal Revenue Code.
In applying the provisions of 13 Del.C. §§212 and 214, the Board shall interpret the term "spouse" in the provisions of Delaware law that apply to each state pension and benefit set forth in 29 Del.C. §8308(b) in accordance with the federal Defense of Marriage Act to the extent required by that law, federal preemption principles, and guidance issued by the Internal Revenue Service and to the extent necessary in order to preserve the qualified governmental plan status of each such state pension plan and benefit under sections 401(a) and 414(d) of the Internal Revenue Code of 1986 or such other provision of the Internal Revenue Code as applicable. This provision shall apply in the same manner to the terms husband, wife, surviving spouse, survivor, widow, widower, and other terms, whether or not gender-specific, that denote or depend upon a spousal relationship.
Accredited Private School or College”. The term "accredited private school or college" as used in Section 29 Del.C. §5551(4)(d), Chapter 55A, Title 29, Del.C. shall be interpreted to mean a private school or college which, during the time the pension applicant was employed there, was accredited by its Regional States Association of Colleges and Secondary Schools or whose students were routinely able to transfer to a school or college accredited by one of the aforesaid Regional Associations without loss of academic credit.
Application for Benefits”. The term "date on which the application for such benefit is filed" as used in Section 5581, Chapter 55A, Title 29 Del.C. § 5581 shall mean the date on which the written documentation is received by the Office of Pensions or by the individual's employer.
"Disability" as used in Section 29 Del.C. §5551(4)(c)(i), Chapter 55A, Title 29, Del.C., shall refer to that period of time during which an individual:
Is on a properly granted medical leave of absence from his or her employer. The employer may grant up to twelve (12) consecutive calendar months of leave. To extend the leave beyond twelve (12) consecutive calendar months, the employer must apply to the Medical Committee of the Board of Pension Trustees for an extension. Such application must be received by the Medical Committee of the Board of Pension Trustees not less than thirty (30) days prior to the expiration of said twelve (12-)month period. Upon returning to employment following a period of approved medical leave, an individual may secure restoration of his or her previously canceled pension credits by submitting medical evidence, of a nature satisfactory to the Executive Secretary to the Board of Pension Trustees, indicating that his or her disability terminated or that he or she was authorized to return to employment not more than four (4) months prior to the date of his or her actual return, or
Full Time or Annual Basis”. The term "employed on a full time or annual basis" as used in Section 29 Del.C. §5551(5)(a), Chapter 55A, Title 29, Del.C., shall mean employment in a permanent position which requires at least 130 hours per month for at least 9 months during a period of 12 consecutive months.
Gubernatorial Appointment”. The term "An official appointed by the Governor" as used in Section 5552(2), Chapter 55A, Title 29 Del.C. §5552(2), shall mean an official appointed directly by the Governor and confirmed by the Senate.
Regular Part Time Employee”. The term "regular part time employee" as used in Section 29 Del.C. §5551(5)(a), Chapter 55A, Title 29, Del.C., shall mean an employee who either:
is employed in a position which requires at least fifty (50) hours per month for at least nine (9) months during a period of twelve (12) consecutive months, or
Temporary Employee”. The term "temporary employee" as used in Section 5552(3), Chapter 55A, Title 29 Del.C. §5552(3), shall mean an employee who is not employed on a "full time or annual basis" or as a "regular part time" employee as such terms are defined in Rules and Regulation 10.5 and 10.6.
2.1 Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a plan participant which exceeds $150,000 (as indexed under Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986) shall be disregarded for purposes of determining benefits or employee contributions. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration under this plan section, the Rules of Section 414(gq)(6) of the Internal Revenue Code of 1986 shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the year.
2.2 Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan participant which exceeds $200,000, as adjusted for cost-of-living increases in accordance with Internal Revenue Code Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986, may not be taken into account in determining benefits or employee contributions for any plan year. Annual compensation means compensation during the plan year or such other consecutive twelve (12)-month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve (12) months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If the compensation for any prior determination period is taken into account in determining a plan participant's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period.
2.3 The limits referenced in paragraphs 2.1 and 2.2 above apply only to years beginning after December 31, 1995, and only to individuals who first become plan participants in plan years beginning on and after January 1, 1996. Individuals who become plan participants of before plan years beginning on and after January 1, 1996, are not subject to the limits of Internal Revenue Code Ssection 401(a)(17) of the Internal Revenue Code. Instead, pursuant to Ssection 13212(d)(3)(A) of OBRA ‘93 Omnibus Budget Reconciliation Act of 1993, and the regulations issued under that section, the annual compensation in effect under Internal Revenue Code Ssection 401(a)(17) of the Internal Revenue Code of 1986 does not apply to any such plan participant in any plan year.
3.1 Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under Internal Revenue Code Ssection 401(a)(9) of the Internal Revenue Code of 1986; the portion of any distribution that is not includible in gross income; and any other distribution that is reasonably expected to total less than $200 during the year. Effective January 1, 2002, a portion of a distribution will not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such non-taxable portion may be transferred only to an individual retirement account or annuity described in Internal Revenue Code Ssection 408(a) or (b) of the Internal Revenue Code of 1986, or to a qualified defined contribution plan described in Internal Revenue Code Ssection 401(a) of the Internal Revenue Code of 1986, or, in addition, on or after January 1, 2007, to a qualified defined benefit plan described in Internal Revenue Code Ssection 401(a) of the Internal Revenue Code of 1986 or to an annuity contract described in Internal Revenue Code Ssection 403(b) of the Internal Revenue Code of 1986, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible.
3.2 Eligible retirement plan:. An eligible retirement plan is any of the following that accepts the distributee's eligible rollover distribution:
3.2.1 aAn individual retirement account described in Internal Revenue Code Ssection 408(a) of the Internal Revenue Code of 1986,
3.2.2 aAn individual retirement annuity described in Internal Revenue Code Ssection 408(b) of the Internal Revenue Code,
3.2.3 aAn annuity plan described in Internal Revenue Code Ssection 403(a) of the Internal Revenue Code of 1986,
3.2.4 aA qualified trust described in Internal Revenue Code Ssection 401(a) of the Internal Revenue Code of 1986,
3.2.5 eEffective January 1, 2002, an annuity contract described in Internal Revenue Code Ssection 403(b) of the Internal Revenue Code,
3.2.6 eEffective January 1, 2002, a plan eligible under Internal Revenue Code Ssection 457(b) of the Internal Revenue Code of 1986 that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into the plan from the Pension Fund, or
3.2.7 eEffective January 1, 2008, a Roth IRA described in section 408A of the Internal Revenue Code Section 408A of 1986.
3.4 Distributee: A distributee includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Internal Revenue Code Ssection 414(p) of the Internal Revenue Code of 1986. Effective July 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Internal Revenue Code Ssection 401(a)(9)(E) of the Internal Revenue Code of 1986. However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.
4.2 For purposes of applying these limits only and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a limitation year, except as noted below and as permitted by Treasury Regulation Section §1.415(c)-(2), or successor regulation. Specifically, compensation will be defined as wages within the meaning of Internal Revenue Code Ssection 3401(a) of the Internal Revenue Code of 1986 and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Internal Revenue Code Ssections 6041(d), 6051(a)(3) and 6052 of the Internal Revenue Code of 1986. Compensation will be determined without regard to any rules under Internal Revenue Code Ssection 3401(a) of the Internal Revenue Code of 1986 that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Internal Revenue Code Ssection 3401(a)(2) of the Internal Revenue Code of 1986.
4.2.1 However, for limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for the an election under Internal Revenue Code Ssections 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) of the Internal Revenue Code of 1986. For limitation years beginning after December 30, 2000, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of Internal Revenue Code Ssection 132(f)(4) of the Internal Revenue Code of 1986.
4.2.2 The definition of compensation will exclude employee contributions picked up under Internal Revenue Code Ssection 414(h)(2) of the Internal Revenue Code of 1986.
4.2.4 Back pay, within the meaning of Treas. Reg. Treasury Regulation § 1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.
An employee who is in qualified military service (within the meaning of section 414(u)(1) of the Internal Revenue Code of 1986) shall be treated as receiving compensation from the employer during such period of qualified military service equal to (i) the compensation the employee would have received during such period if the employee were not in qualified military service, determined based on the rate of pay the employee would have received from the employer but for the absence during the period of qualified military service, or (ii) if the compensation the employee would have received during such period was not reasonably certain, the employee's average compensation from the employer during the twelve (12) month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service).
4.3 Before January 1, 1995, a plan participant may not receive an annual benefit that exceeds the limits specified in Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986, subject to the applicable adjustments in that section. On and after January 1, 1995, a plan participant may not receive an annual benefit that exceeds the dollar amount specified in Internal Revenue Code Ssection 415(b)(1)(A) of the Internal Revenue Code of 1986, subject to the applicable adjustments in Internal Revenue Code Section § 415(b).
4.4 On and after January 1, 2009, for purposes of applying the limits under Internal Code Ssection 415(b) (Limit) of the Internal Revenue Code of 1986, the following will apply:
4.4.1 aA plan participant's applicable Limit will be applied to the plan participant's annual benefit in the first limitation year without regard to any automatic cost of living increases;
4.4.2 tTo the extent the plan participant's annual benefit equals or exceeds the Limit, the plan participant will no longer be eligible for cost of living increases until such time as the benefit plus the accumulated increases are less than the Limit; and
4.4.3 tThereafter, in any subsequent limitation year, the plan participant's annual benefit including any automatic cost of living increase applicable shall be tested under the then applicable benefit limit including any adjustment to the Code Ssection 415(b)(1)(A) of the Internal Revenue Code of 1986 dollar limit under Code Ssection 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder; and.
4.5 In no event shall a plan participant's annual benefit payable from the Pension Fund in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Code Ssection 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder. If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity or a qualified joint and survivor annuity, then the preceding sentence is applied by reducing the Code Section 415(b) limit applicable at the annuity starting date adjusting the form of benefit to an actuarially equivalent amount ([determined using the assumptions specified in Treasury Regulation §1.415(b)-1(c)(2)(ii))] that takes into account the death additional benefits under the form of benefit. as follows:
For a benefit paid in a form to which section 417(e)(3) of the Internal Revenue Code of 1986 does not apply (generally, a monthly benefit), the actuarially equivalent straight life annuity benefit that is the greater of:
4.6.2 If payment pursuant to paragraph Rule 4.6.1 will not avoid a contribution in excess of the limits imposed by Internal Revenue Code Ssection 415(c) of the Internal Revenue Code of 1986, the Board may either reduce the plan participant's contribution to an amount within the limits of that section or refuse the plan participant's contribution.
4.7.1 tThe requirements of Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986 are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986, or
4.7.2 tThe requirements of Internal Revenue Code Ssection 415(c) of the Internal Revenue Code of 1986 are met, determined by treating all such contributions as annual additions for purposes of Code Section 415(c).
For purposes of applying subparagraph Rule 4.7.1 the Pension Fund will not fail to meet the reduced limit under Internal Revenue Code Ssection 415(b)(2)(C) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7, and for purposes of applying subparagraph Rule 4.7.2 the Pension Fund will not fail to meet the percentage limitation under Internal Revenue Code Ssection 415(c)(1)(B) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7.
4.7.3 For purposes of this paragraph (g) Rule 4.7 the term "permissive service credit" means service credit:
4.7.3.1 rRecognized by the Pension Fund for purposes of calculating a plan participant's benefit under the Pension Fund,
4.7.3.2 wWhich such plan participant has not received under the Pension Fund, and
4.7.3.3 wWhich such plan participant may receive only by making a voluntary additional contribution, in an amount determined under the Pension Fund, which does not exceed the amount necessary to fund the benefit attributable to such service credit.
4.7.4.1 mMore than five years of nonqualified service credit are taken into account for purposes of this paragraph Rule 4.7.4, or
4.7.4.2 aAny nonqualified service credit is taken into account under this paragraph Rule 4.7 before the plan participant has at least five (5) years of participation under the Pension Fund.
4.7.5 For purposes of paragraph 4.7.4.2 Rule 4.7.4, effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:
4.7.5.1 sService (including parental, medical, sabbatical, and similar leave) as an employee of the Government of the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than military service or service for credit which was obtained as a result of a repayment described in Internal Revenue Code Ssection 415(k)(3) of the Internal Revenue Code of 1986),
4.7.5.2 sService (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in clause (i) Rule 4.7.5.1) of an education organization described in Internal Revenue Code Ssection 170(b)(1)(A)(ii) of the Internal Revenue Code of 1986 which is a public, private, or sectarian school which provides elementary or secondary education (through gGrade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed,
4.7.5.3 sService as an employee of an association of employees who are described in clause Rule 4.7.5.1, or
4.7.5.4 mMilitary service (other than qualified military service under Internal Revenue Code Ssection 414(u)) of the Internal Revenue Code of 1986 recognized by such governmental plan.
In the case of service described in clause Rules 4.7.5.1, 4.7.5.2, or 4.7.5.3 such service will be nonqualified service if recognition of such service would cause a plan participant to receive a retirement benefit for the same service under more than one plan.
4.7.6 In the case of a trustee-to-trustee transfer after December 31, 2001, to which Internal Revenue Code Ssection 403(b)(13)(A) or 457(e)(17)(A) of the Internal Revenue Code of 1986 applies (without regard to whether the transfer is made between plans maintained by the same employer):
4.7.6.1 the limitations of subparagraph 4.7.5 Rule 4.7.4 will not apply in determining whether the transfer is for the purchase of permissive service credit, and
4.7.7 For an eligible plan participant, the limitation of Internal Revenue Code Ssection 415(c)(1) of the Internal Revenue Code of 1986 shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of the Delaware Code as in effect on August 5, 1997. For purposes of this subparagraph 4.7.7, an eligible plan participant is an individual who first became a plan participant in the Pension Fund before January 1, 1998.
4.7.8 For purposes of section 415 of the Internal Revenue Code Section 415 of 1986, the limitation year is the calendar year January 1 through December 31.
Effective December 12, 1994, notwithstanding any other provision of law, contributions, benefits and service credit with respect to qualified military service are governed by Internal Revenue Code Ssection 414(u) of the Internal Revenue Code of 1986 and the Uniformed Services Employment and Reemployment Rights Act of 1994. The Military Service credit provisions of this section are to be interpreted in accordance with 29 Delaware Code, Section Del.C., §5551(4)(d) so as not to diminish the rights granted under that section.
The plan year for the Pension Fund is the twelve-month twelve (12) month period beginning July 1.
8.1.1 If a former employee, who withdrew his or her accumulated contributions upon termination of service after the date of affiliation with this Plan by the employer, again becomes an employee, his or her service credits to the date of termination shall be restored in accordance with the provisions of Section 29 Del.C. §5551(4)(iiic), Chapter 55A, Title 29, Del.C. if he or she repays the total amount withdrawn, plus an interest rate charge as adopted by the Board, compounded annually, within 90 days after notification from the Office of Pensions.
8.1.2 If the repayment occurs subsequent to 90 days after notification from the Office of Pensions, the repayment shall be equal to the amount in (a) plus Rule 8.1.1, for each full month or fraction thereof following the last day of the 90-day period, interest rate charge as adopted by the Board.
8.2 Credit for Vacation and Accrued Sick Leave. An employee or his or her survivor may elect to use accrued periods of vacation and/or accrued sick leave as credited service under Section 5551(4), Chapter 55A, Title 29 Del.C. §5551(4), provided that an employee or his or her survivor may not receive a pension for any month during the periods of vacation and/or sick leave so used. Service so credited may be used to establish eligibility for a service, disability, survivor or vested pension.
8.4 Leave of Absence Without Pay. Any employee granted a leave of absence without pay shall not incur a break in service under Section 29 Del.C. §5551(4)(c)(i), Chapter 55A, Title 29, Del.C., provided that the leave of absence without pay must be approved in writing and validated by the employer and a copy thereof must be immediately filed with the Office of Pensions and provided further that the leave of absence without pay may not exceed a period of 12 consecutive calendar months.
9.1 Erroneous Payments. Any overpayment of benefits to a pensioner shall be recovered by the State Pension Administrator who, after written notice to the pensioner, shall withhold the amount due from the pensioner's monthly pension benefit within a twelve (12) month period, provided that the amount of monthly withholding may not exceed 15% of the monthly pension benefit. If repayment of any overpayment amount will require more than twelve (12) months, the withholding shall be made at the rate of 15% of the monthly pension benefit until the overpayment has been recovered in full.
Recovery of Disability Pensioners. DELETED
9.2 Effective Date of Pensions. Under Section 5581, Chapter 55A, Title 29 Del.C. §5581 a monthly benefit shall not be payable for any period earlier than the first day of the second month preceding the date on which application for such benefit is filed as defined in Rule and Regulation 10.2.
9.4 Reduction Factors for Survivor's Pensions Payable Under Section 29 Del.C. §5578(d), Chapter 55A, Title 29, Del.C. The Reduction Factors for Survivor's Pensions shall be adopted by resolution of the Board. Such benefits will not be subject to employer discretion.
9.5 Rights of Pensioner, other than disability pensioners, who return to active employment. A pensioner, other than a disability pensioner, who again becomes an employee under Chapter 55(A), Title 29 Del.C. Ch. 55A shall be eligible for an additional pension for each month of credited service during his or her period of re-employment, with such additional pension computed as follows:
9.5.1 Employees who return for subsequent terms of employment which equal or exceed five (5) years and who waive the pension benefits accepted upon initial retirement and repay all benefit monies received from the prior retirement(s) shall be eligible for a pension computed in accordance with all provisions of Chapter 55(A), Title 29, Del.C., ch. 55A.
9.5.2 Employees who return for subsequent terms of employment which total less than 5 years or employees who elect not to re-retire under (a) Rule 9.5.1 above, shall be eligible for an additional pension for each month of credited service during his or her period of re employment, with such additional pension computed in accordance with all provisions of Chapter 55(A), Title 29 Del.C. Ch. 55A provided, however, that the original pension payable before he or she again became an employee shall not be recomputed and shall be payable in the same amount on the date of his or her subsequent retirement plus any post retirement increases he or she would have been eligible to receive during his or her period of active employment.
9.6 Rights of Disability Pensioners who return to active employment. A disability pension constitutes an individual's involuntary retirement; therefore, a disability pensioner who is re instated reinstated as an employee under Chapter 55(A), Title 29 Del.C. Ch. 55A, shall be eligible for his or her subsequent retirement to be considered as a regular retirement under the provisions of the pension law in effect at the time of his or her subsequent retirement.
9.8 Integration with Social Security Service and Survivor Pensions. In applying the 75% maximum benefit limitation established in Section 5577(1), Chapter 55A, Title 29 Del.C. §5577(1), the old age insurance benefit under the Federal Social Security Act shall be the lesser of the member's imputed benefit using the applicable Social Security benefit table adopted by the Board of Pension Trustees, the member's actual age 62 Social Security benefit, or if the member is receiving survivor benefits from Social Security, the age 62 benefit based on the member's work history as estimated by Social Security.
9.9 Integration with Social Security Disability Pensions. In applying the 75% maximum benefit limitation established in Section 5577(2), Chapter 55A, Title 29 Del.C.§5577(2), the disability insurance benefit or the old age insurance benefit under the Federal Social Security Act shall be the lesser of the member's imputed benefit using the applicable Social Security benefit table adopted by the Board of Pension Trustees or the member's initial Social Security disability benefit.
9.10 Buy-In Cost Factors For Computing Lump Sum Payments To Purchase Credit Under Section 29 Del.C. §5501 (4)(d), Chapter 55A, Title 29, Del.C.
9.11 The Buy-In Cost Factors shall be adopted by the Board of Pension Trustees.
9.12 If a disabled employee desires to purchase service credit under this Rule and Regulation 9.12, his or her actual age will be increased by ten (10) years (but not to more than age 65).
9.13 Inception of Benefits. DELETED
10.2 The Pension Fund will pay all benefits in accordance with a good faith interpretation of Ssection 401(a)(9) of the Internal Revenue Code of 1986 and the regulations under that section.
10.3.2 The plan participant's entire interest must be distributed over the plan participant's life or the lives of the plan participant and a designated survivor under state law, or over a period not extending beyond the life expectancy of the plan participant or of the plan participant and a designated survivor under state law. Death benefits must be distributed in accordance with Internal Revenue Code Ssection 401(a)(9) of the Internal Revenue Code of 1986, including the incidental death benefit requirement in Internal Revenue Code Ssection 401(a)(9)(G) of the Internal Revenue Code of 1986, and the regulations implementing that section.
10.3.5.1 dDistributed (in accordance with federal regulations under section 401(a)(9) of the Internal Revenue Code of 1986) over the life or life expectancy of the designated survivor under state law, with the distributions beginning no later than December 31 of the calendar year immediately following the calendar year of the plan participant's death, or
10.3.5.2 dDistributed by December 31 of the calendar year containing the fifth anniversary of the plan participant's death.
11.1 Plan Terminations. In the event of a full or partial termination of, or a complete discontinuance of employer contributions to, the Delaware State Retirement Fund, all accrued benefits which have been vested according to the provisions of Ch. 55A, Title 29 Del.C. Ch. 55A shall be 100% vested and nonforfeitable to the extent funded and to the extent required by federal law.
In conformity with Internal Revenue Code Ssection 401(a)(g)(8) of the Internal Revenue Code of 1986, forfeitures of benefits by members or former members of the Plan will not be used to pay benefit increases. However, such forfeitures shall be used to reduce employer contributions.
13.2 Normal retirement age for purposes of section 457(b) of the Internal Revenue Code Section 457 of 1986 to the extent this plan's normal retirement age is referenced in a deferred compensation plan will be the earliest date when the employee has satisfied the requirements of Section 5572(a), Chapter 55A, Title 29, Del.C. §5572(a).
13.3 For purposes of Internal Revenue Code Ssection 402(l) of the Internal Revenue Code of 1986, normal retirement age will be the earliest date when the employee has satisfied the requirements of Section 5572(a), Chapter 55A, Title 29, Del.C. §5572(a).
The board may not engage in a transaction prohibited by Internal Revenue Code Ssection 503(b) of the Internal Revenue Code of 1986.
In applying the provisions of 13 Del.C. §§212 and 214, the Board shall interpret the term "spouse" in the provisions of Delaware law that apply to each state pension and benefit set forth in 29 Del.C. §8308(b) in accordance with the federal Defense of Marriage Act to the extent required by that law, federal preemption principles, and guidance issued by the Internal Revenue Service and to the extent necessary in order to preserve the qualified governmental plan status of each such state pension plan and benefit under sections 401(a) and 414(d) of the Internal Revenue Code of 1986 or such other provision of the Internal Revenue Code as applicable. This provision shall apply in the same manner to the terms husband, wife, surviving spouse, survivor, widow, widower, and other terms, whether or not gender-specific, that denote or depend upon a spousal relationship.
Application for Benefits” The term “date on which the application for such benefit is filed” as used in Section 8826(a), Chapter 88, Title 11, Del.C. §8826(a) shall mean the date on which the written documentation is received by the Office of Pensions or by the individual’s employer.
Gubernatorial Appointment” The term “An official appointed by the Governor” as used in Section 8802(2), Chapter 88, Title 11 Del.C. §8802(1) shall mean an official appointed directly by the Governor and confirmed by the Senate.
Salary” The word “salary” as used in Chapter 88, Title 11, Del.C Ch. 88 shall mean total salary prior to any payroll deductions, including but not limited to, deductions for contributions to the State’s Deferred Compensation Program pursuant to Section 6055, Chapter 60, Title 29, Del.C. §6055. Salary shall not include payments in the nature of reimbursement or allowance for expenses.
2.1 Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a plan participant which exceeds $150,000 (as indexed under Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986) shall be disregarded for purposes of determining benefits or employee contributions. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration under this plan section, the Rules of Section 414(gq)(6) of the Internal Revenue Code of 1986 shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the year.
2.2 Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan participant which exceeds $200,000, as adjusted for cost-of-living increases in accordance with Internal Revenue Code Ssection 401(a)(17)(B) of the Internal Revenue Code of 1986, may not be taken into account in determining benefits or employee contributions for any plan year. Annual compensation means compensation during the plan year or such other consecutive twelve (12)-month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve (12) months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If the compensation for any prior determination period is taken into account in determining a plan participant's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period.
2.3 The limits referenced in paragraphs Rules 2.1 and 2.2 above apply only to years beginning after December 31, 1995, and only to individuals who first become plan participants in plan years beginning on and after January 1, 1996. Individuals who become plan participants of before plan years beginning on and after January 1, 1996, are not subject to the limits of Internal Revenue Code Ssection 401(a)(17) of the Internal Revenue Code of 1986. Instead, pursuant to Ssection 13212(d)(3)(A) of Omnibus Budget Reconciliation Act of 1993 (“OBRA ‘93”), and the regulations issued under that section, the annual compensation in effect under Internal Revenue Code Ssection 401(a)(17) of the Internal Revenue Code of 1986 does not apply to any such plan participant in any plan year.
3.1 This section Rule applies to distributions made on and after January 1, 1993. A distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a transfer made from the Pension Fund.
3.1.1 Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Internal Revenue Code Ssection 401(a)(9); the portion of any distribution that is not includible in gross income; and any other distribution that is reasonably expected to total less than $200 during the year. Effective January 1, 2002, a portion of a distribution will not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such non-taxable portion may be transferred only to an individual retirement account or annuity described in Internal Revenue Code Ssections 408(a) or (b), or to a qualified defined contribution plan described in Internal Revenue Code Ssection 401(a), or, in addition, on or after January 1, 2007, to a qualified defined benefit plan described in Internal Revenue Code Ssection 401(a) or to an annuity contract described in Internal Revenue Code Ssection 403(b), that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible.
3.1.2 Eligible retirement plan: An eligible retirement plan is any of the following that accepts the distributee's eligible rollover distribution:
3.1.2.1 aAn individual retirement account described in Internal Revenue Code Section 408(a) of the Internal Revenue Code of 1986,
3.1.2.2 aAn individual retirement annuity described in Internal Revenue Code Section 408(b) of the Internal Revenue Code of 1986,
3.1.2.3 aAn annuity plan described in Internal Revenue Code Ssection 403(a) of the Internal Revenue Code of 1986,
3.1.2.4 aA qualified trust described in Internal Revenue Code Ssection 401(a) of the Internal Revenue Code of 1986,
3.1.2.5 eEffective January 1, 2002, an annuity contract described in Internal Revenue Code Ssection 403(b) of the Internal Revenue Code of 1986,
3.1.2.6 eEffective January 1, 2002, a plan eligible under Internal Revenue Code Ssection 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into the plan from the Pension Fund, or
3.1.2.7 eEffective January 1, 2008, a Roth IRA described in Internal Revenue Code Section 408A.
3.1.3 Effective January 1, 2002, the definition of eligible rollover distribution also includes a distribution to a surviving spouse, or to a spouse or former spouse who is an alternate payee under a domestic relations order, as defined in Internal Revenue Code Ssection 414(p).
3.1.4 Distributee: A distributee includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Internal Revenue Code Ssection 414(p). Effective July 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Internal Revenue Code Ssection 401(a)(9)(E). However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.
3.1.5 Direct Rollover. A direct rollover is a payment by the Pension Fund to the eligible retirement plan specified by the distributee.
4.2 For purposes of applying these limits only and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a limitation year, except as noted below and as permitted by Treasury Regulation Section §1.415(c)-2), or successor regulation. Specifically, compensation will be defined as wages within the meaning of Internal Revenue Code Ssection 3401(a) of the Internal Revenue Code of 1986 and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Internal Revenue Code Ssection 6041(d), 6051(a)(3) and 6052 of the Internal Revenue Code of 1986. Compensation will be determined without regard to any rules under Internal Revenue Code Ssection 3401(a) of the Internal Revenue Code of 1986 that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Internal Revenue Code Ssection 3401(a)(2) of the Internal Revenue Code of 1986.
4.2.1 However, for limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for the an election under Internal Revenue Code Ssections 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) of the Internal Revenue Code of 1986. For limitation years beginning after December 30, 2000, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of Internal Revenue Code Ssection 132(f)(4) of the Internal Revenue Code of 1986.
4.2.2 The definition of compensation will exclude employee contributions picked up under Internal Revenue Code Ssection 414(h)(2) of the Internal Revenue Code of 1986.
4.2.4 “Back pay”, within the meaning of Treas. Reg. Treasury Regulation §1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.
4.3 Before January 1, 1995, a plan participant may not receive an annual benefit that exceeds the limits specified in Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986, subject to the applicable adjustments in that section. On and after January 1, 1995, a plan participant may not receive an annual benefit that exceeds the dollar amount specified in Internal Revenue Code Ssection 415(b)(1)(A) of the Internal Revenue Code of 1986, subject to the applicable adjustments in Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986.
4.4 On and after January 1, 2009, for purposes of applying the limits under Internal Code Ssection 415(b) (Limit) of the Internal Revenue Code of 1986, the following will apply:
4.4.1 aA plan participant's applicable Limit will be applied to the plan participant's annual benefit in the first limitation year without regard to any automatic cost of living increases;
4.4.2 tTo the extent the plan participant's annual benefit equals or exceeds the Limit, the plan participant will no longer be eligible for cost of living increases until such time as the benefit plus the accumulated increases are less than the Limit; and
4.4.3 tThereafter, in any subsequent limitation year, the plan participant's annual benefit including any automatic cost of living increase applicable shall be tested under the then applicable benefit limit including any adjustment to the Code Ssection 415(b)(1)(A) of the Internal Revenue Code of 1986 dollar limit under Code Ssection 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder; and.
4.5 In no event shall a plan participant's annual benefit payable from the Pension Fund in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Code Ssection 415(d) of the Internal Revenue Code of 1986 and the regulations thereunder. If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity or a qualified joint and survivor annuity, then the preceding sentence is applied by reducing the Code Section 415(b) limit applicable at the annuity starting date adjusting the form of benefit to an actuarially equivalent amount ([determined using the assumptions specified in Treasury Regulation §1.415(b)-1(c)(2)(ii))] that takes into account the death additional benefits under the form of benefit. as follows:
4.6.2 If payment pursuant to paragraph Rule 4.6.1 will not avoid a contribution in excess of the limits imposed by Internal Revenue Code Ssection 415(c) of the Internal Revenue Code of 1986, the Board may either reduce the plan participant's contribution to an amount within the limits of that section or refuse the plan participant's contribution.
4.7.1 tThe requirements of Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986 are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Internal Revenue Code Ssection 415(b) of the Internal Revenue Code of 1986, or
4.7.2 tThe requirements of Internal Revenue Code Ssection 415(c) of the Internal Revenue Code of 1986 are met, determined by treating all such contributions as annual additions for purposes of Code Ssection 415(c) of the Internal Revenue Code of 1986.
For purposes of applying subparagraph f.1 Rule 4.7.1 the Pension Fund will not fail to meet the reduced limit under Internal Revenue Code Ssection 415(b)(2)(C) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7, and for purposes of applying subparagraph Rule 4.7.2, the Pension Fund will not fail to meet the percentage limitation under Internal Revenue Code Ssection 415(c)(1)(B) of the Internal Revenue Code of 1986 solely by reason of this paragraph Rule 4.7.
4.7.3 For purposes of this paragraph (Rule 4.7) the term "permissive service credit" means service credit:
4.7.3.1 rRecognized by the Pension Fund for purposes of calculating a plan participant's benefit under the Pension Fund,
4.7.3.2 wWhich such plan participant has not received under the Pension Fund, and
4.7.3.3 wWhich such plan participant may receive only by making a voluntary additional contribution, in an amount determined under the Pension Fund, which does not exceed the amount necessary to fund the benefit attributable to such service credit.
Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term may include service credit for periods for which there is no performance of service, and, notwithstanding clause Rule 4.7.3.3, may include service credited in order to provide an increased benefit for service credit which a plan participant is receiving under the Pension Fund.
4.7.4.1 mMore than five (5) years of nonqualified service credit are taken into account for purposes of this paragraph Rule 4.7.4, or
4.7.4.2 aAny nonqualified service credit is taken into account under this paragraph g. Rule 4.7 before the plan participant has at least five (5) years of participation under the Pension Fund.
4.7.5 For purposes of paragraph Rule 4.7.4, effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:
4.7.5.1 sService (including parental, medical, sabbatical, and similar leave) as an employee of the Government of the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than military service or service for credit which was obtained as a result of a repayment described in Internal Revenue Code Ssection 415(k)(3) of the Internal Revenue Code of 1986),
4.7.5.2 sService (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in clause (i) Rule 4.7.5.1) of an education organization described in Internal Revenue Code Ssection 170(b)(1)(A)(ii) of the Internal Revenue Code of 1986 which is a public, private, or sectarian school which provides elementary or secondary education (through gGrade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed,
4.7.5.3 sService as an employee of an association of employees who are described in clause Rule 4.7.5.1, or
4.7.5.4 mMilitary service (other than qualified military service under Internal Revenue Code Ssection 414(u) of the Internal Revenue Code of 1986) recognized by such governmental plan.
In the case of service described in clause Rules 4.7.5.1, 4.7.5.2, or 4.7.5.3, such service will be nonqualified service if recognition of such service would cause a plan participant to receive a retirement benefit for the same service under more than one plan.
4.7.6 In the case of a trustee-to-trustee transfer after December 31, 2001, to which Internal Revenue Code Ssection 403(b)(13)(A) or 457(e)(17)(A) of the Internal Revenue Code of 1986 applies (without regard to whether the transfer is made between plans maintained by the same employer):
4.7.6.1 tThe limitations of subparagraph 4.7.5 Rule 4.7.4 will not apply in determining whether the transfer is for the purchase of permissive service credit, and
4.7.6.2 tThe distribution rules applicable under federal law to the Pension Fund will apply to such amounts and any benefits attributable to such amounts.
4.7.7 For an eligible plan participant, the limitation of Internal Revenue Code Ssection 415(c)(1) of the Internal Revenue Code of 1986 shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of the Delaware Code as in effect on August 5, 1997. For purposes of this subparagraph Rule 4.7.7, an eligible plan participant is an individual who first became a plan participant in the Pension Fund before January 1, 1998.
4.8 For purposes of section 415 of the Internal Revenue Code Section 415 of 1986, the limitation year is the calendar year January 1 through December 31.
Effective December 12, 1994, notwithstanding any other provision of law, contributions, benefits and service credit with respect to qualified military service are governed by Internal Revenue Code Ssection 414(u) of the Internal Revenue Code of 1986 and the Uniformed Services Employment and Reemployment Rights Act of 1994. The Military Service credit provisions of this section are to be interpreted so as not to diminish any other rights relating to military service that may be granted under state law, including 11 Del.C. §8819.
The plan year for the Pension Fund is the twelve-month twelve (12) month period beginning July 1.
7.1 Appeals from Predecessor Boards of Commissions. All appeals from a decision of any predecessor boards or commissions will be automatically denied by the Board of Pension Trustees unless the aggrieved party shows that the Board of Pensions Trustees has jurisdiction in the matter.
8.1.1 If a former employee, who withdrew his or her accumulated contributions upon termination of service after the date of affiliation with this Plan by the employer, again becomes an employee, his or her service credits to the date of termination shall be restored in accordance with the provisions of Section 8814(b)(4), Chapter 88, Title 11 Del.C. §8814(b) if he or she repays the total amount withdrawn, plus an interest rate charge as adopted by the Board, compounded annually, within 90 days after notification from the Office of Pensions.
8.1.2 If the repayment occurs subsequent to the ninety (90) days after notification from the Office of Pensions, the repayment shall be equal to the amount in (a) Rule 8.1.1 plus, for each full month or fraction thereof following the last day of the ninety (90) day period, interest rate charge as adopted by the Board.
9.1 Erroneous Payments. Any overpayment of benefits to a pensioner shall be recovered by the State Pension Administrator who, after written notice to the pensioner, shall withhold the amount due from the pensioner’s monthly pension benefit within a twelve (12) month period, provided that the amount of the monthly withholding may not exceed 15% of the monthly pension benefit. If repayment of any overpayment amount will require more than twelve (12) months, the withholding shall be made at the rate of 15% of the monthly pension benefit until the overpayment has been recovered in full.
9.2 Effective Date of Pension. All pensions shall become effective on the first (1st) day of the month. Under Section 8826, Chapter 88, Title 11 Del.C. §8826 a monthly benefit shall not be payable for any period earlier than the first (1st) day of the second (2nd) month preceding the date on which application for such benefit is filed as defined in Rule and Regulation 10.2.
9.4 Withdrawal Benefits. Effective for employees terminating State employment, an employee’s accumulated contributions, with interest rate as adopted by the Board, shall not be paid to him or her until, in the ordinary course of business, the Pension Office has verified the employee’s total pension contributions.
10.2 The Pension Fund will pay all benefits in accordance with a good faith interpretation of Ssection 401(a)(9) of the Internal Revenue Code of 1986 and the regulations under that section.
10.3.2 The plan participant's entire interest must be distributed over the plan participant's life or the lives of the plan participant and a designated survivor under state law, or over a period not extending beyond the life expectancy of the plan participant or of the plan participant and a designated survivor under state law. Death benefits must be distributed in accordance with Internal Revenue Code Ssection 401(a)(9) of the Internal Revenue Code of 1986, including the incidental death benefit requirement in Internal Revenue Code Ssection 401(a)(9)(G) of the Internal Revenue Code of 1986, and the regulations implementing that section.
10.3.5.1 dDistributed (in accordance with federal regulations under section 401(a)(9) of the Internal Revenue Code of 1986) over the life or life expectancy of the designated survivor under state law, with the distributions beginning no later than December 31 of the calendar year immediately following the calendar year of the plan participant's death, or
10.3.5.2 dDistributed by December 31 of the calendar year containing the fifth (5th) anniversary of the plan participant's death.
10.3.6 The amount of an annuity paid to a plan participant's Bbeneficiary may not exceed the maximum determined under the incidental death benefit requirement of section 401(a)(9)(G) of the Internal Revenue Code of 1986.
11.1 Plan Terminations. In the event of a full or partial termination of, or a complete discontinuance of employer contributions to, the Delaware State Retirement Pension Fund, all accrued benefits which have been vested according to the provisions of Ch. 88, Title 11, Del.C. Ch. 88 shall be 100% vested and nonforfeitable to the extent funded and to the extent required by federal law.
12.1 In conformity with Internal Revenue Code Ssection 401(a)(g)(8) of the Internal Revenue Code of 1986, forfeitures of benefits by members or former members of the Plan will not be used to pay benefit increases. However, such forfeitures shall be used to reduce employer contributions.
13.1 Normal retirement age, for the purposes of the Pension Fund, will be the date the employee becomes eligible for a service pension and not reduced because of the employee's age, pursuant to Section 11 Del.C. §§8813(a) or (b), Chapter 88, Title 11, Del.C.
13.2 Normal retirement age for purposes of section 457(b) of the Internal Revenue Code Section 457 of 1986 to the extent this plan's normal retirement age is referenced in a deferred compensation plan will be the earliest date when the employee has satisfied the requirements of Section 8813(a), Chapter 88, Title 11 Del.C. §8813(a).
13.3 For purposes of Internal Revenue Code Ssection 402(l) of the Internal Revenue Code of 1986, normal retirement age will be the earliest date when the employee has satisfied the requirements of Section 8813(a), Chapter 88, Title 11 Del.C. §8813(a).
14.1 The board may not engage in a transaction prohibited by Internal Revenue Code Ssection 503(b) of the Internal Revenue Code of 1986.
In applying the provisions of 13 Del.C. §§212 and 214, the Board shall interpret the term "spouse" in the provisions of Delaware law that apply to each state pension and benefit set forth in 29 Del.C. §8308(b) in accordance with the federal Defense of Marriage Act to the extent required by that law, federal preemption principles, and guidance issued by the Internal Revenue Service and to the extent necessary in order to preserve the qualified governmental plan status of each such state pension plan and benefit under sections 401(a) and 414(d) of the Internal Revenue Code of 1986 or such other provision of the Internal Revenue Code as applicable. This provision shall apply in the same manner to the terms husband, wife, surviving spouse, survivor, widow, widower, and other terms, whether or not gender-specific, that denote or depend upon a spousal relationship.
Last Updated: December 31 1969 19:00:00.
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