State patrol changes delayed, school retirement bill passed

A measure that makes changes to two of the state’s retirement systems was given final approval April 30.

LB645, introduced by Sen. Beau Ballard of Lincoln at the request of Gov. Jim Pillen, requires different contribution rates to the School Employees Retirement System from school plan participants, employers and the state, contingent on the funded ratio on the actuarial value of assets in the previous year.

Beginning July 1, 2025, state contribution rates will be set at three different funding levels. If the plan is:
• less than 96% actuarially funded, the state’s contribution rate will drop to an amount equal to 2% of the compensation of all members of the retirement system;
• between 96% and 100% actuarially funded, the state’s contribution will be 0.7% of total compensation; and
• 100% or greater actuarially funded, the state will cease making contributions.

The employee contribution rate also will be set at different funding levels. If the plan is:
• less than 96% actuarially funded, the rate will be 9.75% of employee compensation;
• between 96% and 98% funded, the contribution rate will drop to 8.75%;
• between 98% and 100% funded, the contribution rate will be 8%; and
• 100% or greater actuarially funded, the rate will be set at 7.25%.

Employer contributions will continue to be coupled with employee contributions, which currently is 101% of employee contributions. The bill is projected to increase state revenue by $32.6 million in fiscal year 2025-26 and $51.4 million in FY2026-27.

The measure also includes provisions of Lincoln Sen. Eliot Bostar’s LB76, which make changes to the Nebraska State Patrol Retirement System. The provisions will increase survivor benefits under the plan from 75% of a plan member’s benefit to 100% of a plan member’s benefit. The benefit change will apply to survivors of plan members who die after July 1, 2027.

LB645 passed on a vote of 45-2 and takes effect immediately.