Archives - 105th Legislature

This bill would exempt retirement benefits from NE State taxes.

Indefinitely Postponed

This bill would change how the Judges Plan is funded. Effective July 1, 2017, the portion of court fees currently appropriated to the retirement fund would be diverted to the general fund. Each July 1st an annual employer matching contribution (of a currently undesignated percentage of member compensation) would then be remitted to the Judges’ retirement fund.

Indefinitely Postponed

This “clean-up” bill clarifies and harmonizes the definition of actuarial equivalent across the plans. It does not make any changes to plan benefits.

Amended into
LB 1005

Further defines service credit in the School Plan. Jury duty shall be included as service credit when the member is paid full compensation by the employer. Adds language limiting service credit to the statutory definitions.

For employees hired on or after July 1, 2017 , used sick and vacation leave must be leave accrued by the member in order to be counted as service credit. "Sick Leave Bank" or donated leave used by a member would not be eligible for service credit.

Would remove the language allowing employers to pay for purchases of service under the 12-month preretirement provision. The bill would require these purchases be paid in full by the employee.

Amended into LB 415

This bill would exempt retirement benefits from NE State taxes.

Held Over

State & County
The bill clarifies disability as "…an inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which began while the member was a participant in the plan and which was initially diagnosed or which became disabling while the member was an active participant in the plan and can be expected to result in death or be of a long-continued and indefinite duration."

The bill also allows the Public Employees Retirement Board (PERB) to waive the requirement for a medical exam for disability retirement if the PERB determines "…extraordinary circumstances exist which preclude substantial gainful activity by the member. Such circumstances shall include hospice placement or similar confinement for a terminal illness or injury."

School
The bill would modify the application time frame for disability retirement. Under current law, work related disability applications may be made within five years of termination, and non-work related applications within one year. LB 278 would require all disability applications be made within one year of termination of employment.

In addition, the bill would allow the retirement board to require any disability beneficiary who has not attained age of fifty-five to undergo a medical examination at the expense of the board once each year. If any disability beneficiary refuses to undergo such an examination, the disability retirement benefit may be discontinued by the board.

Revised & Amended into LB 415

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

Clarifies language relating to the supplemental cost-of-living payments (COLP) for Judges participating in Tier 2.

Amended into LB 415

School
Increases the minimum age to qualify for the “Rule of 85” from 55 to 60. This provision would apply to members hired on or after July 1, 2018, and participants who have taken a refund or retirement benefit and returned to membership (as a new employee) on or after July 1, 2018.

Further defines service credit in the School Plan for employees hired on or after July 1, 2018. Used sick and vacation leave must be leave accrued by the member in order to be counted as service credit. “Sick Leave Bank” or donated leave used by a member would not be eligible for service credit. Jury duty is added to the definition of service credit when the member is paid full compensation by the employer. Adds language limiting service credit to only those items found in the statutory definitions.

Clarifies early retirement incentives are not counted as compensation for all plan members, and further defines these payments.

Defines disability as “…an inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which was initially diagnosed or became disabling while the member was an active participant in the plan and which can be expected to result in death or be of a long-continued and indefinite duration.” In addition, the bill changes the application time frame for disability retirements. Under the new provisions, all disability applications must be made within one year of termination of employment.

Removes the language allowing employers to pay for purchases of service under the 12-month preretirement provision and requires these purchases be paid by the employee.

Employers participating in the plan must provide written notification of all terminations. This notification shall include whether or not the member accepted and received a retirement incentive and written certification from both the member and employer that, prior to the member's termination, there was no prearranged written or verbal agreement to return to work in any capacity.

Changes the valuation for lump sum settlements to an estate from the Moody’s Triple A Bond Index to the Barclays Long U.S. Corporate Bond Index.

State & County
Currently, State and County Cash Balance annuity rates are determined using the 1994 Group Annuity Mortality Table. This bill would allow the use of updated mortality factors. The new mortality assumptions for calculating cash balance annuity rates shall use a unisex mortality table recommended by the plan actuary and approved by the Public Employees Retirement Board (PERB) after completion of an actuarial experience study, a benefit adequacy study, or a plan valuation. Retirement benefits will be calculated using the mortality table and actuarial factors in effect when the member begins retirement (Retirement Date). These provisions would apply to Cash Balance members hired after January 1, 2018; or terminated members rehired on or after January 1, 2018, who have taken a distribution or refund from their account.

Clarifies that the PERB may make adjustments to the Cash Balance interest (annuity) rate based on a recommendation from the plan actuary after completion of an actuarial experience study, a benefit adequacy study, or a plan valuation. This rate may be, but is not required to be, equal to the actuarial assumed rate of return. Retirement benefits will be calculated using the interest rate and actuarial factors in effect when the member begins retirement (Retirement Date). In addition, the bill clarifies the annuity rate for Defined Contribution members as the Pension Benefit Guaranty Corporation interest rate plus three-fourths of one percent, or the interest rate used for Cash Balance, whichever is lower.

Defines disability as “…an inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which was initially diagnosed or became disabling while the member was an active participant in the plan and which can be expected to result in death or be of a long-continued and indefinite duration.” The bill also allows the PERB to waive the requirement for a medical exam for disability retirement if the PERB determines “…extraordinary circumstances exist which preclude substantial gainful activity by the member. Such circumstances shall include hospice placement or similar confinement for a terminal illness or injury.“

Removes language requiring the PERB to provide information regarding the tax consequences of the various retirement options, to members who are eligible for retirement.

Changes provisions for military service credit. Under the new language, members who are reemployed after qualified military service will be granted vesting and benefit credit for the period of military service. The employer shall be responsible for funding military service benefits including member and employer contributions. Payments must be made within 18 months. Late payments will be subject to actuarial costs and interest. These provisions only apply to military service that begins on or after January 1, 2018 and falls within the definition of uniformed service per the Uniformed Services and Reemployment Rights Act of 1994 (USERRA). The bill allows the PERB to adopt and promulgate rules and regulations to carry out these provisions including, but not limited to, notification of military service, acceptable methods of payment, determining the compensation upon which the contributions must be made, and the documentation required to substantiate that the individual was reemployed pursuant to USERRA regulations.

County
Allows Counties to make quarterly, semiannual, or annual payments to individuals receiving a prior service annuity.

School, Judges, & Patrol
Members who are reemployed after qualified military service will be granted vesting and benefit credit for the period of military service. The employer shall be responsible for funding military service benefits including member and employer contributions. Payments must be made within 18 months. Late payments will be subject to actuarial costs and interest. These changes to military service credit provisions only apply to military service that falls within the definition of uniformed service per the Uniformed Services and Reemployment Rights Act of 1994 (USERRA). The bill allows the Public Employees Retirement Board (PERB) to adopt and promulgate rules and regulations to carry out these provisions including, but not limited to, notification of military service, acceptable methods of payment, determining the compensation upon which the contributions must be made, and the documentation required to substantiate that the individual was reemployed pursuant to USERRA regulations.

Currently, annuity rates are determined using the 1994 Group Annuity Mortality Table and an 8% interest (annuity) rate. This bill would allow the use of updated mortality factors using a unisex mortality table and allow the PERB to adjust the interest rate. The new mortality assumptions and interest rates shall be recommended by the plan actuary and approved by the PERB after completion of an actuarial experience study, a benefit adequacy study, or a plan valuation. Such interest rate may be, but is not required to be, equal to the actuarial assumed rate of return. Retirement benefits will be calculated using the mortality table, interest rate, and actuarial factors in effect when the member begins retirement (Retirement Date). These provisions would apply to members hired after July 1, 2017; or terminated members rehired on or after July 1, 2017, who have taken a retirement benefit or refund of their account.

County, Judges, School, Patrol, State
For retirement plan purposes, the bill defines hire date or date of hire as “…the first day of compensated service subject to retirement contributions.”

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

Judges
Clarifies language relating to the supplemental cost-of-living payments (COLP) for Judges participating in Tier 2.

Passed and Approved by Governor

This bill would merge Omaha Public School Retirement (OSERS) into the Nebraska Public School Plan effective July 1, 2020. Requires NPERS use the current OSERS benefit and contribution structures for all active, deferred, inactive, disabled, and retirement members of the OSERS plan. Transfers all assets, rights, liabilities, and obligations of OSERS obligations to the School Plan. Requires the Retirement Systems Committee of the Legislature to contract with an actuary to provide an analysis that will identify the additional contribution to be made each year for additional funding that would have been required under OSERS to achieve the same funding ratio as the School Plan. Omaha Public School employees first hired on or after July 1, 2020, would participate in the School Plan provisions.

Held Over