Firefighter retirement changes clear final round

Lawmakers passed a bill April 11 that makes changes to the retirement system for certain Nebraska firefighters.

State law classifies cities based on population. First class cities are those with a population between 5,001 and 100,000. LB686, sponsored by Fremont Sen. Lynne Walz, makes a number of changes to the retirement plans of firefighters in those cities, including a series of adjustments to contribution rates.

Under the bill, the current firefighter contribution rate of 6.5% will increase gradually to 12.7% beginning Oct. 1, 2026. The city contribution rate will gradually increase from the current 13% to 15% beginning Oct. 1, 2026.

Beginning July 20, 2024, firefighters in an absolute coverage group — those who also contribute to Social Security — will receive an offset from their retirement contribution equal to 6.2% of their salary. Cities that employ firefighters in an absolute coverage group will receive the same offset.

The offsets will not apply to cities with a population of more than 60,000 in a county with a population of more than 100,000.

The measure also allows two or more firefighter retirement committees to choose to pool investments and administration of plan benefits through an interlocal agreement. The agreement must expressly state that the city is not responsible for ongoing management of pooled investments or any liability relating to its management.

In addition, city general funds, forfeiture funds held by the city and funds held for an account of any firefighter employed by a city on Jan. 1, 1984, cannot be used to fund or operate a pooled asset agreement.

LB686 also changes the definition of salary for firefighters in first class cities to exclude clothing allowances and to include all amounts paid to a participating firefighter by the employing city for personal services as reported on the participant’s federal income tax withholding statement, overtime, call-back and call-in pay.

Finally, the bill specifies that a surviving spouse with no minor children who remarries is entitled to the difference between what remains in the firefighter’s employee account less any amounts paid to the firefighter and his or her beneficiaries, if any.

Lawmakers passed LB686 on a vote of 43-2.