Transfer of university trust fund proposed

The University of Nebraska’s health benefits trust fund would be transferred to a state-controlled trust fund under a bill heard by the Retirement Systems Committee Feb. 28.

Currently, all money used to provide health benefits to university employees is housed in the Group Health Trust Fund, held by Wells Fargo. LB138, introduced by Omaha Sen. Bob Krist, would transfer all existing funds to a new fund held by the Nebraska Investment Council.

Krist said the university originally created the trust fund without the knowledge of State Treasurer Don Stenberg, who is assigned in statute as the custodian of any such trust funds.

“This fund was create without the approval or knowledge of the Legislature,” Krist said. “This bill places the group health trust fund under the direction of the state treasurer, where that money should always have been.”

State Auditor Mike Foley supported the bill, saying the trust fund was discovered as part of a performance audit of state health care benefits.

“This is about who is going to oversee over $143 million in public funds,” he said. “If we do nothing, the university will continue to set aside and spend the money in the fund.”

Stenberg also supported the bill.

“There’s a very long history of the treasurer as custodian of university funds,” Stenberg said. “Even if these funds were deemed not to be a product of the state, we still have the statutory authority.”

University chief financial officer David Lechner opposed the bill. He said there is no need to fix a system that is not broken.

“The catalyst for this bill was a performance audit by the state auditor,” he said. “By virtually every benchmark, that report validated the successful management of the trust fund.”

The committee took no immediate action on the bill.