Retirement Systems

Retirement plan revisions amended

Senators amended a bill May 1 that would change the retirement plan for Nebraska judges.

Introduced by Omaha Sen. Jeremy Nordquist, LB468 would create a new tier of reduced benefits for judges who become members of the judges’ retirement plan on and after July 1, 2015.

The bill would set the maximum cost-of-living adjustment (COLA) at 1 percent unless the plan is 100 percent funded. If the plan is completely funded, the Public Employees’ Retirement Board would have the authority to grant a supplemental COLA, which would be in addition to the 1 percent COLA and could not exceed 1.5 percent.

The measure also would require that the final retirement benefit be calculated using an average of the five highest years of salary and that the contribution rate for judges in this tier not decrease after 20 years.

Nordquist said updating the retirement plan for judges is necessary because it is partially funded by court fees, which have decreased in recent years. Attractive retirement benefits are critical to retaining employees, he said.

“This is a recruiting tool and a retention tool,” Nordquist said. “This makes sure we are looking forward and that the plan is sustainable.”

A Nebraska Retirement Systems Committee amendment, adopted 33-0, would increase the contribution rate to 10 percent for judges who become members of the plan on and after July 1, 2015. It also would:
• redirect specific county court fees to the judges’ retirement fund that currently are deposited into the state’s General Fund;
• direct $2 each from civil, criminal, traffic and probate case docket fees to the retirement fund, beginning July 1, 2015;
• assess a $6 fee on each participant in adult and traffic pre-trial diversion programs and direct the funds to the retirement fund, beginning Oct. 1, 2015;
• direct $3 each from civil, criminal, traffic and probate case docket fees to the retirement fund, beginning July 1, 2017;
• require the county or city treasurer to forward revenue collected from pre-trial diversion participants to the Nebraska Public Employees’ Retirement System; and
• require each county and city attorney who has established a pre-trial diversion program to inform, within 60 days of establishment, the director of the Nebraska Public Employees’ Retirement System about which pre-trial diversion programs have been established.

Omaha Sen. Ernie Chambers, opposing the bill and the amendment, filed a motion to bracket LB468. It is a conflict of interest when court fees are used to pay for or provide retirement benefits to justice system employees, he said.

“They want to create cash-register or checkbook justice,” Chamber said, and withdrew the bracket motion.

Sen. Jerry Johnson of Wahoo also opposed the amendment, saying that higher fees for pre-trial diversion programs might dissuade people from enrolling.

Nordquist disagreed, saying diversion programs like Nebraska’s Safety Training Option Program (STOP) is too popular to be affected by a price increase.

“A $6 fee won’t deter people from participating in [Nebraska’s traffic ticket dismissal] STOP program,” he added. “The issue is, do we want to move away from court fees towards general funds?”

After adopting the committee amendment, lawmakers adjourned for the weekend before taking further action on the bill. It is scheduled for further debate Monday afternoon.

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