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Delaware lawmakers will not hold a hearing this legislative session to scrutinize an unexpected multimillion-dollar decision made by the Carney administration last winter to revamp the state pension system for retired lawmakers, according to Senate leaders.
In an interview with Spotlight Delaware on Monday, ahead of the final day of the legislative year, Senate Majority Leader Brian Townsend said lawmakers will wait until next year to consider a bill that would return the pension system to the way it operated before the March changes.
The changes include a permanent pay increase for retired lawmakers and a one-time payment of nearly $1 million in back pay.
Townsend’s comments came three months later. Spotlight Delaware reported that retiring state lawmakers are set to receive pay raises. Monthly pension payments were reduced 27 years ago when state officials failed to codify changes in Delaware law.
Prior to 1997, a member’s pension was fixed at the pension amount of the highest-earning retiring member of parliament.
Over the next few years, Delaware’s pension office implemented a more standard system under which lawmakers received payments based on a percentage of their highest annual earnings.
However, in March, state officials decided to revert the pension system to its pre-1997 form.
The decision, first revealed in a letter sent to former lawmakers on March 4, came after officials within Carney’s administration determined that Delaware’s law code “has never been updated” since the 1997 changes.
All in all, this has been a strange and complicated development, raising questions about how what appears to be a change in the law can go into effect and then, 30 years later, be repealed when government officials in the executive branch decide that the law is invalid.
Unless that changes, retiring lawmakers are sure to get another pay raise when longtime Democratic Rep. Pete Schwarzkopf retires at the end of the year. Schwarzkopf, who served as House speaker for 10 years, will receive one of the highest pensions in recent memory.
Following the Spotlight Delaware report in April, Townsend was one of several lawmakers who expressed frustration that the Carney administration was able to unilaterally change an apparently vague policy without notifying the Legislature.
Townsend told Delaware Online/The News Journal at the time that he and his colleagues “want to get to the bottom of how this happened and why the members of Congress were not at least notified in advance.”
But when asked Tuesday why Senate Democrats hadn’t yet held a hearing on the matter, Townsend said they had determined that “the decision has been made and it can’t be changed” under the constraints of the six-month legislative session that ends this week.
Townsend also argued that public hearings to force pension officials to testify would only provide “very simple answers.” Instead, he said, it would be more productive to wait for the state’s Official Compensation Commission to release its report on legislative pensions later this year and then act on its conclusions next year.
“given that [the Compensation Committee] “With meetings scheduled to take place in the coming months, we felt it was most appropriate to take this approach,” Townsend said.
Previous report:Delaware made changes to its lawmaker pension system 27 years ago. Why didn’t the changes last?
Still, the decision to wait has drawn criticism from at least one retired Republican state lawmaker, who argues that lawmakers have a responsibility to act on what is essentially a policy decision.
In an interview, former Republican state Sen. Greg Lovell asked why Democratic leaders in the House and Senate are willing to pass bills on a range of topics, from electric vehicles to health care for public employees, but “why not make a decision on this one?”
“I don’t understand why they’re being cowardly about this,” he said.
In response, Townsend reiterated his belief that the Delaware Compensation Commission — a six-member appointee panel that issues salary recommendations for several statewide positions — should be given time to study best practices used by other states’ legislative pension plans.
“That should be what drives our decision-making,” Townsend said.
How the error occurred
Coincidentally, the Delaware Compensation Commission was at the center of this turmoil that prompted the legislative pension changes.
The 1997 law that changed pay for retired lawmakers did not follow the normal legislative process, in which the Legislature considers and passes a bill, then the governor signs it into law.
Rather, the change came after Delaware’s Compensation Commission recommended that Delaware no longer peg the pay of retired lawmakers to the pay of the highest-earning former lawmaker.
And because of a strange provision in Delaware law, the official recommendation from the state commission automatically becomes law unless rejected by a vote of both houses of the state legislature.
In 1997, MPs did not reject the Compensation Committee’s report on MPs’ pensions.
As a result, the changes “ultimately became law,” according to a letter Delaware Pension Commissioner Joanna Adams sent to outgoing lawmakers in March.
“However, Delaware law has never been amended,” she said in the letter.
In an email to Spotlight Delaware in April, Adams appeared to walk back his assertion that the committee’s report could become law.
She again noted that the compensation commission “has the full force and effect of the law,” but also said it is “fully within the power of the Legislature” to add new laws.
Asked whether Adams’ interpretation was correct, Delaware Deputy Comptroller Robert Scoglietti pointed to state law which says the committee’s report “shall have the force of law unless the Legislature by joint resolution rejects it in its entirety.”
The legislators’ pensions are paid through the Delaware Public Employees Retirement System, which manages and invests contributions from workers across the state government. This means that the lump-sum payment to retiring legislators doesn’t cost taxpayers money, but it draws on investable funds of other state pensioners. As of June 2023, the state’s various pension funds held more than $12 billion.
Spotlight Delaware has filed a Freedom of Information Act (FOIA) request seeking emails sent by the Delaware State Pension Office discussing the decision to change payments to retired lawmakers.
The pension office denied the FOIA request earlier this month, and Spotlight Delaware appealed the denial.
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