Lawmakers gave first-round approval March 9 to a proposal that would change the retirement plans of new Nebraska State Patrol members.<\/p>\n
Seward Sen. Mark Kolterman, sponsor of LB467, said the bill was introduced last year as a placeholder while the committee worked to reach a compromise on changes to the state patrol plan.<\/p>\n
\u201cLB467 was introduced to create a second tier of reduced benefits for [new] members of the Nebraska State Patrol,\u201d Kolterman said, adding that similar changes have been made in recent years to the state\u2019s other retirement plans.<\/p>\n
Work was done over the interim, he said, which resulted in additional proposed changes. The result was a Retirement Systems Committee amendment, adopted 32-0, which replaced the bill.<\/p>\n
Among other provisions, the amendment would make the following benefit changes for state patrol officers who are hired on or after July 1, 2016:
\n\u2022\tincrease the officer contribution rate from 16 to 17 percent;
\n\u2022\treduce the maximum cost of living adjustment (COLA) from 2.5 to 1 percent;
\n\u2022\tprohibit participation in the Deferred Retirement Option Plan;
\n\u2022\tincrease from three to five the number of years of employment used to calculate a member\u2019s final compensation rate;
\n\u2022\tlimit the increase in compensation in each of the five years prior to retirement to 8 percent per year for benefit calculations; and
\n\u2022\texclude any unused sick, vacation, holiday and compensatory leave in the calculation of a member\u2019s final average monthly compensation.<\/p>\n
If the plan is 100 percent funded, a maximum supplemental COLA of 1.5 percent could be granted at the discretion of the Public Employees Retirement Board (PERB). <\/p>\n
\u201cWe know that it\u2019s not exactly what the patrol wants\u2014they\u2019d always like to have more\u2014but this brings the state patrol plan into the same position that we passed in 2013 for the teachers and last year for the judges,\u201d Kolterman said.<\/p>\n
Sen. Heath Mello of Omaha supported the bill and the amendment, saying the changes are essential to the sustainability of the state patrol retirement plan.<\/p>\n
Mello said the 8 percent cap on increased compensation was particularly important in containing costs. The impact of so-called \u201cspiking\u201d by patrol members prior to retirement is an estimated unfunded liability for Nebraska taxpayers of $12 million over time, he said.<\/p>\n
Sen. Brett Lindstrom of Omaha also supported the changes, saying additional issues likely will require examination in the future\u2014including the estimated annual rate of return on the plan\u2019s investments.<\/p>\n
\u201cIt comes down to one thing: long-term solvency,\u201d Lindstrom said. \u201cI would suspect that when the actuary looks at the data and puts in its recommendation, that will change from 8 percent to 7.75 or 7.5 percent.\u201d<\/p>\n
Kolterman agreed. While the state patrol plan currently is 87 percent funded, he said, it will be sustained only through annual multi-million dollar, actuarially required contributions by the state.<\/p>\n
\u201cThis summer, the actuarial experience study is going to be completed,\u201d he said. \u201cWe as a committee and the PERB expect to see a reduced assumed rate, which will require even greater contributions by the state.\u201d<\/p>\n
LB467 advanced to select file 32-0.<\/p>\n","protected":false},"excerpt":{"rendered":"
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