NEBRASKA LEGISLATURE

The official site of the Nebraska Unicameral Legislature

Mark Kolterman

Sen. Mark Kolterman

District 24

The content of these pages is developed and maintained by, and is the sole responsibility of, the individual senator's office and may not reflect the views of the Nebraska Legislature. Questions and comments about the content should be directed to the senator's office at mkolterman@leg.ne.gov

Weekly Column – February 19th
February 19th, 2021

As you may know, I have served on the Retirement Committee for six years and have served as Chair of the committee for five. Since I have been with the Committee, I have been working with OPS on various issues related to the investments and management of the Omaha School Employees Retirement System or OSERS for short. Before going into the legislation I introduced on OSERS this year, I want to give you some background on the work the Retirement Committee has done on the OSERS retirement system.

In 2016, at the request of OPS, we passed legislation to move the investment authority of the OSERS retirement assets to the Nebraska Investment Council – which also invests all the state-administered retirement system assets. As part of that legislation, the governance of the OSERS plan was shifted from the OPS Board of Education to the OSERS Board of Trustees.

In 2019, OPS expressed interest in exploring transferring the management of the OSERS plan to the Public Employees Retirement Board (PERB), which already administers 6 retirement systems for the State. I introduced legislation for the PERB to produce a Work Plan, which was completed in June of last year.  It examined management transfer tasks, projected a 3-year timeline for the transition to occur, and estimated transfer costs which ranged from $3.8 million to $6.1 million, with the most likely cost tagged at $4.2 million.

The OPS Board of Education reviewed the Work Plan and last August voted to move forward with the management transfer, with the understanding that OPS is solely responsible for all transfer costs and that OPS would continue to retain all financial obligation and liability for the OSERS plan.

I agreed to introduce legislation to move forward with the understanding that the State will not assume any liability for any costs related to this plan, nor will it assume the near $1 billion unfunded liability for the OSERS plan. I also made it clear that the management transfer is not a merger of the OSERS plan with the School retirement plan – they remain separate retirement systems.

On Tuesday, February 23, the Retirement Committee will hold hearings on a package of bills I have introduced to carry out the transfer of OSERS management to the PERB.  Here is a summary of the bills.

LB 144 was introduced as merely a placeholder bill. Under our legislative rules, retirement bills can only be introduced in the 90-day session, so this bill will carry over until next session and serve as a vehicle for any follow-up legislation needed on the management transfer.

Since the Work Plan was completed last summer, additional study and tasks have been identified that need to be completed before the transfer occurs. LB 145 requires an IRS Legal Compliance Audit to be conducted in 2021 to determine if the plan is in compliance with all IRS requirements. Any audit issues identified in the compliance audit that require statutory changes will be amended into the placeholder bill and taken up in the 2022 session. It also requires the State Auditor to begin auditing the OSERS plan in 2022 to examine any operational issues that may need to be addressed prior to the transfer and requires the PERB to continue to advise the Retirement Committee of any additional issues that need to be addressed prior to management transfer. To accommodate these additional examinations to ensure compliance audit and operational issues can be resolved, the date of transfer will be delayed one year until September 1, 2024.

LB 146 allows school retirees and school employees who have terminated employment with any school district in the state, including Omaha, to provide substitute service 8 days in every calendar month during the 6 months following termination or retirement. This new policy makes it possible for former teachers to sub more frequently during this 6-month time period which will help address the tremendous need for substitutes teachers in all school districts throughout the state.

LB 147 is the main management transfer bill that makes necessary changes for a transfer to occur on September 1, 2024. It clarifies that this is not a merger of the Class V retirement plan with the School plan and contains extensive liability provisions to ensure that the OPS Board of Education retains all financial responsibilities and obligations for the Class V retirement plan and indemnifies and holds harmless the State of Nebraska, the PERB and the Nebraska Public Employees Retirement System from any financial responsibility or funding obligations of the Class V retirement system.

The fifth bill in the package is LB 582, which once again vests retirement administration authority in the OPS Board of Education until the OSERS plan is transferred to the PERB effective September 1, 2024. It also grants the OPS Board of Education the authority to appoint a new Board of Trustees and adds a duty to the Board of Trustees to facilitate the transition and transfer of the plan management to the PERB. Vesting administrative authority with the OPS Board of Education which is seeking this transfer will ensure a smoother transition.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Sen. Mark Kolterman

District 24
Room 2004
P.O. Box 94604
Lincoln, NE 68509
(402) 471-2756
Email: mkolterman@leg.ne.gov
Search Senator Page:
Topics
Committee Assignments
    Appropriations
    Committee On Committees
    Nebraska Retirement Systems
Search Current Bills
Search Laws
Live Video Streaming
Find Your Senator