Lawmakers gave first-round approval April 18 to a bill that would make changes to the state\u2019s school retirement plans.<\/p>\n
LB553, as originally introduced by Omaha Sen. Jeremy Nordquist, would create a new tier of reduced benefits for employees under the School Employees Retirement System (SERS) who begin work for the first time on or after July 1, 2013.<\/p>\n
Nordquist said the recent economic downturn has created significant pension shortfalls.<\/p>\n
\u201cIn 2000 the plan was 112 percent funded and now we are at 77 percent funded,\u201d he said. \u201cWe have a $108 million liability that we need to cover to keep pension plans solvent.\u201d<\/p>\n
A Retirement Systems Committee amendment, adopted 35-0, replaced the bill.<\/p>\n
Under the amended bill, the new benefits tier would take into account a five year salary average to determine benefits instead of the three year average used currently. The maximum cost-of-living adjustment would be 1 percent instead of the current 2.5 percent adjustment figure. The changes would not apply to members of SERS prior to July 1, 2013.<\/p>\n
The amended bill would make a series of other changes to the plans, some of which include:
\n\u2022 the state statutory contribution rate would be increased from 1 percent to 2 percent of total compensation of all school employees beginning July 1, 2014;
\n\u2022 the amortization method in the School Employees Retirement Act would be changed from level dollar to level percentage of salary beginning July 1, 2013;
\n\u2022 eligibility for membership in the school retirement plan would be changed from 15 hours per week to 20 hours; and
\n\u2022 the sunset would be eliminated from the school budget and lid exclusions for expenditures above the Class V employer contribution rate of 7.37 percent and the school employer contribution of 7.35 percent.<\/p>\n
Columbus Sen. Paul Schumacher supported the bill, although he said it represented only a quick fix.<\/p>\n
\u201cI think we need to pass this because we have a statutory obligation [to cover the liability],\u201d he said. \u201cWhen you tell people you\u2019re going to calculate their retirement on 8 percent return and make promises to them, that means we\u2019re going to be facing these issues repeatedly.\u201d<\/p>\n
LB553 also incorporates provisions from three other bills introduced by Nordquist.<\/p>\n
LB554 would apply the provisions of LB553 to all Class V school employees hired after July 1, 2013.<\/p>\n
LB305 would change the amortization method in the Nebraska State Patrol Retirement Act from level dollar to level percentage of salary beginning July 1, 2013.<\/p>\n
LB306 would change the amortization method in the Judges Retirement Act from level dollar to level percentage of salary beginning July 1, 2013.<\/p>\n
Senators advanced the bill to select file on a 33-0 vote.<\/p>\n","protected":false},"excerpt":{"rendered":"
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