Proposed teacher retirement changes said to cut pension shortfall -
Published Thursday, February 7, 2013 at 1:00 am / Updated at 7:10 am
Proposed teacher retirement changes said to cut pension shortfall

LINCOLN — Future schoolteachers in Nebraska would lose some retirement benefits, and current teachers would be required to keep paying more toward their retirement under proposals considered Wednesday.

The changes are designed to trim a $108 million, two-year gap in state pension funding.

The gap, caused by the stock market plunge from 2008 to early 2009, would be reduced to about $20 million a year under the two proposals, Legislative Bills 553 and 554.

The bills were the result of negotiations with the major state education groups. Those talks were led by State Sen. Jeremy Nordquist of Omaha, chairman of the Legislature's Retirement Committee.

During a public hearing Wednesday, representatives of teachers, administrators and school boards said they realize that the state is facing a pension shortfall. Even though the shortfall is smaller than in other states, they said that something needed to be done.

“We believe that LB 553 is a balanced approach,” said Jason Hayes, a representative of the Nebraska State Education Association.

LB 553 makes changes in the pension plan for teachers, administrators and staff in school districts other than Omaha; LB 554 makes similar changes in the plan for Omaha Public Schools employees.

Under the bills:

» Current teachers would continue to contribute 9.78 percent of their salary to retirement. That rate was supposed to sunset in August and drop to 7.28 percent, which was the rate prior to 2011.

» Keeping the higher employee contribution rates will impact local school districts, because their contribution is 101 percent of what employees pay.

» For teachers employed in the future, the cost-of-living increases for pensions would be capped at 1 percent, rather than the current 2.5 percent for teachers in the state and 1.5 percent for Omaha teachers. The calculation of their retirement wage would be based on an average of five years of pay rather than three years, which would serve to reduce their retirement wages (which are 75 percent of that average wage).

» The state would also increase its contribution to the plans from 1 percent of compensation to 2 percent, which translates into about $20 million a year.

By state law, Nordquist said the state likely would be responsible for the entire $108 million shortfall if the Legislature did nothing.

But, he said, his bills would reduce the shortfall, both in the short and long term, and share the burden among the state, local school districts and teachers.

“These bills strike a balance,” said Nordquist, who was critical of Gov. Dave Heineman for not including a plan of his own to address the pension shortfall in his 2013 budget proposals.

The state senator said his bill also makes an accounting change in how the shortfall is accounted for in the state's pension plans, now projected at $2.2 billion over the next 30 years. That change serves to reduce, in the short term, what is owed.

The average pension payment to state teachers and administrators is $1,760 a month, which Nordquist says shows that retirees under these plans are not “fleecing” taxpayers.

The committee took no action on the two bills following Wednesday's hearing.

Contact the writer: 402-473-9584,

More Legislature coverage, resources

Meet your senators

• Map: Find your senator

More Legislature coverage

The State Line: World-Herald Legislature blog

Contact the writer: Paul Hammel    |   402-473-9584    |  

Paul covers state government and affiliated issues and helps coordinate the same.

Crack ring's leaders join others in prison as part of Operation Purple Haze convictions
Saturday forecast opens window for gardening; Easter egg hunts look iffy on Sunday
Last day of 2014 Legislature: Praise, passage of a last few bills and more on mountain lions
A voice of experience: Ex-gang member has helped lead fight against Omaha violence
The thrill of the skill: Omaha hosts statewide contest for students of the trades
Intoxicated man with pellet gun climbs billboard's scaffold; is arrested
'The war is not over,' Chambers says, but legislative session about is
A recap of what got done — and what didn't — in the 2014 legislative session
PAC funded by Senate candidate Ben Sasse's great-uncle releases Shane Osborn attack ad
Teen killed at Gallagher Park was shot in head as he sat in SUV, friend who was wounded says
When judge asks, Nikko Jenkins says ‘I killed them’
New UNO center strengthens ties between campus, community
Threat found in Millard West bathroom deemed 'not credible'
New public employee pay data: Douglas, Lancaster, Sarpy Counties, plus utilities
Nebrasks health officials to advertise jobs via drive-thru
Coral Walker named Omaha police officer of the year
Sarah Palin, Mike Lee coming to Nebraska for Ben Sasse rally
Prescription drug drop-off is April 26
Database: How much did Medicare pay your doctor?
Rather than doing $250K in repairs, owner who lives in lot behind 94-year-old house in Dundee razes it
NB 30th Street lane closed
State Patrol, Omaha police conduct vehicle inspections
Bernie Kanger formally promoted to Omaha fire chief
U.S. House incumbents have deeper pockets than their challengers
Nancy's Almanac, April 17, 2014: Trees save money
< >
Breaking Brad: At least my kid never got stuck inside a claw machine
We need a new rule in Lincoln. If your kid is discovered inside the claw machine at a bowling alley, you are forever barred from being nominated for "Mother of the Year."
Breaking Brad: How many MECA board members can we put in a luxury suite?
As a stunt at the Blue Man Group show, MECA board members are going to see how many people they can stuff into one luxury suite.
Kelly: Creighton's McDermotts put good faces on an Omaha tradition
A comical roast Wednesday night in Omaha brought fans of Creighton basketball laughter by the bucketful. This time it was McJokes, not McBuckets, that entertained the Bluejay crowd.
Kelly: New $24M UNO center embodies spirit of newlywed crash victim
Jessica Lutton Bedient was killed by a drunken driver at age 26 in 2010. Thursday, the widowed husband and other family members will gather with others at the University of Nebraska at Omaha to dedicate a permanent memorial to Jessica.
Breaking Brad: How much would you pay for a corn dog?
The Arizona Diamondbacks have a new concession item: a $25 corn dog. For that kind of money, it should be stuffed with Bitcoin.
Deadline Deal thumbnail
The Jaipur in Rockbrook Village
Half Off Fine Indian Cuisine & Drinks! $15 for Dinner, or $7 for Lunch
Buy Now
< >
Omaha World-Herald Contests
Enter for a chance to win great prizes.
OWH Store: Buy photos, books and articles
Buy photos, books and articles
Travel Snaps Photo
Going on Vacation? Take the Omaha World-Herald with you and you could the next Travel Snaps winner.
Click here to donate to Goodfellows
The 2011 Goodfellows fund drive provided holiday meals to nearly 5,000 families and their children, and raised more than $500,000 to help families in crisis year round.
Want to get World-Herald stories sent directly to your home or work computer? Sign up for's News Alerts and you will receive e-mails with the day's top stories.
Can't find what you need? Click here for site map »