Delaware Treasurer Proposes Legislation to Support State Employees with Retirement Savings
Delaware Treasurer Colleen Davis has proposed two pieces of legislation with bi-partisan support designed to support state employees with their retirement savings.
Senate Bill 94 restores the State’s match and adjusts it for cost-of-living increases by setting the maximum match at $20 per pay period. The previous maximum was set at $10 in the year 2000. The bill also provides retirement help to State employees with student loan debt who are struggling to save for retirement. Senate Bill 94 also authorizes the State to contribute to an employee’s retirement account if the employee is making payments on student loans, and as a result, the employee cannot afford to contribute to their retirement account.
A second piece of legislation will take another step towards increasing retirement saving opportunities for state employees. When passed, House Bill 130, will allow casual seasonal state employees to participate in the State’s 457(b) retirement savings plan. Currently, casual/seasonal employees, who are not eligible for benefits, are excluded from the plan.
Additional Information from the Office of the State Treasurer
Bills would reinstate employer match and allow casual/seasonal employees to participate in retirement plan
Remaining consistent with her three main priorities; bolstering retirement security and readiness, creating pathways to economic empowerment, and promoting a culture of financial excellence, Treasurer Davis has proposed two pieces of legislation with bi-partisan support designed to support state employees with their retirement saving.
The first bill, supported as a key strategic objective of the Delaware Plans Management Board, would reinstate the employer match for state employee contributions to the deferred compensation program. The State suspended the match in July 2008 during the early part of the ‘Great Recession’.
“It was always the intent of the General Assembly to revive the match after lawmakers reluctantly put it on hold in order to cut costs,” said Treasurer Davis. “In fact, every budget bill since Fiscal Year 2008 contained language reading ‘It is the intent of the General Assembly that this program be reinstated when funding becomes available.’”
Senate Bill 94, sponsored by Sen. Trey Paradee and House Majority Leader Valerie Longhurst restores the State’s match and adjusts it for cost-of-living increases by setting the maximum match at $20 per pay period. The previous maximum was set at $10 in the year 2000.
“For over a decade, the State of Delaware provided a meager match to the deferred compensation program as a way to encourage state workers to save for their future,” said Sen. Trey Paradee, D-Dover, Senate prime sponsor of SB 94. “Now, after six straight years of surpluses, I think it’s time we finally keep our promise and restore a match that keeps pace with inflation. This legislation is not only good for state workers, it also will help the State of Delaware at a time when it’s getting harder to compete with the private sector.”
During the time that the State offered the employer match, the employee participation rate was growing at an average of 3.25% per year. After the suspension, employee participation declined at an average rate of 1.6% per year.
Senate Bill 94also provides retirement help to State employees with student loan debt who are struggling to save for retirement. The bill also authorizes the State to contribute to an employee’s retirement account if the employee is making payments on student loans, and as a result, the employee cannot afford to contribute to their retirement account.
A second piece of legislation will take another step towards increasing retirement saving opportunities for state employees. When passed, House Bill 130, sponsored by Reps. Longhurst, Krista Griffith, and Melissa Minor-Brown and Sen. Paradee will allow casual seasonal state employees to participate in the State’s 457(b) retirement savings plan. Currently, casual/seasonal employees, who are not eligible for benefits, are excluded from the plan. As a result, many casual seasonals are missing out on saving for retirement.
“Casual seasonal employees make up a critical part of the state government workforce, and they play a significant role in keeping our state running and delivering services to the people of Delaware.” said Treasurer Davis. “Among those in casual seasonal roles are nurses, park rangers, prosecutors, accountants, security officers, and social workers. The State should be taking care of these hard-working individuals by allowing them to participate in the State’s retirement savings plan so that they can save, invest, and build wealth for a more secure and comfortable retirement.”
“Our hardworking state employees dedicate their lives to serving our communities. It’s only fair that we give these civil servants the tools and resources they need to enter their retirement years with dignity and security. With these bills, we’re taking meaningful steps to fulfill that promise and secure the financial future of our state’s workforce,” said House Majority Leader Valerie Longhurst. “I commend State Treasurer Colleen Davis for her commitment to ensuring that all state workers have the opportunity to plan for their retirement with confidence and I look forward to passing these bills in the General Assembly.”
