LINCOLN — Nebraska lawmakers got nearly $29 million worth of good budget news Tuesday.
An updated actuarial report, delivered to the Nebraska Retirement Systems Committee, shows that three state-sponsored retirement plans are healthier than expected.
As a result, the state will not be on the hook for adding as much money to the plans as once estimated.
The largest plan, which covers teachers and other school employees, does not need any additional contributions to stay healthy.
Balancing projected assets and liabilities for the judges’ and State Patrol plans will require an infusion of about $3 million over the two years.
State Sen. Mark Kolterman of Seward, the committee chairman, said the figures reflect steps taken in previous years to keep the plans strong.
“The reality is we’ve done a good job of managing,” he said. “I’m pretty optimistic.”
The new calculations shrink the state’s projected budget gap by $28.7 million, reducing the shortfall to about $867 million for the two-year budget period ending June 30, 2019.
Pat Beckham, an actuary with Cavanaugh Macdonald Consulting, said the plans are on track to be fully funded, even after the state started using more conservative assumptions about future liabilities and investment returns.
“The funding outlook remains positive even with the impact of the new set of assumptions,” she said.
The Public Employees Retirement Board voted last month to reduce the assumed rate of return on retirement investments to 7.5 percent annually, down from 8 percent.
The board also adopted a new table for calculating the mortality of plan members.
The changes take effect for the year beginning July 1, 2017. The assumptions are used in projecting long-term trends in the plans.