Bill would require retirement plan reports

Certain political subdivisions would be required to file an annual retirement plan report under a bill heard Jan. 22 by the Retirement Systems Committee.

Under LB759, introduced by Omaha Sen. Heath Mello, any political subdivision that offers a defined benefit retirement plan would be required to file a report with the committee if plan contributions do not equal the actuarial requirement for funding or the funded ratio of the plan is less than 80 percent.

The report would include an analysis of the conditions and recommendations for corrective actions.

Mello said the state currently engages in minimal oversight of such defined benefit plans and should encourage local government to adopt best practices to ensure their financial solvency.

“These are common sense changes that should improve the long-term health of local retirement plans,” Mello said.

Platte Institute for Economic Research director Dick Clark testified in support of the bill, saying pension shortfalls in other states frequently have played a role in government entity bankruptcies.

“This bill is an important first step to achieving full transparency in these retirement plans,” Clark said.

Gary Krumland of the League of Nebraska Municipalities testified in a neutral capacity. He said an exception to the bill’s requirements should be made for police and firefighter defined benefit plans in cities of the first class, which have been closed to new membership since 1984.

These plans have so few members, Krumland said, that annual actuarial reports would not be worth the cost to conduct them.

No one testified in opposition and the committee took no immediate action on the bill.