Lawmakers made changes to two retirement systems this session, while efforts to alter a school employee plan stalled.
LB468, introduced by Omaha Sen. Jeremy Nordquist, creates a new tier of reduced benefits for judges who become members of the judges’ retirement plan on and after July 1, 2015.
The bill requires 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. New judges will be required to contribute 10 percent of their annual salaries to the retirement plan.
Beginning July 1, 2015, the bill redirects $2 from civil, criminal, traffic and probate case docket fees from the state’s General Fund to the judges’ retirement plan. This change will generate an estimated $660,000 annually. Beginning July 1, 2017, the bill redirects $4 from those fees to the retirement fund, which is estimated to generate $1.3 million annually.
The bill passed with an emergency clause on a 44-2 vote.
Senators also approved a bill that changes contributions to the Lancaster County Retirement System.
LB126, introduced by Nordquist, increases the combined employee and employer contribution rates from a maximum of 13 percent to a maximum of 16 percent of the employees’ salaries.
Employees receiving a 150 percent employer contribution match can elect to switch to a 100 percent employer match for all future contributions. The election will be irrevocable.
The bill also changes the population size for counties authorized to create their own retirement plan. The changes increase the minimum population size from 200,000 to 250,000 and the maximum population size from 300,000 to 500,000.
The bill passed on a 49-0 vote.
Senators bracketed a bill that proposed several changes to the Omaha school retirement plan. Omaha Public Schools is the only district in the state that has its own retirement plan.
Introduced by Nordquist, LB448 would make several changes in order to bring the Class V (Omaha) and School Employees Retirement System closer to a potential merger in the future.
Among other changes, the bill would further align Omaha member benefits with statewide school employee benefits by limiting the state service annuity and medical cost of living increase 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 said the amendment was the result of extensive negotiations and was intended to reduce benefits and ensure professional management of investments to further secure the retirement plan of the state’s largest school district.
Debate on the measure stalled during select file debate and O’Neill Sen. Tyson Larson offered a motion to bracket the bill until April 15, 2016.
Nordquist did not object to the bracket motion and it was approved by unanimous consent, ending debate on LB448 for the session.