Senators bracketed a bill May 19 that proposed several changes to the Omaha school retirement plan. Omaha Public Schools (OPS) is the only district in the state that has its own retirement plan.
As introduced by Omaha Sen. Jeremy Nordquist, LB448 would have made current and new Class V (Omaha) school employees members of the School Employees Retirement System of the state of Nebraska. The bill was amended on general file to bring the two systems closer to a potential merger in the future.
Among other changes, the bill would limit the state service annuity and medical cost of living increase in the Omaha plan to individuals who were members prior to July 1, 2015. It also would raise the normal retirement age for Omaha school members from 62 to 65.
In addition, the bill would:
• move investment authority from the Omaha board of trustees and Omaha school board to the Nebraska Investment Council;
• restructure the administration and governance of the Omaha system to more closely align with the Public Employee Retirement Board’s governance of the statewide system; and
• create greater state funding parity between the two systems.
Nordquist offered an amendment during select file debate to remove a requirement that if the state transfers general funds to meet a shortfall in the statewide school retirement system, a proportional transfer would be made to the Omaha system.
Under the amendment, adopted 27-10, the Appropriations Committee would hold a hearing to consider transferring the funds.
Nordquist called the amendment an “olive branch” to attempt to keep the bill moving forward, given concerns that were raised during general file debate. The likelihood of such a transfer being necessary are remote, he said, while the benefit reduction portions of the bill are important and would save state tax dollars.
“We’ve got a lot of concessions here [from OPS],” Nordquist said. “At the end of the day, if that’s not sufficient, that’s fine by me.”
Seward Sen. Mark Kolterman offered an amendment that instead would have allowed OPS to increase their levy limit to pay for school district contributions in the event of a retirement system shortfall—known as an actuarially required contribution (ARC).
“I just do not see why taxpayers that don’t reside in the Omaha Public Schools [district] should be on the hook for any financial liabilities for an ARC that could occur,” Kolterman said.
Norquist opposed the amendment, saying adoption of his previous amendment had removed any automatic liability for Nebraska taxpayers. The Kolterman amendment instead would raise property taxes for those in the OPS district, he said.
“I do no support raising property taxes on anyone in Nebraska,” Nordquist said.
The amendment failed 17-18.
O’Neill Sen. Tyson Larson then offered a motion to bracket the bill until April 15, 2016, saying the state cannot afford to continue supporting defined benefit pension plans.
Nordquist did not object to the bracket motion and it was approved by unanimous consent, effectively ending debate on LB448.