LB105 LB105
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 105
Introduced by McDonnell, 5.
Read first time January 06, 2023
Committee: Nebraska Retirement Systems
1 A BILL FOR AN ACT relating to retirement; to amend section 23-2323.01,
2 Reissue Revised Statutes of Nebraska, and sections 24-701,
3 24-710.01, 24-710.04, 79-926, 81-2034, and 84-1325, Revised Statutes
4 Cumulative Supplement, 2022; to change provisions relating to
5 applicable military service; to eliminate a term; to harmonize
6 provisions; to repeal the original sections; and to declare an
7 emergency.
8 Be it enacted by the people of the State of Nebraska,
-1-
LB105 LB105
2023 2023
1 Section 1. Section 23-2323.01, Reissue Revised Statutes of Nebraska,
2 is amended to read:
3 23-2323.01 (1)(a) For military service beginning on or after
4 December 12, 1994, but before January 1, 2018, any employee who, while an
5 employee, entered into and served in the armed forces of the United
6 States and who within ninety days after honorable discharge or honorable
7 separation from active duty again became an employee shall be credited,
8 for the purposes of section 23-2315, with all the time actually served in
9 the armed forces as if such person had been an employee throughout such
10 service in the armed forces pursuant to the terms and conditions of
11 subdivision (b) of this subsection.
12 (b) Under such rules and regulations as the retirement board may
13 adopt and promulgate, an employee who is reemployed on or after December
14 12, 1994, pursuant to 38 U.S.C. 4301 et seq., may pay to the retirement
15 system an amount equal to the sum of all deductions which would have been
16 made from the employee's compensation during such period of military
17 service. Payment shall be made within the period required by law, not to
18 exceed five years. To the extent that payment is made, (i) the employee
19 shall be treated as not having incurred a break in service by reason of
20 the employee's period of military service, (ii) the period of military
21 service shall be credited for the purposes of determining the
22 nonforfeitability of the employee's accrued benefits and the accrual of
23 benefits under the plan, and (iii) the employer shall allocate the amount
24 of employer contributions to the employee's employer account in the same
25 manner and to the same extent the allocation occurs for other employees
26 during the period of service. For purposes of employee and employer
27 contributions under this section, the employee's compensation during the
28 period of military service shall be the rate the employee would have
29 received but for the military service or, if not reasonably determinable,
30 the average rate the employee received during the twelve-month period
31 immediately preceding military service.
-2-
LB105 LB105
2023 2023
1 (c) The employer shall pick up the employee contributions made
2 through irrevocable payroll deduction authorizations pursuant to this
3 subsection, and the contributions so picked up shall be treated as
4 employer contributions in the same manner as contributions picked up
5 under section 23-2307.
6 (2)(a) For military service beginning on or after January 1, 2018,
7 any employee who is reemployed pursuant to 38 U.S.C. 4301 et seq., shall
8 be treated as not having incurred a break in service by reason of the
9 employee's period of military service. Such military service shall be
10 credited for purposes of determining the nonforfeitability of the
11 employee's accrued benefits and the accrual of benefits under the plan.
12 (b) The county employing the employee shall be liable for funding
13 any obligation of the plan to provide benefits based upon such period of
14 military service. To satisfy the liability, the county employing the
15 employee shall pay to the retirement system an amount equal to:
16 (i) The sum of the employee and employer contributions that would
17 have been paid during such period of military service; and
18 (ii) Any actuarial costs necessary to fund the obligation of the
19 plan to provide benefits based upon such period of military service. For
20 the purposes of determining the amount of such liability and obligation
21 of the plan, earnings and forfeitures, gains and losses, regular
22 interest, interest credits, or dividends that would have accrued on the
23 employee and employer contributions that are paid by the employer
24 pursuant to this section shall not be included.
25 (c) The amount required pursuant to subdivision (b) of this
26 subsection shall be paid to the retirement system as soon as reasonably
27 practicable following the date of reemployment but must be paid within
28 eighteen months of the date the board notifies the employer of the amount
29 due. If the employer fails to pay the required amount within such
30 eighteen-month period, then the employer is also responsible for any
31 actuarial costs and interest on actuarial costs that accrue from eighteen
-3-
LB105 LB105
2023 2023
1 months after the date the employer is notified by the board until the
2 date the amount is paid.
3 (d) The retirement board may adopt and promulgate rules and
4 regulations to carry out this subsection, including, but not limited to,
5 rules and regulations on:
6 (i) How and when the employee and employer must notify the
7 retirement system of a period of military service;
8 (ii) The acceptable methods of payment;
9 (iii) Determining the service and compensation upon which the
10 contributions must be made;
11 (iv) Accelerating the payment from the employer due to unforeseen
12 circumstances that occur before payment is made pursuant to this section,
13 including, but not limited to, the employee's termination or retirement
14 or the employer's reorganization, consolidation, merger, or closing; and
15 (v) The documentation required to substantiate that the employee was
16 reemployed pursuant to 38 U.S.C. 4301 et seq.
17 (3) This section only applies to military service that falls within
18 the definition of uniformed services service under 38 U.S.C. 4301 et
19 seq., and includes (a) preparation periods prior to military service, (b)
20 periods during military service, (c) periods of rest and recovery
21 authorized by 38 U.S.C. 4301 et seq., after military service, (d) periods
22 of federal military service, and (e) periods of active service of the
23 state Military service does not include service provided pursuant to
24 sections 55-101 to 55-181.
25 Sec. 2. Section 24-701, Revised Statutes Cumulative Supplement,
26 2022, is amended to read:
27 24-701 For purposes of the Judges Retirement Act, unless the context
28 otherwise requires:
29 (1)(a) Actuarial equivalence means the equality in value of the
30 aggregate amounts expected to be received under different forms of
31 payment.
-4-
LB105 LB105
2023 2023
1 (b) For a judge hired prior to July 1, 2017, the determinations are
2 to be based on the 1994 Group Annuity Mortality Table reflecting sex-
3 distinct factors blended using seventy-five percent of the male table and
4 twenty-five percent of the female table. An interest rate of eight
5 percent per annum shall be reflected in making these determinations.
6 (c) For a judge hired on or after July 1, 2017, or rehired on or
7 after July 1, 2017, after termination of employment and being paid a
8 retirement benefit, the determinations shall be based on a unisex
9 mortality table and an interest rate specified by the board. Both the
10 mortality table and the interest rate shall be recommended by the actuary
11 and approved by the board following an actuarial experience study, a
12 benefit adequacy study, or a plan valuation. The mortality table,
13 interest rate, and actuarial factors in effect on the judge's retirement
14 date will be used to calculate actuarial equivalency of any retirement
15 benefit. Such interest rate may be, but is not required to be, equal to
16 the assumed rate of return;
17 (2) Beneficiary means a person so designated by a judge in the last
18 designation of beneficiary on file with the board or, if no designated
19 person survives or if no designation is on file, the estate of such
20 judge;
21 (3) Board means the Public Employees Retirement Board;
22 (4)(a) Compensation means the statutory salary of a judge or the
23 salary being received by such judge pursuant to law. Compensation does
24 not include compensation for unused sick leave or unused vacation leave
25 converted to cash payments, insurance premiums converted into cash
26 payments, reimbursement for expenses incurred, fringe benefits, per
27 diems, or bonuses for services not actually rendered, including, but not
28 limited to, early retirement inducements, cash awards, and severance pay,
29 except for retroactive salary payments paid pursuant to court order,
30 arbitration, or litigation and grievance settlements. Compensation
31 includes overtime pay, member retirement contributions, and amounts
-5-
LB105 LB105
2023 2023
1 contributed by the member to plans under sections 125 and 457 of the
2 Internal Revenue Code as defined in section 49-801.01 or any other
3 section of the code which defers or excludes such amounts from income.
4 (b) Compensation in excess of the limitations set forth in section
5 401(a)(17) of the Internal Revenue Code as defined in section 49-801.01
6 shall be disregarded. For an employee who was a member of the retirement
7 system before the first plan year beginning after December 31, 1995, the
8 limitation on compensation shall not be less than the amount which was
9 allowed to be taken into account under the retirement system as in effect
10 on July 1, 1993;
11 (5) Creditable service means the total number of years served as a
12 judge, including prior service, military service, and current service,
13 computed to the nearest one-twelfth year. For current service prior to
14 the time that the member has contributed the required percentage of
15 salary until the maximum benefit as limited by section 24-710 has been
16 earned, creditable service does not include current service for which
17 member contributions are not made or are withdrawn and not repaid;
18 (6) Current benefit means the initial benefit increased by all
19 adjustments made pursuant to the Judges Retirement Act;
20 (7)(a) Current service means the period of service (i) any judge of
21 the Supreme Court or judge of the district court serves in such capacity
22 from and after January 3, 1957, (ii)(A) any judge of the Nebraska
23 Workmen's Compensation Court served in such capacity from and after
24 September 20, 1957, and prior to July 17, 1986, and (B) any judge of the
25 Nebraska Workers' Compensation Court serves in such capacity on and after
26 July 17, 1986, (iii) any county judge serves in such capacity from and
27 after January 5, 1961, (iv) any judge of a separate juvenile court serves
28 in such capacity, (v) any judge of the municipal court served in such
29 capacity subsequent to October 23, 1967, and prior to July 1, 1985, (vi)
30 any judge of the county court or associate county judge serves in such
31 capacity subsequent to January 4, 1973, (vii) any clerk magistrate, who
-6-
LB105 LB105
2023 2023
1 was an associate county judge and a member of the fund at the time of
2 appointment as a clerk magistrate, serves in such capacity from and after
3 July 1, 1986, and (viii) any judge of the Court of Appeals serves in such
4 capacity on or after September 6, 1991.
5 (b) Current service shall not be deemed to be interrupted by (i)
6 temporary or seasonal suspension of service that does not terminate the
7 employee's employment, (ii) leave of absence authorized by the employer
8 for a period not exceeding twelve months, (iii) leave of absence because
9 of disability, or (iv) military service, when properly authorized by the
10 board. Current service does not include any period of disability for
11 which disability retirement benefits are received under section 24-709;
12 (8) Final average compensation for a judge who becomes a member
13 prior to July 1, 2015, means the average monthly compensation for the
14 three twelve-month periods of service as a judge in which compensation
15 was the greatest or, in the event of a judge serving less than three
16 twelve-month periods, the average monthly compensation for such judge's
17 period of service. Final average compensation for a judge who becomes a
18 member on and after July 1, 2015, means the average monthly compensation
19 for the five twelve-month periods of service as a judge in which
20 compensation was the greatest or, in the event of a judge serving less
21 than five twelve-month periods, the average monthly compensation for such
22 judge's period of service;
23 (9) Fund means the Nebraska Retirement Fund for Judges;
24 (10) Future member means a judge who first served as a judge on or
25 after December 25, 1969, or means a judge who first served as a judge
26 prior to December 25, 1969, who elects to become a future member on or
27 before June 30, 1970, as provided in section 24-710.01;
28 (11) Hire date or date of hire means the first day of compensated
29 service subject to retirement contributions;
30 (12) Initial benefit means the retirement benefit calculated at the
31 time of retirement;
-7-
LB105 LB105
2023 2023
1 (13) Judge means and includes (a) all duly elected or appointed
2 Chief Justices or judges of the Supreme Court and judges of the district
3 courts of Nebraska who serve in such capacity on and after January 3,
4 1957, (b)(i) all duly appointed judges of the Nebraska Workmen's
5 Compensation Court who served in such capacity on and after September 20,
6 1957, and prior to July 17, 1986, and (ii) judges of the Nebraska
7 Workers' Compensation Court who serve in such capacity on and after July
8 17, 1986, (c) judges of separate juvenile courts, (d) judges of the
9 county courts of the respective counties who serve in such capacity on
10 and after January 5, 1961, (e) judges of the county court and clerk
11 magistrates who were associate county judges and members of the fund at
12 the time of their appointment as clerk magistrates, (f) judges of
13 municipal courts established by Chapter 26, article 1, who served in such
14 capacity on and after October 23, 1967, and prior to July 1, 1985, and
15 (g) judges of the Court of Appeals;
16 (14) Member means a judge eligible to participate in the retirement
17 system established under the Judges Retirement Act;
18 (15) Military service means active service of (a) any judge of the
19 Supreme Court or judge of the district court in any of the armed forces
20 of the United States during a war or national emergency prior or
21 subsequent to September 18, 1955, if s