Pensions/State Judiciary/Clean-up/Tax Status

After enactment of Senate Substitute No. 1 to Senate Bill No. 174 of the 152nd General Assembly (Chapter 446 of Volume 84 of the Laws of Delaware), it was discovered that Senate Substitute No. 1 to Senate Bill No. 174 would, if implemented, jeopardize the qualified federal tax status of the Delaware Public Employees Retirement System by giving individuals who are Justices of the Peace, Commissioners of the Superior Court, Family Court, and Court of Common Pleas (“Commissioners”), and Magistrates in Chancery (“Magistrates”), as of the effective date, an election to participate in the Judicial Pension Plan at a different rate of pre-tax contribution than presently required for those individuals under the State Employees’ Pension Plan (3% or 5%, depending on start date). Based on this information, the Board of Pension Trustees voted unanimously on December 10, 2024, to delay implementation of Senate Substitute No. 1 for Senate Bill No. 174. This Act does the following: (1) Revises § 5601 and 5605 of Title 29 to allow for Justices of the Peace, Commissioners, and Magistrates who first qualify for the State Judicial Pension Plan on the effective date of this Act to elect to remain in the State Employees’ Pension Plan or participate in the State Judicial Pension Plan at the same pre-tax rate each individual was contributing under the State Employees’ Pension Plan (3% or 5%). (2) Sets the mandatory pre-tax contribution rate of any subsequently appointed State judicial officer at 5%. Any Justice of the Peace, Commissioner, or Magistrate as of the effective date who is appointed to a new position within the state judiciary after the effective date of this Act will also be subject to the mandatory 5% contribution rate. (3) Delays the effective date of Senate Substitute No. 1 for Senate Bill No. 174 until January 26, 2025, the effective date of this Act.

• Timothy D. DukesR