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NebraskaLB295109th Legislature 1st and 2nd SessionslegislatureWALLET

Change provisions relating to the County Employees Retirement Act, the Judges Retirement Act, the Nebraska State Patrol Retirement Act, the School Employees Retirement Act, the State Employees Retirement Act, the Spousal Pension Rights Act, and the Public Employees Retirement Board

Sponsored By: Nebraska Retirement Systems Committee

Signed by Governor

Nebraska Retirement Systems Committee

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Bill Overview

Analyzed Economic Effects

23 provisions identified: 9 benefits, 5 costs, 9 mixed.

Class V retirees: COLA and supplement

Class V retirees get an annual COLA each January 1. If you joined before July 1, 2013, the cap is 1.5%; if on/after that date, the cap is 1.0%. The COLA equals the CPI‑U increase since your annuity start, minus past COLAs, up to the cap. If CPI‑U is ever ended, the board chooses a replacement index. Members who joined before July 1, 2016 and have at least 10 years of payments also get a monthly supplement each October 3, capped at $250 per month, which stops at death.

Vesting protections when plans change

If the board finds an employer no longer qualifies for a public plan, affected workers become fully vested right away and are made inactive within 90 days. If the old Department of Labor contributory plan ends, active participants get vesting credit for all years they were in that plan. These rules protect benefits you already earned.

Citizenship or legal status required for school retirement

School employees cannot join the retirement system unless they are U.S. citizens or lawfully present. The school and the employee must keep at least one valid document showing that status as of the hire date. The document must be unexpired or have a DHS or USCIS extension. You must provide it if the retirement board asks.

More stable funding for judges’ pensions

Beginning July 1, 2023, the State pays each year an amount equal to 5% of total judge pay into the Judges Retirement Fund. Lawmakers can adjust or end the rate, but it cannot exceed 5%. The plan actuary reviews contribution needs when the plan is fully funded for two years or underfunded after a reduction. Judges’ picked‑up member contributions are treated as employer contributions for taxes, so they are not taxed until paid out.

Costs and notice for employers risking plan status

Any participating government employer that plans a deal that may end its tax‑qualified status must give the board written notice as soon as possible and at least 180 days before it happens. If the employer loses qualification or completes the deal, it must pay the plan’s funding obligation, administrative costs, and any unpaid actuarial study costs. Funding obligation means the liability to provide benefits for affected members, calculated with methods and assumptions the board’s actuary recommends and the board approves.

Cash‑balance interest and annuity math

Cash‑balance accounts earn the higher of 5% or the IRS mid‑term rate plus 1.5%, compounded yearly. When you convert to an annuity, the law sets which mortality tables to use based on your hire date. For judges hired or rehired on or after July 1, 2017, the board uses a unisex table and interest rate picked after actuarial studies, using the factors in effect at retirement.

Proof of status to join public pensions

You must be a U.S. citizen or lawfully present to join Nebraska’s public retirement plans. Your employer and you must keep at least one approved document from your hire date and show it if asked. Accepted papers include a state driver’s license or ID, a state learner’s permit, a U.S. passport, a certified birth certificate, tribal or USCIS documents, and more. Documents with DHS or USCIS-extended expiration dates count as valid. These rules apply to judges, state, county, school, State Patrol, and deferred compensation plans.

Quick rehire: no termination, possible payback

If you return to a state or participating employer job in under 120 days, it is not treated as a termination. That keeps your service continuous, but any benefits paid out can be recovered. The board can require you to repay distributions or benefits if termination did not occur. It may waive some or all repayment if the payment was an overpayment and paying back would cause serious hardship. For the State Patrol, being in DROP does not count as termination.

School staff coverage and early retirement

Effective September 1, 2021, if you were hired for under 30 hours a week but average 30+ hours a week in each month of any three months in a fiscal year, you must start pension contributions and are treated as a regular employee. Class V hires on or after July 1, 2016 can choose early retirement at age 60 with five years of service. Employers must enroll eligible staff and start contributions right away.

Stronger checks and repayments for overpaid benefits

If the board finds you did not truly end employment but were paid a benefit, you must pay it back. The board can waive or reduce payback if it was an obvious mistake and repayment would cause major hardship. The board can investigate and require people to appear and provide records. It can issue subpoenas like a court to get documents and recover overpayments.

No misleading use of retirement system logos

You cannot use a Nebraska retirement system’s name or logo in a written sales pitch to members without the board’s consent. Any written pitch must clearly say it is not sponsored by or affiliated with the board. Uses that would likely confuse people about sponsorship, approval, or endorsement are banned.

Paid time for retirement‑planning sessions

You can attend board‑provided retirement‑planning sessions on paid time. County and State Employees get up to three days (24 hours). Judges, School, and State Patrol get up to two days (16 hours). Short online materials (4 hours or less) count if you view them within 48 hours. Starting September 1, 2024, these sessions are also offered to Class V school employees.

Apply earlier for school retirement

You can file your first retirement application up to 270 days before the date you want benefits to start. This gives you more time to prepare paperwork and plan your transition.

Divorce orders now apply to Class V

Class V school retirement plans now follow the same QDRO rules as other statewide plans. Spouses, former spouses, and dependents can receive court‑ordered splits of benefits under the Spousal Pension Rights Act.

Paid leave now counts toward pension pay

Paid leave that meets the law’s rules now counts as pensionable pay. This can raise the pay used for your contributions and your future retirement benefit.

Separate death payments to each beneficiary

When a lump-sum death benefit goes to more than one person, the system can pay each person separately. This can speed payments to beneficiaries.

Higher civil court fees for judges’ retirement

The civil filing fee that supports judges’ retirement rises in steps: $8 on July 1, 2021; $9 on July 1, 2022; $10 on July 1, 2023; $11 on July 1, 2024; and $12 on July 1, 2025. Criminal, traffic, and city or village ordinance filings in district or county court stay at $6 on and after July 1, 2021. In county courts, the law also charges a sum equal to 10% of certain statutory fees. The law also repeals section 24-703 as part of these updates.

Late fees on slow remittances

If required information or money is late, the retirement board can charge up to a $25 processing fee plus a daily late fee of 0.038% of the amount due for each day it is late. Collected fees go to the plan fund.

No refunds for contributions on pay above caps

If you paid retirement contributions on pay above the legal caps, the board cannot refund those amounts. Contributions on capped pay stay in the fund and are not returned.

When your pension payout can start

Your required beginning date is April 1 of the year after you stop working and reach the federal age rule (70½, 72, 73, or 75, depending on when you hit those ages). The system sets your final account value on the date it pays you or buys your annuity, but not earlier than 45 days after you leave. Starting September 1, 2024, you must use the system’s approved form to apply for retirement.

How the 20-hour test is figured

To see if you meet the 20-hour-a-week test, add your hours for the month. Divide by the days in that month, then multiply by seven. If the result is 20 or more, you count as a regular employee for retirement.

Plan governance and 25-year funding rule

Starting July 1, 2021, changes in unfunded liabilities are spread over 25 years from the valuation date. Retirement board members get a $75 per diem for meetings or qualifying travel days, plus expense reimbursement. Several outdated statutory sections are repealed to reflect these updates.

New school retirement administrator on Sept. 1, 2024

Until September 1, 2024, the administrator is the person the board appointed. Starting September 1, 2024, the administrator is the director appointed under state law. The change also clarifies who decides retirement dates before and after that date.

Sponsors & Cosponsors

Sponsor

  • Nebraska Retirement Systems Committee

    Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 234 • No: 0

legislature vote • 4/25/2025

Final Reading

Yes: 46 • No: 0 • Other: 3

legislature vote • 4/9/2025

Vote

Yes: 38 • No: 0 • Other: 11

legislature vote • 3/14/2025

Vote

Yes: 36 • No: 0 • Other: 13

legislature vote • 3/14/2025

Vote

Yes: 40 • No: 0 • Other: 9

legislature vote • Unknown

Vote

Yes: 36 • No: 0 • Other: 13

legislature vote • Unknown

Vote

Yes: 38 • No: 0 • Other: 11

Actions Timeline

  1. Provisions/portions of LB420 amended into LB295 by AM404

    6/6/2025legislature

  2. Approved by Governor on April 30, 2025

    4/30/2025legislature

  3. Presented to Governor on April 25, 2025

    4/25/2025legislature

  4. President/Speaker signed

    4/25/2025legislature

  5. Passed on Final Reading with Emergency Clause 46-0-3

    4/25/2025legislature

  6. Dispensing of reading at large approved

    4/25/2025legislature

  7. Enrollment and Review ST17 recorded

    4/15/2025legislature

  8. Enrollment and Review ST17 filed

    4/15/2025legislature

  9. Placed on Final Reading with ST17

    4/15/2025legislature

  10. Advanced to Enrollment and Review for Engrossment

    4/9/2025legislature

  11. Ballard AM797 adopted

    4/9/2025legislature

  12. Enrollment and Review ER30 adopted

    4/9/2025legislature

  13. Ballard AM797 filed

    3/27/2025legislature

  14. Enrollment and Review ER30 filed

    3/25/2025legislature

  15. Placed on Select File with ER30

    3/25/2025legislature

  16. Advanced to Enrollment and Review Initial

    3/14/2025legislature

  17. Ballard AM18 withdrawn

    3/14/2025legislature

  18. Nebraska Retirement Systems AM404 adopted

    3/14/2025legislature

  19. Nebraska Retirement Systems AM404 filed

    3/6/2025legislature

  20. Placed on General File with AM404

    3/6/2025legislature

  21. Nebraska Retirement Systems priority bill

    3/6/2025legislature

  22. Notice of hearing for January 31, 2025

    1/24/2025legislature

  23. Ballard AM18 filed

    1/23/2025legislature

  24. Referred to Nebraska Retirement Systems Committee

    1/17/2025legislature

  25. Date of introduction

    1/15/2025legislature

Bill Text

  • Introduced

    1/15/2025

    PDF

  • Enrolled / Slip Law

    PDF

  • Final / Enacted

    PDF

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