Retirement SystemsSession Review 2024

Session Review: Nebraska Retirement Systems

Senators approved measures this session that make changes to laws covering administration of the retirement programs of the Nebraska State Patrol and certain firefighters.

Previously under the Nebraska State Patrol Retirement System, the contribution rate for both members and the state was 16% or 17% of a member’s monthly compensation, depending on the hire date. LB196, sponsored by Lincoln Sen. Eliot Bostar, reduced the contribution rate for patrol members to 10% and increased the state contribution rate to 24%.

The bill also extends the deadline to file a claim under the state’s In the Line of Duty Compensation Act from one year to three years after the date of death and provides for review of a denied claim by the Lancaster County District Court.

LB196 passed on a 45-0 vote and took effect immediately.

Changes also were made to the plan covering 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 and passed on a 43-2 vote, made 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 reach 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, LB686 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.

The measure includes provisions of two other bills heard by the committee.

Originally introduced by Sumner Sen. Teresa Ibach, provisions of LB221 change the definition of salary for firefighters in first class cities. The new definition includes 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. It excludes clothing allowances.

Finally, provisions of Omaha Sen. Mike McDonnell’s LB197 amend the definition of eligible employees who may participate in a Social Security referendum by removing the prohibition on participation by police officers and firefighters.

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