[HISTORY: Adopted by the Levy Court of Kent County 5-13-2003 by Ord. No. 03-10. Amendments noted where applicable.]
This ordinance also repealed former Ch. 83, Retirement, which consisted of Art. I, County Employees' Retirement Program, adopted 4-5-1988 by Ord. No. 88-05, as amended.
[Amended 5-28-2013 by Ord. No. 13-09]
This article is adopted pursuant to the powers conferred upon the Levy Court of Kent County, Delaware in 9 Del. C. § 4323. The Levy Court of Kent County, Delaware (County government) shall administer the Kent County Employee Retirement Program and shall be vested with all the rights, duties and authority typically reserved for the administration of such a program, including but not limited to determination or selection of investment policy(s), fund allocation(s), investment consultant(s), fund manager(s), investment structure, fund trustee(s), investment type(s), fund administrator(s), and fund contribution(s).
This plan intends to satisfy Code Section 401(a) and other applicable sections of such Code which are applicable to government plans as defined in Section 414(d) of the federal Internal Revenue Code of 1986, as amended from time to time.
The Plan is maintained for the exclusive benefit of covered employees or their beneficiaries as required under Section 401(a).
[Added 12-9-2014 by Ord. No. 14-20]
This article shall be known as the “Kent County Employee Retirement Program.”
As used in this article, the following terms shall have the meanings indicated:
- ACTUARIAL EQUIVALENT
- A benefit of value equivalent to the value of the benefit
being replaced, computed using the applicable interest rate and the
applicable interest rate as defined herein as in effect on the applicable
date of determination.[Added 2-12-2013 by Ord. No. 13-03; amended 5-28-2013 by Ord. No. 13-09]
- (1) Disability as defined in this article.
- (2) Leaves of absence granted by County government to employees.
- (3) Leaves of absence granted by County government to serve in the armed services of the United States of America or any state, provided that said employee returns to active employment with Kent County within 90 days following the period of leave granted, as provided in federal and state law.
- (4) Voluntary severance of employment for a period not to exceed one year, provided that employee returns to County service. The usual vacation and sick leave allowed any employee of any department or agency shall not be considered an interruption from continuous employment.
- APPLICABLE INTEREST RATE
- The annual rate of interest on thirty-year treasury securities
[or such other rate as may be specified by the Secretary of the Treasury
for purposes of Section 417(e)(3) of the Code for the month of December
of the plan year immediately preceding the Plan Year in which the
date of determination occurs.][Added 5-28-2013 by Ord. No. 13-09]
- APPLICABLE MORTALITY TABLE
- The mortality table specified by the Secretary of the Treasury
for purposes of Section 417(3)(3) of the Code.[Added 5-28-2013 by Ord. No. 13-09]
- A natural person living at the death of a participant, and shall not include corporations, partnerships, organizations, associations or other entities.
- The Internal Revenue Code of 1986, as amended from time to
time.[Added 2-12-2013 by Ord. No. 13-03]
- CONTINUOUS EMPLOYMENT
- Service without interruption except allowable interruptions.
- (1) An employee who receives a regular salary directly from Kent County and receives or is eligible to receive County-paid benefits. The following persons shall be considered covered employees notwithstanding other provisions of this section:
- (2) Persons holding the following positions shall be excluded from the definition of "covered employees" and ineligible for a County pension:
- (a) The Mortgage Commissioner.
- (b) Summer Youth Employment Program (or successor) employees.
- (c) Part-time (less than 1,000 hours per year), temporary, contracted, or seasonal employees.
- (d) Former City of Dover paramedics having contributions made to the City pension plan by the County. Covered employment begins when the contributions to the City pension plan cease, if the former City of Dover paramedic remains employed by the County.
- COVERED EMPLOYMENT
- Regular employment as a covered employee with Kent County for more than 1,000 hours in any one calendar year.
- An employee shall be disabled for purposes of this article if he qualifies for and receives disability benefits under the Kent County Long-Term Disability Program. Said disability shall cease when Long-Term Disability Program benefits terminate or the employee becomes eligible to collect retirement benefits.
- MILITARY SERVICE
- Any period of active duty service in the Armed Forces of
the United States including the national guard and reserves, under
the provisions of Title 10, Title 32, and Title 37, United States
Code, which commences less than 90 days after the person ceases to
be an employee and ends less than 90 days before the person again
becomes an employee. Provided, if a member fails to again become an
employee due to being killed while in active duty service, the member
shall be entitled to military service through the date of death.[Added 2-12-2013 by Ord. No. 13-03]
- NORMAL RETIREMENT AGE
- Age 62.[Added 2-12-2013 by Ord. No. 13-03]
- PLAN YEAR
- The calendar year.
- Base wage pay rate compensation approved by the County government
for the position(s) held and paid over a one-year period, excluding
pay for overtime, longevity, shift differential, accrued time payouts,
bonuses or any other special pay other than base wage pay rate compensation.
Payroll deductions shall not reduce the annual compensation or salary
amount. In the case of any covered employee whose participation in
the plan set forth in this chapter commences after December 31, 1995,
salary for purposes of this chapter shall not exceed the dollar limitation
of § 401(a)(17) of the Code, which section is incorporated
herein by reference, as adjusted from time to time.[Amended 10-14-2008 by Ord. No. 08-21; 2-12-2013 by Ord. No. 13-03]
Words of the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter may refer to any gender.
A covered employee in covered employment who shall have service with Kent County in continuous employment for at least five years shall be considered fully vested and eligible for retirement benefits within the meaning of this article, except that those covered employees hired after the adoption of this Ordinance No. 10-11 must have service with Kent County in continuous employment for at least eight years in order to be considered fully vested and eligible for such retirement benefits, except as otherwise provided.
[Amended 6-29-2010 by Ord. No. 10-11]
A covered employee, as defined in this article, who has a vested right to benefits under any law in effect prior to this article shall retain said vested rights until such time as the employee becomes eligible for retirement benefits as defined in this section.
A covered employee who receives retirement benefits and is subsequently elected to public office, including a County office, shall continue to receive retirement benefits in addition to any salary as an elected official as provided in § 83-20B of this article.
Every covered employee who is eligible for retirement benefits under this article may retire after such employee attains the age of 62 years or as hereinafter provided, and shall, after retirement and during the remainder of his/her life, receive the vested portion of the pension fixed by the article, subject to such qualifications and reservations as are contained in this article. Upon reaching his normal retirement age, a covered employee shall be fully vested in his benefits under this chapter.
[Amended 2-12-2013 by Ord. No. 13-03]
A covered employee who is eligible for retirement benefits under this article may select early retirement after serving in covered employment with Kent County as defined herein for at least 30 years at any age, for at least 15 years and attaining the age of 60 or for at least 20 years and attaining the age of 55 years. The employee shall, after such early retirement and during the remainder of his or her life, receive the vested portion of the pension provided by this article.
Nothing in this article shall be construed to make mandatory the retirement of any employee who is a covered employee.
Once acquiring a vested right to benefits, an employee shall not lose his right to benefits by reason of leaving County employment except as provided in § 83-20 of this article.
The monthly pension payable shall be 2% of the average monthly base salary of the highest three consecutive years (36 consecutive months) of service with Kent County multiplied by the number of years which a covered employee shall have served in covered employment with Kent County.
[Amended 11-30-2004 by Ord. No. 04-22]
If a covered employee as defined in this article had similar employment with New Castle County, Sussex County or the State of Delaware prior to June 27, 1986, such years of service shall be recognized and included for pension benefits, provided that such covered employee was employed by Kent County on or before June 27, 1986.
The monthly pension payable to employees hired after the adoption of this subsection shall be 1.85% of the average monthly base salary of the highest three consecutive years (36 consecutive months) of service with Kent County multiplied by the number of years which a covered employee shall have served in covered employment with Kent County.
[Added 3-10-2009 by Ord. No. 09-04; amended 12-21-2010 by Ord. No. 10-24]
Editor's Note: This ordinance also provided that retiring eligible employees choosing the $15,000 cash incentive may, at their option and submission of proper documentation, have said incentive rolled over into a qualified retirement or deferred compensation account, if applicable by law. Retiring eligible employees choosing the additional five years of service enhancement will have such benefit determined solely by the County’s pension actuarial consultant and paid out as part of the regular monthly pension benefit. The Personnel Director, in consultation with the County Administrator and department head, may require certain covered employees eligible for the special retirement incentive/enhancement program to delay their retirement date until June 30, 2009, if their immediate or intended retirement date will adversely impact the operations of a County office or department. Eligible employees may appeal any required delay of retirement to Levy Court for a final determination. The individual commissioners of the Kent County Levy Court shall not be eligible to participate in the special retirement incentive/enhancement option. The Personnel Director is hereby authorized and directed to implement this special retirement incentive/enhancement option for those eligible covered employees requesting participation and shall secure from each participant an acceptance agreement containing a suitable waiver of claims statement.
A covered employee who shall become disabled while in covered employment and covered under a County-provided long-term disability insurance shall be considered as remaining in covered employment as defined in this article until his normal retirement date, or the cessation of disability insurance, whichever shall first occur. Disability retirement pension benefits shall be calculated in accordance with § 83-7A of this article.
At the time of the establishment of the tax rate, the County government shall include, in addition to an amount for active employees' salaries or wages, the amounts for those employees who are carried on the pension roll, plus the amount for those employees who might become eligible for retirement during the period covered in such budget.
The payment of the pension benefits under this article shall be monthly.
The name and address of each employee receiving benefits under the provisions of this article, together with the amount of pension to be received at each payment by each such employee, shall be filed in the Kent County Personnel Office.
Form of benefits.
A covered employee may, with the consent of the government of Kent County, elect in writing one of the following optional forms of retirement benefits, which shall be irrevocable once benefits commence:
A lump sum not to exceed a maximum of $3,500;
Equal monthly benefits payable for life;
Contingent annuitant benefits payable in equal monthly installments during the life of the participant and after his death to his spouse or other designated annuitants in monthly installments either in the same amount (100%) or lesser amount (75%, 50%), as elected by the retiree;
Equal monthly payments for the life of the participant and/or for a period of 10 years certain;
Equal monthly payments for the life of the participant and/or for a period of five years certain; or
Any other form of benefit approved by the County government.
The amount paid for any optional form selected above is actuarially equivalent in value to the amount that will be payable in the form of Subsection C(1)(b), except the lump sum option.
A nonspouse beneficiary limitation may be placed on the percentage that can be continued upon the death of a former employee receiving benefits for designated annuitants as contained in Subsection C(1)(c). Such limitation shall follow the rules set in Treasury Regulation § 1.401(a)(9)-6.
[Amended 2-12-2013 by Ord. No. 13-03]
If a covered employee fails to elect one of these forms of retirement benefits, he shall receive pension benefits in the form of Subsection C(1)(b).
Lump sum distributions.
[Amended 5-28-2013 by Ord. No. 13-09]
The County government, upon recommendation of the actuary, may cash out and make a payment by lump sum to any vested former employee expected to receive a de minimus pension, such figure to be determined from time to time by the actuary, but no more than $3,500.
In the event the vested former employee who will receive a lump sum distribution in excess of $1,000 pursuant to Subsection E(1) above does not elect to receive a distribution directly or to elect to have the distribution rolled over to an eligible retirement plan or individual retirement plan pursuant to Code Section 401(a)(31) and the regulations and other administrative promulgations related thereto, the County government shall make such transfer to an individual retirement plan of a designated trustee or issuer and shall notify the vested former employee in writing that the distribution may be transfer to another individual retirement plan.
[Added 2-12-2013 by Ord. No. 13-03]
Effective January 1, 2002, the annual retirement pension payable under this § 83-10, as adjusted, shall not exceed the maximum limitations of Section 415(b) of the Code and the regulations thereunder, including cost-of-living adjustments. The provisions of Section 415 are incorporated herein by reference and the limitations override any other provision of this chapter. The limitation year shall be the calendar year.
Notwithstanding the preceding subsection, in no event shall a covered employee's annual pension payable under this chapter be less than the benefit which the covered employee had accrued under the chapter as of December 31, 1982; provided, however, that in determining such benefit no changes in the chapter on or after July 1, 1982, shall be taken into account.
Special distribution rules effective January 1, 1989.
[Added 2-12-2013 by Ord. No. 13-03]
Distribution of the entire benefit payable on account of a covered employee shall commence no later than April 1 of the calendar year following the calendar year in which the employee attains age 70 1/2. Distribution may continue over a period no longer than the longest of:
If a covered employee dies after distributions to him have begun, all death benefits shall be distributed to the beneficiary at least as rapidly as under the method of distribution being used before his death.
If a covered employee dies before distributions to him have begun, the death benefits shall be distributed:
Over a period no longer than the longer of the life or life expectancy of a designated beneficiary (and distribution shall begin no later than December 31 of the calendar year after the year of the covered employee's death or a later date prescribed in applicable governmental regulations); or
In their entirety by December 31 of the calendar year in which the fifth anniversary of the covered employee's death falls, if longer.
Any election under this chapter affecting the distribution of a benefit shall conform to incidental death benefit requirements of applicable governmental regulations.
Effective January 1, 2003, all distributions shall additionally be in compliance with the model amendment for defined benefit plans set forth in Rev. Proc. 2002-29, which is incorporated herein by reference and made a part hereof, but without reference to any of the optional amendments set forth in the "Adoption Agreement" section of that revenue procedure.
The beneficiary of the deceased participant not yet in receipt of benefits who had a vested right to pension benefits at the time of said participant's death shall be entitled to a death benefit under the plan as follows:
When the beneficiary is a surviving spouse, the benefit shall be 50% of the benefit the participant would have received had he/she terminated employment on the date of death, survived to the earliest retirement date, and elected to retire at that date with the single life annuity option under § 83-10C(1)(b).
In the event that at the time of such participant’s death no spouse is living or such spouse has released any claim to benefits in writing in compliance with all applicable laws and regulations, the benefits shall be paid such beneficiary designated by such participant. The benefit shall be the benefit the surviving beneficiary would have received had the participant terminated employment on the date of death, survived to the earliest retirement date, and elected to retire that date with the fifty-percent option under § 83-10C(1)(c) and 83-10C(3).
When there is no surviving spouse and no beneficiary is designated, there shall be no death or other benefit.
Effective January 1, 2007, a covered employee's designated beneficiary who is entitled to an eligible rollover distribution may elect, at the time and in the manner prescribed by the Personnel Office, to have all or any portion of the distribution paid directly to an eligible retirement plan specified by the designated beneficiary in a direct rollover. In the case of a beneficiary who is not treated as a spouse under federal income tax law, the direct rollover may be made only to an individual retirement account or annuity described in Code § 408(a) or § 408(b) ("IRA") that is established on behalf of the designated beneficiary and that will be treated as an inherited IRA pursuant to the provisions of Code § 402(c)(11). Also, in this case, the determination of any required minimum distribution under Code § 401(a)(9) that is ineligible for rollover shall be made in accordance with Notice 2007-7, Q&A 17 and 18, 2007-5 I.R.B. 395.
[Added 2-12-2013 by Ord. No. 13-03]
For deaths occurring after December 31, 2006, while performing military service, the employee’s designated beneficiary is entitled to any additional benefits that would have been provided under the plan had the participant resumed employment and then terminated employment on account of death.
[Added 12-9-2014 by Ord. No. 14-20]
A covered employee may request retirement with pension in accordance with this article by making a written request to the Personnel Office at least 60 days prior to the date of retirement.
The Personnel Office shall prepare a statement in such form as may be prescribed by the Kent County Levy Court to enable compliance with the provisions of this article. A copy of such statement shall be given to the employee prior to the date of retirement.
All official records of whatever kind or character received or to be received by the Personnel Office on pension cases shall be kept as all other official employee records of the office are preserved.
The Personnel Administration Board shall be responsible for settling any disagreement that may arise out of the administration of this article by the Personnel Director. The Board shall adjudicate such disagreement within 30 days of the date of receipt of a written appeal, at a time and place to be fixed by the Board, after due notice in writing to all interested parties at least 10 days prior to the date of hearing. The Board may administer oaths and conduct such acts and make such rules as it deems necessary to carry into effect the provisions of this article. The written concurring decision of any four members shall be final.
When the active employee is entitled to the pension benefits of this article, the Personnel Office shall so advise the County government, whereupon such County government shall prepare, sign, seal and deliver to the employee an appropriate resolution in the following form:
If a former employee is vested and entitled to the pension benefits of this article, eligibility shall be certified by the Personnel Director, and no resolution of County government shall be necessary. When a former employee is not entitled to the pension benefits of this article, the Personnel Director shall upon request so advise the former employee in writing.
If a former employee is vested, eligible, and entitled to the pension benefits of this article, but fails to apply upon eligibility due to inability to locate said former employee or beneficiary or some ethical rule, the former employee or designated beneficiary shall be entitled to a lump sum retroactive payment back no earlier than age 62 or age at termination of employment, if later, without accrual of interest or across-the-board increases previously approved by the County government for active recipients.
[Amended 5-13-2014 by Ord. No. 14-08]
Except for orders of the Delaware Family Court for a sum certain payable on a periodic basis or for benefits payable under this chapter, the pension benefits provided herein shall not be subject to attachment or execution, shall be payable only to the beneficiary designated, and shall not be subject to assignment or transfer except as may otherwise by provided by law.
The County government shall establish and maintain a Pension Fund which shall be used only for the purpose of paying the benefits provided for under this article and related administrative costs.
An actuary shall at least biennially review the Pension Fund and shall report to the County government whether any additional sums of money are needed to keep the Pension Fund actuarially sound so that sufficient funds will always be available to pay the benefits provided for under this article.
The County government shall annually appropriate to the Pension Fund such sums as the actuary deems necessary to properly maintain the fund.
The County government may from time to time increase the pension benefits across the board for current recipients, provided sufficient funds are available or are reasonably expected to be available to cover the cost.
The County government may choose to contribute such sums as determined by the actuary to purchase years of service to achieve vesting, eligibility, or increase the pension amount for specific individuals determined to be deserving by it.
All eligible covered employees in covered employment shall contribute a percentage of base salary on a pre-tax basis, which is used to calculate the pension benefit, by payroll deduction over the normal pay periods in a fiscal year, or part thereof, toward their pension benefit as follows:
[Added 4-28-2009 by Ord. No. 09-05; amended 12-9-2014 by Ord. No. 14-20]
Effective July 1, 2009, 1% of base salary payable over the normal pay periods shall be contributed by each eligible covered employee.
Upon termination or withdrawal of service of an employee who is not eligible or vested for a service or disability pension, the accumulated contributions, without interest, shall be paid to the employee within six months of separation. At the option of the former employee and submission of proper documentation within six months of separation, said accumulated contributions may be rolled over into a qualified retirement or deferred compensation account, if applicable by law.
[Added 4-28-2009 by Ord. No. 09-05]
All eligible covered employees in covered employment hired after the adoption of this subsection shall contribute 3% of base salary on a pre-tax basis in excess of $6,000 payable by payroll deduction over the normal pay periods in a fiscal year, or part thereof, toward their pension benefit.
[Added 12-21-2010 by Ord. No. 10-23; amended 12-9-2014 by Ord. No. 14-20]
Employees serving in active duty as a member of the National Guard or military reserve shall not be required to contribute toward their pension benefit for any period of military service encompassing a full month when no hours of work are performed directly on behalf of the County. Such contribution waiver shall not reduce any future pension benefit for the affected employee.
[Added 10-11-2011 by Ord. No. 11-19]
Editor's Note: This ordinance also provided that it shall be retroactively effective as of 7-1-2009.
[Amended 9-16-2003 by Ord. No. 03-22]
The county government may assume the below set forth rights and responsibilities of a trustee or select a trustee to administer and invest the money in the Pension Fund who:
Shall receive such sums as shall be paid to the trustee under the plan.
Shall pay benefits from a fund as directed by the county government and shall be fully protected in doing so.
Shall keep account of all transactions that shall be open to inspection and audited by persons designated by the county government.
Shall not be liable for any loss to the fund or any act done or omitted by the trustees unless due to his own negligence, willful misconduct or lack of good faith.
The trustee acting as a “prudent man” shall in his discretion invest principal and accumulated income without restriction to legal investments and without distinction between principal and income as provided in an approved investment policy, and any subsequent amendments. The trustee(s) may hold investments in nominee or bearer.
The county government may amend or terminate its contract with a trustee(s), provided that the amendments affecting the trustee(s) shall require his consent and no termination or amendment shall divert any part of the fund to any purpose other than the exclusive benefit of employees or their beneficiaries, and no amendment shall divest any vested benefit.
The trustee shall be compensated in accordance with his schedule of rates in effect from time to time during the period in which his services are rendered and as agreed to by the county government and the trustee.
Within 90 days after each plan year or upon his removal or resignation, the trustee shall file with the county government an account of its administration of the Fund during such year or for the end of the preceding plan year to the date of removal or resignation.
The trustee(s) may resign by written notice to the county government that shall be effective 60 days after delivery. The trustee(s) may be removed by the county government by written notice to the trustee(s) which shall be effective 30 days after delivery. On resignation or removal, the trustee(s) shall deliver the funds to his successor as soon as notified in writing by the county government that a successor has been named, provided that this shall not waive any liens the trustee(s) may have upon the fund for his compensation of expenses.
In the event Kent County Levy Court acts as Pension Plan Trustee, the County shall appoint one or more custodians to hold a portion of the assets of the trust and to perform such functions as customarily vested in custodians by law as directed by the County. Further, the County may delegate any subset of its authorities or responsibilities set forth in this chapter to appropriate entities, including but not limited to investment managers and advisors.
A Pension Review Committee composed of three citizens with financial management or pension administration backgrounds appointed by the Levy Court, the Director of Finance, and an employee representative nominated by the Employee Council shall regularly meet to review the investment performance of the pension plan. The Committee may make recommendations to the Levy Court regarding plan amendments, investment policies, investment strategies, professional fund manager(s) or trustee(s), investment advisor(s), etc. The Personnel Office shall provide administrative support for the Committee, and the Personnel Director shall administer the provisions of this article as the Pension Administrator.
Whenever an eligible vested active or former employee applies for a County pension, the Personnel Office shall request a benefit calculation from the pension actuary and direct the trustee(s) to commence pension benefits to a vested retired or former employee beginning the first of the month following eligibility.
Nothing contained herein and no act or omission authorized hereby shall constitute a waiver of immunity from suit set forth in Chapter 40 of Title 10 of the Delaware Code.
In the event that a covered employee resigns or is discharged by the County because he has been convicted of a felony or willfully or recklessly causes the County to be in violation of the law, he shall be deemed as having agreed to forfeit any rights to retirement benefits, and the Personnel Administration Board shall have the power to terminate all rights of the employee and all persons claiming benefits through him under this article.
In the event a former employee receiving retirement benefits under this article is re-employed as a covered employee in covered employment, retirement benefits shall cease, except for elected officials. Upon any subsequent retirement, the additional years of service shall be added to the previous years of service and the new vested benefit calculated using the most recent annual salaries as provided under this article. Former employees receiving retirement benefits under this article who are elected or appointed to a statutorily defined County office shall continue to receive retirement benefits, but shall be ineligible for additional years of service or vested benefits, unless the elected or appointed official chooses to cease his/her retirement benefits during the term of office.
If a covered employee who is employed at the time an amendment of this article becomes effective would have received a greater benefit or been eligible for an earlier retirement, under any law in effect prior to this article, he shall be paid and retired under the earlier law, at his option.
The provisions of this article are severable and if any of its provisions or any sentence, clause, or paragraph shall be held unconstitutional by any court of competent jurisdiction, the decision of such court shall not affect or impair any or the remaining provisions.
This article shall be come effective immediately upon adoption.
In the event of termination or partial termination of this Retirement Program, a participant's interest under the Retirement Program as of such termination or partial termination is nonforfeitable to the extent funded.
[Added 5-28-2013 by Ord. No. 13-09]