LB104 LB104
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 104
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 23-2301,
2 Reissue Revised Statutes of Nebraska, and sections 24-701, 79-902,
3 81-2014, and 84-1301, Revised Statutes Cumulative Supplement, 2022;
4 to redefine terms under the County Employees Retirement Act, the
5 Judges Retirement Act, the School Employees Retirement Act, the
6 Nebraska State Patrol Retirement Act, and the State Employees
7 Retirement Act; to repeal the original sections; and to declare an
8 emergency.
9 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 23-2301, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 23-2301 For purposes of the County Employees Retirement Act, unless
4 the context otherwise requires:
5 (1)(a) Actuarial equivalent means the equality in value of the
6 aggregate amounts expected to be received under different forms of an
7 annuity payment.
8 (b) For a member hired prior to January 1, 2018, the mortality
9 assumption used for purposes of converting the member cash balance
10 account shall be the 1994 Group Annuity Mortality Table using a unisex
11 rate that is fifty percent male and fifty percent female. For purposes of
12 converting the member cash balance account attributable to contributions
13 made prior to January 1, 1984, that were transferred pursuant to the act,
14 the 1994 Group Annuity Mortality Table for males shall be used.
15 (c) For a member hired on or after January 1, 2018, or rehired on or
16 after January 1, 2018, after termination of employment and being paid a
17 retirement benefit or taking a refund of contributions, the mortality
18 assumption used for purposes of converting the member cash balance
19 account shall be a unisex mortality table that is recommended by the
20 actuary and approved by the board following an actuarial experience
21 study, a benefit adequacy study, or a plan valuation. The mortality table
22 and actuarial factors in effect on the member's retirement date will be
23 used to calculate the actuarial equivalency of any retirement benefit;
24 (2) Annuity means equal monthly payments provided by the retirement
25 system to a member or beneficiary under forms determined by the board
26 beginning the first day of the month after an annuity election is
27 received in the office of the Nebraska Public Employees Retirement
28 Systems or the first day of the month after the employee's termination of
29 employment, whichever is later. The last payment shall be at the end of
30 the calendar month in which the member dies or in accordance with the
31 payment option chosen by the member;
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1 (3) Annuity start date means the date upon which a member's annuity
2 is first effective and shall be the first day of the month following the
3 member's termination or following the date the application is received by
4 the board, whichever is later;
5 (4) Cash balance benefit means a member's retirement benefit that is
6 equal to an amount based on annual employee contribution credits plus
7 interest credits and, if vested, employer contribution credits plus
8 interest credits and dividend amounts credited in accordance with
9 subdivision (4)(c) of section 23-2317;
10 (5)(a) Compensation means gross wages or salaries payable to the
11 member for personal services performed during the plan year. Compensation
12 does not include insurance premiums converted into cash payments,
13 reimbursement for expenses incurred, fringe benefits, per diems, or
14 bonuses for services not actually rendered, including, but not limited
15 to, early retirement inducements, cash awards, and severance pay, except
16 for retroactive salary payments paid pursuant to court order,
17 arbitration, or litigation and grievance settlements. Compensation
18 includes overtime pay, member retirement contributions, and amounts
19 contributed by the member to plans under sections 125, 403(b), and 457 of
20 the Internal Revenue Code or any other section of the code which defers
21 or excludes such amounts from income.
22 (b) Compensation in excess of the limitations set forth in section
23 401(a)(17) of the Internal Revenue Code shall be disregarded. For an
24 employee who was a member of the retirement system before the first plan
25 year beginning after December 31, 1995, the limitation on compensation
26 shall not be less than the amount which was allowed to be taken into
27 account under the retirement system as in effect on July 1, 1993;
28 (6) Date of adoption of the retirement system by each county means
29 the first day of the month next following the date of approval of the
30 retirement system by the county board or January 1, 1987, whichever is
31 earlier;
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1 (7) Date of disability means the date on which a member is
2 determined by the board to be disabled;
3 (8) Defined contribution benefit means a member's retirement benefit
4 from a money purchase plan in which member benefits equal annual
5 contributions and earnings pursuant to section 23-2309 and, if vested,
6 employer contributions and earnings pursuant to section 23-2310;
7 (9) Disability means an inability to engage in any substantially
8 gainful activity by reason of any medically determinable physical or
9 mental impairment which was initially diagnosed or became disabling while
10 the member was an active participant in the plan and which can be
11 expected to result in death or be of a long-continued and indefinite
12 duration;
13 (10) Employee means all persons or officers who are employed by a
14 county of the State of Nebraska on a permanent basis, persons or officers
15 employed by or serving in a municipal county formed by at least one
16 county participating in the retirement system, persons employed as
17 provided in section 2-1608, all elected officers of a county, and such
18 other persons or officers as are classified from time to time as
19 permanent employees by the county board of the county by which they are
20 employed, except that employee does not include judges, employees or
21 officers of any county having a population in excess of two hundred fifty
22 thousand inhabitants as determined by the most recent federal decennial
23 census, or, except as provided in section 23-2306, persons making
24 contributions to the School Employees Retirement System of the State of
25 Nebraska;
26 (11) Employee contribution credit means an amount equal to the
27 member contribution amount required by section 23-2307;
28 (12) Employer contribution credit means an amount equal to the
29 employer contribution amount required by section 23-2308;
30 (13) Final account value means the value of a member's account on
31 the date the account is either distributed to the member or used to
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1 purchase an annuity from the plan, which date shall occur as soon as
2 administratively practicable after receipt of a valid application for
3 benefits, but no sooner than forty-five days after the member's
4 termination;
5 (14) Five-year break in service means a period of five consecutive
6 one-year breaks in service;
7 (15) Full-time employee means an employee who is employed to work
8 one-half or more of the regularly scheduled hours during each pay period;
9 (16) Future service means service following the date of adoption of
10 the retirement system;
11 (17) Guaranteed investment contract means an investment contract or
12 account offering a return of principal invested plus interest at a
13 specified rate. For investments made after July 19, 1996, guaranteed
14 investment contract does not include direct obligations of the United
15 States or its instrumentalities, bonds, participation certificates or
16 other obligations of the Federal National Mortgage Association, the
17 Federal Home Loan Mortgage Corporation, or the Government National
18 Mortgage Association, or collateralized mortgage obligations and other
19 derivative securities. This subdivision shall not be construed to require
20 the liquidation of investment contracts or accounts entered into prior to
21 July 19, 1996;
22 (18) Hire date or date of hire means the first day of compensated
23 service subject to retirement contributions;
24 (19) Interest credit rate means the greater of (a) five percent or
25 (b) the applicable federal mid-term rate, as published by the Internal
26 Revenue Service as of the first day of the calendar quarter for which
27 interest credits are credited, plus one and one-half percent, such rate
28 to be compounded annually;
29 (20) Interest credits means the amounts credited to the employee
30 cash balance account and the employer cash balance account at the end of
31 each day. Such interest credit for each account shall be determined by
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1 applying the daily portion of the interest credit rate to the account
2 balance at the end of the previous day. Such interest credits shall
3 continue to be credited to the employee cash balance account and the
4 employer cash balance account after a member ceases to be an employee,
5 except that no such credit shall be made with respect to the employee
6 cash balance account and the employer cash balance account for any day
7 beginning on or after the member's date of final account value. If
8 benefits payable to the member's surviving spouse or beneficiary are
9 delayed after the member's death, interest credits shall continue to be
10 credited to the employee cash balance account and the employer cash
11 balance account until such surviving spouse or beneficiary commences
12 receipt of a distribution from the plan;
13 (21) Member cash balance account means an account equal to the sum
14 of the employee cash balance account and, if vested, the employer cash
15 balance account and dividend amounts credited in accordance with
16 subdivision (4)(c) of section 23-2317;
17 (22) One-year break in service means a plan year during which the
18 member has not completed more than five hundred hours of service;
19 (23) Participation means qualifying for and making the required
20 deposits to the retirement system during the course of a plan year;
21 (24) Part-time employee means an employee who is employed to work
22 less than one-half of the regularly scheduled hours during each pay
23 period;
24 (25) Plan year means the twelve-month period beginning on January 1
25 and ending on December 31;
26 (26) Prior service means service prior to the date of adoption of
27 the retirement system;
28 (27) Regular interest means the rate of interest earned each
29 calendar year as determined by the retirement board in conformity with
30 actual and expected earnings on the investments through December 31,
31 1985;
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1 (28) Required beginning date means, for purposes of the deferral of
2 distributions and the commencement of mandatory distributions pursuant to
3 section 401(a)(9) of the Internal Revenue Code and the regulations issued
4 thereunder, April 1 of the year following the calendar year in which a
5 member has:
6 (a)(i) Terminates Terminated employment with all employers
7 participating in the plan; and
8 (ii)(A) Attains Attained at least seventy and one-half years of age
9 for a member who attains attained seventy and one-half years of age on or
10 before December 31, 2019; or
11 (B) Attains Attained at least seventy-two years of age for a member
12 who attains attained seventy and one-half years of age on or after
13 January 1, 2020, and prior to January 1, 2023; or
14 (C) Attains at least seventy-three years of age for a member who
15 attains seventy-two years of age after December 31, 2022, and seventy-
16 three years of age prior to January 1, 2033; or
17 (D) Attains at least seventy-five years of age for individuals who
18 attain seventy-four years of age after December 31, 2032; or
19 (b)(i) Terminated employment with all employers participating in the
20 plan; and
21 (ii) Otherwise reached the date specified by section 401(a)(9) of
22 the Internal Revenue Code and the regulations issued thereunder;
23 (29) Required contribution means the deduction to be made from the
24 compensation of employees as provided in the act;
25 (30) Retirement means qualifying for and accepting the retirement
26 benefit granted under the act after terminating employment;
27 (31) Retirement application means the form approved and provided by
28 the retirement system for acceptance of a member's request for either
29 regular or disability retirement;
30 (32) Retirement board or board means the Public Employees Retirement
31 Board;
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1 (33) Retirement date means (a) the first day of the month following
2 the date upon which a member's request for retirement is received on a
3 retirement application if the member is eligible for retirement and has
4 terminated employment or (b) the first day of the month following
5 termination of employment if the member is eligible for retirement and
6 has filed an application but has not yet terminated employment;
7 (34) Retirement system means the Retirement System for Nebraska
8 Counties;
9 (35) Service means the actual total length of employment as an
10 employee and is not deemed to be interrupted by (a) temporary or seasonal
11 suspension of service that does not terminate the employee's employment,
12 (b) leave of absence authorized by the employer for a period not
13 exceeding twelve months, (c) leave of absence because of disability, or
14 (d) military service, when properly authorized by the retirement board.
15 Service does not include any period of disability for which disability
16 retirement benefits are received under section 23-2315;
17 (36) Surviving spouse means (a) the spouse married to the member on
18 the date of the member's death or (b) the spouse or former spouse of the
19 member if survivorship rights are provided under a qualified domestic
20 relations order filed with the board pursuant to the Spousal Pension
21 Rights Act. The spouse or former spouse shall supersede the spouse
22 married to the member on the date of the member's death as provided under
23 a qualified domestic relations order. If the benefits payable to the
24 spouse or former spouse under a qualified domestic relations order are
25 less than the value of benefits entitled to the surviving spouse, the
26 spouse married to the member on the date of the member's death shall be
27 the surviving spouse for the balance of the benefits;
28 (37) Termination of employment occurs on the date on which a county
29 which is a member of the retirement sy