School Employees Pension Plan
Important Changes: LB198 - Unlimited Subbing/Volunteering and Immigration Documentation
With the recent passage of LB198 in the Unicameral there are changes to the return-to-work
guidelines for School Plan members. Members who have terminated employment but are not taking a distribution or applying for a retirement benefit are now allowed to provide
unlimited substitute and voluntary service, as well as temporary service, following the termination of regular employment. It also changed the required documentation to
determine eligibility for plan participation based on immigration status.
Please reference our Frequently Asked Questions (FAQ) about LB198 document. After reviewing the FAQ document, if
questions remain, our Member Services area is available at (402) 471-2053 or (800) 245-5712, option #1.
The 1945 Legislature established the School Retirement System for Nebraska school employees. As a defined benefit plan, lifetime monthly retirement "pension" benefits are based on this formula:
Average highest 12-month periods of compensation
X
Creditable Service Years
X
Formula Factor (currently 2%)
X
Option Factor
Plan Overview:
- All permanent public school employees who work at least 20 hours per week on an ongoing, regular basis, except Class V school districts (Omaha), are members of the system.
- Temporary and substitute employees not hired on an ongoing, regular basis, cannot participate.
- School Plan members contribute 9.78% of gross compensation to retirement. This is matched by the employer at 101%.
- Vesting occurs with 5 years of service credit. Members who joined the plan prior to July 1, 2016 can also vest with 1/2 a year service credit by working for a participating employer up to age 65. Unvested members are only eligible for a refund of their contributions, plus interest.
- The normal retirement age for unreduced benefits is age 65.
- A member may retire as early as age 60 and receive a reduced benefit.
- In 1998, legislation for a "Rule of 85" benefit was passed. This legislation allows a member who is at least 55 to retire with unreduced benefits when the member's age and years of service equal 85. For members hired (or rehired as a new member) on or after July 1, 2018, the minimum age for the "Rule of 85" is 60.
Recommended Reading for New and Terminating Members
New Member Information Packet (pdf)
This packet gives new members a very brief overview regarding the retirement benefits offered to School employees. It also contains links to the forms that should be provided to all new members.
Terminating Member Information Packet (pdf)
This packet provides information regarding benefit/distribution options at termination.
Required Minimum Distribution Packet (pdf)
This packet provides information and warnings regarding Required Minimum Distributions (RMDs).
Application Process
It is the responsibility of the member to notify NPERS and apply for benefits. Members cannot take a benefit distribution until they have ceased employment (terminated) at all school districts, ESUs, and state agencies participating in the plan. Monthly (pension) benefits will not increase once a vested and terminated member reaches the age/status when they can draw an unreduced benefit. Please refer to the plan handbook for information on benefits and the application process.
Pension benefits are issued on the last day of every month unless that day falls on a weekend or federal holiday. If the last day of the month is a weekend or holiday, benefits will be issued on the prior business day. Retirees will be notified of the upcoming payment schedule via the annual NPERS Retiree Update. Members who have not received their benefit should contact our office.
Educational Videos for Members
Retirement Seminar Video Series
The following six videos were created to serve as an alternative to the in-person NPERS School Preretirement Seminars. These seminars are designed to give school plan members nearing retirement an overview of their retirement plan, the Social Security and Medicare programs. and the fundamentals of estate planning
Leaving Service Before Retirement Age
Deferral
If you terminate employment prior to retirement age with five or more years of service credit, you may leave your account on an inactive basis. Once you are within 6 months of retirement age, you should contact NPERS to apply for your benefit.
If you terminate employment prior to earning enough service credit for vesting, you may defer the account (recommended if you plan to return to work in the system) and continue to earn interest. If you return to employment at a participating employer, you will resume earning service credit. If you do not earn enough service credit to vest for benefits, you will only be eligible for a refund/withdrawal (see below).
Inactive members should keep their addresses up to date with NPERS. They cannot defer receipt of benefits later than April 1 following the year they reach their required minimum distribution age.
For more information on retirement age and eligibility, please refer to the plan handbook (pdf).
Withdrawal (REFUND)
If you terminate employment from the Nebraska public school system, you may withdraw your accumulated contributions and interest in a lump sum refund. You are eligible to receive a refund no earlier than four months after termination of employment. Due to processing timelines, distribution of a refund will occur no sooner than 20 business days following receipt of your completed application. Applications are processed in the order received and as soon as administratively possible. Your school must submit a Non-Contributing Member form to NPERS in order for you to receive a refund.
PLEASE NOTE!!
- Taking a refund removes your years of service credit and terminates your membership in the plan.
- Withdrawals/refunds do not include employer contributions.
- If you return to work for any employer participating in the plan within 180 days, you will be required to repay the refund.
- You are not eligible to receive a refund if you cease active work at the end of one school year and return to work during the following school year with any school district or employer participating in the Plan.
- The refund will be subject to 20% federal tax withholding and 5% Nebraska state tax withholding.
- You are not required to take a refund when ceasing employment.
For additional information on refunds, please see:
Information on Lump Sum Withdrawals/Frequently Asked Questions.
To apply for a refund; download, complete, and submit these forms to our office:
School Application for Refund/Refund Election Form (pdf)
Direct Deposit Form (pdf)
If you are rolling your refund to another qualified retirement account, please complete and submit these forms:
School Application for Refund/Refund Election Form (pdf)
Rollover to Financial Institution Form (pdf)
You should also download and review the tax information regarding refunds:
IRS Tax Information (pdf)
School Refund Application Guide
Repaying a Refund
Plan members who cease employment and take a refund may be eligible to restore cancelled service credit by repaying the refund. Only members who return to plan participation are eligible to repay a refund. Members must notify NPERS within five years of reemployment if they wish to repay a refund. Refund applications must be submitted to NPERS at least 60 days prior to termination or the 5-year deadline. Please refer to the plan booklet (pdf) for additional information.
Per statute, the cost for members who elect repayment shall include the original amount of the refund plus the actuarial assumed rate of return which would have been earned.
Below is a table to help you estimate the cost of a repayment of refund. Find the factor for the year you took your refund and multiply the gross amount of the refund by that factor. Actual cost of repayment will be determined by NPERS upon written receipt of a request for repayment.
Optional Service Credit
Active School plan members may increase creditable years of service by purchasing Optional Service Credit (OSC). OSC may be purchased for Out of State service, Leave of Absences, or 12-Month Preretirement service. Please refer to the School plan booklet (pdf) for additional information.
Members who wish to purchase Out of State, Leave of Absence, or 12-month Preretirement service should contact NPERS in writing. To learn more about Out of State and the 12-month Preretirement service purchases and calculate an estimate, please visit the School Purchase of Service Estimator
School Seminar Schedules
All Preretirement Seminars for School members are held in the Spring. You will receive registration information approximately four weeks prior to the seminar. For more information, visit the Retirement Seminars main page.