Teacher retirement changes removed, omnibus retirement bill advanced

Lawmakers advanced an omnibus retirement bill to final reading May 10 after amending out proposed changes to the state’s school employee retirement plans.

Seward Sen. Mark Kolterman, chairperson of the Nebraska Retirement Systems Committee, said he introduced LB415 in an attempt to eliminate or reduce the practice of teachers returning to work after initial retirement.

As amended by the Nebraska Retirement Systems Committee on general file, the bill would have eliminated exemptions that allow intermittent voluntary or substitute service during the 180-day separation of service after termination. It also would have required a three-year break in service if a school employee received an early retirement incentive.

Several senators raised concerns that these provisions would compound the state’s substitute teacher shortage, especially in rural areas.

Kolterman offered an amendment on select file that removed the provisions, which he said would leave current law intact regarding separation of service for school employees. He said he would conduct an interim study on the issue and continue to work with stakeholders.

“As we move forward, I will continue to work and negotiate in good faith,” Kolterman said. “My primary concern is to protect the plan and maintain the fiscal health of these plans.”

The amendment was adopted on a 41-0 vote.

A provision that creates a new “Rule of 85” with a minimum retirement age of 60 for new school employees was retained in the bill. The change would apply only to employees hired on or after July 1, 2018. Under the rule, an employee could retire at age 60 if their age plus their years of creditable service equal 85 or higher.

Also included are provisions of six additional measures introduced by Kolterman that would make changes to the various state retirement plans, including:
LB31, which would make changes in the school employees retirement plan related to creditable service;
LB32, which would change the frequency and method of calculation of county prior service annuity payments in the County Employees Retirement Act;
LB110, which would eliminate the obligation of political subdivisions to file annual reports on defined contribution plans after Dec. 31, 2017, and delete the requirement for the Public Employees Retirement Board to design and provide the annual reporting form;
LB278, which would clarify the definition of disability in the county, state and school plans;
LB413, which would make technical and clean-up changes to the judges and state patrol retirement plans; and
LB532, which would make changes regarding military service in the judges and state patrol plans.

Also included are provisions of LB219, introduced by the Nebraska Retirement Systems Committee, which would change provisions related to authorized benefit elections and actuarial assumptions.

Following adoption of a technical amendment offered by Kolterman, the bill advanced to final reading by voice vote.