LINCOLN — The Legislature abandoned a proposal Wednesday that would have barred newly retired teachers from working as substitutes.
Instead, lawmakers will undertake an interim study of the issue.
State Sen. Mark Kolterman of Seward proposed the study, as well as an amendment stripping restrictions on post-retirement employment from Legislative Bill 415.
The amendment resolved an issue that provoked controversy during first-round debate. Lawmakers adopted the amendment before giving the bill second-round approval. As advanced, LB 415 makes several less contentious changes in state retirement plans, including raising the retirement age for school employees who start work after July 1, 2018.
School employees now can retire at age 55 if they have accumulated 30 years of service, which is called the “rule of 85.” Under the bill, future employees will be able to retire at age 60 if they have 25 years of service.
Kolterman, chairman of the Nebraska Retirement Systems Committee, said the change would help the school retirement plan financially because it would mean paying out benefits for fewer years.
His amendment removed provisions from LB 415 that would have restricted school employees from working or volunteering in schools after they retired.
The original bill would have required teachers to stay out of the classroom for 180 days after retirement. Those who took early retirement buyouts would have had a three-year waiting period.
Kolterman had argued that the restrictions would ensure compliance with federal tax laws, which require a clear end to a person’s employment, and would discourage retirees from drawing a pension while going back to work.
But the Nebraska State Education Association and representatives of several school districts said the proposals would have worsened a shortage of substitute teachers.
Kolterman’s study resolution calls for examining the federal tax law, retirement administration challenges and substitute teacher service.
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