School retirement plan changes passed
Lawmakers passed a bill May 7 that makes changes to the state’s school retirement plans.
LB553, introduced by Omaha Sen. Jeremy Nordquist, creates a new tier of reduced benefits for employees under the School Employees Retirement System (SERS) who begin work for the first time on or after July 1, 2013.
The new benefits tier will take into account a five year salary average to determine benefits instead of the three year average used currently. The maximum cost-of-living adjustment will be 1 percent instead of the current 2.5 percent adjustment figure. The changes will not apply to members of SERS prior to July 1, 2013.
The bill also makes a series of other changes to the plans, some of which include:
• the state statutory contribution rate will be increased from 1 percent to 2 percent of total compensation of all school employees beginning July 1, 2014;
• the amortization method in the School Employees Retirement Act will be changed from level dollar to level percentage of salary beginning July 1, 2013;
• eligibility for membership in the school retirement plan will be changed from 15 hours per week to 20 hours; and
• the sunset will be eliminated from the school budget and lid exclusions for expenditures above the Class V employer contribution rate of 7.37 percent and the school employer contribution of 7.35 percent.
LB553 also incorporates provisions from three other bills introduced by Nordquist.
LB554 applies the provisions of LB553 to all Class V school employees hired after July 1, 2013.
LB305 changes the amortization method in the Nebraska State Patrol Retirement Act from level dollar to level percentage of salary beginning July 1, 2013.
LB306 changes the amortization method in the Judges Retirement Act from level dollar to level percentage of salary beginning July 1, 2013.
Senators initially voted 27-8 to approve the bill, which was insufficient for passage of a bill with an emergency clause. Nordquist filed a motion to reconsider the vote, which was adopted, and the body voted to pass the bill with the emergency clause 34-0.
