Lincoln, Ne - Lawmakers gave select file approval April 24 to a measure that would gradually reduce contribution rates to the School Employees Retirement System based on its actuarial funding level.
Currently, the state contribution is an amount equal to 2% of the compensation of all members of the retirement system. LB645, introduced by Sen. Beau Ballard of Lincoln at the request of Gov. Jim Pillen, would require different contribution levels from plan participants, employers and the state, contingent on the funded ratio on the actuarial value of assets in the previous year.
Under LB645 as amended on general file, beginning July 1, 2025, state contribution rates would be set at three different funding levels. If the plan is:• less than 96% actuarially funded, the state’s contribution rate would 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 would be 0.7% of total compensation; and• 100% or greater actuarially funded, the state would cease making contributions.
The employee contribution rate also would be set at different funding levels. If the plan is:• less than 96% actuarially funded, the rate would be 9.75% of employee compensation;• between 96% and 98% funded, the contribution rate would drop to 8.75%;• between 98% and 100% funded, the contribution rate would be 8%; and• 100% or greater actuarially funded, the rate would be set at 7.25%.
Employer contributions would 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.
Ballard withdrew an amendment that would have adjusted the calculation that determines the age at which a member of the School Employees Retirement System may retire without a reduction in benefits. He said opposition to the amendment at a public hearing April 23 indicated it would be better to wait and address the issue over the interim.
Lincoln Sen. Eliot Bostar offered an amendment on select file to add amended provisions of his LB76 that would make changes to the Nebraska State Patrol Retirement System.
Those provisions would increase survivor benefits under the plan from 75% of the plan member’s benefit to 100% of the plan member’s benefit. The original LB76 also included cost-of-living adjustments to the State Patrol plan, but those were stricken by the amendment.
The stress that State Patrol members face daily has measurable health impacts, Bostar said, including increased risks for some cancers and other long-term physical and mental health challenges.
“It’s imperative that our troopers know their families will be taken care of should the worst happen,” Bostar said.
Ballard supported the amendment, saying the current 75% survivor benefit is “uncommon,” especially for retirement plans that cover first responders.
The Bostar amendment was adopted 39-0.
Lincoln Sen. Danielle Conrad offered and later withdrew an amendment intended to clarify that the changes outlined in LB645 would not indicate changes to the state’s obligations under the Omaha School Employees Retirement System.
Conrad said she wanted to give lawmakers time to familiarize themselves with the amendment and indicated that she would refile it for consideration on the final round of debate.
Senators adopted a technical amendment offered by Ballard on a 36-0 vote and advanced LB645 to final reading by voice vote.