Archives - 106th Legislature

LB 683
PERB

Requests the Public Employees Retirement Board (PERB) develop a work plan, recommendations, and cost estimate of allowing members of OSERS who have terminated employment to elect a one-time lump sum payment of a their retirement account in lieu of the lifetime pension benefit. This payment amount shall be determined using a percentage of the actuarial present value of the member's retirement account.

The work plan is due 6/30/2020. The PERB may bill the OSERS system for all services and related expenses in completion of the work plan.

LB 806
State, County, Judges, School, Patrol

This bill would exempt certain retirement benefits from Nebraska income taxes. Effective 1/1/2021, Social Security benefits, retirement benefits from a 401(a) or 403(a) qualified retirement plan, retirement benefits from OSERS retirement plan, retirement benefits from the County, Judges, Patrol, School, and State retirement plans, retirement benefits from the US Civil Service or Federal Employees Retirement System, and military retirement benefits would be exempt from Nebraska income taxes.

Referred to Revenue Committee

LB 1054
All Plans

Modifies Required Minimum Distribution (RMD) language to conform to recent changes in federal law. This bill would increase the RMD age from 70½ to 72 for individuals who turned 70½ after 12/31/2019.

Final Reading

LB 31
PERB

LB 31 requires the Public Employees Retirement Board (PERB) to create and submit a report examining the process and costs to transfer administration of the Omaha School Employee's Retirement System (OSERS) to the Nebraska Public Employees Retirement System (NPERS).

The report shall include:

• • A detailed analysis and recommendations regarding management, administration, actuarial service, information technology, computer infrastructure, accounting, member data and record transfer.
• • Necessary statutory changes to achieve the transfer of management and actuarial services.
• • Staff training and assessment of staffing needs.
• • Educational and communication plans to fully inform all system stakeholders and affected governmental entities regarding management changes.
• • Sufficient timeframes for an orderly transition and implementation of management and actuary changes.
• • Cost estimates associated with the tasks necessary to carry out the management transition.
• • A comparison of the current annual cost to administer OSERS with an estimate of the annual cost for the PERB and NPERS to administer OSERS after a transfer occurs.

The cost of the report shall be funded by Omaha Public Schools (OPS) and provided to the Clerk of the Legislature no later than June 30, 2020.

LB 32
State, County,
DCP, & DROP

LB 32 allows the Nebraska Investment Council (NIC) to modify the 13 investment options currently provided to participants in the State and County Defined Contribution plan. This will also result in a change to the investment options in the voluntary State Deferred Compensation Plan (DCP), and the State Patrol DROP program.

On or after January 1, 2021, investment options shall include, but not be limited to:

• • An investor select account which shall be invested under the direction of the state investment officer with an asset allocation and investment strategy substantially similar to the investment allocations made by the state investment officer for the defined benefit plans. These investments shall most likely include domestic and international equities, fixed income investments, and real estate, as well as potentially additional asset classes.
• • A stable return account which shall be invested by or under the direction of the state investment officer in a stable value strategy that provides capital preservation and consistent, steady returns.
• • An equities account which shall be invested by or under the direction of the state investment officer in equities.
• • A fixed income account which shall be invested by or under the direction of the state investment officer in fixed income instruments.
• • A life-cycle fund which shall be invested under the direction of the state investment officer with an asset allocation and investment strategy that adjusts from a position of higher risk to one of lower risk as the member ages.

Defined Contribution, DCP, and DROP participants shall be given a detailed current description of each new investment option. Participants who fail to make an investment election from the new funds shall have their account invested in the life-cycle fund.

Passed and Approved by Governor

LB 33
PERB

Increases the Public Employees Retirement Board (PERB) per diem from $50 to $75. In addition, the bill changes the actuary contract limits to allow for two 3-year options, and removes the requirement for a competitive, formal, sealed bidding process for the legal compliance audit. Finally, the bill changes the due date of the Annual Legislative Report from March 31 to April 10, effective 2020.

Passed and Approved by Governor

LB 34
State, County, School, & DCP

Under current law, State and County members who have filed a grievance regarding a termination may withdraw up to $25,000 from their account pending the outcome of the grievance. If reinstated, the member must repay the distribution. LB 34 eliminates this grievance distribution provision.

Changes reemployment provisions for State and County effective January 1, 2020.
Under the new provisions:
A State or County member who is reemployed in any capacity with less than a 120-day break in service shall not be deemed to have terminated employment.
In this instance, the member must:

• • Return to plan participation. A member previously participating in Defined Contribution shall resume participation in Defined Contribution. A member participating in Cash Balance shall resume participation in the Cash Balance Tier they were previously participating.
• • Repay all distributions, including annuity payments. No further distributions may be taken.
• • Make up any missed contributions.

• • A member previously participating in Defined Contribution shall resume participation in Defined Contribution. A member participating in Cash Balance shall resume participation in the Cash Balance Tier in which they were previously participating.
• • If the member purchased an annuity, these payments will continue.
• • No further distributions may be taken until the member again terminates employment at all employers/entities participating in the plan.
• • If the member was previously vested, they remain vested.
• • If the member was not vested at the time of termination, prior vesting credit shall be restored if they did not take a distribution.
• • If the member was not vested at the time of termination and took a distribution, vesting credit for the prior service is forfeited. During the first three years after reemployment, the member may make a one-time election to repay lump sum and/or rollover distributions. If repayment is elected, vesting credit and forfeited employer matching contributions shall be restored in proportion to the percentage of repayment against the total value of all distributions. Repayment must be completed within five years of reemployment or prior to termination, whichever is earlier.

Removes the separate service credit definitions for Tier Four in the School plan. Service credit provisions will be the same for all four tiers. Clarifies service credit is not granted for service provided in an Omaha Public School.

Under prior statute, School plan members who were actively employed and participating in the plan on April 17, 2014, had until April 16, 2020, to apply for and repay a refund. Repayment must be completed no later than April 16, 2020, or termination, whichever is earlier. LB 36 retains the April 16, 2020 application deadline but extends the repayment deadline to April 16, 2021, or termination, whichever is earlier.

Removes the payroll deduction option for School plan members who submit an application to repay a refund within one year of termination or within one year of the repayment deadlines outlined in statute.

Designates the spouse of a married plan member as the default primary beneficiary in the State, County, School, and DCP plans. When a married plan member dies with no beneficiary designation on file, the surviving spouse who was married to the member on the member's date of death shall be considered the primary beneficiary of the retirement account.

AM591 amended and revised the provisons of LB 35, LB 36, and LB 565 into this bill.

Passed and Approved by Governor

LB 35
State & County

LB 35 makes changes to the eligibility and reemployment provisions of the County and State plans.

It would require permanent full-time State and County employees be at least 18 years old to participate in the plan, which is consistent with what is required of part-time employees.

Consistent with current practices, effective January 1, 2020 a State or County member who is reemployed in any capacity with less than a 120-day break in service shall not be deemed to have terminated employment.
In this instance the member must:

• • Return to plan participation. A member previously participating in Defined Contribution shall resume participation in Defined Contribution. A member participating in Cash Balance shall resume participation in the Cash Balance Tier they were previously participating.
• • Repay all distributions, including annuity payments. No further distributions may be taken.
• • Make up any missed contributions.

Effective January 1, 2020 a State or County member who is reemployed on a permanent full or permanent part-time basis on or after a 120-day break in service:

• • A member previously participating in Defined Contribution shall resume participation in Defined Contribution. A member participating in Cash Balance shall resume participation in the Cash Balance Tier in which they were previously participating.
• • If the member purchased an annuity, these payments will continue.
• • No further distributions may be taken until the member again terminates employment at all employers/entities participating in the plan.
• • If the member did not take a distribution, prior vesting credit shall be restored.
• • If the member took a distribution, vesting credit for the prior service is forfeited. During the first three years after reemployment, the member may make a one-time election to repay lump sum and/or rollover distributions. If repayment is elected, vesting credit and forfeited employer matching contributions shall be restored in proportion to the percentage of repayment against the total value of all distributions. Repayment must be completed within five years of reemployment or prior to termination, whichever is earlier.

Revised and Amended into
LB 34

LB 36
School

LB 36 modifies repayment of refund time frames and payment options, and clarifies and simplifies service credit provisions for School plan members.

Removes the separate service credit definitions for Tier Four. Service credit provisions will be the same for all four tiers. Clarifies service credit is not granted for service provided in an Omaha Public School.

Under current statute, members who were actively employed and participating in the plan on April 17, 2014, have until April 16, 2020, to apply for and repay a refund. Repayment must be completed no later than April 16, 2020, or termination, whichever is earlier. LB 36 requires these members submit an application for repayment no later than April 16, 2020 but extends the repayment date to April 16, 2021, or termination, whichever is earlier.

For all refund repayments, members who submit an application within one year of termination or within one year of the repayment deadlines outlined in statute cannot utilize the payroll deduction option to repay the refund.

Amended into
LB 34

LB 565
State, County, School & DCP

LB 565 designates the spouse of a married plan member as the default primary beneficiary. When a married plan member dies with no beneficiary designation on file, the surviving spouse shall be considered the primary beneficiary of the retirement account.

Amended into
LB 34

LB 683
PERB

LB 683 requests the Public Employees Retirement Board (PERB) develop a work plan, recommendations, and cost estimate of allowing members of OSERS who have terminated employment to elect a one-time lump sum payment of a their retirement account in lieu of the lifetime pension benefit. This payment amount shall be determined using a percentage of the actuarial present value of the member's retirement account.

The work plan is due June 30, 2020. The PERB may bill the OSERS system for all services and related expenses in completion of the work plan.

Hearing held
3/19