For purposes of the Class V School Employees Retirement Act, unless the context otherwise requires:

(1) Accumulated contributions means the sum of amounts contributed by a member of the system together with regular interest credited thereon;

(2) Actuarial equivalent means the equality in value of the retirement allowance for early retirement or the retirement allowance for an optional form of annuity, or both, with the normal form of the annuity to be paid, as determined by the application of the appropriate actuarial table, except that use of such actuarial tables shall not effect a reduction in benefits accrued prior to September 1, 1985, as determined by the actuarial tables in use prior to such date;

(a) For determining the actuarial equivalent of any annuities other than joint and survivorship annuities:

(i) For members hired before July 1, 2018, a unisex mortality table using twenty-five percent of the male mortality and seventy-five percent of the female mortality from the 1994 Group Annuity Mortality Table with a One Year Setback and using an interest rate of eight percent compounded annually; and

(ii) For members hired on or after July 1, 2018, or rehired on or after July 1, 2018, after termination of employment and being paid a retirement benefit, the determinations shall be based on a unisex mortality table and an interest rate specified by (A) the board until September 1, 2024, or (B) the retirement board beginning on September 1, 2024. Both the mortality table and the interest rate shall be recommended by the actuary retained pursuant to section 79-984 following an actuarial experience study, a benefit adequacy study, or a plan valuation. The mortality table, interest rate, and actuarial factors in effect on the member's retirement date shall be used to calculate the actuarial equivalency of any retirement benefit. Such interest rate may be, but is not required to be, equal to the assumed rate; and

(i) For members hired before July 1, 2018, a unisex retiree mortality table using sixty-five percent of the male mortality and thirty-five percent of the female mortality from the 1994 Group Annuity Mortality Table with a One Year Setback and using an interest rate of eight percent compounded annually and a unisex joint annuitant mortality table using thirty-five percent of the male mortality and sixty-five percent of the female mortality from the 1994 Group Annuity Mortality Table with a One Year Setback and using an interest rate of eight percent compounded annually; and

(4) Administrator of the retirement system or administrator means (a) until September 1, 2024, the person administering the retirement system who is appointed by the board or (b) beginning on September 1, 2024, the director appointed by the retirement board pursuant to section 84-1503;

(6) Annuity means annual payments, for both prior service and membership service, for life as provided in the Class V School Employees Retirement Act;

(7) Audit year means the period beginning January 1 in any year and ending on December 31 of that same year, which is the period of time used in the preparation of (a) the annual actuarial analysis and valuation and (b) a financial audit of the retirement system, including the investments of the retirement system;

(8) Beneficiary means any person entitled to receive or receiving a benefit by reason of the death of a member;

(9) Board means the board of trustees until July 1, 2021, and the board of education beginning July 1, 2021, and until September 1, 2024;

(10) Board of education means the board or boards of education of a school district or districts;

(a) Until September 1, 2024, the entity established pursuant to section 79-980; and

(b) Beginning September 1, 2024, the board of education shall be deemed to be the successor in interest for all liability associated with the actions or inactions of the entity identified under subdivision (11)(a) of this section and as specified in the Class V School Employees Retirement Act;

(12)(a) Compensation means gross wages or salaries payable to the member during a fiscal year and includes (i) overtime pay, (ii) member contributions to the retirement system that are picked up under section 414(h) of the Internal Revenue Code, as defined in section 49-801.01, (iii) retroactive salary payments paid pursuant to court order, arbitration, or litigation and grievance settlements, and (iv) amounts contributed by the member to plans under sections 125, 403(b), and 457 of the Internal Revenue Code, as defined in section 49-801.01, or any other section of the code which defers or excludes such amounts from income.

(b) Compensation does not include (i) fraudulently obtained amounts as determined by the board, (ii) amounts for accrued unused sick leave or accrued unused vacation leave converted to cash payments, (iii) insurance premiums converted into cash payments, (iv) reimbursement for expenses incurred, (v) fringe benefits, (vi) per diems paid as expenses, (vii) bonuses for services not actually rendered, (viii) early retirement inducements, (ix) cash awards, (x) severance pay, or (xi) employer contributions made for the purposes of separation payments made at retirement and early retirement inducements.

(c) Compensation in excess of the limitations set forth in section 401(a)(17) of the Internal Revenue Code, as defined in section 49-801.01, shall be disregarded;

(13) Council means the Nebraska Investment Council created and acting pursuant to section 72-1237;

(14) Creditable service means the sum of the membership service and the prior service, measured in one-tenth-year increments;

(15) Early retirement date means, for members hired prior to July 1, 2016, who have attained age fifty-five, that month and year selected by a member having at least ten years of creditable service which includes a minimum of five years of membership service. Early retirement date means, for members hired on or after July 1, 2016, that month and year selected by a member having at least five years of creditable service and who has attained age sixty;

(a) A benefit, bonus, or payment to a member by an employer in exchange for an agreement by the member to retire with a reduced retirement benefit;

(b) A benefit, bonus, or payment paid to a member by an employer in addition to the member's retirement benefit;

(c) Lump-sum or installment cash payments by an employer, except payments for accrued unused leave converted to cash payments;

(d) An additional salary or wage component of any kind that is being paid by an employer as an incentive to leave employment and not for personal services performed for which creditable service is granted;

(e) Partial or full employer payment of a member's health, dental, life, or long-term disability insurance benefits or cash in lieu of such insurance benefits that extend beyond the member's termination of employment and contract of employment dates. This subdivision does not apply to any period during which the member is contributing to the retirement system and being awarded creditable service; and

(f) Any other form of separation payments made by an employer to a member at termination, including, but not limited to, purchasing retirement contracts for the member pursuant to section 79-514, or depositing money for the member in an account established under section 403(b) of the Internal Revenue Code except for payments for accrued unused leave;

(17) Employee means the following enumerated persons receiving compensation from the school district: (a) Teachers, other than substitutes, employed on a written contract basis; (b) administrators employed on a written contract, agreement, or document basis; and (c) regular employees;

(18) Employer means a school district participating in a retirement system established pursuant to the Class V School Employees Retirement Act;

(19) Fiscal year means the period beginning September 1 in any year and ending on August 31 of the next succeeding year;

(20) Hire date or date of hire means the first day of compensated service subject to retirement contributions;

(21) Interest means, for the purchase of service credit, the purchase of prior service credit, restored refunds, and delayed payments, the investment return assumption used in the most recent actuarial valuation;

(22) Member means any employee included in the membership of the retirement system or any former employee who has made contributions to the system and has not received a refund;

(23) Membership service means service on or after September 1, 1951, as an employee of the school district and a member of the system for which compensation is paid by the school district. Credit for more than one year of membership service shall not be allowed for service rendered in any fiscal year. Beginning September 1, 2005, a member shall be credited with a year of membership service for each fiscal year in which the member performs one thousand or more hours of compensated service as an employee of the school district. For an employee who becomes a member prior to July 1, 2018, an hour of compensated service shall include any hour for which the member is compensated by the school district during periods when no service is performed due to vacation or approved leave. For an employee who becomes a member on or after July 1, 2018, an hour of compensated service shall include any hour for which the member is compensated by the school district during periods when no service is performed due to used accrued sick days, used accrued vacation days, federal and state holidays, and jury duty leave for which the member is paid full compensation by an employer. If a member performs less than one thousand hours of compensated service during a fiscal year, one-tenth of a year of membership service shall be credited for each one hundred hours of compensated service by the member in such fiscal year. In determining a member's total membership service, all periods of membership service, including fractional years of membership service in one-tenth-year increments, shall be aggregated;

(24) Military service means service in the uniformed services as defined in 38 U.S.C. 4301 et seq., as such provision existed on March 27, 1997;

(25) Normal retirement date means the end of the month during which the member attains age sixty-five and has completed at least five years of membership service;

(26) Participation means qualifying for and making required deposits to the retirement system during the course of a fiscal year;

(27) Primary beneficiary means the person or persons entitled to receive or receiving a benefit by reason of the death of a member;

(28) Prior service means service rendered prior to September 1, 1951, for which credit is allowed under section 79-999, service rendered by retired employees receiving benefits under preexisting systems, and service for which credit is allowed under sections 79-990, 79-991, 79-994, 79-995, and 79-997;

(29)(a) Regular employee means a person hired on a full-time basis, which basis shall contemplate a work week of not less than thirty hours, and who is not (i) a teacher employed on a written contract basis or (ii) an administrator employed on a written contract, agreement, or document basis.

(b) Effective September 1, 2021, a person hired by an employer or under contract to provide service for less than thirty hours per week but who provides service for an average of thirty hours or more per week in each calendar month of any three calendar months of a fiscal year shall, beginning with the next full payroll period, commence contributions and shall be deemed a regular employee;

(30) Regular interest means interest (a) on the total contributions of the member prior to the close of the last preceding fiscal year, (b) compounded annually, and (c)(i) beginning September 1, 2016, at a rate equal to the daily treasury yield curve for one-year treasury securities, as published by the Secretary of the Treasury of the United States, that applies on September 1 of each year and (ii) prior to September 1, 2016, at rates to be determined annually by the board, which shall have the sole, absolute, and final discretionary authority to make such determination, except that the rate for any given year in no event shall exceed the actual percentage of net earnings of the system during the last preceding fiscal year;

(31) Retirement allowance means the total annual retirement benefit payable to a member for service or disability;

(32) Retirement application means beginning on and after September 1, 2024, the form approved and provided by the retirement system for acceptance of a member's request for either regular or disability retirement;

(33) Retirement board means the Public Employees Retirement Board created and acting pursuant to section 84-1501;

(34) Retirement date means the date of retirement of a member for service or disability as fixed by (a) the board for retirements occurring prior to September 1, 2024, or (b) the retirement board for retirements occurring on or after September 1, 2024;

(35) Retirement system or system means the School Employees' Retirement System of (corporate name of the school district as described in section 79-405) as provided for by the act;

(36) School district means an employer participating in a retirement system established pursuant to the Class V School Employees Retirement Act;

(37) Secondary beneficiary means the person or persons entitled to receive or receiving a benefit by reason of the death of all primary beneficiaries prior to the death of the member. If no primary beneficiary survives the member, secondary beneficiaries shall be treated in the same manner as primary beneficiaries;

(38) Solvency means the rate of all contributions required pursuant to the Class V School Employees Retirement Act is equal to or greater than the actuarially required contribution rate as annotated in the most recent valuation report prepared by the actuary retained for the retirement system as provided in section 79-984;

(39) State investment officer means the person appointed by the council pursuant to section 72-1240 and acting pursuant to the Nebraska State Funds Investment Act;

(40) Substitute employee means a person hired by an employer as a temporary employee to assume the duties of an employee due to a temporary absence of any employee. Substitute employee does not mean a person hired as an employee on an ongoing basis to assume the duties of other employees who are temporarily absent;

(41) Temporary employee means a person hired by an employer who is not an employee and who is hired to provide service for a limited period of time to accomplish a specific purpose or task. When such specific purpose or task is complete, the employment of such temporary employee shall terminate and in no case shall the temporary employment period exceed one year in duration;

(42)(a) Termination of employment occurs on the date on which the member experiences a bona fide separation from service of employment with the member's employer, the date of which separation is determined by the end of the member's contractual agreement or, if there is no contract or only partial fulfillment of a contract, by an employer. A member shall not be deemed to have terminated employment if the member subsequently provides service to an employer within one hundred eighty days after ceasing employment unless such service is:

(ii) Substitute service provided on an intermittent basis. For purposes of this subdivision, (A) intermittent basis means service provided on a day-to-day basis that is not greater than eight days of service during a calendar month and (B) day of service means any length of substitute service provided during a single calendar day; or

(iii) Temporary service following a bona fide separation of service of not less than thirty calendar days and which is provided to accomplish a specific purpose or task for a limited period not to exceed one year.

(b) A member shall not be deemed to have terminated employment if the board determines that, based on the facts and circumstances, (i) a claimed termination was not a bona fide separation from service with the employer or (ii) a member was compensated for a full contractual period when the member terminated prior to the end date of the member's employment as determined by the member's contract or labor agreement.

(c) Nothing in this subdivision precludes an employer from adopting a policy which limits or denies employees who have terminated employment from providing voluntary or substitute service within one hundred eighty days after termination;

(43) Transfer of management means the transition and transfer of the general management, administration, and operation of the retirement system from the board of trustees, board of education, and school district to the retirement board as described in the Class V School Employees Retirement Act. Transfer of management does not include:

(a) Transfer of the school district's funding obligations described in the Class V School Employees Retirement Act or assumption of financial liability for such funding obligations by (i) the State of Nebraska, (ii) the retirement board, (iii) the Nebraska Public Employees Retirement Systems, (iv) any other state entity with duties related to administration of the retirement system, or (v) the council for its investment duties regarding the assets of the retirement system; or

(b) Merger or consolidation of any Class V school employees retirement system established under the Class V School Employees Retirement Act with the School Employees Retirement System of the State of Nebraska or any other retirement system administered by the retirement board;

(45) Voluntary service or volunteer means providing bona fide unpaid service to an employer.

Source:Laws 1951, c. 274, § 1, p. 910; Laws 1953, c. 308, § 1, p. 1025; Laws 1967, c. 544, § 1, p. 1786; Laws 1976, LB 994, § 1; Laws 1982, LB 131, § 1; Laws 1985, LB 215, § 1; Laws 1987, LB 298, § 5; Laws 1988, LB 1142, § 9; Laws 1988, LB 551, § 2; Laws 1989, LB 237, § 1; Laws 1991, LB 350, § 1; Laws 1992, LB 1001, § 20; Laws 1993, LB 107, § 1; Laws 1995, LB 505, § 1; R.S.Supp.,1995, § 79-1032; Laws 1996, LB 900, § 613; Laws 1997, LB 347, § 28; Laws 1997, LB 623, § 28; Laws 1998, LB 497, § 6; Laws 2000, LB 155, § 1; Laws 2005, LB 364, § 11; Laws 2010, LB950, § 17; Laws 2015, LB446, § 4; Laws 2016, LB447, § 14; Laws 2016, LB790, § 7; Laws 2017, LB415, § 34; Laws 2018, LB1005, § 31; Laws 2021, LB147, § 7; Laws 2022, LB700, § 8.

Sections 79-978 to 79-9,124 shall be known and may be cited as the Class V School Employees Retirement Act.

Source:Laws 1998, LB 497, § 7; Laws 2011, LB509, § 33; Laws 2016, LB447, § 15; Laws 2017, LB415, § 35; Laws 2019, LB31, § 1; Laws 2019, LB34, § 17; Laws 2021, LB147, § 8.

(1) Prior to September 13, 1997, in each Class V school district in the State of Nebraska there is hereby established a separate retirement system for all employees of such school district. Such system shall be for the purpose of providing retirement benefits for all employees of the school district as provided in the Class V School Employees Retirement Act. The system shall be known as School Employees' Retirement System of (corporate name of the school district as described in section 79-405). All of its business shall be transacted, all of its funds shall be invested, and all of its cash and securities and other property shall be held in trust on behalf of the retirement system for the purposes set forth in the act. Such funds shall be kept separate from all other funds of the school district and shall be used for no other purpose.

(2) Except as provided in subsection (3) of this section, if any new Class V school districts are formed after September 13, 1997, such new Class V school district shall elect to become or remain a part of the retirement system established pursuant to the School Employees Retirement Act.

(3) Any new Class V school districts formed pursuant to the Learning Community Reorganization Act shall continue to participate in the retirement system established pursuant to the Class V School Employees Retirement Act if such new Class V school district was formed at least in part by territory that had been in a Class V school district that participated in the retirement system established pursuant to the Class V School Employees Retirement Act.

Source:Laws 1951, c. 274, § 2, p. 912; Laws 1988, LB 1142, § 10; R.S.1943, (1994), § 79-1033; Laws 1996, LB 900, § 614; Laws 1997, LB 623, § 29; Laws 1997, LB 624, § 22; Laws 1998, LB 497, § 8; Laws 2006, LB 1024, § 60; Laws 2016, LB447, § 16; Laws 2021, LB147, § 9.

(1)(a) The board of trustees or its designee, the school district, the board of education or its designee, and the retirement board shall enter into a plan for the transition and transfer of management and general administration of the retirement system from the board of trustees, the school district, and board of education to the retirement board.

(b) The plan shall be consistent with the applicable requirements and recommendations of the work plan submitted to the Clerk of the Legislature as required by section 79-9,121. The plan shall be completed no later than December 31, 2021, and shall also address additional duties, obligations, and examinations related to the transition and transfer of management of the retirement system to the retirement board as described in the Class V School Employees Retirement Act as amended by Laws 2021, LB147. A copy of the plan described in this section shall be filed with the Nebraska Retirement Systems Committee of the Legislature and the Governor upon completion.

(2) The board of trustees, the school district, and the board of education shall timely provide to the retirement board all records, documents, member and annuitant data, agreements, accounting and record-keeping systems, information technology, and other information related to the administration of the retirement system as may be necessary or appropriate for the performance and completion of the work plan required by section 79-9,121, the plan described in subsection (1) of this section, and any other duties and obligations related to the transition and transfer of management and general administration of the retirement system requested by the director of the Nebraska Public Employees Retirement Systems.

(3)(a) All costs, fees, and expenses incurred by the retirement board on or after May 27, 2021, until September 1, 2025, related to the transition and transfer of management and general administration of the retirement system to the retirement board shall be paid by an employer of the retirement system.

(b) The retirement board may bill an employer of the retirement system monthly for all services and expenses relating to the work performed as required in the Class V School Employees Retirement Act by the retirement board and the Nebraska Public Employees Retirement Systems staff, consultants, and contractors. An employer shall remit payment as provided in section 79-9,122 and within the time period and in the manner negotiated in the transition and transfer of management and administration plan entered into pursuant to this section.

(4) No later than September 1, 2024, except for information technology stabilization work performed until September 1, 2025, the retirement board or its designee shall complete the applicable requirements and carry out recommendations consistent with the work plan and the plan entered into as described in subsection (1) of this section for the transition and transfer of management and general administration of the retirement system to the retirement board that was submitted to the Clerk of the Legislature as required by section 79-9,121. The retirement board is authorized to perform such tasks, enter into contracts for services, access and copy administrative and computer systems and records of the retirement system, and generally perform and take all other action it determines necessary or appropriate to transfer the management and general administration of the retirement system to the retirement board.

(5)(a) Beginning September 1, 2024, the school district and board of education shall not have any duty or authority for management, operation, or general administration of the retirement system except for reporting requirements and funding obligations as described in the Class V School Employees Retirement Act.

(b) On and after such date, the retirement board, acting through the director of the Nebraska Public Employees Retirement Systems, shall have the duty and authority for the management, operation, and general administration of the retirement system. Such duty and authority of the retirement board and its officers, employees, or assigns does not include financial responsibility or liability for funding obligations of the retirement system which remain the responsibility of the school district as described in the Class V School Employees Retirement Act.

Source:Laws 2021, LB147, § 16.

(1) Beginning September 1, 2024, the State of Nebraska, the retirement board, the Nebraska Public Employees Retirement Systems, and their respective officers, members, employees, and agents shall be indemnified and held harmless by the school district and board of education from any and all liabilities, claims, suits, losses, damages, and costs that arise from, or are reasonably related to, any conduct, decision, action, inaction, or omission of the board of trustees, the board of education, or the school district or any consequences arising thereof during the course of performing their respective duties and responsibilities for, or actions or services related to or in support of, the retirement system under the Class V School Employees Retirement Act prior to September 1, 2024.

(2) The school district of a retirement system described under the Class V School Employees Retirement Act shall remain at all times and in all circumstances solely liable for all funding obligations and responsibilities as described in the act.

(3) At no time and under no circumstances shall the State of Nebraska, the Nebraska Public Employees Retirement Systems, the retirement board, or any other state entity or its officers, employees, or assigns with duties related to the Class V school employees retirement system be liable for any funding obligations of any Class V school employees retirement system.

(4) The retirement board shall not be liable for any acts or omissions occurring prior to September 1, 2024, in the administration of the Class V School Employees Retirement Act and made at the direction of or by the board of trustees or its employees, the school district or its employees, or the board of education.

(5) A member of the board of education, the board of trustees, or the retirement board shall not be personally liable for any action related to such board member's retirement duties except in cases of willful dishonesty, gross negligence, or intentional violation of law.

(6) Except as otherwise provided in this section, the school district shall not be liable for any act or omission in the administration of the Class V School Employees Retirement Act made at the direction of the retirement board or the administrator of the Nebraska Public Employees Retirement Systems or its employees on and after September 1, 2024.

Source:Laws 2021, LB147, § 17.

(a) At any time that the retirement system consists of only one Class V school district, the general administration of the retirement system is hereby vested in the board of trustees;

(b) Beginning July 1, 2016, the board of trustees shall consist of the following individuals: (i) Two members of the retirement system who are certificated staff elected by the members of the retirement system who are certificated staff; (ii) one member of the retirement system who is classified staff elected by the members of the retirement system who are classified staff; (iii) one member of the retirement system who is an annuitant elected by the members of the retirement system who are annuitants; (iv) the superintendent of schools or his or her designee to serve as a voting, ex officio trustee; and (v) two business persons approved by the board of education qualified in financial affairs who are not members of the retirement system. The business person trustees shall be recommended to four-year terms by the trustees who are not business persons, and the appointments shall be approved by the board of education. The elections of the trustees who are members of the retirement system shall be arranged for, managed, and conducted by the board of trustees and, after the initial terms as otherwise designated, shall be for terms of four years. One certificated staff trustee serving on July 1, 2016, will continue serving until an elected certificated staff trustee will take position effective July 1, 2017; the second certificated staff trustee serving on July 1, 2016, will continue serving until a second elected certificated staff trustee will take position July 1, 2018; the classified staff trustee serving on July 1, 2016, will continue serving until an elected classified staff trustee will take position July 1, 2019; the annuitant member trustee serving on July 1, 2016, will continue serving until an elected annuitant member trustee will take position July 1, 2020; one business member trustee serving on July 1, 2016, will continue serving until a new term of office begins effective July 1, 2018; and the second business member trustee serving on July 1, 2016, will continue serving until a new term of office begins effective July 1, 2020. The terms of the elected trustees shall be fixed so that one member trustee election shall be held each year. The board of trustees shall appoint a qualified individual to fill any vacancy on the board of trustees for the remainder of the unexpired term. No vacancy or vacancies on the board of trustees shall impair the power of the remaining trustees to administer the retirement system pending the filling of such vacancy or vacancies. The trustees shall serve without compensation, but shall be reimbursed from the funds of the retirement system for expenses that they may incur through service on the board of trustees as provided in sections 81-1174 to 81-1177. A trustee shall serve until a successor qualifies, except that a trustee who is a member of the retirement system shall be disqualified as a trustee immediately upon ceasing to be a member of the retirement system. The terms of all trustees under this subsection shall end on June 30, 2021. Each trustee shall be entitled to one vote on the board of trustees, and four trustees shall constitute a quorum for the transaction of any business. The board of trustees and the administrator of the retirement system shall administer the retirement system in compliance with the tax-qualification requirements applicable to government retirement plans under section 401(a) of the Internal Revenue Code, as defined in section 49-801.01, including: Section 401(a)(9) of the Internal Revenue Code relating to the time and manner in which benefits are required to be distributed, including the incidental death benefit distribution requirement of section 401(a)(9)(G) of the Internal Revenue Code; section 401(a)(25) of the Internal Revenue Code relating to the specification of actuarial assumptions; section 401(a)(31) of the Internal Revenue Code relating to direct rollover distributions from eligible retirement plans; and section 401(a)(37) of the Internal Revenue Code relating to the death benefit of a member whose death occurs while performing qualified military service. No member of the board of education or board of trustees shall be personally liable, except in cases of willful dishonesty, gross negligence, or intentional violations of law, for actions relating to his or her retirement system duties; and

(c) Beginning July 1, 2016, and until July 1, 2021, the board of education shall not have any duty or responsibility for the general administration of the retirement system, including the determination and calculation of the benefits of any member or beneficiary, except as may specifically be provided in the Class V School Employees Retirement Act.

(a) At any time that the retirement system consists of only one Class V school district, the general administration of the retirement system is hereby vested in the board of education;

(b)(i) The board of education, by a majority vote of all its members, shall appoint seven trustees to serve as executive officers to administer the Class V School Employees Retirement Act. Such trustees shall consist of (A) the superintendent of the school district or his or her designee to serve as a voting, ex officio trustee, (B) two members of the retirement system, one of whom shall be a teacher, (C) two members of the board of education, and (D) two trustees who are business persons qualified in financial affairs and who are not members of the retirement system. Each trustee shall be entitled to one vote on the board of trustees. The board of education shall take action within fifteen days of May 27, 2021, to appoint the new members of the board of trustees as required in this section. The new members shall begin their service on the board of trustees on July 1, 2021;

(ii) Except for the initial appointments made immediately following May 27, 2021, the term of a trustee shall be one fiscal year except the terms of the two trustees who are not members of the board of education or the retirement system shall each be three fiscal years or until September 1, 2024, whichever is later. A trustee shall serve until a successor qualifies, except a trustee who is a member of the board of education shall be disqualified as a trustee immediately upon ceasing to be a member of the board of education. No vacancy on the board of trustees shall impair the power of the remaining trustees to administer the retirement system pending the filling of such vacancy; and

(iii) The trustees shall serve without compensation, but shall be reimbursed from the funds of the retirement system for expenses that they may incur through service as trustees as provided in sections 81-1174 to 81-1177;

(c) In addition to duties and responsibilities as otherwise described in the Class V School Employees Retirement Act, the board of trustees shall, as directed by the board of education, facilitate the transition and transfer of management and general administration of the retirement system effective September 1, 2024, to the retirement board;

(d) The board of trustees and the administrator of the retirement system, shall administer the retirement system in compliance with the tax-qualification requirements applicable to government retirement plans under section 401(a) of the Internal Revenue Code, as defined in section 49-801.01, including, but not limited to: Section 401(a)(9) of the Internal Revenue Code relating to the time and manner in which benefits are required to be distributed, including the incidental death benefit distribution requirement of section 401(a)(9)(G) of the Internal Revenue Code; section 401(a)(25) of the Internal Revenue Code relating to the specification of actuarial assumptions; section 401(a)(31) of the Internal Revenue Code relating to direct rollover distributions from eligible retirement plans; and section 401(a)(37) of the Internal Revenue Code relating to the death benefit of a member whose death occurs while performing qualified military service; and

(e) No member of the board of education or board of trustees shall be personally liable, except in cases of willful dishonesty, gross negligence, or intentional violations of law, for actions relating to such member's retirement system duties.

(3)(a) Effective September 1, 2024, the board of trustees described in subsection (2) of this section shall terminate, the terms of the trustees shall end, and the retirement board shall assume administration of the retirement system. Administration by the retirement board does not include financial responsibility or liability of the funding obligation for the retirement system which remain with the school district as described in the Class V School Employees Retirement Act, nor does it include responsibility for investment of funds, which authority and responsibility shall be retained by the council and the state investment officer.

(b) On and after such date, the retirement board shall have the duties and authorities provided to the retirement board in section 84-1503 for the administration of the retirement system, and its administrative duties shall be performed by the Nebraska Public Employees Retirement Systems under the direction of the retirement board.

(a) At any time that the retirement system consists of more than one Class V school district, the general administration of the retirement system is hereby vested in the board of trustees;

(b) The board of trustees shall consist of the following individuals: (i) Two members of the retirement system who are certificated staff elected by the members of the retirement system who are certificated staff; (ii) one member of the retirement system who is classified staff elected by the members of the retirement system who are classified staff; (iii) one member of the retirement system who is an annuitant elected by the members of the retirement system who are annuitants; (iv) the superintendent of each of the school districts represented in the retirement system or his or her designee to serve as a voting, ex officio trustee; and (v) two business persons approved by the board of education qualified in financial affairs who are not members of the retirement system. The elections of the trustees who are members of the retirement system shall be arranged for, managed, and conducted by the board of trustees and, after the initial terms as otherwise designated, shall be for terms of four years. The business person trustees shall be recommended to four-year terms by the trustees who are not business persons, and the appointments shall be approved by the board of education. The board of trustees shall appoint a qualified individual to fill any vacancy on the board of trustees for the remainder of the unexpired term. No vacancy or vacancies on the board of trustees shall impair the power of the remaining trustees to administer the retirement system pending the filling of such vacancy or vacancies. The trustees shall serve without compensation, but shall be reimbursed from the funds of the retirement system for expenses that they may incur through service on the board of trustees as provided in sections 81-1174 to 81-1177. A trustee shall serve until a successor qualifies, except that a trustee who is a member of the retirement system shall be disqualified as a trustee immediately upon ceasing to be a member of the retirement system. The terms of all trustees under this subsection shall end on June 30, 2021. Each trustee shall be entitled to one vote on the board of trustees, and four trustees shall constitute a quorum for the transaction of any business. The board of trustees and the administrator of the retirement system shall administer the retirement system in compliance with the tax-qualification requirements applicable to government retirement plans under section 401(a) of the Internal Revenue Code, as defined in section 49-801.01, including: Section 401(a)(9) of the Internal Revenue Code relating to the time and manner in which benefits are required to be distributed, including the incidental death benefit distribution requirement of section 401(a)(9)(G) of the Internal Revenue Code; section 401(a)(25) of the Internal Revenue Code relating to the specification of actuarial assumptions; section 401(a)(31) of the Internal Revenue Code relating to direct rollover distributions from eligible retirement plans; and section 401(a)(37) of the Internal Revenue Code relating to the death benefit of a member whose death occurs while performing qualified military service. No member of the board of education or board of trustees shall be personally liable, except in cases of willful dishonesty, gross negligence, or intentional violations of law, for actions relating to his or her retirement system duties; and

(c) The board of education shall not have any duty or responsibility for the general administration of the retirement system, including the determination and calculation of the benefits of any member or beneficiary, except as may specifically be provided in the Class V School Employees Retirement Act.

(a) At any time that the retirement system consists of more than one Class V school district, the general administration of the retirement system is hereby vested in the board of education;

(b)(i) The board of education, by a majority vote of all its members, shall appoint seven trustees to serve as executive officers to administer the Class V School Employees Retirement Act. Such trustees shall consist of (A) the superintendent of such school district or his or her designee to serve as a voting, ex officio trustee, (B) two members of the retirement system, one of whom shall be a teacher, (C) two members of the board of education, and (D) two trustees who are business persons qualified in financial affairs and who are not members of the retirement system. Each trustee shall be entitled to one vote on the board of trustees. The board of education shall take action within fifteen days of May 27, 2021, to appoint the new members of the board of trustees as required in this section. The new members shall begin their service on the board of trustees on July 1, 2021;

(c) The board of education shall have the duty and responsibility for the general administration of the retirement system except as specifically provided in the Class V School Employees Retirement Act;

(d) In addition to duties and responsibilities as otherwise described in the Class V School Employees Retirement Act, the board of trustees shall, as directed by the board of education, facilitate the transition and transfer of management and general administration of the retirement system effective September 1, 2024, to the retirement board;

(e) The board of trustees and the administrator of the retirement system, shall administer the retirement system in compliance with the tax-qualification requirements applicable to government retirement plans under section 401(a) of the Internal Revenue Code, as defined in section 49-801.01, including, but not limited to: Section 401(a)(9) of the Internal Revenue Code relating to the time and manner in which benefits are required to be distributed, including the incidental death benefit distribution requirement of section 401(a)(9)(G) of the Internal Revenue Code; section 401(a)(25) of the Internal Revenue Code relating to the specification of actuarial assumptions; section 401(a)(31) of the Internal Revenue Code relating to direct rollover distributions from eligible retirement plans; and section 401(a)(37) of the Internal Revenue Code relating to the death benefit of a member whose death occurs while performing qualified military service; and

(f) No member of the board of education or board of trustees shall be personally liable, except in cases of willful dishonesty, gross negligence, or intentional violations of law, for actions relating to such member's retirement system duties.

(6)(a) Effective September 1, 2024, the board of trustees described in subsection (5) of this section shall terminate, the terms of the trustees shall end, and the retirement board shall assume administration of the retirement system. Administration by the retirement board does not include financial responsibility or liability of the funding obligation for the retirement system which remain with the school district as described in the Class V School Employees Retirement Act, nor does it include responsibility for investment of funds, which authority and responsibility shall be retained by the council and the state investment officer.

Source:Laws 1951, c. 274, § 3, p. 913; Laws 1963, c. 490, § 1, p. 1564; Laws 1979, LB 135, § 1; Laws 1981, LB 204, § 157; Laws 1993, LB 107, § 2; Laws 1995, LB 505, § 2; R.S.Supp.,1995, § 79-1034; Laws 1996, LB 900, § 615; Laws 1998, LB 497, § 9; Laws 2001, LB 711, § 5; Laws 2006, LB 1024, § 61; Laws 2012, LB916, § 24; Laws 2014, LB1042, § 8; Laws 2016, LB447, § 17; Laws 2021, LB147, § 10.

(a) The board of trustees shall from time to time establish rules and regulations for the administration of the retirement system and for the transaction of its business and shall appoint an administrator of the retirement system;

(b) The board of trustees may contract for such medical and other services as shall be required to transact the business of the retirement system;

(c) Beginning on March 31, 2016, neither the board of education nor the board of trustees shall establish any further rules or regulations related to the investment of the assets of the retirement system without first consulting with the state investment officer. Beginning January 1, 2017, all rules and regulations adopted and promulgated under this section related to the investment of assets of the retirement system terminate;

(d) Compensation for all persons employed by the board of trustees and all other expenses of the board of trustees necessary for the proper and efficient operation of the retirement system shall be paid in such amounts as the board of trustees determines and approves; and

(e) In addition to such duties and other duties arising out of the Class V School Employees Retirement Act not specifically reserved or assigned to others, the board of education shall maintain a separate account of each member's retirement account information as indicated in section 79-989, the record of which shall be available in a timely manner to the member and the board of trustees upon request. The board of trustees shall compile such data as may be necessary for the required actuarial valuation, consider and pass on all applications for annuities or other benefits and have examinations made when advisable of persons receiving disability benefits, and direct and determine all policies necessary in the administration of the act.

(i) Establish rules and regulations for the administration of the retirement system, transaction of its business, and to facilitate the transition and transfer of management and general administration of the retirement system effective September 1, 2024, to the retirement board;

(ii) Direct the board of trustees to establish policies and rules and regulations for the transaction of its business and administration of the retirement system and to facilitate the transition and transfer of management and general administration of the retirement system effective September 1, 2024, to the retirement board; and

(b) The board of education may contract for such medical and other services as shall be required to transact the business of the retirement system;

(c) Compensation for all persons employed by the board of education and all other expenses of the board of trustees necessary for the proper and efficient operation of the retirement system shall be paid in such amounts as the board of education determines and approves; and

(d) In addition to such duties and other duties arising out of the Class V School Employees Retirement Act not specifically reserved or assigned to others, the board of education shall:

(i) Maintain a separate account of each member's contributions, the record of which shall be available to the member and the board of trustees in a timely manner upon request;

(ii) Compile such data as may be necessary for the required actuarial valuation;

(iv) Have examinations made when advisable of persons receiving disability benefits; and

(v) Direct and determine all policies necessary in the administration of the Class V School Employees Retirement Act.

(a) Administer the retirement system pursuant to its duties in section 84-1503 and the provisions of the Class V School Employees Retirement Act;

(b) Maintain a separate account of each member's retirement account information as indicated in section 79-989, which shall be available to the member;

(e) Have examinations made when advisable of persons receiving disability benefits; and

(f) Direct and determine all policies and procedures necessary in the administration of the Class V School Employees Retirement Act.

(4) All expenses on and after January 1, 2017, related to the investment of the assets of the retirement system shall be paid in such amounts as the state investment officer determines and approves.

Source:Laws 1951, c. 274, § 4, p. 913; Laws 1985, LB 215, § 2; Laws 1991, LB 350, § 2; R.S.1943, (1994), § 79-1035; Laws 1996, LB 900, § 616; Laws 1998, LB 497, § 10; Laws 2001, LB 711, § 6; Laws 2006, LB 1024, § 62; Laws 2016, LB447, § 18; Laws 2021, LB147, § 11.

(1) Until July 1, 2021, the board of trustees shall (a) hold regular meetings annually and such special meetings at such times as may be deemed necessary, which meetings shall be open to the public, (b) keep a record of all the proceedings of such meetings, (c) prior to January 1, 2017, and subject to the approval of the board of education, invest all cash income not required for current payments in securities of the type provided in section 79-9,107 and so reinvest the proceeds from the sale or redemption of investments, and (d) supervise the affairs of the retirement system related to the administration of benefits and approve any changes in the administration of the retirement system essential to the actuarial requirements of the retirement system.

(2) Beginning July 1, 2021, until September 1, 2024, the board of trustees, as directed by the board of education shall (a) hold regular meetings annually and such special meetings at such times as may be deemed necessary, which meetings shall be open to the public, (b) keep a record of all the proceedings of such meetings, (c) supervise the affairs of the retirement system related to the administration of benefits and recommend to the board of education any changes in the administration of the retirement system essential to the actuarial requirements of the retirement system, and (d) facilitate the transition and transfer of management and general administration of the retirement system to the retirement board effective September 1, 2024.

(3) Effective September 1, 2024, the board of trustees shall not have any duty or responsibility for the general administration of the retirement system, and the board of trustees and the terms of the members shall terminate.

Source:Laws 1951, c. 274, § 5, p. 914; Laws 1955, c. 321, § 1, p. 992; Laws 1979, LB 187, § 242; Laws 1993, LB 107, § 3; R.S.1943, (1994), § 79-1036; Laws 1996, LB 900, § 617; Laws 2001, LB 711, § 7; Laws 2016, LB447, § 19; Laws 2021, LB147, § 12.

(1) The members of the board of trustees shall have the responsibility for the administration of the retirement system pursuant to section 79-982 until September 1, 2024.

(2)(a) Until September 1, 2024, the board of trustees shall be deemed fiduciaries with respect to the administration of the retirement system, and shall be held to the standard of conduct of a fiduciary specified in subdivision (b) of this subsection.

(i) Discharge their duties with respect to the retirement system solely in the interests of the members and beneficiaries of the retirement system for the exclusive purposes of providing benefits to members and members' beneficiaries and defraying reasonable expenses incurred within the limitations and according to the powers, duties, and purposes prescribed by law at the time such duties are discharged;

(ii) Not have a duty in their official capacity to seek the enhancement of plan benefits through the legislative process if such benefits are not already contained within the plan documents; and

(iii) Act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(3)(a) Beginning July 1, 2021, and until September 1, 2024, the members of the board of education shall:

(i) Have the responsibility for the administration of the retirement system pursuant to section 79-982;

(ii) Be deemed fiduciaries with respect to the administration of the retirement system; and

(iii) Be held to the standard of conduct of a fiduciary specified in subdivision (b) of this subsection.

(ii) Not have a duty in their official capacity to seek the enhancement of plan benefits through the legislative process if such benefits are not already contained within the plan documents; and

Source:Laws 2016, LB447, § 20; Laws 2021, LB147, § 13.

(1)(a) Beginning January 1, 2017, the board of trustees, the board of education, and beginning September 1, 2024, the retirement board shall not have the duty or authority to invest the assets of the retirement system, and the council and the state investment officer shall have the duty and authority to invest such assets in accordance with the Nebraska State Funds Investment Act. Until September 1, 2024, the board shall be responsible for administering the noninvestment affairs of the retirement system, including the payment of plan benefits and management of the actuarial requirements of the retirement system.

(b) Beginning September 1, 2024, the retirement board shall be responsible for administering the noninvestment affairs of the retirement system including the disbursement of plan benefits and management of the actuarial requirements of the retirement system. Administration does not include financial responsibility or liability for the funding obligation for the retirement system which remain with the school district as described in the Class V School Employees Retirement Act.

(2) On or before July 1, 2016, the board of trustees, or its designee, and the state investment officer shall enter into a plan for the transition of the investment authority from the board of trustees to the council. The plan shall include, but not be limited to, the following items:

(a) The board of trustees shall provide to the state investment officer by July 1, 2016, an accounting of the assets in the retirement system and a detailed description of the investments;

(b) The board of trustees shall provide to the state investment officer by July 1, 2016, a list containing the name, mailing address, telephone number, and email address of all managers, advisers, and custodians who are providing services related to the assets of the retirement system;

(c) The board of trustees shall provide to the state investment officer by July 1, 2016, a copy of all agreements and instruments related to the investment, management, and custody of the assets;

(d) The board of trustees shall assign investment authority and responsibility for investment-related agreements and instruments to the council by January 1, 2017, as determined by the state investment officer in his or her sole discretion;

(e) The board of trustees shall provide to the state investment officer by July 1, 2016, a copy of the most recent asset liability study, and in its sole discretion, the council may require the preparation of an updated asset liability study;

(f) The board of trustees shall provide to the state investment officer by July 1, 2016, a copy of the most recent actuarial valuation and audited certified annual financial report of the plan; and

(g) The state investment officer and the board of trustees shall identify items that will need to be addressed prior to the transition of investment authority on January 1, 2017.

(3) All costs, fees, and expenses incurred after March 31, 2016, related to the transition of the investment authority on January 1, 2017, from the board of trustees and the board of education to the council and the state investment officer shall be paid from the assets of a retirement system provided for under the Class V School Employees Retirement Act and to the extent such costs, fees, and expenses are incurred by the council or the state investment officer, they shall be paid in accordance with sections 72-1249 and 72-1249.02.

(4) The state investment officer shall provide a quarterly report to the board until September 1, 2024, and beginning September 1, 2024, to the retirement board regarding the assets of the retirement system and related costs, fees, and expenses.

Source:Laws 2016, LB447, § 21; Laws 2021, LB147, § 14.

(1) Until July 1, 2021, the administrator of the retirement system shall be appointed by the board of trustees and approved by the board of education and shall serve at the pleasure of the board of trustees. Beginning July 1, 2021, the administrator of the retirement system shall be appointed by the board of education. The administrator shall hire, dismiss, and otherwise supervise the other staff of the retirement system as approved and directed by the board, shall keep the minutes and records of the retirement system, shall be the executive officer in charge of the administration of the detailed affairs of the retirement system, and shall perform such other duties as may be assigned by the board. The administrator and retirement system staff shall be employees of the Class V school district, with compensation and the benefits as available to school district employees determined by the board. The retirement system shall reimburse the Class V school district for all employee costs of salary, employment taxes, and benefits provided to the administrator and retirement system staff. The administrator shall serve as a nonvoting, ex officio member of the council and shall not be deemed a fiduciary of the council.

(2) Effective September 1, 2024, the position of the administrator and all retirement system staff positions shall terminate. The administrator duties shall be assumed by the director appointed by the retirement board pursuant to section 84-1503.

Source:Laws 1951, c. 274, § 6, p. 915; Laws 1991, LB 350, § 3; R.S.1943, (1994), § 79-1037; Laws 1996, LB 900, § 618; Laws 2006, LB 1024, § 63; Laws 2016, LB447, § 22; Laws 2021, LB147, § 15.

(1) Until July 1, 2021, the board of trustees shall contract for the services of an actuary who shall be the technical advisor of the board of trustees on matters regarding the operation of the retirement system. The selection of the actuary shall be approved by the board of education. The actuary shall (a) make a general investigation of the operation of the retirement system annually, which investigation shall cover mortality, retirement, disability, employment, turnover, interest, and earnable compensation, and (b) recommend tables to be used for all required actuarial calculations. The actuary shall perform such other duties as may be assigned by the board of trustees.

(2) Beginning July 1, 2021, and until September 1, 2024, the board of education shall contract for the services of an actuary who shall be the technical advisor of the board of education and the board of trustees on matters regarding the operation of the retirement system. The actuary shall:

(a) Make a general investigation of the operation of the retirement system annually, which investigation shall cover mortality, retirement, disability, employment, turnover, interest, and earnable compensation;

(3) Beginning September 1, 2024, the retirement board shall select and appoint the actuary for the retirement system pursuant to section 84-1503.

Source:Laws 1951, c. 274, § 7, p. 915; R.S.1943, (1994), § 79-1038; Laws 1996, LB 900, § 619; Laws 1998, LB 497, § 11; Laws 2001, LB 711, § 8; Laws 2006, LB 1024, § 64; Laws 2013, LB263, § 21; Laws 2016, LB447, § 23; Laws 2021, LB147, § 18.

The board may contract for the services of a legal advisor to the board of trustees until September 1, 2024. Beginning September 1, 2024, the attorney hired by the retirement board pursuant to section 84-1503 shall also advise such board regarding the administration of the retirement system.

Source:Laws 1951, c. 274, § 8, p. 915; R.S.1943, (1994), § 79-1039; Laws 1996, LB 900, § 620; Laws 2006, LB 1024, § 65; Laws 2016, LB447, § 24; Laws 2021, LB147, § 19.

(1) The State Treasurer shall (a) act as treasurer of the retirement system and the official custodian of the cash and securities belonging to such retirement system, (b) provide adequate safe deposit facilities for the preservation of such securities, and (c) hold such cash and securities subject to the order of the council.

(2) The school district and the Nebraska Public Employees Retirement Systems, as applicable, shall receive all items of taxes or cash belonging to the retirement system as specified in the Class V School Employees Retirement Act and shall deposit in banks approved by the State Treasurer all such amounts in trust or custodial accounts. Notwithstanding any limitations elsewhere imposed by statute on the location of the retirement system's depository bank, such limitations shall not apply to the use of depository banks for the custody of the system's cash, securities, and other investments.

(3) The State Treasurer as treasurer of the retirement system shall make payments to the school district upon request of the administrator of a retirement system provided for under the Class V School Employees Retirement Act and as directed by the Nebraska Public Employees Retirement Systems. The school district shall use payments received from the State Treasurer to make payments for purposes specified in the Class V School Employees Retirement Act.

(4) Beginning September 1, 2024, the State Treasurer as treasurer of the retirement system shall disburse money from funds in his or her custody belonging to the retirement system for the purposes specified in the Class V School Employees Retirement Act. The State Treasurer, along with the Director of Administrative Services, shall make such disbursements upon vouchers signed by a person authorized by the retirement board.

(5) All banks and custodians which receive and hold securities and investments for the retirement system may hold and evidence such securities by book entry account rather than obtaining and retaining the original certificate, indenture, or governing instrument for such security.

Source:Laws 1951, c. 274, § 9, p. 915; Laws 1988, LB 1142, § 11; Laws 1995, LB 505, § 3; Laws 1996, LB 604, § 11; R.S.Supp.,1995, § 79-1040; Laws 1996, LB 900, § 621; Laws 1997, LB 623, § 30; Laws 1998, LB 497, § 12; Laws 2006, LB 1024, § 66; Laws 2016, LB447, § 25; Laws 2021, LB147, § 20.

(1)(a) Until January 1, 2022, an annual audit of the affairs of the retirement system shall be conducted in each fiscal year. At the option of the board of trustees, such audit may be conducted by a certified public accountant or the Auditor of Public Accounts.

(b) Beginning January 1, 2022, and each January 1 through January 1, 2024, it shall be the duty of the Auditor of Public Accounts to make an annual audit of the immediately preceding audit year of the condition of the retirement system. The auditor shall report such audit no later than July 1, 2022, and on each July 1 through July 1, 2024, and shall electronically submit the audit report to the board of trustees, the board of education, the retirement board, the Nebraska Retirement Systems Committee of the Legislature, and the Clerk of the Legislature. The cost of each such annual audit shall be charged to the retirement system. At the request of the Nebraska Retirement Systems Committee of the Legislature, the Auditor of Public Accounts, or the auditor's designee, shall present the audit report to the committee at a public hearing.

(c) Following transfer of management of the retirement system to the Public Employees Retirement Board on September 1, 2024, the Auditor of Public Accounts shall make an annual audit of the retirement system beginning January 1, 2025, and electronically submit an annual report to the Clerk of the Legislature of its condition. Expenses of the audits shall be paid from the Class V School Expense Fund.

(2)(a) Beginning May 1, 2018, and until July 1, 2021, the board of trustees shall cause to be prepared an annual report and the administrator shall file the same with the Auditor of Public Accounts and submit to the members of the Nebraska Retirement Systems Committee of the Legislature a copy of such report. The report submitted to the committee and the Auditor of Public Accounts shall be submitted electronically. The report shall consist of a full actuarial analysis of each such retirement plan established pursuant to section 79-979. The analysis shall be prepared by an independent private organization or public entity employing actuaries who are members of the American Academy of Actuaries and meet the academy's qualification standards to render a statement of actuarial opinion, and which organization or entity has demonstrated expertise to perform this type of analysis and is unrelated to any organization offering investment advice or which provides investment management services to the retirement plan. The report shall be presented to the Nebraska Retirement Systems Committee of the Legislature at a public hearing.

(b) Beginning July 1, 2021, through July 1, 2024, the board shall file with the Auditor of Public Accounts an electronic copy of the annual actuarial investigation of the retirement system prepared pursuant to section 79-984 and submit electronically a copy of such investigation to the Nebraska Retirement Systems Committee of the Legislature.

(3) Beginning July 1, 2021, each school district with a retirement system under the Class V School Employees Retirement Act shall comply with the reporting and filing requirements set forth in section 13-2402.

Source:Laws 1951, c. 274, § 19, p. 921; Laws 1973, LB 215, § 1; R.S.1943, (1994), § 79-1050; Laws 1996, LB 900, § 622; Laws 1998, LB 1191, § 61; Laws 1999, LB 795, § 13; Laws 2001, LB 711, § 9; Laws 2006, LB 1019, § 10; Laws 2011, LB509, § 34; Laws 2012, LB782, § 157; Laws 2013, LB263, § 22; Laws 2014, LB1042, § 9; Laws 2016, LB447, § 26; Laws 2017, LB415, § 36; Laws 2021, LB147, § 21.

Beginning January 1, 2023, every contract of employment with an employee shall specify (1) the contractual period of employment, including the starting and ending dates of the contract, and (2) that it is subject to the provisions of the Class V School Employees Retirement Act.

Source:Laws 2021, LB147, § 23.

(1) Any person who becomes an employee on or after the date of establishment of the retirement system shall become a member of the retirement system upon employment. Contributions by such employee under the Class V School Employees Retirement Act shall begin with the first payroll period after becoming a member, and creditable service shall then begin to accrue.

(2) Any employee who qualifies for membership in the retirement system pursuant to subsection (1) of this section may not be disqualified for membership in the retirement system solely because such employee also maintains separate employment which qualifies the employee for membership in another public retirement system, nor may membership in this retirement system disqualify such an employee from membership in another public retirement system solely by reason of separate employment which qualifies such employee for membership in this retirement system.

Source:Laws 1951, c. 274, § 10, p. 916; Laws 1953, c. 308, § 2, p. 1028; Laws 1979, LB 391, § 3; Laws 1982, LB 131, § 2; Laws 1987, LB 298, § 6; R.S.1943, (1994), § 79-1041; Laws 1996, LB 900, § 623; Laws 1997, LB 624, § 23; Laws 1998, LB 497, § 13.

(1) The board of education shall have available records showing the name, address, title, social security number, beneficiary records, annual compensation, sex, date of birth, length of creditable and noncreditable service in hours, standard hours, and contract days, bargaining unit, and annual contributions of each employee entitled to membership in the retirement system and such other information as may be reasonably requested by the board of trustees until September 1, 2024, and by the retirement board beginning September 1, 2024, regarding such member as may be necessary for actuarial study and valuation and the administration of the retirement system. This information shall be available in a timely manner to the board or retirement board, as applicable, upon request.

(a)(i) The administrator of the retirement system shall keep a complete record of all members with respect to name, current address, age, contributions, and any other facts and information as may be necessary in the administration of the Class V School Employees Retirement Act. The information in the records shall be provided by an employer in an accurate and verifiable form, as specified by the administrator; and

(ii) The administrator shall, from time to time, carry out testing procedures pursuant to section 84-1512 to verify the accuracy of such facts and information. For the purpose of obtaining such facts and information, the administrator shall have access to the records of an employer and the holder of the records shall comply with a request by the administrator for access by providing such facts and information to the administrator in a timely manner. A certified copy of a birth certificate or delayed birth certificate shall be prima facie evidence of the age of the person named in the certificate;

(b) An employer and every employee shall send to the director of the Nebraska Public Employees Retirement Systems, as specified in this section, upon request and in the manner required by the director, such information as he or she may require (i) for the identification of employees and (ii) for the determination of the membership of the retirement system and the obligations of an employer and employee to the retirement system; and

(c) The administrator shall develop and implement an employer education program using principles generally accepted by public employee retirement systems so an employer has the knowledge and information necessary to prepare and file reports as the retirement board requires.

(3) The information maintained by the board of education and obtained from the board by the board of trustees or information obtained and maintained by the retirement board for the administration of the retirement system pursuant to this section shall not be considered public records subject to sections 84-712 to 84-712.09, except that the following information shall be considered public records: The member's name, the date the member's participation in the retirement system commenced, and the date the member's participation in the retirement system ended, if applicable.

Source:Laws 1951, c. 274, § 11, p. 917; R.S.1943, (1994), § 79-1042; Laws 1996, LB 900, § 624; Laws 2016, LB447, § 27; Laws 2019, LB33, § 5; Laws 2021, LB147, § 22.

(1) Any member who is eligible for reemployment on or after December 12, 1994, pursuant to 38 U.S.C. 4301 et seq., as adopted under section 55-161, or who is eligible for reemployment under section 55-160 may pay to the retirement system after the date of his or her return from active military service, and within the period required by law, not to exceed five years, an amount equal to the sum of all deductions which would have been made from the salary which he or she would have received during the period of military service for which creditable service is desired. If such payment is made, the member shall be entitled to credit for membership service in determining his or her annuity for the period for which contributions have been made and the board of education shall be responsible for any funding necessary to provide for the benefit which is attributable to this increase in the member's creditable service. The member's payments shall be paid as the board may direct until September 1, 2024, and as the retirement board may direct beginning September 1, 2024, through direct payments to the retirement system or on an installment basis pursuant to a binding irrevocable payroll deduction authorization between the member and the school district. Creditable service may be purchased only in one-tenth-year increments, starting with the most recent years' salary.

(2) Under such rules and regulations as the board may direct until September 1, 2024, and as the retirement board may direct beginning September 1, 2024, any member who was away from his or her position while on a leave of absence from such position authorized by the board of education of the school district by which he or she was employed at the time of such leave of absence or pursuant to any contractual agreement entered into by such school district may receive credit for any or all time he or she was on leave of absence. Such time shall be included in creditable service when determining eligibility for death, disability, termination, and retirement benefits. The member who receives the credit shall earn benefits during the leave based on salary at the level received immediately prior to the leave of absence. Such credit shall be received if such member pays into the retirement system (a) an amount equal to the sum of the deductions from his or her salary for the portion of the leave for which creditable service is desired, (b) any contribution which the school district would have been required to make for the portion of the leave for which creditable service is desired had he or she continued to receive salary at the level received immediately prior to the leave of absence, and (c) interest on these combined payments from the date such deductions would have been made to the date of repayment determined by using the rate of interest for interest on such purchases of service credit. Such amounts shall be paid as the board may direct until September 1, 2024, and as the retirement board may direct beginning September 1, 2024, through direct payments to the retirement system or on an installment basis pursuant to a binding irrevocable payroll deduction authorization between the member and the school district over a period not to exceed five years from the date of the termination of his or her leave of absence. Interest on any delayed payment shall be at the rate of interest for determining interest on delayed payments by members to the retirement system. Creditable service may be purchased only in one-tenth-year increments, starting with the most recent years' salary, and if payments are made on an installment basis, creditable service will be credited only as payment has been made to the retirement system to purchase each additional one-tenth-year increment. Leave of absence shall be construed to include, but not be limited to, sabbaticals, maternity leave, exchange teaching programs, full-time leave as an elected official of a professional association or collective-bargaining unit, or leave of absence to pursue further education or study. A leave of absence granted pursuant to this section shall not exceed four years in length, and in order to receive credit for the leave of absence, the member must have returned to employment with the school district within one year after termination of the leave of absence.

(3) Until one year after May 2, 2001, any member currently employed by the school district who resigned from full-time employment with the school district for maternity purposes prior to September 1, 1979, and was reemployed as a full-time employee by the school district before the end of the school year following the school year of such member's resignation may have such absence treated as though the absence was a leave of absence described in subsection (2) of this section. The period of such absence for maternity purposes shall be included in creditable service when determining the member's eligibility for death, disability, termination, and retirement benefits if the member submits satisfactory proof to the board of education that the prior resignation was for maternity purposes and the member complies with the payment provisions of subsection (2) of this section before the one-year anniversary of May 2, 2001.

Source:Laws 1951, c. 274, § 12, p. 917; Laws 1981, LB 369, § 1; Laws 1982, LB 131, § 3; Laws 1988, LB 551, § 3; Laws 1991, LB 350, § 4; Laws 1992, LB 1001, § 21; Laws 1993, LB 107, § 4; Laws 1995, LB 505, § 4; Laws 1996, LB 847, § 26; R.S.Supp.,1995, § 79-1043; Laws 1996, LB 900, § 625; Laws 1996, LB 1076, § 12; Laws 2001, LB 711, § 10; Laws 2002, LB 722, § 7; Laws 2005, LB 364, § 12; Laws 2010, LB950, § 18; Laws 2013, LB263, § 23; Laws 2016, LB447, § 28; Laws 2021, LB147, § 24.

(1) An employee who becomes a member without prior service credit may purchase prior service credit, not to exceed the lesser of ten years or the member's years of membership service, for the period of service the member was employed by a school district or by an educational service unit and which is not used in the calculation of any retirement or disability benefit having been paid, being paid, or payable in the future to such member under any defined benefit retirement system or program maintained by such other school district or educational service unit. The purchase of prior service credit shall be made in accordance with and subject to the following requirements:

(a) A member who desires to purchase prior service credit shall make written application to the administrator of the retirement system that includes all information and documentation determined by the administrator as necessary to verify the member's prior service and qualification to purchase the prior service credit. Such application shall include the member's written authorization for the administrator to request and receive from any of the member's former employers verification of the member's prior service, salary, and other information for determining the member's eligibility to purchase prior service credit. Before prior service credit may be purchased, the administrator shall have received verification of the member's salary in each year with the other school district or educational service unit and confirmation that the prior service to be purchased by the member is not also credited in the calculation of a retirement or disability benefit for such member under another defined benefit retirement system or program. The member's application to purchase prior service credit may be made at any time before the fifth anniversary of the member's membership in the retirement system or, if earlier, the member's termination of employment with the school district;

(b) The member shall pay to the retirement system the total amount he or she would have contributed to the retirement system had he or she been a member of the retirement system during the period for which prior service is being purchased, together with interest thereon as determined using the rate of interest for the purchase of prior service credit. Such payment shall be based on the most recent years' salary the member earned in another school district or educational service unit if the salary is verified by the other school district or educational service unit or, if not, the payment shall be based on the member's annual salary at the time he or she became a member;

(c) Payments by the member for the purchase of the prior service credit shall be paid as the board may direct until September 1, 2024, and as the retirement board may direct beginning September 1, 2024, through direct payments to the retirement system or on an installment basis pursuant to a binding irrevocable payroll deduction authorization between the member and the school district over a period not to exceed five years from the date of membership. Interest on delayed payments shall be at the rate of interest for determining interest on delayed payments by members to the retirement system. In the event the member terminates employment with the school district for any reason before full payment for the prior service has been made, the remaining installments shall be immediately due and payable to the retirement system. Prior service credit may be purchased only in one-tenth-year increments, and if payments are made on an installment basis, the prior service will be credited only as payment has been made to the retirement system. If the prior service to be purchased by the member exceeds the member's membership service at the time of application or any subsequent date, such excess prior service shall be credited to the member only as the member completes and is credited additional membership service, in one-tenth-year increments, notwithstanding the member's payment for such prior service credit. If the member retires or terminates employment before completing sufficient membership service to permit all of the excess prior service that has been purchased by the member to be credited to such member, the retirement system shall refund to the member, or to the member's beneficiary if the member's termination is due to his or her death, the payments that have been made to the retirement system for such uncredited prior service, together with regular interest on such refund; and

(d) The school district shall contribute to the retirement system an amount equal to the amount paid by each member for the purchase of prior service credit at the time such payments are made by such member.

(2) Any employee who became a member before July 1, 2014, and who has five or more years of creditable service and any employee who became a member for the first time on or after July 1, 2014, and who has ten or more years of creditable service, excluding in either case years of prior service acquired pursuant to section 79-990, 79-994, 79-995, or 79-997, or subsection (1) of this section, may elect to purchase up to a total of five years of additional creditable service under the retirement system, and upon such purchase the member shall be given the same status as though he or she had been a member of the retirement system for such additional number of years, except as otherwise specifically provided in the Class V School Employees Retirement Act. Creditable service may be purchased only in one-tenth-year increments. The amount to be paid to the retirement system for such creditable service shall be equal to the actuarial cost to the retirement system of the increased benefits attributable to such additional creditable service as determined by the retirement system's actuary at the time of the purchase pursuant to actuarial assumptions and methods adopted by the board until September 1, 2024, and as adopted by the retirement board beginning September 1, 2024. The election to purchase additional creditable service may be made at any time before the member's termination of employment, and all payments for the purchase of such creditable service must be completed within five years after the election or before the member's termination or retirement, whichever event occurs first. Payment shall be made as the board may direct until September 1, 2024, and as the retirement board may direct beginning September 1, 2024, through a single payment to the retirement system, on an installment basis, including payments pursuant to a binding irrevocable payroll deduction authorization between the member and the school district, or by such other method approved by the board or the retirement board, as applicable, and permitted by law. If payments are made on an installment basis, creditable service will be credited only as payment has been made to the retirement system to purchase each additional one-tenth-year increment. Interest shall be charged on installment payments at the rate of interest for determining interest on delayed payments by members to the retirement system.

Source:Laws 1951, c. 274, § 14, p. 918; Laws 1953, c. 308, § 3, p. 1029; Laws 1982, LB 131, § 5; Laws 1987, LB 298, § 8; Laws 1988, LB 551, § 4; Laws 1992, LB 1001, § 23; Laws 1993, LB 107, § 5; Laws 1995, LB 505, § 6; R.S.Supp.,1995, § 79-1045; Laws 1996, LB 900, § 626; Laws 1997, LB 624, § 24; Laws 1998, LB 497, § 15; Laws 2005, LB 364, § 13; Laws 2013, LB263, § 24; Laws 2014, LB1042, § 10; Laws 2016, LB447, § 29; Laws 2021, LB147, § 25.

(1) A member who has five years or more of creditable service, excluding years of prior service acquired pursuant to section 79-990, 79-991, 79-994, 79-995, or 79-997, and who terminates his or her employment may elect to leave his or her contributions in the retirement system, in which event he or she shall receive a retirement allowance at normal retirement age based on the annuity earned to the date of such termination of employment. Such member may elect to receive a retirement allowance at early retirement age if such member retires at an early retirement date. Such annuity shall be adjusted in accordance with section 79-9,100. Upon termination of employment, except on account of retirement, a member shall be entitled to receive refunds as follows: (a) An amount equal to the accumulated contributions to the retirement system by the member; and (b) any contributions made to a previously existing system which were refundable under the terms of that system. Any member receiving a refund of contributions shall thereby forfeit and relinquish all accrued rights in the retirement system including all accumulated creditable service, except that if any member who has withdrawn his or her contributions as provided in this section reenters the service of the district and again becomes a member of the retirement system, he or she may restore any or all money previously received by him or her as a refund, including the interest on the amount of the restored refund for the period of his or her absence from the district's service as determined using the interest rate for interest on such restored refunds, and he or she shall then again receive credit for that portion of service which the restored money represents. Such restoration may be made as the board may direct until September 1, 2024, and as the retirement board may direct beginning September 1, 2024, through direct payments to the system or on an installment basis pursuant to a binding irrevocable payroll deduction authorized between the member and the school district over a period of not to exceed five years from the date of reemployment. Interest on delayed payments shall be at the rate of interest for determining interest on delayed payments by members to the retirement system. Creditable service may be purchased only in one-tenth-year increments, starting with the most recent years' salary.

(a) A retired member who returns to employment as an employee of the school district shall again participate in the retirement system as a new member and shall make contributions to the retirement system commencing upon reemployment. The retirement annuity of a retired member who returns to employment with the school district shall continue to be paid by the retirement system. A retired member who returns to employment as an employee of the school district shall receive creditable service only for service performed after his or her return to employment and in no event shall creditable service which accrues or the compensation paid to the member after such return to employment after retirement increase the amount of the member's original retirement annuity; and

(b) Upon termination of employment of the reemployed member, the member shall receive in addition to the retirement annuity which commenced at the time of the previous retirement (i) if the member has accrued five years or more of creditable service after his or her return to employment, excluding years of prior service acquired pursuant to section 79-990, 79-991, 79-994, 79-995, or 79-997, a retirement annuity as provided in section 79-999 or 79-9,100, as applicable, calculated solely on the basis of creditable service and final average compensation accrued and earned after the member's return to employment after his or her original retirement, and as adjusted to reflect any payment in other than the normal form or (ii) if the member has not accrued five years or more of creditable service after his or her return to employment, a refund equal to the member's accumulated contributions which were credited to the member after the member's return to employment. In no event shall the member's creditable service which accrued prior to a previous retirement be considered as part of the member's creditable service after his or her return to employment for any purpose of the Class V School Employees Retirement Act.

(3) In the event a member is entitled to receive a refund of contributions pursuant to subsection (1) or subdivision (2)(b)(ii) of this section in an amount greater than one thousand dollars, if the member does not elect to have the refund paid directly to himself or herself or transferred to an eligible retirement plan designated by the member as a direct rollover pursuant to section 79-998, then the refund of contributions shall be paid in a direct rollover to an individual retirement plan as designated by the board until September 1, 2024, and as designated by the retirement board beginning September 1, 2024.

Source:Laws 1951, c. 274, § 18, p. 920; Laws 1955, c. 321, § 2, p. 992; Laws 1963, c. 490, § 3, p. 1565; Laws 1967, c. 544, § 3, p. 1789; Laws 1972, LB 1116, § 2; Laws 1982, LB 131, § 8; Laws 1985, LB 215, § 7; Laws 1987, LB 298, § 10; Laws 1988, LB 551, § 6; Laws 1992, LB 1001, § 25; Laws 1993, LB 107, § 9; R.S.1943, (1994), § 79-1049; Laws 1996, LB 900, § 627; Laws 1997, LB 624, § 25; Laws 1998, LB 497, § 16; Laws 2001, LB 711, § 11; Laws 2005, LB 364, § 14; Laws 2006, LB 1019, § 11; Laws 2013, LB263, § 25; Laws 2016, LB447, § 30; Laws 2017, LB415, § 37; Laws 2021, LB147, § 26.

(1) An employer participating in a retirement system established pursuant to the Class V School Employees Retirement Act shall:

(a) Until September 1, 2024, notify the administrator and the board of trustees in writing of the date upon which a termination of employment has occurred and provide the administrator and the board of trustees with such information as the board of trustees deems necessary; and

(b) Beginning September 1, 2024, notify the retirement board in writing of the date upon which a termination of employment has occurred and provide the administrator and the board with such information as the administrator and the board deem necessary.

(2) Until September 1, 2024, and except as provided in section 79-981, the board of trustees, and, beginning September 1, 2024, the retirement board, may adopt and promulgate rules and regulations and prescribe forms as the board of trustees or the retirement board, as applicable, determines appropriate in order to carry out this section and to ensure full disclosure and reporting by an employer and member in order to minimize fraud and abuse and the filing of false or fraudulent claim or benefit applications.

Source:Laws 2017, LB415, § 38; Laws 2021, LB147, § 27; Laws 2022, LB700, § 9.

(1) Any person who, knowing it to be false or fraudulent, presents or causes to be presented a false or fraudulent claim or benefit application, any false or fraudulent proof in support of such a claim or benefit, or false or fraudulent information which would affect a future claim or benefit application to be paid under a retirement system for the purpose of defrauding or attempting to defraud the retirement system shall be guilty of a Class II misdemeanor. The (a) administrator and the board until September 1, 2024, and (b) retirement board beginning September 1, 2024, shall deny any benefits that it determines are based on false or fraudulent information and shall have a cause of action against the member to recover any benefits already paid on the basis of such information.

(2) Any employee, member of a board of education, or agent of any employer who willfully fails or refuses to furnish to the (a) administrator and the board of trustees until September 1, 2024, and (b) retirement board beginning September 1, 2024, upon its request and in the manner prescribed by it such information, data, or records, as may be necessary for carrying into effect the Class V School Employees Retirement Act, shall be guilty of a Class V misdemeanor.

Source:Laws 2017, LB415, § 39; Laws 2021, LB147, § 28.

For one year from May 30, 1987, any person who withdrew his or her accumulated contributions pursuant to section 79-992 prior to May 30, 1987, has again become an employee, and has not previously repaid all of his or her accumulated contributions pursuant to such section may elect to repay any unpaid portion of these accumulated contributions to the retirement system for any number of years of creditable service which he or she accumulated prior to withdrawing his or her accumulated contributions. The amount to be repaid shall not exceed the amount of the withdrawal for the years of creditable service for which the repayment is being made plus the regular interest which would have accrued on that amount under the retirement system. Any person who repays such amount shall be restored to the same status for the years of creditable service for which repayment is made as he or she had prior to the withdrawal of the accumulated contributions.

Source:Laws 1987, LB 298, § 1; R.S.1943, (1994), § 79-1049.01; Laws 1996, LB 900, § 628.

For one year from May 30, 1987, any person who was an employee of another school district prior to May 30, 1987, has joined or rejoined the retirement system, and has not previously paid into the retirement system a total of ten years of service in another school district may elect to pay the retirement system any unpaid portion of such service up to a total of ten years. Such electing employee shall furnish satisfactory proof that he or she has been employed for such period of time by another school district and shall pay to the retirement system the total amount which he or she would have contributed to the retirement system had he or she been a member of the retirement system plus the regular interest which would have accrued on such amount during such period under the retirement system. Such contribution shall be based on the most recent years' salary the employee earned in another school district if the salary is verified by the other school district or, if not, on his or her annual salary at the time he or she became a member and shall be payable in total for the period of time, not exceeding ten years, for which such member requests such prior service credit. Any person who pays such amount shall be given credit for any number of years of service which he or she has elected to pay for, not to exceed ten years of service rendered as an employee in another school district, and shall be given the same status as though he or she had been a member of the retirement system for such number of years, except as otherwise specifically provided in the Class V School Employees Retirement Act.

Source:Laws 1987, LB 298, § 2; R.S.1943, (1994), § 79-1049.02; Laws 1996, LB 900, § 629; Laws 1998, LB 497, § 17.

For one year from May 30, 1987, any person who served in the armed forces as specified in subsection (1) of section 79-990 or who was on a leave of absence as specified in subsection (2) of such section, has again become an employee, and has not previously paid into the system for all of the years of military service or leave of absence permitted by such section may elect to pay into the retirement system for the total number of years of service authorized by such section but not previously paid in. The amount to be paid in by the member shall be calculated as provided in such section. Any person who pays such amount shall be given credit for any number of years of service for which he or she has elected to pay, not to exceed the total number of years authorized by such section, and shall be given the same status as though he or she had been a member of the retirement system for such number of years, except as otherwise specifically provided in the Class V School Employees Retirement Act.

Source:Laws 1987, LB 298, § 3; R.S.1943, (1994), § 79-1049.03; Laws 1996, LB 900, § 630; Laws 1998, LB 497, § 18.

The payments provided for by sections 79-993, 79-994, and 79-997 may be made in equal installments over a period of not to exceed two years from the date of the election to make such payments. The payments provided for by section 79-995 may be made in equal installments over a period of not to exceed three years from the date of election to make such payments. Any person who elects to make payments on an installment basis shall be credited with prior service only in six-month increments and only after payment has been made to the retirement system to purchase each additional six-month increment.

Source:Laws 1987, LB 298, § 4; Laws 1988, LB 551, § 7; R.S.1943, (1994), § 79-1049.04; Laws 1996, LB 900, § 631; Laws 2013, LB263, § 26; Laws 2016, LB447, § 31.

On or before May 27, 1988, any person who was an employee of an educational service unit in the State of Nebraska prior to April 7, 1988, has joined or rejoined the retirement system, and has not previously paid into the retirement system a total of ten years of service in another school district or educational service unit may elect to pay the retirement system any unpaid portion of such service up to a total of ten years. Such electing employee shall furnish satisfactory proof that he or she has been employed for such period of time by an educational service unit and shall pay to the retirement system the total amount which he or she would have contributed to the retirement system had he or she been a member of the retirement system plus the regular interest which would have accrued on such amount during such period under the retirement system. Such contribution shall be based on the most recent years' salary the employee earned in the educational service unit if the salary is verified by the educational service unit or, if not, on his or her annual salary at the time he or she became a member and shall be payable in total for the period of time, not exceeding ten years, for which such member requests such prior service credit. Any person who pays such amount shall be given credit for any number of years of service for which he or she has elected to pay, not to exceed ten years of service rendered as an employee in another school district or educational service unit, and shall be given the same status as though he or she had been a member of the retirement system for such number of years except as otherwise specifically provided in the Class V School Employees Retirement Act. This section shall not apply to employees retiring prior to April 7, 1988.

Source:Laws 1988, LB 551, § 1; R.S.1943, (1994), § 79-1049.05; Laws 1996, LB 900, § 632; Laws 1998, LB 497, § 19.

(1) The retirement system may accept as payment for additional service credit that is purchased pursuant to sections 79-990 to 79-992 an eligible rollover distribution from or on behalf of the member who is making payments for such service credit if the eligible rollover distribution does not exceed the amount of payment required for the service credit being purchased by the member. The eligible rollover distribution may be contributed to the retirement system by the member or directly transferred from the plan that is making the eligible rollover distribution on behalf of the member. Contribution by a member pursuant to this section may only be made in the form of a cash contribution. For purposes of this section, an eligible rollover distribution means all or any portion of an amount that qualifies as an eligible rollover distribution under the Internal Revenue Code from:

(a) A plan of another employer which is qualified under section 401(a) or 403(a) of the Internal Revenue Code;

(b) An annuity contract or custodial account described in section 403(b) of the Internal Revenue Code;

(c) An eligible deferred compensation plan under section 457(b) of the Internal Revenue Code which is maintained by a governmental employer described in section 457(e)(1)(A) of the Internal Revenue Code; or

(d) An individual retirement account or annuity described in section 408(a) or section 408(b) of the Internal Revenue Code that is eligible to be rolled over to an employer plan under the Internal Revenue Code.

(2) The retirement system may accept as payment for service credit that is purchased pursuant to sections 79-990 to 79-992 a direct trustee-to-trustee transfer from an eligible deferred compensation plan as described in section 457(e)(17) of the Internal Revenue Code on behalf of a member who is making payments for such service credit if the amount transferred from the eligible deferred compensation plan does not exceed the amount of payment required for the service credit being purchased and the purchase of such service credit qualifies as the purchase of permissive service credit by the member as defined in section 415(n)(3) of the Internal Revenue Code.

(3) Until September 1, 2024, the board, and, beginning September 1, 2024, the retirement board, may establish rules, regulations, and limitations on the eligible rollover distributions and direct trustee-to-trustee transfers that may be accepted by the retirement system pursuant to this section, including restrictions on the type of assets that may be transferred to the retirement system.

(4) Cash and other properties contributed or transferred to the retirement system pursuant to this section shall be deposited and held as a commingled asset of the retirement system and shall not be separately accounted for or invested for the member's benefit. Contributions or direct transfers made by or on behalf of any member pursuant to this section shall be treated as qualifying payments under sections 79-990 to 79-992 and as employee contributions for all other purposes of the Class V School Employees Retirement Act except in determining federal and state tax treatment of distributions from the system.

(5) The retirement system, the board of education, the board of trustees, the retirement board, and their respective members, officers, and employees shall have no responsibility or liability with respect to the federal and state income tax consequences of any contribution or transfer to the retirement system pursuant to this section. Until September 1, 2024, the board, and, beginning September 1, 2024, the retirement board, may require as a condition to the retirement system's acceptance of any rollover contribution or transfer satisfactory evidence that the proposed contribution or transfer is a qualifying rollover contribution or trustee-to-trustee transfer under the Internal Revenue Code and reasonable releases or indemnifications from the member against any and all liabilities which may in any way be connected with such contribution or transfer.

(6) Effective January 1, 1993, any member who is to receive an eligible rollover distribution, as defined in the Internal Revenue Code, from the retirement system may, in accordance with such rules, regulations, and limitations as may be established by the board or the retirement board, as applicable, elect to have such distribution made in the form of a direct transfer to a retirement plan eligible to receive such transfer under the provisions of the Internal Revenue Code. Any such election shall be made in the form and within the time periods established by the board or the retirement board, as applicable.

(7) A member's surviving spouse or former spouse who is an alternate payee under a qualified domestic relations order and, on or after September 1, 2010, any designated beneficiary of a member who is not a surviving spouse or former spouse who is entitled to receive an eligible rollover distribution from the retirement system may, in accordance with such rules, regulations, and limitations as may be established by the board or the retirement board, as applicable, elect to have such distribution made in the form of a direct transfer to a retirement plan eligible to receive such transfer under the provisions of the Internal Revenue Code.

(8) An eligible rollover distribution on behalf of a designated beneficiary of a member who is not a surviving spouse or former spouse of the member may be transferred to an individual retirement account or annuity described in section 408(a) or section 408(b) of the Internal Revenue Code that is established for the purpose of receiving the distribution on behalf of the designated beneficiary and that will be treated as an inherited individual retirement account or individual retirement annuity described in section 408(d)(3)(C) of the Internal Revenue Code.

(9) All distributions from the retirement system shall be subject to all withholdings required by federal or state tax laws.

Source:Laws 1992, LB 1001, § 27; Laws 1993, LB 107, § 10; Laws 1995, LB 574, § 76; R.S.Supp.,1995, § 79-1049.06; Laws 1996, LB 900, § 633; Laws 1998, LB 497, § 20; Laws 2001, LB 711, § 12; Laws 2002, LB 407, § 47; Laws 2012, LB916, § 25; Laws 2016, LB447, § 32; Laws 2021, LB147, § 29.

After the date of establishment of the retirement system, each member shall be credited annually with a retirement annuity of an amount equal to one and one-half percent of the salary or wage earned by him or her during the then current fiscal year not in excess of five thousand dollars, except that (1) for each member who retires on or after August 31, 1969, such credit shall be an amount equal to one and sixty-five hundredths percent of such salary or wage not in excess of five thousand dollars and (2) for each member who chose the new system in 1951 and who retires on or after August 31, 1976, for service from September 1, 1951, to August 31, 1955, such credit shall be two and four-tenths percent of such salary or wage not in excess of five thousand dollars, for service from September 1, 1955, to August 31, 1963, one and forty-four hundredths percent of such salary or wage not in excess of six thousand dollars, for service from September 1, 1963, to August 31, 1969, one and forty-four hundredths percent of such salary or wage up to the social security wage base, plus two and four-tenths percent of salary or wage in excess thereof, and for service after September 1, 1969, one and forty-four hundredths percent of the first seventy-eight hundred dollars of such salary or wage and two and four-tenths percent of the excess of such salary or wage over seventy-eight hundred dollars. With respect to service rendered prior to the date of establishment of the retirement system, each employee in service or on leave of absence on such date shall be entitled to an annuity on account of prior service. Such annuity shall be such percentage of the maximum annuity to which such member might have been entitled under the terms of a retirement plan previously in effect as the number of years of service under such plan bears to the total number of years for which credit for service might have been granted under such plan, except that no credit shall be given in excess of the maximum annuity provided under such preexisting plan. The number of years of prior service for which credit shall be given under this section shall be the number of years of service with which the employee is credited under such preexisting plan on May 21, 1951. The sum of these two annuities shall constitute the retirement allowance to which the member shall be entitled to be paid beginning on his or her retirement date. Such annuity shall be paid in twelve equal monthly installments unless the amount thereof is less than ten dollars per month in which event payments shall be made quarterly or semiannually.

Source:Laws 1951, c. 274, § 13, p. 917; Laws 1969, c. 724, § 1, p. 2754; Laws 1972, LB 1116, § 1; Laws 1976, LB 994, § 2; Laws 1987, LB 298, § 7; R.S.1943, (1994), § 79-1044; Laws 1996, LB 900, § 634.

(1) In lieu of the retirement annuity provided by section 79-999 or 79-9,113, any member who becomes eligible to receive a retirement annuity after February 20, 1982, under the Class V School Employees Retirement Act shall receive a formula retirement annuity based on final average compensation, except that if the monthly formula retirement annuity based on final average compensation is less than the monthly retirement annuity specified in section 79-999 or 79-9,113, accrued to the date of retirement or August 31, 1983, whichever first occurs, the member shall receive the monthly retirement annuity specified in section 79-999 or 79-9,113 accrued to the date of retirement or August 31, 1983, whichever first occurs.

(2) The monthly formula retirement annuity based on final average compensation shall be determined by multiplying the number of years of creditable service for which such member would otherwise receive the retirement annuity provided by section 79-999 or 79-9,113 by one and one-half percent of his or her final average compensation. For retirements after June 15, 1989, and before April 18, 1992, the applicable percentage shall be one and sixty-five hundredths percent of his or her final average compensation. For retirements on or after April 18, 1992, and before June 7, 1995, the applicable percentage shall be one and seventy-hundredths percent of his or her final average compensation. For retirements on or after June 7, 1995, and before March 4, 1998, the applicable percentage shall be one and eighty-hundredths percent of his or her final average compensation. For retirements on or after March 4, 1998, and before March 22, 2000, the applicable percentage shall be one and eighty-five hundredths percent of his or her final average compensation. For retirements on or after March 22, 2000, the applicable percentage shall be two percent of his or her final average compensation.

(a) Except as provided in subdivision (3)(b) of this section, by dividing the member's total compensation for the three fiscal years in which such compensation was the highest by thirty-six; and

(b) For an employee who became a member on or after July 1, 2013, by dividing the member's total compensation for the five fiscal years in which such compensation was the highest by sixty.

(4)(a) In the determination of compensation for members whose retirement date is on or after July 1, 2016, that part of a member's compensation for the plan year which exceeds the member's compensation for the preceding plan year by more than eight percent during the capping period shall be excluded. If the compensation for the preceding plan year was reduced as a result of unpaid absence from work, the compensation used in the capping calculation will be the greater of (i) the annualized compensation for the preceding year as if it had been fully received or (ii) the most recent preceding plan year in which the member had no unpaid absence from work. Such member's compensation for the first plan year of the capping period shall be compared to the member's compensation received for the plan year immediately preceding the capping period. If the first plan year of the capping period is the member's first year of membership service, these capping provisions shall not be applied to that first plan year.

(i) Capping period means the five plan years preceding the later of (A) such member's retirement date or (B) such member's final compensation date; and

(ii) Final compensation date means the later of (A) the date on which a retiring member's final compensation is actually paid or (B) if a retiring member's final compensation is paid in advance as a lump sum, the date on which such final compensation would have been paid to the member in the absence of such advance payment.

(5) This subsection does not apply to employees who become members on or after July 1, 2016. If the annuity begins prior to the sixty-second birthday of the member and the member has completed thirty-five or more years of creditable service, the annuity shall not be reduced. For retirements on or after June 7, 1995, any retirement annuity which begins prior to the sixty-second birthday of the member shall be reduced by twenty-five hundredths percent for each month or partial month between the date the annuity begins and the member's sixty-second birthday. If the annuity begins at a time when:

(a) The sum of the member's attained age and creditable service is eighty-five or more, the annuity shall not be reduced;

(b) The sum of the member's attained age and creditable service totals eighty-four, the annuity shall not be reduced by an amount greater than three percent of the unreduced annuity;

(c) The sum of the member's attained age and creditable service totals eighty-three, the annuity shall not be reduced by an amount greater than six percent of the unreduced annuity; and

(d) The sum of the member's attained age and creditable service totals eighty-two, the annuity shall not be reduced by an amount greater than nine percent of the unreduced annuity.

(6) For purposes of this section, a member's creditable service and attained age shall be measured in one-half-year increments.

(7)(a) Except as provided in section 79-9,104, the normal form of the formula retirement annuity based on final average compensation shall be an annuity payable monthly during the remainder of the member's life with the provision that in the event of the member's death before sixty monthly payments have been made the monthly payments will continue until sixty monthly payments have been made in total pursuant to section 79-9,119.

(b) A member may elect to receive, in lieu of the normal form of annuity, an actuarially equivalent annuity in any optional form provided by section 79-9,101.

(8) Any member receiving a formula retirement annuity based on final average compensation who is a member prior to July 1, 2016, shall also receive the service annuity to be paid by the State of Nebraska as provided in sections 79-933 to 79-935 and 79-951.

Source:Laws 1982, LB 131, § 4; Laws 1985, LB 215, § 3; Laws 1989, LB 237, § 2; Laws 1992, LB 1001, § 22; Laws 1995, LB 505, § 5; R.S.Supp.,1995, § 79-1044.01; Laws 1996, LB 900, § 635; Laws 1998, LB 497, § 21; Laws 1998, LB 1191, § 62; Laws 2000, LB 155, § 2; Laws 2013, LB553, § 11; Laws 2015, LB446, § 5; Laws 2016, LB447, § 33; Laws 2019, LB34, § 19.

(1)(a) For employees who become members on or after July 1, 2016, and prior to July 1, 2018, if the annuity begins at a time when the sum of the member's attained age and creditable service totals eighty-five and the member is at least fifty-five years of age, the annuity shall not be reduced.

(b) For employees who become members on or after July 1, 2018, if the annuity begins at a time when the sum of the member's attained age and creditable service totals eighty-five and the member is at least sixty years of age, the annuity shall not be reduced.

(2)(a) For an employee who becomes a member prior to July 1, 2018, if the annuity begins on or after the sixtieth birthday of the member and the member has completed at least a total of five years of creditable service, the annuity shall be reduced by twenty-five hundredths percent for each month or partial month between the date the annuity begins and the member's sixty-fifth birthday.

(b) For a member hired or rehired on or after July 1, 2018, if the annuity begins on or after the sixtieth birthday and the member has completed at least a total of five years of creditable service including eligibility and vesting credit but has not qualified for an unreduced annuity as specified in this section, the annuity shall be reduced by twenty-five hundredths percent for each month or partial month between the date the annuity begins and the member's sixty-fifth birthday.

(4) Except as provided in section 42-1107, the normal form of the formula retirement annuity based on final average compensation shall be an annuity payable monthly during the remainder of the member's life with the provision that, in the event of his or her death before sixty monthly payments have been made, the monthly payments will be continued to his or her estate or to the beneficiary he or she has designated until a total of sixty monthly payments have been made. A member may elect to receive, in lieu of the normal form of annuity, an actuarially equivalent annuity in any optional form provided by section 79-9,101.

(5) All formula annuities shall be paid from the Class V School Employees Retirement Fund.

Source:Laws 2016, LB447, § 34; Laws 2017, LB415, § 40.

Any time prior to receiving the first annuity payment, the member may elect to receive in lieu of such annuity, but payable in the same manner, an actuarially equivalent annuity in one of the following forms:

(1) A joint and survivorship annuity which shall continue after the death of the member to the death of the (a) member's spouse or (b) other designated beneficiary whose adjusted age in the calendar year in which the payment of the annuity commences is no more than ten years less than the attained age of the member in such calendar year;

(2) A joint and survivorship annuity which shall continue after the death of the member so that seventy-five percent of the amount of the member's monthly benefit under this option shall be paid monthly to the (a) member's spouse until his or her death or (b) other designated beneficiary whose adjusted age in the calendar year in which the payment of the annuity commences is no more than nineteen years less than the attained age of the member in such calendar year until his or her death;

(3) An annuity payable monthly during the remainder of the member's life with the provision that in the event of his or her death before one hundred twenty monthly payments have been made the monthly payments will be continued as provided in this section until a total of one hundred twenty monthly payments have been made;

(4) A joint and survivorship annuity which will continue after the death of the member to the death of the (a) member's spouse or (b) other designated beneficiary whose adjusted age in the calendar year in which the payment of the annuity commences is no more than ten years less than the attained age of the member in such calendar year but which annuity shall, upon the spouse's or designated beneficiary's death before the death of the member, be increased after such death for the remaining life of the member so that the monthly benefit equals the monthly benefit which would have been payable to the member had the member selected the normal form of the formula retirement annuity specified in section 79-9,100; or

(5) A joint and survivorship annuity which shall continue after the death of the member so that fifty percent of the amount of the member's monthly benefit under this option shall be paid monthly to a designated beneficiary until his or her death.

For purposes of the annuities provided in subdivisions (1), (2), and (4) of this section, a designated beneficiary's adjusted age means the attained age of the designated beneficiary in the calendar year in which payment of the annuity commences plus the number of years, if any, by which the member's attained age in the calendar year in which payment of the annuity commences is younger than seventy years.

Each of these actuarially equivalent annuities, except for the form provided in subdivision (3) of this section, shall continue for a minimum of sixty months.

The amount of each monthly payment shall be the amount specified in the form elected by the member.

Whether the member elects the normal form or one of the optional forms of the formula retirement annuity, if the member and his or her designated beneficiary die before the specified monthly payments have been made, the remaining number of the specified payments shall be paid to the individual or individuals designated in writing, on forms prescribed by the system, by the last surviving of the member or the member's designated beneficiary and, if no such designation is made, to the estate of the last surviving of the member or the member's designated beneficiary. At the election of a beneficiary, a single sum payment which is the actuarial equivalent of the remaining monthly payments to be paid to such beneficiary may be paid in lieu of the annuity benefit otherwise to be provided under the normal form or the optional form described in subdivision (3) of this section.

Source:Laws 1951, c. 274, § 15, p. 919; Laws 1985, LB 215, § 4; Laws 1989, LB 237, § 3; Laws 1991, LB 350, § 5; Laws 1993, LB 107, § 6; Laws 1995, LB 505, § 7; R.S.Supp.,1995, § 79-1046; Laws 1996, LB 900, § 636; Laws 2001, LB 711, § 13; Laws 2005, LB 364, § 15.

(1) Notwithstanding any other provision of the Class V School Employees Retirement Act, no member or beneficiary of the retirement system shall receive in any calendar year an annuity or other benefit which would exceed the maximum benefit permitted under section 415 of the Internal Revenue Code, or any successor provision and the regulations issued thereunder, as they may be amended from time to time, and as adjusted as of January 1 of each calendar year to the dollar limitation as determined for such year by the Commissioner of Internal Revenue pursuant to section 415(d) of the Internal Revenue Code to reflect cost-of-living adjustments, and the amount of benefit to be paid to any member or beneficiary by the retirement system shall be adjusted each calendar year, if necessary, to conform with the maximum benefit permitted under section 415 of the Internal Revenue Code. The cost-of-living adjustment to the maximum benefit permitted under section 415 of the Internal Revenue Code shall apply to determining the maximum benefit of a member who severed employment or commenced receiving benefits prior to the effective date of the adjustment.

(2) Any payments provided for by sections 79-990, 79-991, and 79-992 for the purchase or restoration of creditable service shall be subject to the limitations of section 415 of the Internal Revenue Code on annual additions to the retirement system. Until September 1, 2024, the board, and, beginning September 1, 2024, the retirement board, may suspend payments, alter installment periods, or, if such suspension or alteration is not possible, deny the purchase of all or a portion of the creditable service desired to be purchased, as necessary to comply with the requirements of section 415 of the Internal Revenue Code.

(3) This section is intended to meet and incorporate the requirements of section 415 of the Internal Revenue Code and regulations under that section that are applicable to governmental plans and shall be construed in accordance with section 415 of the Internal Revenue Code and the regulations issued thereunder and shall, by this reference, incorporate any subsequent changes made to such section as the same may apply to the retirement system.

Source:Laws 1985, LB 215, § 8; Laws 1995, LB 574, § 75; R.S.Supp.,1995, § 79-1046.01; Laws 1996, LB 900, § 637; Laws 1997, LB 623, § 31; Laws 1998, LB 497, § 22; Laws 2013, LB263, § 27; Laws 2016, LB447, § 35; Laws 2021, LB147, § 30.

(1) Any annuity paid on or after September 1, 1983, to a member who retired prior to February 21, 1982, pursuant to the Class V School Employees Retirement Act, or to such member's beneficiary, or to a person who retired under the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, or to such person's beneficiary, shall be adjusted by the increase in the cost of living or wage levels between the effective date of retirement and June 30, 1983, except that such increase shall not exceed the sum of one dollar and fifty cents per month for each year of creditable service and one dollar per month for each completed year of retirement as measured from the effective date of retirement to June 30, 1983. No separate adjustment in such annuity shall be made as a result of the changes made in section 79-9,113 pursuant to Laws 1983, LB 488. If a joint and survivor annuity was elected, the increase shall be actuarially adjusted so that the joint and survivor annuity remains the actuarial equivalent of the life annuity otherwise payable.

(2) In addition to the cost-of-living adjustment provided in subsection (1) of this section, any annuity paid on or after September 1, 1986, pursuant to the act or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before September 1, 1985, shall be adjusted by the increase in the cost of living or wage levels between the effective date of retirement and June 30, 1986, except that such increase shall not exceed (a) three and one-half percent for annuities first paid on or after September 1, 1984, (b) seven percent for annuities first paid on or after September 1, 1983, but before September 1, 1984, or (c) ten and one-half percent for all other annuities.

(3) In addition to the cost-of-living adjustments provided in subsections (1) and (2) of this section, any annuity paid on or after September 1, 1989, pursuant to the act or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before September 1, 1988, shall be adjusted by the increase in the cost of living or wage levels between the effective date of retirement and June 30, 1989, except that such increase shall not exceed (a) three percent for annuities first paid on or after September 1, 1987, (b) six percent for annuities first paid on or after September 1, 1986, but before September 1, 1987, or (c) nine percent for all other annuities.

(4) In addition to the cost-of-living adjustments provided in subsections (1), (2), and (3) of this section, any annuity paid on or after September 1, 1992, pursuant to the act or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before October 1, 1991, shall be adjusted by the increase in the cost of living or wage levels between the effective date of retirement and June 30, 1992, except that such increase shall not exceed (a) three percent for annuities first paid after October 1, 1990, (b) six percent for annuities first paid after October 1, 1989, but on or before October 1, 1990, or (c) nine percent for all other annuities.

(5) In addition to the cost-of-living adjustments provided in subsections (1), (2), (3), and (4) of this section, any annuity paid on or after September 1, 1995, pursuant to the act or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before October 1, 1994, shall be adjusted by the increase in the cost of living or wage levels between the effective date of retirement and June 30, 1995, except that such increase shall not exceed (a) three percent for annuities first paid after October 1, 1993, (b) six percent for annuities first paid after October 1, 1992, but on or before October 1, 1993, or (c) nine percent for all other annuities.

(6) In addition to the cost-of-living adjustments provided in subsections (1), (2), (3), (4), and (5) of this section, any annuity paid pursuant to the act or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before October 1, 1994, shall be subject to adjustment to equal the greater of (a) the annuity payable to the member or beneficiary as adjusted, if applicable, under the provisions of subsection (1), (2), (3), (4), or (5) of this section or (b) ninety percent of the annuity which results when the original annuity that was paid to the member or beneficiary (before any cost-of-living adjustments under this section), is adjusted by the increase in the cost of living or wage levels between the commencement date of the annuity and June 30, 1995.

(7) In addition to the cost-of-living adjustments provided in subsections (1), (2), (3), (4), (5), and (6) of this section, any annuity paid on or after September 1, 1998, pursuant to the act or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before October 3, 1997, shall be adjusted by the increase in the cost of living or wage levels between the effective date of retirement and June 30, 1998, except that such increase shall not exceed (a) three percent for annuities first paid after October 1, 1996, (b) six percent for annuities first paid after October 1, 1995, but on or before October 1, 1996, or (c) nine percent for all other annuities.

(8) Beginning January 1, 2000, and on January 1 of every year thereafter, for employees of Class V school districts who were members prior to July 1, 2013, a cost-of-living adjustment shall be made for any annuity being paid pursuant to the act, or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before October 3 preceding such January 1 adjustment date. The cost-of-living adjustment for any such annuity shall be the lesser of (a) one and one-half percent or (b) the increase in the consumer price index from the date such annuity first became payable through the August 31 preceding the January 1 adjustment date as reduced by the aggregate cost-of-living adjustments previously made to the annuity pursuant to this section.

(9) Beginning January 1, 2014, and on January 1 of every year thereafter, for employees of Class V school districts who became members on or after July 1, 2013, a cost-of-living adjustment shall be made for any annuity being paid pursuant to the act and on which the first payment was dated on or before October 3 preceding such January 1 adjustment date. The cost-of-living adjustment for any such annuity shall be the lesser of (a) one percent or (b) the increase in the consumer price index from the date such annuity first became payable through the August 31 preceding the January 1 adjustment date as reduced by the aggregate cost-of-living adjustments previously made to the annuity pursuant to this section.

(10) Beginning September 1, 1999, the actuary shall make an annual valuation of the assets and liabilities of the system. If the annual valuation made by the actuary, as approved by the board of trustees, indicates that the system has sufficient actuarial surplus to provide for a cost-of-living adjustment in addition to the adjustment made pursuant to subsection (8) or (9) of this section, the board of trustees may, in its discretion, declare by resolution that each annuity being paid pursuant to the act, or pursuant to the provisions of the retirement system established by statute for employees of Class V school districts in effect prior to September 1, 1951, and on which the first payment was dated on or before October 3 of the year such resolution is adopted, shall be increased beginning as of the January 1 following the date of the board of trustees' resolution by such percentage as may be declared by the board of trustees, except that such increase for any such annuity shall not exceed the increase in the consumer price index from the date such annuity first became payable through the applicable valuation date as reduced by the aggregate cost-of-living adjustments previously made to the annuity pursuant to this section.

(11) Except for the adjustments pursuant to subsection (13) of this section, the consumer price index to be used for determining any cost-of-living adjustment under this section shall be the Consumer Price Index - All Urban Consumers, as published by the Bureau of Labor Statistics of the United States Department of Labor. If this consumer price index is discontinued or replaced, a substitute index published by the United States Department of Labor shall be selected by the board if before September 1, 2024, or by the retirement board if on or after September 1, 2024. Any substitute index selected shall be a reasonable representative measurement of the cost of living for retired employees. An annuity as increased by any cost-of-living adjustment made under this section shall be considered the base annuity amount for the purpose of future adjustments pursuant to this section. In no event shall any cost-of-living adjustment be deemed to affect or increase the amount of the base retirement annuity of a member as determined under section 79-999 or 79-9,100.

(12) Any decision or determination by the board or retirement board, as applicable, (a) to declare or not declare a cost-of-living adjustment, (b) as to whether the annual valuation indicates a sufficient actuarial surplus to provide for a cost-of-living adjustment, or (c) pursuant to the selection of a substitute index shall be made in the sole, absolute, and final discretion of the board or retirement board, as applicable, and shall not be subject to challenge by any member or beneficiary. In no event shall the Legislature be constrained or limited in amending the system or increasing the benefits of members under the system, nor shall the board or retirement board, as applicable, be constrained from supporting any such change to the system, notwithstanding the effect of any such change upon the actuarial surplus of the system and the ability of the board or retirement board, as applicable, to declare future cost-of-living adjustments.

(13) The Legislature finds and declares that there exists in this state a pressing need to attract and retain qualified and dedicated public school employees and that one of the factors prospective public school employees consider when seeking or continuing public school employment is the retirement system and benefits the employment provides. The Legislature further finds that over the past decades, as reflected by the Medical Price Index published by the United States Department of Labor, the cost of medical care, including the cost of medications and insurance coverages, has increased at a rate in excess of that by which the Consumer Price Index - All Urban Consumers has increased. The Legislature further finds and declares that there accordingly exists a need to adjust the amount of retirement benefits paid to retired public school employees in order to assist them in meeting the increased cost of medical care. Therefor, in addition to the cost-of-living adjustments provided in subsections (1) through (12) of this section, commencing on October 3, 2001, and on October 3 of every year thereafter, a medical cost-of-living adjustment shall be paid to any annuitant who became a member prior to July 1, 2016, and has been paid an annuity from the retirement system for at least ten years through the October 3 adjustment date. The cost-of-living adjustment shall be paid in the form of a supplemental annuity providing monthly payments equal to the amount which results when (a) the fraction, not to exceed one, that results when the annuitant's years of creditable service at his or her retirement date is divided by twenty, is multiplied by (b) the product of ten dollars times the number of years, including attained one-half years, that such annuitant has received annuity payments from the retirement system through the October 3 adjustment date. The supplemental annuity being paid to an annuitant shall increase by ten dollars on October 3 of each subsequent year to reflect the additional year of annuity payments to the annuitant until the total amount of the supplemental annuity is two hundred fifty dollars. In no event shall the medical cost-of-living adjustment for any annuitant pursuant to this subsection result in the payment of a supplemental annuity exceeding two hundred fifty dollars per month. The supplemental annuity paid to an annuitant pursuant to this subsection shall cease at the death of the annuitant regardless of the form of retirement annuity being paid to the annuitant at the time of his or her death.

Source:Laws 1983, LB 488, § 2; Laws 1986, LB 1048, § 5; Laws 1989, LB 237, § 8; Laws 1992, LB 1001, § 26; Laws 1993, LB 107, § 11; Laws 1995, LB 505, § 9; R.S.Supp.,1995, § 79-1056.06; Laws 1996, LB 900, § 638; Laws 1998, LB 497, § 23; Laws 2001, LB 711, § 14; Laws 2013, LB553, § 12; Laws 2016, LB447, § 36; Laws 2021, LB147, § 31.

(1) All annuities and other benefits payable under the Class V School Employees Retirement Act and all accumulated credits of members of the retirement system shall not be assignable or subject to execution, garnishment, or attachment except to the extent that such annuity or benefit is subject to a qualified domestic relations order as such term is defined in and which meets the requirements of section 414(p) of the Internal Revenue Code. Payments under such a qualified domestic relations order shall be made only after the administrator of the retirement system receives written notice of such order and such additional information and documentation as the administrator may require.

(2) In lieu of the assignment of a member's future annuity or benefit to the member's spouse or former spouse, the retirement system shall permit the spouse or former spouse of a member to receive, pursuant to a qualified domestic relations order, a single sum payment of a specified percentage of the member's accumulated contributions on the condition that upon the payment of such amount the spouse or former spouse shall have no further interest in the retirement system or in the remaining benefit of the member under the retirement system.

(3) A member's interest and benefits under the retirement system shall be reduced, either at termination of employment, retirement, disability, or death, by the actuarial value of the benefit assigned or paid to the member's spouse, former spouse, or other dependents under a qualified domestic relations order, as determined by the plan actuary on the basis of the actuarial assumptions then recommended by the actuary pursuant to section 79-984.

Source:Laws 1951, c. 274, § 29, p. 925; Laws 1991, LB 350, § 8; R.S.1943, (1994), § 79-1060; Laws 1996, LB 900, § 639; Laws 1997, LB 623, § 32; Laws 1998, LB 497, § 24; Laws 2000, LB 155, § 3; Laws 2012, LB916, § 26; Laws 2015, LB40, § 11.

(1) Any member with five or more years of creditable service, excluding years of prior service acquired pursuant to section 79-990, 79-991, 79-994, 79-995, or 79-997, who becomes totally disabled for further performance of duty on or after March 22, 2000, may be approved for deferred disability retirement by the board until September 1, 2024, and by the retirement board beginning September 1, 2024. In the case of such deferred disability retirement, the member, during the period specified in subsection (3) of this section, shall be credited with creditable service for each year or portion thereof, to be determined in accordance with policies of the board or retirement board, as applicable, governing creditable service, that the member defers retirement, up to a maximum of thirty-five years of total creditable service, including creditable service accrued before the member became totally disabled. The member approved for deferred disability retirement may at any time of the member's choosing request the deferral to end and retirement annuity payments to begin. The retirement annuity of such member shall be based on the total number of years of the member's creditable service, including the years credited to the member during his or her total disability under this section, and the member's final average salary as of the date that the member became totally disabled and as adjusted from such date by a percentage equal to the cumulative percentage cost-of-living adjustments that were made or declared for annuities in pay status pursuant to section 79-9,103 after the date of the approval of the board or retirement board, as applicable, for deferred disability retirement and before the cessation of the accrual of additional creditable service pursuant to subsection (3) of this section. Except as provided in subsection (4) of this section, the retirement annuity so determined for the member shall be payable to the member without reduction due to any early commencement of benefits, except that the retirement annuity shall be reduced by the amount of any periodic payments to such employee as workers' compensation benefits. Additional creditable service acquired through deferred disability retirement shall apply to the service requirements specified in section 79-9,106. The board or retirement board, as applicable, shall consider a member to be totally disabled when it has received an application by the member and a statement by at least two licensed and practicing physicians designated by the board or retirement board, as applicable, certifying that the member is totally and presumably permanently disabled and unable to perform his or her duties as a consequence thereof.

(2) Notwithstanding the provisions of subsection (1) of this section, the payment of the retirement annuity of a member may not be deferred later than the member's required beginning date as defined in section 401(a)(9) of the Internal Revenue Code, as defined in section 49-801.01. If the payment of a disabled member's retirement annuity is required to commence before the member has elected to end his or her deferred disability retirement, the amount of benefit that would have accrued pursuant to subsection (1) of this section in the fiscal year of the member's required beginning date, and in each subsequent fiscal year through the year of the member's election to end the deferred disability retirement period, shall be reduced, but not below zero, by the actuarial equivalent of the payments which were paid to the member during each such fiscal year and after the member's required beginning date. The retirement annuity of any member that commences before the end of the member's deferred disability retirement shall be adjusted as of each September 1 pursuant to the requirements of this subsection.

(3) The accrual of creditable service and any adjustment of final average salary provided in subsection (1) of this section shall begin from the first day of the month following the date of the first of the two examinations by which the member is determined by the board or the retirement board, as applicable, to be totally disabled, shall continue only so long as the member does not receive any wages or compensation for services, and shall end at the earlier of (a) the time total disability ceases as determined by the board or the retirement board, as applicable, or (b) the date the member elects to end the deferred disability retirement and begin to receive his or her retirement annuity. The board or the retirement board, as applicable, may require periodic proof of disability but not more frequently than semiannually.

(4)(a) For an employee hired prior to July 1, 2018, the payment of any retirement annuity to a disabled member, which begins to be paid under this section (i) before the member's sixty-second birthday or (ii) at a time before the sum of the member's attained age and creditable service is eighty-five or more, shall be suspended if the board or the retirement board, as applicable, determines at any time before the member's sixty-second birthday that the member's total disability has ceased.

(b) For an employee hired on or after July 1, 2018, the payment of any retirement annuity to a disabled member, which begins to be paid under this section (i) before the member's sixty-fifth birthday or (ii) at a time before the sum of the member's attained age and creditable service is eighty-five or more, shall be suspended if the board or the retirement board, as applicable, determines at any time before the member's sixty-fifth birthday that the member's total disability has ceased.

(c) Payment of the retirement annuity of such member as determined under this section shall recommence at the member's early retirement date or normal retirement date but shall be subject to reduction at such time as specified in section 79-9,100.

Source:Laws 1951, c. 274, § 17, p. 919; Laws 1957, c. 354, § 2, p. 1202; Laws 1963, c. 490, § 2, p. 1565; Laws 1982, LB 131, § 7; Laws 1985, LB 215, § 6; Laws 1987, LB 298, § 9; Laws 1988, LB 551, § 5; Laws 1991, LB 350, § 6; Laws 1993, LB 107, § 8; R.S.1943, (1994), § 79-1048; Laws 1996, LB 900, § 640; Laws 2000, LB 155, § 4; Laws 2001, LB 711, § 15; Laws 2013, LB553, § 13; Laws 2016, LB447, § 37; Laws 2017, LB415, § 41; Laws 2021, LB147, § 32.

(1) Upon the death of a member who has not yet retired and who has twenty years or more of creditable service, the member's primary beneficiary, as designated by the member in writing on forms provided by the system, shall receive a survivorship annuity in accordance with subdivision (1) of section 79-9,101 if the primary beneficiary is (a) the member's spouse or (b) one other designated beneficiary whose attained age in the calendar year of the member's death is no more than ten years less than the attained age of the member in such calendar year. The amount of such actuarially equivalent annuity shall be calculated using the attained ages of the member and the beneficiary and be based on the annuity earned to the date of the member's death without reduction due to any early commencement of benefits. Within sixty days from the date of the member's death, if the member has not previously filed with the administrator of the retirement system a form requiring that only the survivorship annuity be paid, the beneficiary may request to receive in a lump sum an amount equal to the member's accumulated contributions. If prior to the member's death, the member files with the administrator of the retirement system a form requiring that the beneficiary receive a lump-sum settlement in lieu of the survivorship annuity, the beneficiary shall receive, in lieu of the survivorship annuity, a lump-sum settlement in an amount equal to the member's accumulated contributions notwithstanding any other provision of this section.

(2) Upon the death of a member who has not yet retired and who has less than twenty years of creditable service or upon the death of a member who has not yet retired and who has twenty years or more of creditable service but whose beneficiary does not meet the criteria in subsection (1) of this section, a lump sum in an amount equal to the member's accumulated contributions shall be paid pursuant to section 79-9,119.

(3) A lump-sum death benefit paid pursuant to subsection (1) or (2) of this section, other than the member's estate, that is an eligible distribution may be distributed in the form of a direct transfer to a retirement plan eligible to receive such transfer under the provisions of the Internal Revenue Code.

(4) For any member whose death occurs on or after January 1, 2007, while performing qualified military service as defined in section 414(u) of the Internal Revenue Code, the member's beneficiary shall be entitled to any additional death benefit that would have been provided, other than the accrual of any benefit relating to the period of qualified military service. The additional death benefit shall be determined as if the member had returned to employment with the school district and such employment had terminated on the date of the member's death.

Source:Laws 1951, c. 274, § 16, p. 919; Laws 1965, c. 527, § 1, p. 1659; Laws 1967, c. 544, § 2, p. 1788; Laws 1982, LB 131, § 6; Laws 1985, LB 215, § 5; Laws 1992, LB 1001, § 24; Laws 1993, LB 107, § 7; R.S.1943, (1994), § 79-1047; Laws 1996, LB 900, § 641; Laws 2001, LB 711, § 16; Laws 2012, LB916, § 27; Laws 2019, LB34, § 20.

The funds of the retirement system which are not required for current operations shall be invested and reinvested (1) before January 1, 2017, by the board of trustees subject to the approval of the board of education or Class V Retirement System Board as provided in sections 79-9,108 to 79-9,111 and (2) on and after January 1, 2017, by the council and the state investment officer in accordance with the Nebraska State Funds Investment Act without the approval of the board of education, board of trustees, or retirement board, as applicable. Except as otherwise provided in the Class V School Employees Retirement Act, no trustee and no member of the board of education shall have any direct interest in the income, gains, or profits of any investment made by the board of trustees, nor shall any such person receive any pay or emolument for services in connection with any such investment. Neither the state investment officer nor any trustee, member of the board of education, member of the retirement board, nor member of the council shall become an endorser or surety or in any manner an obligor for money loaned by or borrowed from the retirement system. Any person who violates any of these restrictions shall be guilty of a Class II misdemeanor.

Source:Laws 1951, c. 274, § 20, p. 921; Laws 1967, c. 545, § 1, p. 1791; Laws 1977, LB 39, § 257; Laws 1986, LB 1048, § 1; Laws 1989, LB 237, § 4; R.S.1943, (1994), § 79-1051; Laws 1996, LB 900, § 642; Laws 1998, LB 497, § 25; Laws 2006, LB 1024, § 67; Laws 2016, LB447, § 38; Laws 2021, LB147, § 33.

(1) Prior to January 1, 2017, the board of trustees, with approval of the board of education or Class V Retirement System Board, shall invest and reinvest funds of the retirement system. Beginning January 1, 2017, the funds of the retirement system shall be invested and reinvested solely by the council and the state investment officer in accordance with the Nebraska State Funds Investment Act.

(2) Prior to January 1, 2017, a professional investment manager may be employed by the board of trustees subject to approval of the board of education or Class V Retirement System Board. The professional investment manager shall be responsible for the purchase, sale, exchange, investment, or reinvestment of such funds subject to guidelines determined by the board of trustees. Prior to January 1, 2017, the trustees shall each month submit a report to the board of education or Class V Retirement System Board with respect to the investment of funds. The board of education or Class V Retirement System Board shall approve or disapprove the investments in the report, and in the event of disapproval of any investment, the board of trustees shall direct the sale of all or part of such investment or establish future policy with respect to that type of investment. Beginning January 1, 2017, the funds of the retirement system shall be invested and reinvested by the council and the state investment officer, who may employ advisers, counsel, managers, and other professionals in accordance with the Nebraska State Funds Investment Act.

(3) Beginning January 1, 2017, the board of trustees, the board of education, and the retirement board shall not have any duty, responsibility, or authority for the investment and reinvestment of the funds of the retirement system, or any investment decision, contract, rule, or regulation related thereto.

Source:Laws 1967, c. 545, § 2, p. 1791; Laws 1991, LB 350, § 7; R.S.1943, (1994), § 79-1051.01; Laws 1996, LB 900, § 643; Laws 2006, LB 1024, § 68; Laws 2016, LB447, § 39; Laws 2021, LB147, § 34.

Prior to January 1, 2017, in the event of default in the payment of principal of, or interest on, the investments made, the board of trustees are authorized to institute the proper proceedings to collect such matured principal or interest, and may, with approval of the board of education or Class V Retirement System Board, accept for exchange purposes, refunding bonds or other evidences of indebtedness with interest rates to be agreed upon with the obligor. Prior to January 1, 2017, the board of trustees, with the approval of the board of education or Class V Retirement System Board, are further authorized to make such compromises, adjustments, or disposition of the past-due interest or principal as are in default, or to make such compromises and adjustments as to future payments of interest or principal as deemed advisable for the purpose of protecting the investment.

Source:Laws 1967, c. 545, § 3, p. 1792; R.S.1943, (1994), § 79-1051.02; Laws 1996, LB 900, § 644; Laws 2006, LB 1024, § 69; Laws 2016, LB447, § 40.

Investments may also be made in first mortgages on improved real property which are insured by the Federal Housing Administration under the National Housing Act, are guaranteed by the United States Department of Veterans Affairs under the federal Veterans' Benefits Act of 1958 and any amendments thereto, or are otherwise insured or guaranteed by the United States of America or any agency or instrumentality thereof so as to give the investor protection essentially the same as that provided by such National Housing Act or federal Veterans' Benefits Act of 1958 and any amendments thereto or in notes, bonds, or debentures fully collateralized by such protected mortgages.

Source:Laws 1967, c. 545, § 6, p. 1795; Laws 1991, LB 2, § 21; R.S.1943, (1994), § 79-1051.05; Laws 1996, LB 900, § 645.

The board of trustees shall invest the funds of the retirement system in investments of the nature which individuals of prudence, discretion, and intelligence acquire or retain in dealing with the property of another. Such investments shall not be made for speculation but for investment, considering the probable safety of their capital as well as the probable income to be derived. The board of trustees shall not purchase investments on margin or enter into any futures contract or other contract obligation which requires the payment of margin or enter into any similar contractual arrangement which may result in losses in excess of the amount paid or deposited with respect to such investment or contract, unless such transaction constitutes a hedging transaction or is incurred for the purpose of portfolio or risk management for the funds and investments of the system. Prior to January 1, 2017, the board of trustees may write covered call options or put options. Prior to January 1, 2017, the board of trustees shall establish written guidelines for any such option, purchase, or contract obligation. Any such option, purchase, or contract obligation shall be governed by the prudent investment rule stated in this section for investment of the funds of the system. The board of trustees may lend any security if cash, United States Government obligations, or United States Government agency obligations with a market value equal to or exceeding the market value of the security lent are received as collateral. Prior to January 1, 2017, if shares of stock are purchased under this section, all proxies may be voted by the board of trustees prior to January 1, 2017. As of January 1, 2017, the funds of the retirement system shall be invested solely by the council and the state investment officer in accordance with the Nebraska State Funds Investment Act. The state investment officer may lend securities and vote proxies in accordance with the standard set forth in section 72-1246.

Source:Laws 1989, LB 237, § 6; R.S.1943, (1994), § 79-1051.07; Laws 1996, LB 900, § 646; Laws 1997, LB 624, § 26; Laws 2016, LB447, § 41.

(1)(a) Commencing September 1, 1969, all employees of the school district shall contribute an amount equal to the membership contribution which shall be two and three-fourths percent of the first seven thousand eight hundred dollars of salary or wages earned each fiscal year and five percent of salary or wages earned above that amount in the same fiscal year. Commencing September 1, 1976, all employees of the school district shall contribute an amount equal to the membership contribution which shall be two and nine-tenths percent of the first seven thousand eight hundred dollars of salary or wages earned each fiscal year and five and twenty-five hundredths percent of salary or wages earned above that amount in the same fiscal year. Commencing on September 1, 1982, all employees of the school district shall contribute an amount equal to the membership contribution which shall be four and nine-tenths percent of the compensation earned in each fiscal year. Commencing September 1, 1989, all employees of the school district shall contribute an amount equal to the membership contribution which shall be five and eight-tenths percent of the compensation earned in each fiscal year. Commencing September 1, 1995, all employees of the school district shall contribute an amount equal to the membership contribution which shall be six and three-tenths percent of the compensation earned in each fiscal year. Commencing September 1, 2007, all employees of the school district shall contribute an amount equal to the membership contribution which shall be seven and three-tenths percent of the compensation paid in each fiscal year. Commencing September 1, 2009, all employees of the school district shall contribute an amount equal to the membership contribution which shall be eight and three-tenths percent of the compensation paid in each fiscal year. Commencing September 1, 2011, all employees of the school district shall contribute an amount equal to the membership contribution which shall be nine and three-tenths percent of the compensation paid in each fiscal year. Commencing September 1, 2013, all employees of the school district shall contribute an amount equal to the membership contribution which shall be nine and seventy-eight hundredths percent of the compensation paid in each fiscal year.

(b) The contributions by the school district in any fiscal year beginning on or after September 1, 1999, shall be the greater of (i) one hundred percent of the contributions by the employees for such fiscal year or (ii) such amount as may be necessary to maintain the solvency of the system, as determined annually by the board of education upon recommendation of the actuary and the board of trustees.

(c) The contributions by the school district in any fiscal year beginning on or after September 1, 2007, and prior to September 1, 2018, shall be the greater of (i) one hundred one percent of the contributions by the employees for such fiscal year or (ii) such amount as may be necessary to maintain the solvency of the system, as determined annually by the board of education upon recommendation of the actuary retained by the board of trustees and after considering any amounts that will be, or are expected to be, transferred to the system pursuant to subdivision (1)(b) of section 79-966. The amount necessary to maintain the solvency of the system as determined in subdivision (ii) of this subdivision (c) shall be transmitted by the school district to the account of the retirement system no later than August 31, 2018. The school district contributions specified in subdivision (i) of this subdivision (c) shall be made monthly and shall be immediately transmitted to the account of the retirement system.

(d) The contributions by the school district in any fiscal year beginning on or after September 1, 2018, and prior to September 1, 2024, shall be the greater of (i) one hundred one percent of the contributions by the employees for such fiscal year or (ii) such amount as may be necessary to maintain the solvency of the system, as determined annually by the board of education upon recommendation of the actuary retained by the board of trustees and after considering any amounts pursuant to subdivision (1)(b) of section 79-966 that will be, or are expected to be, transferred to the school district by the State Treasurer. The amount necessary to maintain the solvency of the system as determined in subdivision (ii) of this subdivision (d) shall be transmitted by the school district to the account of the retirement system no later than August 31, 2019, and each August 31 thereafter. The school district contributions specified in subdivision (i) of this subdivision (d) shall be made monthly and shall be immediately transmitted to the account of the retirement system.

(e) The contributions by the school district in any fiscal year beginning on or after September 1, 2024, shall be the greater of:

(i) One hundred one percent of the contributions by the employees for such fiscal year; or

(ii) Such amount as may be necessary to maintain the solvency of the system, as determined annually by the board of education upon recommendation of the actuary retained by the retirement board pursuant to section 79-984 and after considering any amounts pursuant to subdivision (1)(b) of section 79-966 that will be, or are expected to be, transferred to the school district by the State Treasurer for transfer by the school district to the retirement system.

(f) The amount necessary to maintain the solvency of the system as determined in subdivision (1)(e)(ii) of this section shall be transmitted by the school district to the Class V School Employees Retirement Fund no later than August 31, 2025, and each August 31 thereafter.

(g) The school district contributions specified in subdivision (1)(e)(i) of this section shall be made monthly and shall be immediately transmitted to the Class V School Employees Retirement Fund.

(h) Nothing in this section prohibits the school district from making other contributions in addition to the contributions required pursuant to this section.

(i) The employee's contribution shall be made in the form of a monthly deduction from compensation as provided in subsection (2) of this section and shall be immediately transmitted to the account of the retirement system. Every employee who is a member of the system shall be deemed to consent and agree to such deductions and shall receipt in full for compensation, and payment to such employee of compensation less such deduction shall constitute a full and complete discharge of all claims and demands whatsoever for services rendered by such employee during the period covered by such payment except as to benefits provided under the Class V School Employees Retirement Act.

(j) After September 1, 1963, and prior to September 1, 1969, all employees shall be credited with a membership service annuity which shall be nine-tenths of one percent of salary or wage covered by old age and survivors insurance and one and one-half percent of salary or wages above that amount, except that those employees who retire on or after August 31, 1969, shall be credited with a membership service annuity which shall be one percent of salary or wages covered by old age and survivors insurance and one and sixty-five hundredths percent of salary or wages above that amount for service performed after September 1, 1963, and prior to September 1, 1969. Commencing September 1, 1969, all employees shall be credited with a membership service annuity which shall be one percent of the first seven thousand eight hundred dollars of salary or wages earned by the employee during each fiscal year and one and sixty-five hundredths percent of salary or wages earned above that amount in the same fiscal year, except that all employees retiring on or after August 31, 1976, shall be credited with a membership service annuity which shall be one and forty-four hundredths percent of the first seven thousand eight hundred dollars of salary or wages earned by the employee during such fiscal year and two and four-tenths percent of salary or wages earned above that amount in the same fiscal year, and the retirement annuities of employees who have not retired prior to September 1, 1963, and who elected under the provisions of section 79-988 as such section existed immediately prior to February 20, 1982, not to become members of the system shall not be less than they would have been had they remained under any preexisting system to date of retirement.

(k) Members of this system having the service qualifications of members of the School Employees Retirement System of the State of Nebraska, as provided by section 79-926, who are members of the retirement system established pursuant to the Class V School Employees Retirement Act prior to July 1, 2016, shall receive the state service annuity provided by sections 79-933 to 79-935 and 79-951.

(2) The school district shall pick up the employee contributions required by this section for all compensation paid on or after January 1, 1985, and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the Internal Revenue Code, except that the school district shall continue to withhold federal income taxes based upon these contributions until the Internal Revenue Service or the federal courts rule that, pursuant to section 414(h) of the Internal Revenue Code, these contributions shall not be included as gross income of the employee until such time as they are distributed or made available. The school district shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The school district shall pick up these contributions by a salary deduction either through a reduction in the cash salary of the employee or a combination of a reduction in salary and offset against a future salary increase. Beginning September 1, 1995, the school district shall also pick up any contributions required by sections 79-990, 79-991, and 79-992 which are made under an irrevocable payroll deduction authorization between the member and the school district, and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the Internal Revenue Code, except that the school district shall continue to withhold federal and state income taxes based upon these contributions until the Internal Revenue Service rules that, pursuant to section 414(h) of the Internal Revenue Code, these contributions shall not be included as gross income of the employee until such time as they are distributed from the system. Employee contributions picked up shall be treated for all purposes of the Class V School Employees Retirement Act in the same manner and to the extent as employee contributions made prior to the date picked up.

Source:Laws 1951, c. 274, § 25, p. 923; Laws 1953, c. 308, § 4, p. 1029; Laws 1955, c. 321, § 3, p. 993; Laws 1963, c. 490, § 5, p. 1567; Laws 1969, c. 724, § 2, p. 2755; Laws 1972, LB 1116, § 3; Laws 1976, LB 994, § 3; Laws 1982, LB 131, § 12; Laws 1983, LB 488, § 1; Laws 1984, LB 218, § 3; Laws 1989, LB 237, § 7; Laws 1995, LB 505, § 8; Laws 1995, LB 574, § 77; R.S.Supp.,1995, § 79-1056; Laws 1996, LB 900, § 648; Laws 1997, LB 623, § 33; Laws 1998, LB 497, § 26; Laws 1998, LB 1191, § 63; Laws 2000, LB 155, § 5; Laws 2007, LB596, § 3; Laws 2009, LB187, § 3; Laws 2011, LB382, § 4; Laws 2011, LB509, § 35; Laws 2013, LB553, § 14; Laws 2016, LB447, § 42; Laws 2018, LB1005, § 32; Laws 2021, LB147, § 35.

(1) An employer shall deduct and withhold an amount pursuant to section 79-9,113 from the compensation of an employee on each payroll period after such employee becomes a member of the retirement system. An employer shall transmit periodically, as directed by and in such form as is approved by the retirement board, such amounts and any information required by the retirement board. The retirement board shall immediately transmit to the State Treasurer all payments received.

(2) The retirement board may charge an employer a late administrative processing fee not to exceed twenty-five dollars if the information required by this section and the contributions from an employer consistent with the dates and frequency of transmittal as specified in section 79-9,113 are delinquent or are not timely received by the retirement board. In addition, the retirement board may charge an employer a late fee of thirty-eight thousandths of one percent of the amount required to be submitted pursuant to this section for each day such amount has not been received. The late fee may be used to make a member's account whole for any costs that may have been incurred by the member due to the late receipt of contributions. The retirement board shall charge an employer an amount equal to the interest which would have accrued if the delinquent report causes the employee to lose interest on his or her account. The proceeds of the interest charge shall be used to reimburse the account of each employee deprived of interest by the delay.

Source:Laws 2021, LB147, § 38.

In the event that an agreement for social security under the provisions of section 218(d)(3) of the federal Social Security Act is made applicable to services performed by employees in positions covered by the school employees retirement system and to services performed by employees who have elected under the provisions of section 79-988 as such section existed immediately prior to February 20, 1982, to remain under a preexisting system, such agreement shall also be made applicable to services performed by individuals as employees of the school district in positions not so covered, but which are otherwise eligible to the benefits of old age and survivors insurance under the provisions of section 218 of the federal Social Security Act as amended, and such employees shall be included in the coverage group, specified in such agreement.

Source:Laws 1955, c. 321, § 8, p. 995; R.S.1943, (1994), § 79-1056.05; Laws 1996, LB 900, § 649.

(a) All allowances, annuities, or other benefits granted under the Class V School Employees Retirement Act, and all expenses incurred in connection with the administration of the act, except clerical work incurred in connection with maintenance of records and payment of benefits, shall be paid from the Class V School Employees Retirement Fund;

(b) Such clerical work shall be performed by employees of the school district or districts;

(c) The administrator and staff of the retirement system shall be permitted reasonable office and records storage space in the central office building of the Class V school district formed before September 13, 1997; and

(d) All expenses for the retirement system office accommodations and integrated pension benefit information management systems, including all services, support, furniture, and equipment provided to or by any central office department of the school district, shall be charged to the retirement system.

(3)(a) Beginning September 1, 2024, the required deposits of the school district and the amounts transferred to the school district by the State Treasurer for transmission to the retirement system and required deposits of the employees shall be credited to the Class V School Employees Retirement Fund and all allowances, annuities, and other benefits shall be paid from such fund as directed by the retirement board as provided in the Class V School Employees Retirement Act.

(b) The account of each member in the Class V School Employees Retirement Fund shall be credited with regular interest earned monthly, quarterly, semiannually, or annually as the retirement board may direct.

(4) Beginning on August 24, 2017, any expenses with respect to the transfer to and assumption by the council and the state investment officer of the duty and authority to invest the assets of a retirement system provided for under the Class V School Employees Retirement Act shall be charged to the Class V School Employees Retirement Fund. Such expenses shall be paid without the approval of the board of trustees or the retirement board, as applicable.

Source:Laws 1951, c. 274, § 27, p. 925; R.S.1943, (1994), § 79-1058; Laws 1996, LB 900, § 650; Laws 1998, LB 497, § 27; Laws 2006, LB 1024, § 70; Laws 2016, LB447, § 43; Laws 2017, LB29, § 2; Laws 2021, LB147, § 36.

The Class V School Expense Fund is created. Beginning September 1, 2024, the fund shall be credited with money from the retirement system assets and income sufficient to pay the pro rata share of administrative expenses incurred as directed by the retirement board for the proper administration of the Class V School Employees Retirement Act and as necessary in connection with the administration and operation of the retirement system.

Source:Laws 2021, LB147, § 37.

Beginning September 1, 2024, all assets of the retirement system shall be credited, according to the purpose for which they are held, to the Class V School Expense Fund or to the Class V School Employees Retirement Fund. Any money in the funds available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

Source:Laws 2021, LB147, § 39.

Sections 79-993 to 79-996 and the changes to sections 79-978, 79-988, 79-991, 79-992, 79-999, and 79-9,105 and to section 79-1057 as such section existed immediately before May 30, 1987, made by Laws 1987, LB 298, shall not apply to employees retiring prior to May 30, 1987.

Source:Laws 1987, LB 298, § 11; R.S.1943, (1994), § 79-1060.01; Laws 1996, LB 900, § 651.

(1)(a) Until September 1, 2024, the board of trustees shall establish a comprehensive preretirement planning program for school employees who are members of the retirement system. The program shall provide information and advice regarding the many changes members face upon retirement, including, but not limited to, changes in physical and mental health, housing, family life, leisure activity, and retirement income.

(b) Beginning September 1, 2024, the retirement board shall establish sessions as provided in section 84-1511 for school employees who are members of the retirement system.

(2) The preretirement planning program shall be available to all members who have attained the age of fifty years or are within five years of qualifying for retirement or early retirement under their retirement systems.

(3) The preretirement planning program shall include information on the federal and state income tax consequences of the various annuity or retirement benefit options available to the member, information on social security benefits, information on various local, state, and federal government programs and programs in the private sector designed to assist elderly persons, and information and advice the board of trustees or retirement board, as applicable, deems valuable in assisting members in the transition from public employment to retirement.

(4) The board of trustees or retirement board, as applicable, shall work with any governmental agency, including political subdivisions or bodies whose services or expertise may enhance the development or implementation of the preretirement planning program.

(5) The costs of the preretirement planning program shall be charged back to the retirement system.

(6) An employer shall provide each member leave with pay to attend up to two preretirement planning programs. For purposes of this subsection, leave with pay means a day off paid by an employer and does not mean vacation, sick, personal, or compensatory time. A member may choose to attend a program more than twice, but such leave shall be at the expense of the member and shall be at the discretion of the employer. A member shall not be entitled to attend more than one preretirement planning program per fiscal year prior to actual election of retirement.

(7) A nominal registration fee may be charged to each person attending a preretirement planning program to cover the costs for meals, meeting rooms, or other expenses incurred under such program.

Source:Laws 2011, LB509, § 36; Laws 2013, LB263, § 28; Laws 2016, LB447, § 44; Laws 2021, LB147, § 40; Laws 2022, LB700, § 10.

On and after July 1, 2011, no employee shall be authorized to participate in the retirement system unless the employee (1) is a United States citizen or (2) is a qualified alien under the federal Immigration and Nationality Act, 8 U.S.C. 1101 et seq., as such act existed on January 1, 2009, and is lawfully present in the United States.

Source:Laws 2011, LB509, § 37.

(1) Except as provided in section 79-9,104, in the event of a member's death, the death benefit shall be paid to the following, in order of priority:

(a) To the member's surviving designated beneficiary as designated in writing on forms provided by the system;

(b) To the spouse married to the member on the member's date of death if there is no surviving designated beneficiary as designated in writing on forms provided by the system; or

(c) To the member's estate if the member is not married on the member's date of death and there is no surviving designated beneficiary as designated in writing on forms provided by the system.

(2) The priority designations described in subsection (1) of this section shall not apply if the member has retired under a joint and survivor benefit option.

Source:Laws 2019, LB34, § 18.

It is the intent of the Legislature that the Public Employees Retirement Board develop a work plan, recommendations, cost estimates, and cost comparisons regarding the transfer of management of any Class V school employees retirement system established under the Class V School Employees Retirement Act and which existed on January 1, 2019, to the Public Employees Retirement Board.

Source:Laws 2019, LB31, § 2.

(1)(a) The Public Employees Retirement Board, in consultation with stakeholders including, but not limited to, the Nebraska Retirement Systems Committee of the Legislature and the board of trustees and employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act and which existed on January 1, 2019, shall develop a work plan for the transfer of management and actuarial services of any such Class V school employees retirement system to the Public Employees Retirement Board.

(b) The work plan shall include, but not be limited to, a detailed analysis and recommendations regarding (i) management, administration, actuarial service, information technology, computer infrastructure, accounting, and member data and record transfer; (ii) necessary statutory changes to achieve the transfer of management and actuarial services; (iii) staff training and assessment of staffing needs; (iv) educational and communication plans to fully inform all system stakeholders and affected governmental entities regarding management changes; (v) sufficient timeframes for an orderly transition and implementation of management and actuarial changes; (vi) cost estimates associated with the tasks necessary to carry out the management transition; and (vii) a comparison of the current annual cost to administer any Class V school employees retirement system established under the Class V School Employees Retirement Act and which existed on January 1, 2019, with an estimate of the annual cost for the Public Employees Retirement Board to administer such system after a management transfer occurs.

(c) The employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act and which existed on January 1, 2019, shall provide all records, documents, data, or other information to the Public Employees Retirement Board within thirty calendar days after receiving a written request from the director of the Nebraska Public Employees Retirement Systems, or from the director's representative on behalf of the Public Employees Retirement Board, for such records, documents, data, or other information.

(d) The Public Employees Retirement Board shall electronically report the work plan, including any recommendations, cost estimates, and cost comparisons, to the Clerk of the Legislature no later than June 30, 2020.

(a) A merger or consolidation of any Class V school employees retirement system established under the Class V School Employees Retirement Act and which existed on January 1, 2019, with the School Employees Retirement System of the State of Nebraska or any other retirement system administered by the Public Employees Retirement Board; or

(b) An assumption of any of the liability for any such Class V school employees retirement system by the State of Nebraska, the Public Employees Retirement Board, or the Nebraska Public Employees Retirement Systems.

(3) The Public Employees Retirement Board may quarterly bill the employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act and which existed on January 1, 2019, for all work performed by the Public Employees Retirement Board for services and related expenses in completion of the work plan described in this section. Such employer shall remit payment as provided in section 79-9,122 within forty-five calendar days after receipt of each bill.

Source:Laws 2019, LB31, § 3.

(1) The Class V School Employees Retirement System Management Work Plan Fund is created. The purpose of the fund is to transfer funds as specified in this section. The fund shall consist of the amounts transferred from an employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act for all work performed by the Public Employees Retirement Board for services and related expenses in completion of the work described in sections 79-979.01, 79-9,121, and 79-9,124. The fund shall be administered by the Nebraska Public Employees Retirement Systems. Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(2) An employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act shall remit the payments described in subsection (3) of section 79-9,121, subsection (3) of section 79-979.01, and section 79-9,124 to the State Treasurer for credit to the Class V School Employees Retirement System Management Work Plan Fund for all work performed by the retirement board for (a) services and related expenses in completion of the work plan, (b) additional identification and examination of issues as required under section 79-9,124, and (c) the transfer of management of the retirement system to the retirement board.

Source:Laws 2019, LB31, § 4; Laws 2021, LB147, § 41.

(1) The administrator and board of trustees of any Class V school employees retirement system established under the Class V School Employees Retirement Act may quarterly bill the employer of such Class V school employees retirement system for all work performed and expenses incurred by the administrator, staff, and any consultants of the Class V school employees retirement system in response to requests for records, documents, data, or other information from the Nebraska Public Employees Retirement Systems or the retirement board in completion of the work plan described in section 79-9,121.

(2)(a) The retirement board may bill an employer of any Class V school employees retirement system monthly for all work performed and expenses incurred pursuant to section 79-9,124.

(b) The administrator and board of trustees of any Class V school employees retirement system established under the Class V School Employees Retirement Act may bill the employer of such Class V school employees retirement system monthly for all work performed and expenses incurred by the administrator, staff, and any consultants of the Class V school employees retirement system for the transition and transfer of management and general administration of such retirement system to the retirement board as described in section 79-979.01.

(3) An employer of a retirement system shall remit payment pursuant to this section to the board of trustees within forty-five calendar days after receipt of each monthly bill and to the retirement board within the time period and in the manner negotiated in the transition and transfer of management and administration plan entered into pursuant to section 79-979.01.

Source:Laws 2019, LB31, § 5; Laws 2021, LB147, § 42.

(1) The Legislature finds that following completion and submission of the work plan by the retirement board pursuant to section 79-9,121, additional issues have emerged related to transfer of the management of any Class V school employees retirement system to the retirement board. Further examination and evaluation are necessary and shall be completed by the entities described in this section. Such additional examination and evaluation shall include, but not be limited to:

(a) Completion of a compliance audit of the retirement system as described in this section;

(b) Completion of the audits of the retirement system by the Auditor of Public Accounts pursuant to subsection (1)(b) of section 79-987; and

(2) The board of trustees shall obtain a compliance audit of the retirement system to be completed no later than November 15, 2021. The compliance audit shall be in addition to the annual audit conducted by the Auditor of Public Accounts pursuant to subsection (1)(b) of section 79-987.

(3) The compliance audit shall include an examination of records, files, and any other documents or resources of the retirement system and an evaluation of all policies and procedures of the retirement system, the school district, the board of education, and the board of trustees related to the administration and operation of the retirement system to determine compliance with all state and federal laws. The compliance audit shall also include, but not be limited to, an examination and evaluation of:

(a) Eligibility and enrollment to ensure eligible individuals are properly and timely enrolled in the plan;

(b) Contributions, compensation, service hours, and other records to ensure that members are making the correct contributions, that only eligible compensation and eligible service hours are reported at the time and in the manner specified in plan documents, and that only the authorized interest is being recorded;

(c) Termination of employment to ensure that only terminated members are taking distributions from the plan at the time and in the manner specified in the plan documents;

(d) Reemployment after retirement to ensure that retirees and members who have terminated employment who reemploy have complied with plan documents;

(e) Benefit calculations and benefit payments to ensure that the correct benefits are calculated for members and paid on a timely basis; and

(i) The determination of the member's disability status and any accrual of additional disability benefits due to deferred distribution of such benefits are conducted in accordance with the act; and

(ii) The amount of the disability retirement benefits is correctly calculated for members and paid on a timely basis.

(4) The examination of each of the issues listed in subsection (3) of this section shall also include, but not be limited to, a review of:

(a) The plan documents and training that the retirement system has provided to the staff of the retirement system and employees who provide services to the retirement system to ensure proper compliance with the procedures and processes;

(b) Oversight practices or processes used by the board of trustees and administrator of the retirement system to identify whether the employer properly followed the plan documents; and

(c) Practices and processes used by the board of trustees and administrator of the retirement system to correct any errors made.

(5) The board of trustees, the board of education, the school district, and the retirement system shall provide:

(a) The compliance auditors with the documents identified in this section and access to personnel who perform or have knowledge of duties related to the practices, procedures, operations, and administration of the retirement system to facilitate timely completion of the compliance audit; and

(b) The Auditor of Public Accounts with documents and access to personnel as requested by the auditor to facilitate timely completion of the audit required by subsection (1)(b) of section 79-987.

(6) Expenses related to obtaining the compliance audit shall be charged to the retirement system.

(7) The board of trustees shall submit an electronic copy of the compliance audit report to the Clerk of the Legislature, the board of education, the Nebraska Retirement Systems Committee of the Legislature, the Governor, and the retirement board no later than November 15, 2021. The compliance audit report shall be presented to the Nebraska Retirement Systems Committee of the Legislature at a public hearing.

(8)(a) The Public Employees Retirement Board shall identify and examine additional issues which have emerged since the completion of the work plan conducted pursuant to section 79-9,121. Such identification and examination shall include, but are not limited to, issues related to the transition and transfer of management of any Class V school employees retirement system to the retirement board and the board's duties to administer such retirement system pursuant to section 84-1503 in a manner which will maintain the transferred retirement system plan's status as a qualified plan and address any concerns in meeting the retirement board's fiduciary duties and responsibilities pursuant to section 84-1503.02.

(b) The retirement board may retain the services of consultants, if necessary, to carry out its responsibilities under this subsection.

(c) The retirement board shall timely respond to any written communications from the Nebraska Retirement Systems Committee of the Legislature regarding its ongoing examinations under this subsection and advise the committee if additional areas of examination related to the transfer of management as required under this section should be addressed.

(d) The retirement board may bill an employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act on a monthly basis as provided in section 79-9,123 for all services and related expenses incurred in carrying out its responsibilities under this section.

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