Bill would clarify school retirement rules

The Nebraska Retirement Systems Committee heard testimony Feb. 2 on a bill that would codify current retirement practices and rules for some certified teachers in Nebraska.

Seward Sen. Mark Kolterman, sponsor of LB1043, said the bill would clarify rules for former members of the state’s school employee retirement plan who subsequently go to work for state agencies such as the Nebraska Department of Education, Department of Health and Human Services and Department of Correctional Services.

The federal tax code requires that an individual terminate employment with all employers covered by a multiple employer retirement plan — which the state school plan is — before they can take a distribution, Kolterman said.

“The intent of this bill is to cover any agency of the state which may in the future employ certified teachers who are covered by the [State Code Agency Teacher Association] contract,” he said.

Orron Hill, legal counsel for the Public Employees Retirement Board, testified in support of the bill, saying it would allow the board to better inform members of the regulations that govern their retirement plans.

“We need clearer rules in our plans to define what termination of employment and reemployment rules exist, especially when we have an employer like the State of Nebraska that participates in multiple different retirement plans,” Hill said.

LB1043 also would eliminate a current option that allows a state school official employed by the Nebraska Department of Education to elect to remain in, or become a member of, the school plan or the state plan. The bill instead would establish specific rules for such officials.

Jason Hayes, testifying on behalf of the Nebraska State Education Association, spoke in support of that provision.

“We support eliminating the election option for certificated teachers who are school plan members and remain in the school employee retirement plan when they take a position with the State of Nebraska,” Hayes said. “Rarely does a member elect not to remain in the school plan, so the clarification helps reflect what is current practice.”

No one testified in opposition and the committee voted to amend the bill’s provisions into LB700, which they advanced to general file on a 6-0 vote.