NebraskaLB822109th Legislature 1st and 2nd SessionslegislatureWALLET

Rename the Police Officers Retirement Act as the Cities of the First Class Police Officers Retirement Act and change provisions of such act

Sponsored By: Nebraska Retirement Systems Committee

Signed by Governor

Nebraska Retirement Systems Committee

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 0 benefits, 1 costs, 6 mixed.

Income during police disability

If you are disabled in the line of duty, your pension equals 50% of your regular pay for as long as the disability lasts. If your disability is temporary, you get full salary for up to 12 months; if it becomes permanent in that time, salary stops and the 50% disability pension starts. Workers' compensation is deducted from city salary or pension, and you cannot get full salary and full workers' comp at the same time. For permanent disability, you must use sick or annual leave first when that keeps your pay whole. Your total payments above workers' comp cannot be less than your retirement value at the date of disability, and the city must fund any shortfall at the first payment.

Police vesting, cash-outs, transfers

Vesting (since July 1, 2012) is 0% under 2 years; 40% after 2; 60% after 4; 80% after 5; and 100% after 7. You are 100% vested at age 60 while employed. All service after 1965 counts. If you leave before retirement, you may take a lump sum equal to your retirement account value at the last valuation; if you do, you give up future benefits tied to that value. If your vested value is under $3,500, the city may pay it in one lump sum. Vested officers can defer a pension to age 60 or choose to start at age 55 if they elect before payments. Nonvested employer funds are forfeited and used first for plan administrative costs, then to reduce the city's required contribution. If you start as a police officer with another city within 120 days, you can transfer your full employee account and your vested employer portion to the new city's fund, and the old city owes no more.

Property tax levy for police pensions

A city's mayor and council may add a property tax levy, within legal limits, to fund police pensions. This can raise property tax bills for homeowners in that city.

How the police pension fund works

Each city keeps a separate police pension fund as a trust used only for retirement purposes. The fund may be a trust, custodial account, group annuity, or a mix, with a qualified funding agent, the city treasurer, or another authorized city officer as trustee or custodian. Cities may allow officer‑directed investment accounts; your returns can go up or down, and fees and losses reduce your retirement value. Actuarial assumptions must be sex‑neutral; if no blended rates are sold in Nebraska, the average of male and female rates is used. The plan must keep its federal 401(a) tax‑qualified status and follow rollover, limit, and distribution rules. The system can correct over‑ or under‑payments and offset future payments for overpayments with interest. It does not honor domestic relations orders that change, increase, or speed up benefits; orders must meet federal QDRO rules. This law applies to police officers employed by cities of the first class.

Police disability proofs and rehiring

Disability means you cannot perform police duties because of an on‑duty accident or cause. The city can require medical exams to prove disability. It pays for exams it requires during the first three years, and after that may ask a court to order proof if fraud is suspected. If you recover, the disability pension ends and your vested retirement value is reduced by prior disability payments. If recovery is found within the first three years, the city must rehire you at no less than your prior pay grade when a qualifying vacancy exists or may create one under its reduction-in-force policy. Tenured officers (5+ years) with hypertension or heart or respiratory disease are presumed line‑of‑duty disabled or deceased, including within three months after separation, unless proved otherwise. Payments under the In the Line of Duty Compensation Act do not count as regular pay for pension calculations.

Police pension contributions and paychecks

You must contribute 7% of salary until September 30, 2025, and 9% starting October 1, 2025. The city must pick up these employee contributions and treat them as employer contributions for federal tax rules. It pays them from the same source as wages and may adjust salary to do so; you cannot take this money as cash. You may also make voluntary cash contributions up to IRS limits; they go into your employee account and earn interest.

Local oversight and public reports

Each city sets up a retirement committee to oversee the plan. The committee has six members: four chosen by police officers and two by the city council. Members serve four‑year terms and are not paid. The committee directs investments or hires managers, and investments must follow Nebraska Investment Council policies. Cities with defined benefit plans must file an annual report by June 30 with benefit levels, present value of benefits, funding sources, and an independent actuarial analysis. If a committee misses the filing, the state auditor may audit it and the committee must pay the audit costs.

Sponsors & Cosponsors

Sponsor

Nebraska Retirement Systems Committee
Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 78 • No: 0

legislature vote • 4/9/2026

Final Reading

Yes: 49 • No: 0

legislature vote • 2/11/2026

Vote

Yes: 29 • No: 0 • Other: 20

Actions Timeline

Approved by Governor on April 14, 2026
4/14/2026legislature
Presented to Governor on April 10, 2026
4/10/2026legislature
President/Speaker signed
4/10/2026legislature
Passed on Final Reading 49-0-0
4/9/2026legislature
Dispensing of reading at large approved
4/9/2026legislature
Placed on Final Reading
3/11/2026legislature
Advanced to Enrollment and Review for Engrossment
3/6/2026legislature
Kauth FA451 withdrawn
3/6/2026legislature
Enrollment and Review ER123 adopted
3/6/2026legislature
Enrollment and Review ER123 filed
2/23/2026legislature
Placed on Select File with ER123
2/23/2026legislature
Advanced to Enrollment and Review Initial
2/11/2026legislature
Placed on General File
2/2/2026legislature
Notice of hearing for January 30, 2026
1/15/2026legislature
Referred to Nebraska Retirement Systems Committee
1/9/2026legislature
Kauth FA451 filed
1/8/2026legislature
Date of introduction
1/7/2026legislature

Bill Text

Introduced
1/7/2026
PDF
Enrolled / Slip Law
PDF
Final / Enacted
PDF

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