Senators made several changes to the state’s retirement systems this session.
LB1042, introduced by Omaha Sen. Jeremy Nordquist, changes the cost for repurchase of relinquished creditable service in the School Employees Retirement Plan.
Current plan members who rejoined the school system prior to the effective date of the bill who wish to repurchase creditable service must complete payment for such service within six years of the effective date of the bill. All other members who rejoin the system after the effective date of the bill must complete payment within five years of rejoining the system.
All members must pay to the retirement system an amount equal to the member’s previously withdrawn contributions for the credible service to be restored, plus an amount equal to the actuarial assumed rate of return on such amount to the date of repayment—currently 8 percent.
The bill also includes provisions of LB1041, introduced by Nordquist, which changes the length of service required for new employees of the School Employees Retirement Plan and the Class V (Omaha) School Employees Retirement Plan to be eligible to purchase additional service credit.
Beginning July 1, 2014, new employees of the two plans will not be eligible to purchase service credit—also known as “air time”—until they have acquired 10 years of creditable service. Employees hired before the deadline still will be eligible to purchase air time after acquiring five years of creditable service.
LB1042 passed on a 48-0 vote.
Senators also approved a bill that was amended to become the Nebraska Retirement Systems Committee omnibus bill.
Under LB759, introduced by Omaha Sen. Heath Mello, any political subdivision that offers a defined benefit retirement plan is 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 will include an analysis of the conditions and recommendations for corrective actions.
The bill includes provisions of four additional bills.
LB713, introduced by Grand Island Sen. Mike Gloor, increases from $1 million to $6 million the maximum amount of time deposit open accounts made available to banks, capital stock financial institutions and qualifying mutual financial institutions willing to meet the rate and other requirements of the Nebraska Capital Expansion Act.
LB918, introduced by Nordquist, removes a limitation on investment options for participants in the county and state employees defined contribution plans.
LB929, also introduced by Gloor, amends the city of the first class police and firefighter retirement acts to define the term sex-neutral basis.
LB977, introduced by Lincoln Sen. Danielle Conrad, adds a city of the primary class and public power districts to the list of exempt entities that can offer investment in a fund as long as it is a prudent investment. Currently, only a city of the metropolitan class, a metropolitan utilities district and a county in which a city of the metropolitan class is located are exempt.
The bill passed 47-0.