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Under LB 147, retired teachers will be able to double the number of days they can sub during the six months following retirement. Currently, teachers are only allowed to sub about 4 days a month, but the bill doubles it to 8 days every calendar month which means a teacher will be able to sub up to 48 days during the mandatory six-month break in service. This change addresses a critical need for additional substitute teachers in every school district across the state.
The second change reflects a culmination of many years of work on the Omaha School Employees Retirement System. In 2016, after the OSERS board of trustees made a series of investment decisions that resulted in enormous losses to the OSERS Plan, the legislature moved the investment authority from the OSERS board of trustees to the Nebraska Investment Council (NIC). That bill passed by a vote of 47-0 and the Governor signed the bill. The investment authority transfer has occurred seamlessly and has been very successful. Last year the OSERS Plan earned an investment return of 9.4% under NIC investment management.
I have continued to work closely with OPS to help find ways to relieve the district’s administrative duties for the OSERS plan so the district can focus on its core mission of educating students. So two years ago, at the request of OPS Superintendent, Dr. Cheryl Logan, I introduced LB 31 to study transferring the management of the Omaha retirement system to the PERB, which administers six other retirement systems on behalf of the State. The bill passed with the support of 47 senators and was signed by the Governor.
The LB 31 Study was completed last summer and determined that transferring the management of the OSERS Plan to the PERB would result in an annual management cost savings of about $250,000. The LB 31 Study also projected it would cost approximately $4.2 million and take three years to transfer the administration of OSERS to the PERB. LB 147 puts in place the necessary statutory changes to transfer OSERS management to the PERB.
There are three vitally important provisions that I have made sure are contained in LB 147:
1. The State will not assume any financial responsibility or liability for the nearly $1 billion of OSERS’ unfunded liability. The language of the bill says specifically that “OPS at all times and in all circumstances remains solely liable for all funding obligations of the OSERS Plan and at no time or under any circumstances does the State assume any financial liability or obligation for the OSERS Plan.”
2. The OPS school district, who paid the entire cost for the LB 31 transfer study, is also obligated to pay costs to transfer the management of OSERS to the PERB. The State will not pay a single cent of these costs.
3. Once the transfer occurs, the annual costs of administering the OSERS Plan will be paid by the OSERS Plan – just like the administrative costs are assessed against each of the six plans PERB currently administers. The $250,000 annual administration cost savings will result from the efficiencies of the PERB management of multiple retirement plans.
Additionally, the Omaha Board of Education passed a resolution which commits the Board to paying for all transfer of management costs under LB 147 and also maintains its commitment to the retention of all financial responsibility and funding liability for the OSERS Plan.
I believe the changes proposed under LB 147 will better serve all school districts throughout the State by increasing availability of substitute teachers. It will also result in better service to the 14,000 OSERS Plan members while freeing the OPS school district from the responsibility of administering a retirement system so it can focus solely on educating its students. I am confident these changes will not expose the State of Nebraska and the state’s taxpayers to any additional costs or liability and will ultimately result in administration cost savings for the OSERS Plan.
I am committed to ensuring the long-term sustainability of our public retirement plans. Nebraska is consistently ranked among the top ten states in the nation for the solid funding status of our state-administered plans which average over a 90% funding ratio. In addition, our public employee retirees provide an economic boost to every county in Nebraska. Last year, the plans administered by the PERB paid out retirement benefits each and every month totaling over $67 million. I see this as a win-win for Nebraska.
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 email@example.com, 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.