Archives - 103rd Legislature

103rd Legislature - 2013 & 2014

2014 Legislative Action

LB 918
Defined Contribution, Patrol DROP,
DCP
Removes the requirement the Stable Value fund be invested only in guaranteed investment contracts and allows the inclusion of investment options that will provide "capital preservation and consistent, steady returns." Amended into LB 759
Passed and approved by Governor
LB 927
Judges
Clarifies that court fees to be credited to the Judge’s retirement plan cannot be waived by the court. In Committee
LB 1041
School
School employees who initially joined the plan on or after July 1, 2014, must have at least 10 years of service credit in order to purchase additional years of service under the 12-month preretirement service purchase provision. Amended into LB1042
LB 1042
School

The proposed legislation would revise the provisions to repay a refund and change the eligibility requirements for the 12-month preretirement service purchase.

Under current statute, the cost to repay a refund is calculated using the original amount of the refund plus regular interest provided the member submits application within three years of reemployment. Refund repayments three or more years after reemployment are calculated using the original amount of the refund plus the actuarial assumed rate of return.

LB1042 removes the refund plus regular interest based purchase.

All refund repayments will be calculated using the refund plus the actuarial assumed rate of return (as of the date of repayment) and must be submitted within five years after returning to employment. Requests to repay a refund will be allowed on a one-time basis. Members must be actively employed and participating in the plan in order to repay a refund. All refund repayments must be completed within five years of reemployment or prior to termination. Service credit will be restored in proportion to the amount repaid.

Members currently employed and participating in the plan will have an extended time frame to submit a one-time application for repayment. These applications must be received within six years from the effective date of the bill, and repayment completed within six years from the effective date of the bill or prior to termination. The repayment will be calculated using the original amount of the refund plus the actuarial assumed rate of return.

In addition, the bill clarifies individuals reemployed on or after July 1, 2013 who were previously participating under Tier 1 provisions and took a refund, will return to plan participation under Tier 2 status. These members may return to Tier 1 status only after repaying the refund in full thereby restoring all Tier 1 service credit.

The bill would also require individuals who initially join the plan on or after July 1, 2014, to acquire a minimum of ten years of service credit prior to purchasing additional years of service under the 12-month preretirement service purchase.

Provisions of LB1042 took effect on April 17.

Passed and Approved by Governor

2013 Legislative Action

LB 77
All Plans
This bill proposes state funds and funds administered by the state, including public employee retirement funds, would not be invested in companies that provide power production-related services, mineral extraction activities, or military equipment to the government of Iran. Held Over
LB 227
All Plans
This bill proposes to exclude retirement benefits from Nebraska State income tax.

Beginning January 1, 2014, up to January 1, 2015, when filing Nebraska State income tax, federal adjusted gross income shall be reduced by thirty-three and one third percent of all amounts received as retirement benefits to the extent such benefits are included in federal adjusted gross income.

From January 1, 2015, up to January 1, 2016, this deduction shall increase to sixty-six and two-thirds percent of all amounts received as retirement benefits to the extent such benefits are included in federal adjusted gross income.

On or after January 1, 2016, this deduction shall increase to one hundred percent of all amounts received as retirement benefits to the extent such benefits are included in federal adjusted gross income.

Retirement benefits are defined as "the total amount of governmental or other pension or retirement pay, including, but not limited to, such pay received under the federal Social Security Act, defined benefit or defined contribution plans, annuities, individual retirement accounts, plans maintained or contributed to by an employer, or maintained or contributed to by a self-employed person as an employer, and deferred compensation plans or any earnings attributable to deferred compensation plans."
Held Over
LB 229
Judges
Under current statute, the court fee designated for the Nebraska Retirement Fund for Judges is scheduled to decrease from six to five dollars effective July 1, 2014. This bill proposes to remove this language, keeping the fee at six dollars. Amended into LB306
LB 238
All Plans

This bill proposes to exempt Social Security and certain retirement benefits from Nebraska State income tax.

Beginning January 1, 2013, when filing Nebraska State income tax, federal adjusted gross income shall be modified to exclude one dollar of retirement income for every one dollar of non-retirement income. This exclusion shall be limited to $60,000 dollars for taxpayers filing a married filing joint return and $30,000 dollars for taxpayers filing any other return.

For taxpayers filing a married joint return, if their federal adjusted gross income exceeds $120,000, the $60,000 exclusion shall be reduced by one dollar for every one dollar over the $120,000 threshold. For taxpayers filing any other return, if their federal adjusted gross income exceeds $60,000, the $30,000 exclusion shall be reduced by one dollar for every one dollar over the $60,000 threshold.

Non-retirement income means income other than retirement income that is included in the taxpayer's federal adjusted gross income and is earned in Nebraska. Non-retirement income excludes investment income.

Retirement income means any of the following amounts received which are included in the taxpayer's federal adjusted gross income:

  • Amounts received as benefits under the federal Social Security Act.
  • Amounts received as a retirement benefit under a retirement plan qualified under section 401(a) or 403(a) of the Internal Revenue Code.
  • Amounts received as a retirement benefit from the retirement systems provided for in the Class V School Employees Retirement Act, the County Employees Retirement Act, the Judges Retirement Act, the Nebraska State Patrol Retirement Act, the School Employees Retirement Act, the State Employees Retirement Act, the United States civil service retirement system, and the United States military employee retirement system.

Held Over
LB 263
All Plans
County
Permanent part-time employees age eighteen or older who wish to exercise the option to begin participation in the retirement system must do so within the first thirty days of employment. Provides for participation by counties with populations up to 200,000 (increased from the current cap of 150,000).

School
Increases the filing time for retirement applications from 90 to 120 days prior to effective date of retirement.

Effective July 1, 2013, salary increases as the result of a change in employers are no longer exempt from the salary caps used when determining benefits. Additional language added via AM835 (see below).

Clarifies termination dates. Stipulates employment contracts shall specify the period of employment including starting and ending dates.

The time frame for a new member to submit an application for eligibility and vesting credit shall be increased from 30 to 180 days.

State Patrol
The time frame for a new member to submit an application for eligibility and vesting credit shall be increased from 30 to 180 days.

State
Permanent part-time employees age eighteen or older who wish to exercise the option to begin participation in the retirement system must do so within the first thirty days of employment.

AM835
Clarifies language and definitions relating to the 8% salary cap (with no exemptions) for determination of retirement benefits for members retiring on or after 7/1/2013.
Passed & Approved by Governor
LB 305
State Patrol
This bill proposes the following changes for new members joining the State Patrol plan on or after July 1, 2013:
  • Final average monthly compensation shall be determined using compensation during the five twelve-month periods of service in which compensation was the greatest, divided by sixty.
  • Cost of living adjustments shall be capped at one percent. The 60% purchasing power language is removed.
Held Over
LB 306
Judges

Speaker Priority Bill
If passed into law, the temporary additional 1% member contribution rate currently scheduled to be removed as of 7/1/2014 would be retained.

AM624
Incorporates language from LB229.

AM1114
Increases salaries of Justices serving on the Nebraska Supreme Court effective July 1, 2013, and again on July 1, 2014.

Passed & Approved by Governor

AM624 Adopted

AM1114 Adopted

LB 355
State Patrol
This bill would change the definition of an eligible dependent child from under nineteen years of age to under eighteen years of age. Held Over
LB 405
All Plans
This bill proposes to eliminate the Nebraska State Income Tax including retirement plan distributions. Indefinitely Postponed
LB 406
All Plans
This bill proposes to exempt certain retirement benefits from Nebraska State Income Tax.

Effective January 1, 2014, when filing Nebraska State income tax, federal adjusted gross income shall be reduced by any distributions under the provisions of any retirement or disability plan for employees of any governmental agency. This reduction shall be limited to $12,000 for a married filing jointly return or $6,000 for any other return.
Indefinitely Postponed
LB 552
Firefighters
This bill would create a new cash balance retirement plan for firefighters employed by cities with populations of 5,000 to 100,000.

Participants would contribute 6.5% of compensation with a 200% employer match.

Vesting time frames are incremental. Members with less than four years of plan participation are not vested. Starting at four years of plan participation, members will be vested at 40% of the employer match. At five years, 60% vested. At 6 years, 80% vested. At 7 years, fully vested.

Adds a new member representing the plan to the retirement board.
Held Over
LB 553
School
This bill proposes multiple changes to the School Retirement plan.

Starting 7/1/2013, State contributions to the plan would increase from 1 to 2 percent of member salary. Language amended by AM802 - see below.

The bill contains a "placeholder" that would allow a change in contribution rates to an unspecified amount, at a future date. Language amended by AM802 - see below.

For new members joining the plan on or after July 1, 2013:
  • Final average monthly compensation would be determined using compensation during the five twelve-month periods of service in which compensation was the greatest, divided by sixty.
  • Cost of living adjustments would be capped at one percent. The 75% purchasing power language is removed.
AM802
Increases the number of hours used to determine plan membership from 15 to 20 hours per week.

Removes the language that would have reduced member contributions from the current rate of 9.78% to 7.28% on 9/1/2017.

Increases State contributions from 1 to 2 percent of member salary beginning 7/1/2014.
Approved by Unicameral over Governor's veto

AM802 Adopted
LB 638
School
This bill proposes to create a new School Employees retirement plan similar to the Nebraska State and County Cash Balance plan.

Individuals who would participate in the new plan include:
  • New employees hired after the plan effective date.
  • Employees who return to employment after taking a distribution or monthly benefit under the prior defined benefit plan provisions.
  • Employees who return to work with a break in service of five years or more.
Upon re-employment with a participating school, individuals who were previously participating in the defined benefit plan would return to participation in defined benefit if:
  • They did not take a distribution or monthly benefit, and;
  • Their break in service is less than five years.
The plan would mirror the provisions of the State and County Cash Balance plan with the following exceptions:
  • The member contribution rate is not yet designated in the bill.
  • The employer match would be 101%.
  • Vesting in the plan would occur at 5 years of participation or working for a participating employer up to age 55.
In addition, the bill would increase the total members of the PERB to 12 members - 6 plan members and 6 public members.
Indefinitely Postponed
LB 639
Judges & State Patrol
If passed into law, new State Patrol employees and Judges appointed on or after the effective date of the bill would participate in the State of Nebraska Cash Balance retirement. The plan would mirror the provisions of the State and County Cash Balance plan with the following exceptions:
  • The bill creates an additional "supplemental retirement plan" for Patrol members. Both the employer and plan members contribute an additional 7.65% of member compensation to the supplemental plan.
  • The bill incorporates prior retirement age language from the prior defined benefit plan for Patrol members including mandatory termination at age 60.
In addition, the bill increases the total members of the PERB to 12 members - 6 plan members and 6 public members.
Indefinitely Postponed