The proposed bill would adjust how the pensions are calculated in the county and municipal police and firefighter pension plan.

Financial burdens cause opposition to pension bill

Jarek RutzGovernment, Headlines

The proposed bill would adjust how the pensions are calculated in the county and municipal police and firefighter pension plan.

The proposed bill would adjust how the pensions are calculated in the county and municipal police and firefighter pension plan.

A bill that would adjust the pension calculations for Delaware’s police officers and firefighters faced opposition from those very groups in Wednesday’s House Judiciary Committee meeting.

House Bill 266, sponsored by Rep. Cyndie Romer, D-Newark, would add wages earned as a result of required additional work hours to the definition of “compensation” for purposes of calculating pensions in the county and municipal police and firefighter pension plan. 

Under the current system, mandatory overtime earnings are not included in the pension calculation.

Romer clarified that this would not take into consideration volunteer time. 

“When a firefighter or police officer volunteers for overtime… that pay does not go towards their pension plan and that does not change with this bill,” she said. “However, there are times when they are ordered to work due to lack of staffing, and if they refuse, they are subject to disciplinary action and could be terminated. So this is not optional work, but it is also not paying into their pension plan.”

Nationally, police departments have been hit with staffing shortages. 

Last year, House Bill 39 was introduced. It would pump an extra $20 million into local police departments, and several officers testified that it would help with their marketing and advertising initiatives to help recruit more officers.

That bill is awaiting consideration in the House Appropriations Committee.

In Wednesday’s hearing, Romer also explained that the final average compensation rate for pensions is calculated by taking the average of the highest paid 36th consecutive month of a person’s career to determine the base pay. 

“There is no cost to the state because this is not a state plan,” she said. “We just administer it, but the cost will be shared across the agencies.”

Captain Joe Malloy, a firefighter in the city of Wilmington, said the employees are overworked, and provided stats stating that the average state employee would have to work an additional 63 days a year to match the hours he and his colleagues work, which is more than 2,400 hours a year. 

“We’ve always asked for more manpower, and every year we go to the city through budget appropriations, asking for more manpower,” he said. “Since I’ve been on the job, we have never added additional manpower, we’ve only removed it.”

Malloy said there’s a rotating list of employees that will be selected to work mandatory overtime. 

Several committee members said the bill needs some clarification on what mandatory overtime is. 

“The county municipal police and firefighters pension plan is a very rich pension plan that means that the minimum number of years to retire is lower and the benefit calculation is higher,” said Joanna Adams, the pension administrator for the state. “For example, the FY 25 normal costs portion of this pension plan rate is 12.74% compared to the state employees pension rate, which is 6.15%.”

If House Bill 266 were to be signed into law, she said, the normal cost component of the pension rate would most definitely be increased by several percent which could have a major impact on the finances of the 40 employers participating in the pension plan. 

“The employers participating in this plan include county governments, town and city government as well as our local volunteer fire companies,” she said. “House Bill 266 has no direct impact on the state’s budget. However, there’s a real possibility that a change like this in the pension plan would expand changes in other plans such as the state employees pension plan and the state police pension plan, which again would have a negative budgetary impact on the state.”

She said she recognizes everyone is trying to come up with creative ways to deal with the staffing shortages, but said it’s important lawmakers understand this would not come without a significant financial impact to the 40 employers on the plan. 

John Looney of the Wilmington Fire Department said he was against the current bill because of the serious fiscal and operational impact it would have on the department. 

“My biggest concern with this is I do believe that, just like others have already mentioned…our voluntary overtime that exists right now in this department would disappear and we will get into a forced overtime situation all the time,” he said. “And my concern with that is it’s the excessive hours that our personnel would work.”

A town manager of Georgetown and a representative from the Delaware League of Local Governments said he was also against the bill because of financial implications that would create cuts and/or tax increases.

The bill did not have a vote and Romer said she will work with leaders of the firefighter and police community to improve the legislation.

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