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LEGISLATIVE BILL 17
Approved by the Governor May 5, 2021
Introduced by Kolterman, 24.
A BILL FOR AN ACT relating to retirement; to amend sections 24-703, 33-106.02,
33-123, 33-124, 33-125, 33-126.02, 33-126.03, 33-126.06, and 79-966.01,
Reissue Revised Statutes of Nebraska, and sections 24-701, 24-710,
25-2804, 79-966, and 81-2017, Revised Statutes Cumulative Supplement,
2020; to change fees and distribution of fees for the Nebraska Retirement Fund for Judges; to provide for transfers to the Nebraska Retirement Fund for Judges; to change actuarial valuation provisions and amortization periods in retirement systems under the Judges Retirement Act, the School Employees Retirement Act, and the Nebraska State Patrol Retirement Act; to eliminate obsolete provisions; to harmonize provisions; to repeal the original sections; and to declare an emergency.
Be it enacted by the people of the State of Nebraska,
Section 1. Section 24-701, Revised Statutes Cumulative Supplement, 2020,
is amended to read:
24-701 For purposes of the Judges Retirement Act, unless the context otherwise requires:
(1)(a) Actuarial equivalence means the equality in value of the aggregate amounts expected to be received under different forms of payment.
(b) For a judge hired prior to July 1, 2017, the determinations are to be based on the 1994 Group Annuity Mortality Table reflecting sex-distinct factors blended using seventy-five percent of the male table and twenty-five percent of
the female table. An interest rate of eight percent per annum shall be
reflected in making these determinations.
(c) For a judge hired on or after July 1, 2017, or rehired on or after July 1, 2017, after termination of employment and being paid a retirement benefit, the determinations shall be based on a unisex mortality table and an
interest rate specified by the board. Both the mortality table and the interest rate shall be recommended by the actuary and approved by the board following an
actuarial experience study, a benefit adequacy study, or a plan valuation. The mortality table, interest rate, and actuarial factors in effect on the judge's retirement date will be used to calculate actuarial equivalency of any retirement benefit. Such interest rate may be, but is not required to be, equal to the assumed rate of return;
(2) Beneficiary means a person so designated by a judge in the last designation of beneficiary on file with the board or, if no designated person survives or if no designation is on file, the estate of such judge;
(3) Board means the Public Employees Retirement Board;
(4)(a) Compensation means the statutory salary of a judge or the salary being received by such judge pursuant to law. Compensation does not include compensation for unused sick leave or unused vacation leave converted to cash payments, insurance premiums converted into cash payments, reimbursement for expenses incurred, fringe benefits, per diems, or bonuses for services not actually rendered, including, but not limited to, early retirement inducements,
cash awards, and severance pay, except for retroactive salary payments paid pursuant to court order, arbitration, or litigation and grievance settlements.
Compensation includes overtime pay, member retirement contributions, and amounts contributed by the member to plans under sections 125 and 457 of the Internal Revenue Code as defined in section 49-801.01 or any other section of
the code which defers or excludes such amounts from income.
(b) Compensation in excess of the limitations set forth in section 401(a)
(17) of the Internal Revenue Code as defined in section 49-801.01 shall be
disregarded. For an employee who was a member of the retirement system before the first plan year beginning after December 31, 1995, the limitation on
compensation shall not be less than the amount which was allowed to be taken into account under the retirement system as in effect on July 1, 1993;
(5) Creditable service means the total number of years served as a judge,
including prior service, military service, and current service, computed to the nearest one-twelfth year. For current service prior to the time that the member has contributed the required percentage of salary until the maximum benefit as
limited by section 24-710 has been earned, creditable service does not include current service for which member contributions are not made or are withdrawn and not repaid;
(6) Current benefit means the initial benefit increased by all adjustments made pursuant to the Judges Retirement Act;
(7)(a) Current service means the period of service (i) any judge of the Supreme Court or judge of the district court serves in such capacity from and after January 3, 1957, (ii)(A) any judge of the Nebraska Workmen's Compensation Court served in such capacity from and after September 20, 1957, and prior to
July 17, 1986, and (B) any judge of the Nebraska Workers' Compensation Court serves in such capacity on and after July 17, 1986, (iii) any county judge serves in such capacity from and after January 5, 1961, (iv) any judge of a separate juvenile court serves in such capacity, (v) any judge of the municipal
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court served in such capacity subsequent to October 23, 1967, and prior to July
1, 1985, (vi) any judge of the county court or associate county judge serves in
such capacity subsequent to January 4, 1973, (vii) any clerk magistrate, who was an associate county judge and a member of the fund at the time of
appointment as a clerk magistrate, serves in such capacity from and after July
1, 1986, and (viii) any judge of the Court of Appeals serves in such capacity on or after September 6, 1991.
(b) Current service shall not be deemed to be interrupted by (i) temporary or seasonal suspension of service that does not terminate the employee's employment, (ii) leave of absence authorized by the employer for a period not exceeding twelve months, (iii) leave of absence because of disability, or (iv)
military service, when properly authorized by the board. Current service does not include any period of disability for which disability retirement benefits are received under section 24-709;
(8) Final average compensation for a judge who becomes a member prior to
July 1, 2015, means the average monthly compensation for the three twelve-month periods of service as a judge in which compensation was the greatest or, in the event of a judge serving less than three twelve-month periods, the average monthly compensation for such judge's period of service. Final average compensation for a judge who becomes a member on and after July 1, 2015, means the average monthly compensation for the five twelve-month periods of service as a judge in which compensation was the greatest or, in the event of a judge serving less than five twelve-month periods, the average monthly compensation for such judge's period of service;
(9) Fund means the Nebraska Retirement Fund for Judges;
(10) Future member means a judge who first served as a judge on or after December 25, 1969, or means a judge who first served as a judge prior to
December 25, 1969, who elects to become a future member on or before June 30,
1970, as provided in subsection (8) of section 24-703 or section 24-710.01;
(11) Hire date or date of hire means the first day of compensated service subject to retirement contributions;
(12) Initial benefit means the retirement benefit calculated at the time of retirement;
(13) Judge means and includes (a) all duly elected or appointed Chief Justices or judges of the Supreme Court and judges of the district courts of
Nebraska who serve in such capacity on and after January 3, 1957, (b)(i) all duly appointed judges of the Nebraska Workmen's Compensation Court who served in such capacity on and after September 20, 1957, and prior to July 17, 1986,
and (ii) judges of the Nebraska Workers' Compensation Court who serve in such capacity on and after July 17, 1986, (c) judges of separate juvenile courts,
(d) judges of the county courts of the respective counties who serve in such capacity on and after January 5, 1961, (e) judges of the county court and clerk magistrates who were associate county judges and members of the fund at the time of their appointment as clerk magistrates, (f) judges of municipal courts established by Chapter 26, article 1, who served in such capacity on and after October 23, 1967, and prior to July 1, 1985, and (g) judges of the Court of
Appeals;
(14) Member means a judge eligible to participate in the retirement system established under the Judges Retirement Act;
(15) Military service means active service of (a) any judge of the Supreme Court or judge of the district court in any of the armed forces of the United States during a war or national emergency prior or subsequent to September 18,
1955, if such service commenced while such judge was holding the office of
judge, (b) any judge of the Nebraska Workmen's Compensation Court or the Nebraska Workers' Compensation Court in any of the armed forces of the United States during a war or national emergency prior or subsequent to September 20,
1957, if such service commenced while such judge was holding the office of
judge, (c) any judge of the municipal court in any of the armed forces of the United States during a war or national emergency prior or subsequent to October
23, 1967, and prior to July 1, 1985, if such service commenced while such judge was holding the office of judge, (d) any judge of the county court or associate county judge in any of the armed forces of the United States during a war or
national emergency prior or subsequent to January 4, 1973, if such service commenced while such judge was holding the office of judge, (e) any clerk magistrate, who was an associate county judge and a member of the fund at the time of appointment as a clerk magistrate, in any of the armed forces of the United States during a war or national emergency on or after July 1, 1986, if such service commenced while such clerk magistrate was holding the office of
clerk magistrate, and (f) any judge of the Court of Appeals in any of the armed forces of the United States during a war or national emergency on or after September 6, 1991, if such service commenced while such judge was holding the office of judge. The board shall have the power to determine when a national emergency exists or has existed for the purpose of applying this definition and provision;
(16) Normal form annuity means a series of equal monthly payments payable at the end of each calendar month during the life of a retired judge as
provided in sections 24-707 and 24-710, except as provided in section 42-1107.
The first payment shall include all amounts accrued since the effective date of
the award of the annuity. The last payment shall be at the end of the calendar month in which such judge dies. If at the time of death the amount of annuity payments such judge has received is less than contributions to the fund made by
such judge, plus regular interest, the difference shall be paid to the beneficiary or estate;
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(17) Normal retirement date means the first day of the month following attainment of age sixty-five;
(18) Original member means a judge who first served as a judge prior to
December 25, 1969, who does not elect to become a future member pursuant to
subsection (8) of section 24-703 or section 24-710.01, and who was retired on
or before December 31, 1992;
(19) Plan year means the twelve-month period beginning on July 1 and ending on June 30 of the following year;
(20) Prior service means all the periods of time any person has served as
a (a) judge of the Supreme Court or judge of the district court prior to
January 3, 1957, (b) judge of the county court prior to January 5, 1961, (c)
judge of the Nebraska Workmen's Compensation Court prior to September 20, 1957,
(d) judge of the separate juvenile court, or (e) judge of the municipal court prior to October 23, 1967;
(21) Regular interest means interest fixed at a rate equal to the daily treasury yield curve for one-year treasury securities, as published by the Secretary of the Treasury of the United States, that applies on July 1 of each year, which may be credited monthly, quarterly, semiannually, or annually as
the board may direct;
(22) Required beginning date means, for purposes of the deferral of
distributions, April 1 of the year following the calendar year in which a member has:
(a)(i) Terminated employment with the State of Nebraska; and
(ii)(A) Attained at least seventy and one-half years of age for a member who attained seventy and one-half years of age on or before December 31, 2019;
or
(B) Attained at least seventy-two years of age for a member who attained seventy and one-half years of age on or after January 1, 2020; or
(b)(i) Terminated employment with the State of Nebraska; and
(ii) Otherwise reached the date specified by section 401(a)(9) of the Internal Revenue Code and the regulations issued thereunder;
(23) Retirement application means the form approved and provided by the retirement system for acceptance of a member's request for either regular or
disability retirement;
(24) Retirement date means (a) the first day of the month following the date upon which a member's request for retirement is received on a retirement application if the member is eligible for retirement and has terminated employment or (b) the first day of the month following termination of
employment if the member is eligible for retirement and has filed an
application but has not yet terminated employment;
(25) Retirement system or system means the Nebraska Judges Retirement System as provided in the Judges Retirement Act;
(26) Surviving spouse means (a) the spouse married to the member on the date of the member's death or (b) the spouse or former spouse of the member if
survivorship rights are provided under a qualified domestic relations order filed with the board pursuant to the Spousal Pension Rights Act. The spouse or
former spouse shall supersede the spouse married to the member on the date of
the member's death as provided under a qualified domestic relations order. If the benefits payable to the spouse or former spouse under the qualified domestic relations order are less than the value of benefits entitled to the surviving spouse, the spouse married to the member on the date of the member's death shall be the surviving spouse for the balance of the benefits; and
(27) Termination of employment occurs on the date on which the State Court Administrator's office determines that the judge's employer-employee relationship with the State of Nebraska is dissolved. The State Court Administrator's office shall notify the board of the date on which such a termination has occurred. Termination of employment does not include ceasing employment as a judge if the judge returns to regular employment as a judge or
is employed on a regular basis by another agency of the State of Nebraska and there are less than one hundred twenty days between the date when the judge's employer-employee relationship ceased and the date when the employer-employee relationship recommences. It is the responsibility of the employer that is
involved in the termination of employment to notify the board of such change in
employment and provide the board with such information as the board deems necessary. If the board determines that termination of employment has not occurred and a retirement benefit has been paid to a member of the retirement system pursuant to section 24-710, the board shall require the member who has received such benefit to repay the benefit to the retirement system.
Sec. 2. Section 24-703, Reissue Revised Statutes of Nebraska, is amended to read:
24-703 (1) Each original member shall contribute monthly four percent of
his or her monthly compensation to the fund until the maximum benefit as
limited in subsection (1) of section 24-710 has been earned. It shall be the duty of the Director of Administrative Services in accordance with subsection
(7) (10) of this section to make a deduction of four percent on the monthly payroll of each original member who is a judge of the Supreme Court, a judge of
the Court of Appeals, a judge of the district court, a judge of a separate juvenile court, a judge of the county court, a clerk magistrate of the county court who was an associate county judge and a member of the fund at the time of
his or her appointment as a clerk magistrate, or a judge of the Nebraska Workers' Compensation Court showing the amount to be deducted and its credit to
the fund. The Director of Administrative Services and the State Treasurer shall credit the four percent as shown on the payroll and the amounts received from
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the various counties to the fund and remit the same to the director in charge of the judges retirement system who shall keep an accurate record of the contributions of each judge.
(2)(a) In addition to the contribution required under subdivision (c) of this subsection, beginning on July 1, 2004, each future member who became a member prior to July 1, 2015, and who has not elected to make contributions and receive benefits as provided in section 24-703.03 shall contribute monthly six percent of his or her monthly compensation to the fund until the maximum benefit as limited in subsection (2) of section 24-710 has been earned. After the maximum benefit as limited in subsection (2) of section 24-710 has been earned, such future member shall make no further contributions to the fund,
except that (i) any time the maximum benefit is changed, a future member who has previously earned the maximum benefit as it existed prior to the change shall contribute monthly six percent of his or her monthly compensation to the fund until the maximum benefit as changed and as limited in subsection (2) of section 24-710 has been earned and (ii) such future member shall continue to
make the contribution required under subdivision (c) of this subsection.
(b) In addition to the contribution required under subdivision (c) of this subsection, beginning on July 1, 2004, a judge who became a member prior to
July 1, 2015, and who first serves as a judge on or after July 1, 2004, or a fut