By CRIS BARRISH, The News Journal
Posted Wednesday, December 19, 2007
Overtime pay would be excluded in calculating the pensions of state employees hired after June 30 under a House bill filed Tuesday.
The measure was prompted by a November report in The News Journal about excessive overtime in state government, including the fact that employees in certain jobs pad their pensions by working large amounts of overtime as they near retirement.
For example, one prison guard profiled by the newspaper is on track to receive more than $95,000 a year when he retires in 2009 -- nearly twice his annual salary.
Sgt. Joseph H. Belanger, a 28-year veteran, regularly works 108 hours a week. Belanger's salary is $53,000, but this year he'll be paid more than $170,000 with overtime.
Under the state's pension system, employees' total pay, including overtime, is used to calculate the annual pension they will receive for the rest of their lives.
"It's just not right for people to be able to pad their pensions with overtime," said state Rep. Gregory F. Lavelle, R-Sharpley, who prefiled the legislation in advance of the General Assembly session that starts Jan. 8. "I understand the need for overtime in running the state, but it has tremendous long-term costs for taxpayers."
Lavelle's bill has the support of several legislators in both parties. But union officials promptly condemned it.
"It's ridiculous that the correctional officer is going to make $40,000 more in pension than his regular pay," said Rep. Peter Schwartzkopf, a Rehoboth Beach Democrat and bill co-sponsor. "He's just working extra overtime to bump up the pension, and I have a problem with that."
Organized labor, however, plans to oppose the measure.
"I don't understand this knee-jerk reaction," said Michael A. Begatto, executive director of the American Federation of State, County and Municipal Employees' Delaware chapter, which represents about 3,500 of the more than 54,000 employees of the state and school districts.
"You are painting everybody in state government with the same brush. Hire enough people so employees don't need to work so much overtime," he said.
Stephen L. Martelli, president of the Correctional Officers Association of Delaware, contends guards shouldn't be punished in retirement for working in a job with low pay and high turnover. Currently, there are 215 vacancies in a force of 1,862 at state prisons.
"I don't like it at all," Martelli said. "For five or six years we've been arguing that we need more officers and higher salaries. But now we're getting hit over the head because legislators are seeing how much overtime the state is paying. They built this animal and now they want to solve it on our backs."
Auditor could expand probe
From 2004 through 2006, state taxpayers spent an average of $43.4 million annually on overtime pay -- nearly quadruple what was paid in 1992, the newspaper's analysis of state payroll records found. Overtime pay statewide was 3.25 percent of regular payroll costs during the three-year period.
The most overtime during that period occurred at the Department of Correction, which spent $45.3 million, and Health and Social Services, which spent $28.2 million, much of that on nurses and attendants at the Delaware Psychiatric Center, the state's hospital for the mentally ill.
State Auditor R. Thomas Wagner Jr. is investigating overtime at the hospital, where he suspects "fraud and abuse" and said he might expand the probe into other agencies in light of the newspaper's findings.
David C. Craik, Delaware's pension administrator, said the agency does not track how much overtime pay contributes to the annual total pension payout, which is expected to surpass $350 million in the fiscal year ending June 30.
"My thought is that overtime pay would be insignificant in the big scheme of things," Craik said.
Money in the pension fund, currently valued at $7.4 billion for the 20,000 retirees and 35,000 active employees, comes from contributions by employees and taxpayers, as well as interest on investments, Craik said.
Employees contribute 3 percent of all pay above $6,000, including overtime, shift differential and special-duty pay, such as coaching salaries, to the fund. Taxpayers kick in 6.06 percent of total payroll -- about $107 million this year, Craik said.
'Gone overboard'
House Minority Leader Robert F. Gilligan, D-Sherwood Park, said Lavelle's proposal, while laudable, goes too far by excluding extra-duty pay.
"He's gone overboard," Gilligan said. "It would prevent someone who teaches social studies but coaches football from getting the additional pension when he puts in all those extra hours," Gilligan said.
As far as overtime, Gilligan agrees with Lavelle and the bill's backers, to a degree.
"The intent of the pension system wasn't to let people work 24/7 and walk away earning way more than their salary in retirement," Gilligan said. "We can address this but at the same not penalize people for working reasonable overtime."
Lavelle said he's willing to negotiate the bill's provisions, such as allowing some overtime to be included in pensions.
So what does the correctional officer whose future pension windfall triggered this debate about overtime and pensions think of the Lavelle's proposal?
Sgt. Belanger isn't taking a position on the bill, but said state officials must figure out a way to cut vacancies at prisons, hospitals and other agencies that must be staffed around the clock.
"I'm just capitalizing on the system," Belanger said. "But this bill doesn't address why the overtime exists. It doesn't resolve anything."
Contact senior reporter Cris Barrish at 324-2785 or cbarrish@delawareonline.com.
