Judicial retirement bill amended, advanced

A bill that that would address a shortfall in the state judges’ retirement plan was amended and advanced from select file April 20.

Sen. Mark Kolterman
Sen. Mark Kolterman

LB17, as introduced by Seward Sen. Mark Kolterman, would adopt shorter amortization periods to reflect current actuarial standards for the judges’, state patrol and school employee retirement plans. Beginning July 1, 2021, the amortization period would be reduced from the current 30-year period to a 25-year period.

LB17 was amended on general file to include provisions of Kolterman’s LB24, which would increase a dedicated court fee — and the earmarked amount of other court fees — to provide additional revenue to cover a shortfall in the judges’ retirement plan.

A dedicated court fee charged to support the judges’ retirement fund would increase from $6 to $8 on July 1, 2021. It then would rise incrementally until reaching $12 on July 1, 2025. The bill also would direct a higher proportion of other court fees to the judges’ retirement fund.

The bill includes provisions of LB16, also introduced by Kolterman, which would add an annual contribution from the state to the judges’ retirement fund of 4 percent of total compensation of the members of the judges’ retirement system beginning on July 1, 2021, and increase that percentage to 6 percent beginning July 1, 2023.

Kolterman brought an amendment on select file meant to address concerns raised during the previous round of debate regarding the use of fees to fund essential government responsibilities — particularly when the impact is felt disproportionally by those least able to afford those fees.

The amendment, adopted 35-1, would stipulate that fees would not increase on any criminal cause of action, traffic misdemeanor or infraction, or city or village criminal ordinance violation filed in district court or county court. The fee on such criminal causes of action would remain at $6.

Kolterman said the amendment would result in 30 percent less revenue for the judges’ retirement plan than the provisions of the original bill, but that a compromise was necessary.

The amendment also would cap the annual general fund contribution from the state at 5 percent of the total annual compensation of all members of the judges’ retirement system. The rate could be adjusted or terminated but could not exceed 5 percent.

Kolterman said the contribution would cover actuarial shortfalls and is necessary because the judges’ retirement plan does not have an employer contribution, as every other state retirement plan does. The 5 percent general fund contribution would provide a funding mechanism to remove year-to-year unpredictability in the state’s actuarial required contribution, he said.

Gering Sen. John Stinner supported the amendment, which he called a “good compromise” that would ensure that the state is able to keep its commitment to public employees. He agreed that the 5 percent state contribution would remove volatility in funding the retirement plan.

“You’ve budgeted for it; it’s predictable,” Stinner said.

Sen. John Cavanaugh of Omaha also supported the amendment, saying it would be a step in the right direction toward funding judges’ retirement with state dollars rather than court fees.

“I think that we should bear the responsibility for funding these things,” he said.

Omaha Sen. Machaela Cavanaugh offered an amendment that instead would appropriate $3 million in general funds to the Nebraska Retirement Fund for Judges in the current fiscal year to cover the shortfall. The amendment failed 2-23.

Following adoption of a technical amendment, senators voted 32-2 to advance LB17 to final reading.

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