LB 820 — Change retirement provisions relating to approved identification documents, participation in certain retirement systems, state contributions, ex officio members of the Nebraska Investment Council, contributions by school districts, computation of tax withholdings, retirement allowances, cost-of-living adjustments, and the Nebraska State Patrol and change the title of the executive director of the Nebraska Public Employees Retirement Systems

(b) The board shall have the power, through the executive director of the Nebraska Public Employees Retirement Systems or the executive director's designee, to make a thorough investigation of any overpayment of a benefit, when in the judgment of the retirement system such investigation is necessary, including, but not limited to, circumstances in which benefit payments are made after the death of a member or beneficiary and the retirement system is not made aware of such member's or beneficiary's death.

In connection with any such investigation, the board, through the executive director or the executive director's designee, shall have the power to compel the attendance of witnesses and the production of books, papers, records, and documents, whether in hardcopy, electronic form, or otherwise, and issue subpoenas for such purposes.

Such subpoenas shall be served in the same manner and have the same effect as subpoenas from district courts.

(2) The board may adopt and promulgate rules and regulations implementing this section, which may include, but not be limited to, the following:

(a) The procedures for refunding contributions, adjusting future contributions or benefit payments, and requiring additional contributions or repayment of benefits;

(b) the process for a member, member's beneficiary, employee, or employer to dispute an adjustment of contributions or benefits;

and (c) notice provided to all affected persons.

All notices shall be sent prior to an adjustment and shall describe the process for disputing an adjustment of contributions or benefits.

Sec.

3.

Section 23-2306, Revised Statutes Supplement, 2025, is amended to read:

23-2306 (1) The membership of the retirement system shall be composed of all persons who are or were employed by member counties and who maintain an account balance with the retirement system.

(2) The following employees of member counties are authorized to participate in the retirement system:

(a) All permanent full-time employees who have attained the age of eighteen years shall begin participation in the retirement system upon employment and full-time elected officials shall begin participation in the retirement system upon taking office, (b) all permanent part-time employees who have attained the age of eighteen years may exercise the option to begin participation in the retirement system within the first thirty days of employment, and (c) all part-time elected officials may exercise the option to begin participation in the retirement system within thirty days after taking office.

An employee who exercises the option to begin participation in the retirement system shall remain in the system until termination or retirement, regardless of any change of status as a permanent or temporary employee.

(3) No employee of a member county shall be authorized to participate in the retirement system provided for in the County Employees Retirement Act unless the employee is a United States citizen or is lawfully present in the United States.

The employing member county and the employee shall:

(a) Maintain at least one approved identification document as defined in section 4-108;

and (b) Produce any such approved identification document so maintained upon request of the Public Employees Retirement Board or the Nebraska Public Employees Retirement Systems.

maintain at least one of the following documents, which shall be unexpired if applicable to the particular document or which has an expiration date that has been extended by the United States Department of Homeland Security or the United States Citizenship and Immigration Services so that such document is still valid, to demonstrate United States citizenship or lawful presence in the United States as of the employee's date of hire and produce any such document so maintained upon request of the retirement board or the Nebraska Public Employees Retirement Systems:

(a) A state-issued driver's license;

(b) A state-issued identification card;

-2- LB820 LB820 2026 (c) A state-issued motor vehicle learner's permit;

(d) A certified copy of a birth certificate or delayed birth certificate issued in any state, territory, or possession of the United States;

(e) A Consular Report of Birth Abroad issued by the United States Department of State;

(f) A United States passport;

(g) A foreign passport with a United States visa;

(h) A United States Certificate of Naturalization;

(i) A United States Certificate of Citizenship;

(j) A tribal certificate of Native American blood or similar document;

(k) A United States Citizenship and Immigration Services Employment Authorization Document, Form I-766;

(l) A United States Citizenship and Immigration Services Permanent Resident Card, Form I-551;

or (m) Any other document issued by the United States Department of Homeland Security or the United States Citizenship and Immigration Services granting employment authorization in the United States and approved by the retirement board.

(4)(a) The board may determine that a governmental entity currently participating in the retirement system no longer qualifies, in whole or in part, under section 414(d) of the Internal Revenue Code as a participating employer in a governmental plan.

(b)(i) To aid governmental entities in their business decisionmaking process, any governmental entity currently participating in the retirement system contemplating a business transaction that may result in such entity no longer qualifying, in whole or in part, under section 414(d) of the Internal Revenue Code may notify the board in writing as soon as reasonably practicable, but no later than one hundred eighty days before the transaction is to occur.

(ii) The board when timely notified shall, as soon as is reasonably practicable, obtain from its contracted actuary the cost of any actuarial study necessary to determine the potential funding obligation.

The board shall notify the entity of such cost.

(iii) If such entity pays the board's contracted actuary pursuant to subdivision (4)(c)(vi) of this section for any actuarial study necessary to determine the potential funding obligation, the board shall, as soon as reasonably practicable following its receipt of the actuarial study, (A) determine whether the entity's contemplated business transaction will cause the entity to no longer qualify under section 414(d) of the Internal Revenue Code, (B) determine whether the contemplated business transaction constitutes a plan termination by the entity, (C) determine the potential funding obligation, (D) determine the administrative costs that will be incurred by the board or the Nebraska Public Employees Retirement Systems in connection with the entity's removal from the retirement system, and (E) notify the entity of such determinations.

(iv) Failure to timely notify the board pursuant to subdivision (4)(b)(i) of this section may result in the entity being treated as though the board made a decision pursuant to subdivision (4)(a) of this section.

(c) If the board makes a determination pursuant to subdivision (4)(a) of this section, or if the entity engages in the contemplated business transaction reviewed under subdivision (4)(b) of this section that results in the entity no longer qualifying under section 414(d) of the Internal Revenue Code:

(i) The board shall notify the entity that it no longer qualifies under section 414(d) of the Internal Revenue Code within ten business days after the determination;

(ii) The affected plan members shall be immediately considered fully vested;

(iii) The affected plan members shall become inactive within ninety days after the board's determination;

(iv) The entity shall pay to the County Employees Retirement Fund an amount equal to any funding obligation;

(v) The entity shall pay to the County Employees Cash Balance Retirement Expense Fund an amount equal to any administrative costs incurred by the board or the Nebraska Public Employees Retirement Systems in connection with the entity's removal from the retirement system;

and (vi) The entity shall pay directly to the board's contracted actuary an amount equal to the cost of any actuarial study necessary to aid the board in determining the amount of such funding obligation, if not previously paid.

(d) For purposes of this subsection:

(i) Business transaction means a merger;

consolidation;

sale of assets, equipment, or facilities;

termination of a division, department, section, or subgroup of the entity;

or any other business transaction that results in termination of some or all of the entity's workforce;

and (ii) Funding obligation means the financial liability of the retirement system to provide benefits for the affected plan members incurred by the retirement system due to the entity's business transaction calculated using the methodology and assumptions recommended by the board's contracted actuary and approved by the board.

The methodology and assumptions used must be structured in a way that ensures the entity is financially liable for all the costs of the entity's business transaction, and the retirement system is not financially liable for any of the cost of the entity's business transaction.

(e) The board may adopt and promulgate rules and regulations to carry out this subsection including, but not limited to, the methods of notifying the board of pending business transactions, the acceptable methods of payment, and -3- LB820 LB820 2026 the timing of such payment.

(5) Within the first one hundred eighty days of employment, a full-time employee may apply to the board for vesting credit for years of participation in another Nebraska governmental plan, as defined by section 414(d) of the Internal Revenue Code.

During the years of participation in the other Nebraska governmental plan, the employee must have been a full-time employee, as defined in the Nebraska governmental plan in which the credit was earned.

The board may adopt and promulgate rules and regulations governing the assessment and granting of vesting credit.

(6) Any employee who qualifies for membership in the retirement system pursuant to this section may not be disqualified from 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.

(7) A full-time or part-time employee of a city, village, or township who becomes a county employee pursuant to a merger of services shall receive vesting credit for his or her years of participation in a Nebraska governmental plan, as defined by section 414(d) of the Internal Revenue Code, of the city, village, or township.

(8) A full-time or part-time employee of a city, village, fire protection district, or township who becomes a municipal county employee shall receive credit for his or her years of employment with the city, village, fire protection district, or township for purposes of the vesting provisions of this section.

(9) A full-time or part-time employee of the state who becomes a county employee pursuant to transfer of assessment function to a county shall not be deemed to have experienced a termination of employment and shall receive vesting credit for his or her years of participation in the State Employees Retirement System of the State of Nebraska.

(10) Counties shall ensure that employees authorized to participate in the retirement system pursuant to this section shall enroll and make required contributions to the retirement system immediately upon becoming an employee.

Information necessary to determine membership in the retirement system shall be provided by the employer.

Sec.

4.

Section 23-2312, Reissue Revised Statutes of Nebraska, is amended to read:

23-2312 (1) The executive director of the Nebraska Public Employees Retirement Systems shall keep a complete record of all members with respect to names, current addresses, ages, contributions, and any other facts as may be necessary in the administration of the County Employees Retirement Act.

The information in the records shall be provided by the employer in an accurate and verifiable form, as specified by the executive director.

The executive director shall, from time to time, carry out testing procedures pursuant to section 84-1512 to verify the accuracy of such information.

For the purpose of obtaining such facts and information, the executive director shall have access to the records of the various counties and state departments and agencies and the holder of the records shall comply with a request by the executive director for access by providing such facts and information to the executive director 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.

(2) The executive director shall develop and implement an employer education program using principles generally accepted by public employee retirement systems so that all employers have the knowledge and information necessary to prepare and file reports as the board requires.

Sec.

5.

Section 24-703, Revised Statutes Supplement, 2025, is amended to read:

24-703 (1) Each original member shall contribute monthly four percent of his or her monthly compensation to the fund until the maximum benefit as limited in subsection (1) of section 24-710 has been earned.

It shall be the duty of the Director of Administrative Services in accordance with subsection (7) of this section to make a deduction of four percent on the monthly payroll of each original member who is a judge of the Supreme Court, a judge of the Court of Appeals, a judge of the district court, a judge of a separate juvenile court, a judge of the county court, a clerk magistrate of the county court who was an associate county judge and a member of the fund at the time of his or her appointment as a clerk magistrate, or a judge of the Nebraska Workers' Compensation Court showing the amount to be deducted and its credit to the fund.

The Director of Administrative Services and the State Treasurer shall credit the four percent as shown on the payroll and the amounts received from the various counties to the fund and remit the same to the executive director in charge of the judges retirement system who shall keep an accurate record of the contributions of each judge.

(2)(a) In addition to the contribution required under subdivision (c) of this subsection, beginning on July 1, 2004, each future member who became a member prior to July 1, 2015, and who has not elected to make contributions and receive benefits as provided in section 24-703.03 shall contribute monthly six percent of his or her monthly compensation to the fund until the maximum benefit as limited in subsection (2) of section 24-710 has been earned.

After the maximum benefit as limited in subsection (2) of section 24-710 has been -4- LB820 LB820 2026 earned, such future member shall make no further contributions to the fund, except that (i) any time the maximum benefit is changed, a future member who has previously earned the maximum benefit as it existed prior to the change shall contribute monthly six percent of his or her monthly compensation to the fund until the maximum benefit as changed and as limited in subsection (2) of section 24-710 has been earned and (ii) such future member shall continue to make the contribution required under subdivision (c) of this subsection.

(b) In addition to the contribution required under subdivision (c) of this subsection, beginning on July 1, 2004, a judge who became a member prior to July 1, 2015, and who first serves as a judge on or after July 1, 2004, or a future member who became a member prior to July 1, 2015, and who elects to make contributions and receive benefits as provided in section 24-703.03 shall contribute monthly eight percent of his or her monthly compensation to the fund until the maximum benefit as limited by subsection (2) of section 24-710 has been earned.

In addition to the contribution required under subdivision (c) of this subsection, after the maximum benefit as limited in subsection (2) of section 24-710 has been earned, such judge or future member shall contribute monthly four percent of his or her monthly compensation to the fund for the remainder of his or her active service.

(c) Beginning on July 1, 2009, a member or judge described in subdivisions (a) and (b) of this subsection shall contribute monthly an additional one percent of his or her monthly compensation to the fund.

(d) Beginning on July 1, 2015, a judge who first serves as a judge on or after such date shall contribute monthly ten percent of his or her monthly compensation to the fund.

(e) It shall be the duty of the Director of Administrative Services to make a deduction on the monthly payroll of each such future member who is a judge of the Supreme Court, a judge of the Court of Appeals, a judge of the district court, a judge of a separate juvenile court, a judge of the county court, a clerk magistrate of the county court who was an associate county judge and a member of the fund at the time of his or her appointment as a clerk magistrate, or a judge of the Nebraska Workers' Compensation Court showing the amount to be deducted and its credit to the fund.

This shall be done each month.

The Director of Administrative Services and the State Treasurer shall credit the amount as shown on the payroll and the amounts received from the various counties to the fund and remit the same to the executive director in charge of the judges retirement system who shall keep an accurate record of the contributions of each judge.

(3)(a) Except as otherwise provided in this subsection, a Nebraska Retirement Fund for Judges fee of six dollars through June 30, 2021, eight dollars beginning July 1, 2021, through June 30, 2022, nine dollars beginning July 1, 2022, through June 30, 2023, ten dollars beginning July 1, 2023, through June 30, 2024, eleven dollars beginning July 1, 2024, through June 30, 2025, and twelve dollars beginning July 1, 2025, shall be taxed as costs in each (i) civil cause of action, criminal cause of action, traffic misdemeanor or infraction, and city or village ordinance violation filed in the district courts, the county courts, and the separate juvenile courts, (ii) filing in the district court of an order, award, or judgment of the Nebraska Workers' Compensation Court or any judge thereof pursuant to section 48-188, (iii) appeal or other proceeding filed in the Court of Appeals, and (iv) original action, appeal, or other proceeding filed in the Supreme Court.

In county courts a sum shall be charged which is equal to ten percent of each fee provided by sections 33-125, 33-126.02, 33-126.03, and 33-126.06, rounded to the nearest even dollar.

No judges retirement fee shall be charged for filing a report pursuant to sections 33-126.02 and 33-126.06.

(b) The fee increases described in subdivision (a) of this subsection shall not be taxed as a cost in any criminal cause of action, traffic misdemeanor or infraction, or city or village ordinance violation filed in the district court or the county court.

The fee on such criminal causes of action, traffic misdemeanors or infractions, or city or village ordinance violations shall remain six dollars on and after July 1, 2021.

(c) When collected by the clerk of the district or county court, such fees shall be remitted to the State Treasurer within ten days after the close of each calendar month for credit to the Nebraska Retirement Fund for Judges.

In addition, information regarding collection of court fees shall be submitted to the executive director in charge of the judges retirement system by the State Court Administrator within ten days after the close of each calendar month.

(d) The board may charge a late administrative processing fee not to exceed twenty-five dollars if the information is not timely received or the money is delinquent.

In addition, the board may charge 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.

Such late fees shall be remitted to the executive director who shall promptly thereafter remit such fees to the State Treasurer for credit to the fund.

(e) No Nebraska Retirement Fund for Judges fee which is uncollectible for any reason shall be waived by a county judge as provided in section 29-2709.

(4) All expenditures from the fund shall be authorized by voucher in the manner prescribed in section 24-713.

The fund shall be used for the payment of all annuities and other benefits to members and their beneficiaries and for the expenses of administration.

(5)(a) Prior to July 1, 2021:

(i) Beginning July 1, 2013, and each fiscal year thereafter, the board shall cause an annual actuarial valuation to be performed that will value the -5- LB820 LB820 2026 plan assets for the year and ascertain the contributions required for such fiscal year.

The actuary for the board shall perform an actuarial valuation of the system on the basis of actuarial assumptions recommended by the actuary, approved by the board, and kept on file with the board using the entry age actuarial cost method.

Under this method, the actuarially required funding rate is equal to the normal cost rate, plus the contribution rate necessary to amortize the unfunded actuarial accrued liability on a level percentage of salary basis.

The normal cost under this method shall be determined for each individual member on a level percentage of salary basis.

The normal cost amount is then summed for all members;

(ii) Beginning July 1, 2006, any existing unfunded liabilities shall be reinitialized and amortized over a thirty-year period, and during each subsequent actuarial valuation through June 30, 2021, changes in the unfunded actuarial accrued liability due to changes in benefits, actuarial assumptions, the asset valuation method, or actuarial gains or losses shall be measured and amortized over a thirty-year period beginning on the valuation date of such change;

(iii) If the unfunded actuarial accrued liability under the entry age actuarial cost method is zero or less than zero on an actuarial valuation date, then all prior unfunded actuarial accrued liabilities shall be considered fully funded and the unfunded actuarial accrued liability shall be reinitialized and amortized over a thirty-year period as of the actuarial valuation date;

and (iv) If the actuarially required contribution rate exceeds the rate of all contributions required pursuant to the Judges Retirement Act, there shall be a supplemental appropriation sufficient to pay for the differences between the actuarially required contribution rate and the rate of all contributions required pursuant to the Judges Retirement Act.

(b) Beginning July 1, 2021, and each fiscal year thereafter:

(i) The board shall cause an annual actuarial valuation to be performed that will value the plan assets for the year and ascertain the contributions required for such fiscal year.

The actuary for the board shall perform an actuarial valuation of the system on the basis of actuarial assumptions recommended by the actuary, approved by the board, and kept on file with the board using the entry age actuarial cost method.

Under such method, the actuarially required funding rate is equal to the normal cost rate, plus the contribution rate necessary to amortize the unfunded actuarial accrued liability on a level percentage of salary basis.

The normal cost under such method shall be determined for each individual member on a level percentage of salary basis.

The normal cost amount is then summed for all members;

(ii) Any changes in the unfunded actuarial accrued liability due to changes in benefits, actuarial assumptions, the asset valuation method, or actuarial gains or losses shall be measured and amortized over a twenty-five- year period beginning on the valuation date of such change;

(iii) If the unfunded actuarial accrued liability under the entry age actuarial cost method is zero or less than zero on an actuarial valuation date, then all prior unfunded actuarial accrued liabilities shall be considered fully funded and the unfunded actuarial accrued liability shall be reinitialized and amortized over a twenty-five-year period as of the actuarial valuation date;

and (iv) If the actuarially required contribution rate exceeds the rate of all contributions required pursuant to the Judges Retirement Act, there shall be a supplemental appropriation sufficient to pay for the differences between the actuarially required contribution rate and the rate of all contributions required pursuant to the act.

(c) Upon the recommendation of the actuary to the board, and after the board notifies the Nebraska Retirement Systems Committee of the Legislature, the board may combine or offset certain amortization bases to reduce future volatility of the actuarial contribution rate.

Such notification to the committee shall be in writing and include, at a minimum, the actuary's projection of the contributions to fund the plan if the combination or offset were not implemented, the actuary's projection of the contributions to fund the plan if the combination or offset were implemented, and the actuary's explanation of why the combination or offset is in the best interests of the plan at the proposed time.

(d) For purposes of this subsection, the rate of all contributions required pursuant to the Judges Retirement Act includes (i) member contributions, (ii) state contributions pursuant to subsection (6) of this section which shall be considered as a contribution for the plan year ending the prior June 30, (iii) court fees as provided in subsection (3) of this section, and (iv) all fees pursuant to sections 25-2804, 33-103, 33-103.01, 33-106.02, 33-123, 33-124, 33-125, 33-126.02, 33-126.03, and 33-126.06, as directed to be remitted to the fund.

(6)(a) In addition to the contributions otherwise required by this section, beginning July 1, 2023, and on July 1 of each year thereafter, the state shall contribute from the General Fund to the Nebraska Retirement Fund for Judges an amount equal to five percent of the total annual compensation of all members of the retirement system except as otherwise provided in this subsection and as such rate shall be adjusted or terminated by the Legislature.

No adjustment may cause the total contribution rate established in this subsection to exceed five percent.

For purposes of this subsection, (i) total annual compensation is based on the total member compensation reported in the most recent annual actuarial valuation report for the retirement system produced for the board pursuant to section 84-1503 and (ii) the contribution -6- LB820 LB820 2026 described in this subsection shall be considered as a contribution for the plan year ending the prior June 30.

(b) If the funded ratio on the actuarial value of assets is at or above one hundred percent for two consecutive years as reported in the annual actuarial valuation report, the actuary shall assess whether the percentage of the state contribution rate should be adjusted based on projected annual actuarial valuation report results including the funded ratio, actuarial contribution, and expected revenue sources using several assumed investment return scenarios that the actuary deems to be reasonable, and shall make a recommendation to the board as part of the annual actuarial valuation report.

(c) If the state contribution rate has been adjusted to less than five percent and the funded ratio on the actuarial value of assets is below one hundred percent for two consecutive years as reported in the annual actuarial valuation report, the actuary shall assess whether the percentage of the state contribution rate should be adjusted based on projected annual actuarial valuation report results including the funded ratio, actuarial contribution, and expected revenue sources using several assumed investment return scenarios that the actuary deems to be reasonable, and shall make a recommendation to the board as part of the annual actuarial valuation report.

(d) If an annual actuarial valuation report includes a recommendation from the actuary to adjust the contribution rate as described in subdivision (b) or (c) of this subsection, the board shall provide written notice electronically to the Nebraska Retirement Systems Committee of the Legislature, to the Governor, and to the Supreme Court of such recommendation within seven business days after voting to approve an annual actuarial valuation report.

The notice shall include the actuary's recommendation and analysis regarding such adjustment.

(e) Following receipt of the actuary's recommendation and analysis pursuant to this subsection, the Nebraska Retirement Systems Committee of the Legislature shall determine the amount of any adjustment of the contribution rate and, if necessary, shall propose any such adjustment to the Legislature.

(7) The state or county shall pick up the member 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 pursuant to section 414(h)(2) of the Internal Revenue Code in determining federal tax treatment under the code and shall not be included as gross income of the member until such time as they are distributed or made available.

The contributions, although designated as member contributions, shall be paid by the state or county in lieu of member contributions.

The state or county shall pay these member contributions from the same source of funds which is used in paying earnings to the member.

The state or county shall pick up these contributions by a compensation deduction through a reduction in the compensation of the member.

Member contributions picked up shall be treated for all purposes of the Judges Retirement Act in the same manner and to the extent as member contributions made prior to the date picked up.

Sec.

6.

Section 24-703.01, Revised Statutes Supplement, 2025, is amended to read:

24-703.01 No judge shall be authorized to participate in the retirement system provided for in the Judges Retirement Act unless the judge is a United States citizen or is lawfully present in the United States.

The court and the judge shall:

(1) Maintain at least one approved identification document as defined in section 4-108;

and (2) Produce any such approved identification document so maintained upon request of the Public Employees Retirement Board or the Nebraska Public Employees Retirement Systems.

maintain at least one of the following documents, which shall be unexpired if applicable to the particular document or which has an expiration date that has been extended by the United States Department of Homeland Security or the United States Citizenship and Immigration Services so that such document is still valid, to demonstrate United States citizenship or lawful presence in the United States as of the judge's date of hire and produce any such document so maintained upon request of the board or the Nebraska Public Employees Retirement Systems:

(1) A state-issued driver's license;

(2) A state-issued identification card;

(3) A state-issued motor vehicle learner's permit;

(4) A certified copy of a birth certificate or delayed birth certificate issued in any state, territory, or possession of the United States;

(5) A Consular Report of Birth Abroad issued by the United States Department of State;

(6) A United States passport;

(7) A foreign passport with a United States visa;

(8) A United States Certificate of Naturalization;

(9) A United States Certificate of Citizenship;

(10) A tribal certificate of Native American blood or similar document;

(11) A United States Citizenship and Immigration Services Employment Authorization Document, Form I-766;

(12) A United States Citizenship and Immigration Services Permanent Resident Card, Form I-551;

or (13) Any other document issued by the United States Department of Homeland Security or the United States Citizenship and Immigration Services granting employment authorization in the United States and approved by the board.

Sec.

7.

Section 24-704, Revised Statutes Cumulative Supplement, 2024, is -7- LB820 LB820 2026 amended to read:

24-704 (1) The general administration of the retirement system for judges provided for in the Judges Retirement Act, except the investment of funds, is hereby vested in the board.

The Auditor of Public Accounts shall make an annual audit of the retirement system and electronically file an annual report of its condition with the Clerk of the Legislature.

Each member of the Legislature shall receive an electronic copy of the annual report by making a request for such report to the Auditor of Public Accounts.

The board may adopt and promulgate rules and regulations as may be necessary to carry out the Judges Retirement Act.

(2)(a) The board shall employ an executive a director and such assistants and employees as may be necessary to efficiently discharge the duties imposed by the act.

The executive director shall keep a record of all acts and proceedings taken by the board.

(b) The executive director shall keep a complete record of all members with respect to name, current address, age, contributions, length of service, compensation, and any other facts as may be necessary in the administration of the act.

The information in the records shall be provided by the State Court Administrator in an accurate and verifiable form, as specified by the executive director.

The executive director shall, from time to time, carry out testing procedures pursuant to section 84-1512 to verify the accuracy of such information.

For the purpose of obtaining such facts and information, the executive director shall have access to the records of the various state departments and agencies and the holder of the records shall comply with a request by the executive director for access by providing such facts and information to the executive director 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.

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

(3) Information necessary to determine membership in the retirement system shall be provided by the State Court Administrator.

(4) Any funds of the retirement system available for investment shall be invested by the Nebraska Investment Council pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

Payment for investment services by the council shall be charged directly against the gross investment returns of the funds.

Charges so incurred shall not be a part of the board's annual budget request.

The amounts of payment for such services, as of December 31 of each year, shall be reported not later than March 31 of the following year to the council, the board, and the Nebraska Retirement Systems Committee of the Legislature.

The report submitted to the committee shall be submitted electronically.

The state investment officer shall sell any such securities upon request from the executive director so as to provide money for the payment of benefits or annuities.

Sec.

8.

Section 24-704.01, Revised Statutes Cumulative Supplement, 2024, is amended to read:

24-704.01 (1)(a) If the board determines that the retirement system has previously received contributions or distributed benefits which for any reason are not in accordance with the Judges Retirement Act, the board shall refund contributions, require additional contributions, adjust benefits, or require repayment of benefits paid.

In the event of an overpayment of a benefit, the board may, in addition to other remedies, offset future benefit payments by the amount of the prior overpayment, together with regular interest thereon.

In the event of an underpayment of a benefit, the board shall immediately make payment equal to the deficit amount plus regular interest.

(b) The board shall have the power, through the executive director of the Nebraska Public Employees Retirement Systems or the executive director's designee, to make a thorough investigation of any overpayment of a benefit, when in the judgment of the retirement system such investigation is necessary, including, but not limited to, circumstances in which benefit payments are made after the death of a member or beneficiary and the retirement system is not made aware of such member's or beneficiary's death.

In connection with any such investigation, the board, through the executive director or the executive director's designee, shall have the power to compel the attendance of witnesses and the production of books, papers, records, and documents, whether in hardcopy, electronic form, or otherwise, and issue subpoenas for such purposes.

Such subpoenas shall be served in the same manner and have the same effect as subpoenas from district courts.

(2) The board may adopt and promulgate rules and regulations implementing this section, which shall include, but not be limited to, the following:

(a) The procedures for refunding contributions, adjusting future contributions or benefit payments, and requiring additional contributions or repayment of benefits;

(b) the process for a member, member's beneficiary, employee, or employer to dispute an adjustment of contributions or benefits;

and (c) notice provided to all affected persons.

All notices shall be sent prior to an adjustment and shall describe the process for disputing an adjustment of contributions or benefits.

Sec.

9.

Section 24-705, Reissue Revised Statutes of Nebraska, is amended to read:

24-705 The board shall have the power to secure and employ the services of such technical and administrative employees as are necessary to carry out the -8- LB820 LB820 2026 Judges Retirement Act.

Pursuant to subdivision (2)(e) of section 84-1503, the board shall have an annual report prepared by a member of the American Academy of Actuaries showing a complete valuation of the present and prospective assets and liabilities of the fund created by the act.

Such valuation shall be on the basis of actuarial assumptions recommended by the actuary, approved by the board, and kept on file with the board.

The report shall further include a prospectus of the amount of the appropriation that will be required from the Legislature for the succeeding year.

This report shall be furnished electronically to the Clerk of the Legislature at each regular session.

Each member of the Legislature shall receive an electronic copy of such report by making a request for it to the executive director.

The employees of the board shall be paid at such rates as the board shall approve.

All administrative expenses shall be paid from the retirement fund.

Sec.

10.

Section 24-710, Revised Statutes Cumulative Supplement, 2024, is amended to read:

24-710 (1) The retirement annuity of a judge who is an original member, who has not made the election provided for in section 24-710.01, and who retires under section 24-708 or 24-709 shall be computed as follows:

Each such judge shall be entitled to receive an annuity, each monthly payment of which shall be in an amount equal to three and one-third percent of his or her final average compensation as such judge, multiplied by the number of his or her years of creditable service.

The amount stated in this section shall be supplemental to any benefits received by such judge under the Nebraska and federal old age and survivors' insurance acts at the date of retirement, but the monthly combined benefits received thereunder and by the Judges Retirement Act shall not exceed sixty-five percent of the final average compensation such judge was receiving when he or she last served as such judge.

The amount of retirement annuity of a judge who retires under section 24-708 or 24-709 shall not be less than twenty-five dollars per month if he or she has four years or more of service credit.

(2) The retirement annuity of a judge who is a future member and who retires after July 1, 1986, under section 24-708 or 24-709 shall be computed as follows:

Each such judge shall be entitled to receive an annuity, each monthly payment of which shall be in an amount equal to three and one-half percent of his or her final average compensation as such judge, multiplied by the number of his or her years of creditable service, except that prior to an actuarial factor adjustment for purposes of calculating an optional form of annuity benefits under subsection (3) of this section, the monthly benefits received under this subsection shall not exceed seventy percent of the final average compensation such judge was receiving when he or she last served as such judge.

(3) Except as provided in section 42-1107, any member may, when filing an application as provided by the retirement system, elect to receive, in lieu of the normal form annuity benefits to which the member or his or her beneficiary may otherwise be entitled under the Judges Retirement Act, an optional form of annuity benefits which the board may by rules and regulations provide, the value of which, determined by accepted actuarial methods and on the basis of actuarial assumptions recommended by the actuary, approved by the board, and kept on file in the office of the executive director, is equal to the value of the benefit replaced.

The board may (a) adopt and promulgate appropriate rules and regulations to establish joint and survivorship annuities, with and without reduction on the death of the first annuitant, and such other forms of annuities as may in its judgment be appropriate and establishing benefits as provided in sections 24-707 and 24-707.01, (b) prescribe appropriate forms for making the election by the members, and (c) provide for the necessary actuarial services to make the required valuations.

(4) A one-time cost-of-living adjustment shall be made for each retired judge and each surviving beneficiary who is receiving a retirement annuity as provided for in this section.

The annuity 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 increases shall not exceed three percent per year of retirement and the total increase shall not exceed two hundred fifty dollars per month.

Sec.

11.

Section 42-1111, Reissue Revised Statutes of Nebraska, is amended to read:

42-1111 (1) During the period of time that a determination, by the board, its designee, or a court of competent jurisdiction, is being made as to whether a domestic relations order is a qualified domestic relations order, the executive director of the Nebraska Public Employees Retirement Systems statewide public retirement systems shall separately account for the segregated amounts.

(2) If a member of the statewide public retirement systems participates in a defined contribution account, the member shall maintain investment authority over the entire account until the order is determined to be a qualified domestic relations order, but upon such determination, the alternate payee shall receive investment authority over the alternate payee's share of the account.

(3) If within the eighteen-month period the order is determined to be a qualified domestic relations order, the executive director of the Nebraska Public Employees Retirement Systems statewide public retirement systems shall pay the segregated amounts plus interest to the alternate payee or payees entitled thereto.

(4) If within the eighteen-month period the order is determined not to be a qualified domestic relations order or the qualified status of the order is -9- LB820 LB820 2026 not resolved, the executive director of the Nebraska Public Employees Retirement Systems statewide public retirement systems shall pay the segregated amounts plus interest to the member or other beneficiaries entitled thereto.

(5) If the determination that the order is a qualified domestic relations order is made after the eighteen-month period, the order will be applied prospectively only.

(6) For purposes of this section, the eighteen-month period begins on the date that the first payment would be required under the domestic relations order.

Sec.

12.

Section 49-617, Revised Statutes Supplement, 2025, is amended to read:

49-617 The Revisor of Statutes shall cause the statutes to be printed.

The printer shall deliver all completed copies to the Supreme Court.

These copies shall be held and disposed of by the court as follows:

Sixty copies to the State Library to exchange for statutes of other states;

five copies to the State Library to keep for daily use;

not to exceed twenty-five copies to the Legislative Council for bill drafting and related services to the Legislature and executive state officers;

as many copies to the Attorney General as he or she has attorneys on his or her staff;

as many copies to the Commission on Public Advocacy as it has attorneys on its staff;

up to sixteen copies to the State Court Administrator;

thirteen copies to the Tax Commissioner;

eight copies to the Nebraska Publications Clearinghouse;

six copies to the Public Service Commission;

four copies to the Secretary of State;

three copies to the Tax Equalization and Review Commission;

four copies to the Clerk of the Legislature for use in his or her office and three copies to be maintained in the legislative chamber, one copy on each side of the chamber and one copy at the desk of the Clerk of the Legislature, under control of the sergeant at arms;

three copies to the Department of Health and Human Services;

two copies each to the Governor of the state, the Chief Justice and each judge of the Supreme Court, each judge of the Court of Appeals, the Clerk of the Supreme Court, the Reporter of Decisions, the Commissioner of Labor, the Auditor of Public Accounts, and the Revisor of Statutes;

one copy each to the Secretary of State of the United States, each Indian tribal court located in the State of Nebraska, the library of the Supreme Court of the United States, the Adjutant General, the Air National Guard, the Commissioner of Education, the State Treasurer, the Board of Educational Lands and Funds, the Director of Agriculture, the Director of Administrative Services, the Director of Economic Development, the executive director of the Nebraska Public Employees Retirement Systems, the Director-State Engineer, the Director of Banking and Finance, the Director of Insurance, the Director of Motor Vehicles, the Director of Veterans' Affairs, the Director of Water, Energy, and Environment, the Director of Correctional Services, the Nebraska Emergency Operating Center, each judge of the Nebraska Workers' Compensation Court, each commissioner of the Commission of Industrial Relations, the Nebraska Liquor Control Commission, the State Real Estate Commission, the secretary of the Game and Parks Commission, the Board of Pardons, each state institution under the Department of Health and Human Services, each state institution under the State Department of Education, the State Surveyor, the Nebraska State Patrol, the materiel division of the Department of Administrative Services, the personnel division of the Department of Administrative Services, the Nebraska Motor Vehicle Industry Licensing Board, the Board of Trustees of the Nebraska State Colleges, each of the Nebraska state colleges, each district judge of the State of Nebraska, each judge of the county court, each judge of a separate juvenile court, the Lieutenant Governor, each United States Senator from Nebraska, each United States Representative from Nebraska, each clerk of the district court for the use of the district court, the clerk of the Nebraska Workers' Compensation Court, each clerk of the county court, each county attorney, each county public defender, each county law library, and the inmate library at all state penal and correctional institutions, and each member of the Legislature shall be entitled to two complete sets, and two complete sets of such volumes as are necessary to update previously issued volumes, but each member of the Legislature and each judge of any court referred to in this section shall be entitled, on request, to an additional complete set.

Copies of the statutes distributed without charge, as listed in this section, shall be the property of the state or governmental subdivision of the state and not the personal property of the particular person receiving a copy.

Distribution of statutes to the library of the College of Law of the University of Nebraska shall be as provided in sections 85-176 and 85-177.

Sec.

13.

Section 72-1237, Revised Statutes Cumulative Supplement, 2024, is amended to read:

72-1237 (1) (1)(a) The Nebraska Investment Council is created.

For purposes of the Nebraska State Funds Investment Act, council means the Nebraska Investment Council.

The council shall consist of five members, appointed by the Governor with the approval of the Legislature.

The State Treasurer and , the executive director of the Nebraska Public Employees Retirement Systems , and except as provided in subdivision (1)(b) of this section, beginning January 1, 2017, the administrator of each retirement system provided for under the Class V School Employees Retirement Act shall serve as nonvoting, ex officio members.

One of the appointed members shall be designated chairperson by the Governor.

(b) Beginning September 1, 2024, the director of the Nebraska Public Employees Retirement Systems shall also represent each retirement system provided for under the Class V School Employees Retirement Act.

(2) Each of the appointed members of the council shall serve for a term of -10- LB820 LB820 2026 five years that begins on January 1 and may be removed by the Governor for cause after notice and an opportunity to be heard.

A member may serve until his or her successor's appointment is effective.

A member may be reappointed.

A successor shall be appointed in the same manner as provided for the members first appointed, and in case of a vacancy caused by death, resignation, or otherwise, the Governor shall appoint a qualified person to fill the vacancy for the unexpired term.

(3) No member of the council shall be personally liable, except in cases of willful dishonesty, gross negligence, or intentional violation of law, for actions relating to his or her duties as a member of the council.

Sec.

14.

Section 72-1239, Revised Statutes Cumulative Supplement, 2024, is amended to read:

72-1239 The purpose of the council is to formulate and establish such policies as it may deem necessary and proper which shall govern the methods, practices, and procedures followed by the state investment officer for the investment or reinvestment of state funds and funds described in section 83-133 and the purchase, sale, or exchange of securities as provided by the Nebraska State Funds Investment Act.

The council shall meet from time to time as directed by the Governor or the chairperson or as requested by the state investment officer.

The members of the council, except the State Treasurer and , the executive director of the Nebraska Public Employees Retirement Systems, and beginning January 1, 2017, each administrator of a retirement system provided for under the Class V School Employees Retirement Act, shall be paid seventy-five dollars per diem.

The members shall be reimbursed for expenses incurred in connection with the performance of their duties as members as provided in sections 81-1174 to 81-1177.

Sec.

15.

Section 79-904.01, Revised Statutes Supplement, 2025, is amended to read:

79-904.01 (1)(a) If the board determines that the retirement system has previously received contributions or distributed benefits which for any reason are not in accordance with the statutory provisions of the School Employees Retirement Act, the board may refund contributions, require additional contributions, adjust benefits, or require repayment of benefits paid.

In the event of an overpayment of a benefit, the board may, in addition to other remedies, offset future benefit payments by the amount of the prior overpayment, together with regular interest thereon.

In the event of a material underpayment of a benefit, the board shall immediately make payment equal to the deficit amount plus regular interest.

(b) The board shall have the power, through the executive director of the Nebraska Public Employees Retirement Systems or the executive director's designee, to make a thorough investigation of any overpayment of a benefit, when in the judgment of the retirement system such investigation is necessary, including, but not limited to, circumstances in which benefit payments are made after the death of a member or beneficiary and the retirement system is not made aware of such member's or beneficiary's death.

In connection with any such investigation, the board, through the executive director or the executive director's designee, shall have the power to compel the attendance of witnesses and the production of books, papers, records, and documents, whether in hardcopy, electronic form, or otherwise, and issue subpoenas for such purposes.

Such subpoenas shall be served in the same manner and have the same effect as subpoenas from district courts.

(2) If the board determines that termination of employment has not occurred and a retirement benefit has been paid to a member of the retirement system pursuant to section 79-933, such member shall repay the benefit to the retirement system unless the board determines that all or any portion of such benefit was the result of an inadvertent benefit overpayment and repayment of such benefit would create a significant hardship.

(3) The board may adopt and promulgate rules and regulations implementing this section, which shall include, but not be limited to, the following:

(a) The procedures for refunding contributions, adjusting future contributions or benefit payments, and requiring additional contributions or repayment of benefits;

(b) the process for a member, member's beneficiary, employee, or employer to dispute an adjustment of contributions or benefits;

and (c) notice provided to all affected persons.

All notices shall be sent at the time of or prior to an adjustment and shall describe the process for disputing an adjustment of contributions or benefits.

(4) The board shall not refund contributions made on compensation in excess of the limitations imposed by subdivision (4) of section 79-902 or subsection (9) of section 79-934.

Sec.

16.

Section 79-905, Reissue Revised Statutes of Nebraska, is amended to read:

79-905 It shall be the duty of the retirement board to:

(1) Determine the eligibility of an individual to be a member of the retirement system and other questions of fact in the event of dispute between an individual and a department;

(2) Adopt rules and regulations, as the board may deem necessary, for the management of the board;

(3) Prescribe the form in which employers report contributions, hours worked by school employees, payroll information, and other information necessary to carry out the board's duties;

(4) Keep a complete record of all proceedings taken at any meeting of the board;

(5) Employ an executive a director and such assistants and employees as -11- LB820 LB820 2026 may be necessary in the performance of its duties;

and (6) Obtain actuarial services pursuant to subdivision (2)(e) of section 84-1503.

Sec.

17.

Section 79-906, Reissue Revised Statutes of Nebraska, is amended to read:

79-906 (1) The executive director in charge of the retirement system shall keep a complete record of all members with respect to name, current address, age, contributions, and any other facts as may be necessary in the administration of the School Employees Retirement Act.

The information in the records shall be provided by the employer in an accurate and verifiable form, as specified by the executive director.

The executive director shall, from time to time, carry out testing procedures pursuant to section 84-1512 to verify the accuracy of such information.

For the purpose of obtaining such facts and information, the executive director shall have access to the records of the various employers and state departments and agencies and the holder of the records shall comply with a request by the executive director for access by providing such facts and information to the executive director 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.

(2) The executive director shall develop and implement an employer education program using principles generally accepted by public employee retirement systems so that all employers have the knowledge and information necessary to prepare and file reports as the board requires.

Sec.

18.

Section 79-907, Reissue Revised Statutes of Nebraska, is amended to read:

79-907 (1)(a) On or before October 1, 2001, and at least every two years thereafter, the retirement board shall send to each contributing member of the retirement system by first-class mail, a statement of creditable service, reported salary, and other such information as is determined by the executive director of the Nebraska Public Employees Retirement Systems to be necessary in calculating the member's retirement benefit.

(b) If the member requests a modification or correction of his or her statement of information, the member shall provide documentation to the board supporting such modification or correction and provide clear and convincing evidence that the statement is in error.

The board shall, within sixty days after receipt of the documentation supporting the modification or correction, determine whether the member has proven by clear and convincing evidence that the statement shall be modified or corrected.

If the board determines that the member has provided clear and convincing evidence, the board shall modify or correct the statement.

If the board determines that the member has not provided clear and convincing evidence, the board shall deny the modification or correction.

In either case, the board shall notify the member.

The member may appeal the decision of the board pursuant to section 79-950.

(c) The board has an ongoing fiduciary duty to modify or correct a member's statement if the board discovers an error in the information it has on record.

A modification or correction shall be made within sixty days after the error is brought to the attention of the board.

(2) The board may adopt and promulgate rules and regulations and prescribe the necessary forms to carry out this section.

Sec.

19.

Section 79-915, Revised Statutes Supplement, 2025, is amended to read:

79-915 (1) Persons residing outside of the United States and engaged temporarily as school employees in the State of Nebraska shall not become members of the retirement system.

(2) No school employee shall be authorized to participate in the retirement system provided for in the School Employees Retirement Act unless the employee is a United States citizen or is lawfully present in the United States.

The employing public school and the school employee shall:

(a) Maintain at least one approved identification document as defined in section 4-108;

and (b) Produce any such approved identification document so maintained upon request of the Public Employees Retirement Board or the Nebraska Public Employees Retirement Systems.

maintain at least one of the following documents, which shall be unexpired if applicable to the particular document or which has an expiration date that has been extended by the United States Department of Homeland Security or the United States Citizenship and Immigration Services so that such document is still valid, to demonstrate United States citizenship or lawful presence in the United States as of the employee's date of hire and produce any such document so maintained upon request of the retirement board or the Nebraska Public Employees Retirement Systems:

(a) A state-issued driver's license;

(b) A state-issued identification card;

(c) A state-issued motor vehicle learner's permit;

(d) A certified copy of a birth certificate or delayed birth certificate issued in any state, territory, or possession of the United States;

(e) A Consular Report of Birth Abroad issued by the United States Department of State;

(f) A United States passport;

(g) A foreign passport with a United States visa;

(h) A United States Certificate of Naturalization;

(i) A United States Certificate of Citizenship;

(j) A tribal certificate of Native American blood or similar document;

-12- LB820 LB820 2026 (k) A United States Citizenship and Immigration Services Employment Authorization Document, Form I-766;

(l) A United States Citizenship and Immigration Services Permanent Resident Card, Form I-551;

or (m) Any other document issued by the United States Department of Homeland Security or the United States Citizenship and Immigration Services granting employment authorization in the United States and approved by the retirement board.

(3)(a) The board may determine that a governmental entity currently participating in the retirement system no longer qualifies, in whole or in part, under section 414(d) of the Internal Revenue Code as a participating employer in a governmental plan.

(b)(i) To aid governmental entities in their business decisionmaking process, any governmental entity currently participating in the retirement system contemplating a business transaction that may result in such entity no longer qualifying, in whole or in part, under section 414(d) of the Internal Revenue Code may notify the board in writing as soon as reasonably practicable, but no later than one hundred eighty days before the transaction is to occur.

(ii) The board when timely notified shall, as soon as is reasonably practicable, obtain from its contracted actuary the cost of any actuarial study necessary to determine the potential funding obligation.

The board will notify the entity of such cost.

(iii) If such entity pays the board's contracted actuary pursuant to subdivision (3)(c)(vi) of this section for any actuarial study necessary to determine the potential funding obligation, the board shall, as soon as reasonably practicable following its receipt of the actuarial study, (A) determine whether the entity's contemplated business transaction will cause the entity to no longer qualify under section 414(d) of the Internal Revenue Code, (B) determine whether the contemplated business transaction constitutes a plan termination by the entity, (C) determine the potential funding obligation, (D) determine the administrative costs that will be incurred by the board or the Nebraska Public Employees Retirement Systems in connection with the entity's removal from the retirement system, and (E) notify the entity of such determinations.

(iv) Failure to timely notify the board pursuant to subdivision (3)(b)(i) of this section may result in the entity being treated as though the board made a decision pursuant to subdivision (3)(a) of this section.

(c) If the board makes a determination pursuant to subdivision (3)(a) of this section, or if the entity engages in the contemplated business transaction reviewed under subdivision (3)(b) of this section that results in the entity no longer qualifying under section 414(d) of the Internal Revenue Code:

(i) The board shall notify the entity that it no longer qualifies under section 414(d) of the Internal Revenue Code within ten business days after the determination;

(ii) The affected plan members shall be immediately considered fully vested;

(iii) The affected plan members shall become inactive within ninety days after the board's determination;

(iv) The entity shall pay to the School Retirement Fund an amount equal to any funding obligation;

(v) The entity shall pay to the Expense Fund an amount equal to any administrative costs incurred by the board or the Nebraska Public Employees Retirement Systems in connection with the entity's removal from the retirement system;

and (vi) The entity shall pay directly to the board's contracted actuary an amount equal to the cost of any actuarial study necessary to aid the board in determining the amount of such funding obligation, if not previously paid.

(d) For purposes of this subsection:

(i) Business transaction means a merger;

consolidation;

sale of assets, equipment, or facilities;

termination of a division, department, section, or subgroup of the entity;

or any other business transaction that results in termination of some or all of the entity's workforce;

and (ii) Funding obligation means the financial liability of the retirement system to provide benefits for the affected plan members incurred by the retirement system due to the entity's business transaction calculated using the methodology and assumptions recommended by the board's contracted actuary and approved by the board.

The methodology and assumptions used must be structured in a way that ensures the entity is financially liable for all the costs of the entity's business transaction, and the retirement system is not financially liable for any of the cost of the entity's business transaction.

(e) The board may adopt and promulgate rules and regulations to carry out this subsection including, but not limited to, the methods of notifying the board of pending business transactions, the acceptable methods of payment, and the timing of such payment.

Sec.

20.

Section 79-916, Revised Statutes Supplement, 2025, is amended to read:

79-916 (1)(a) On July 1, 2004, the board shall transfer from the School Retirement Fund to the Service Annuity Fund an amount equal to the funded ratio of the retirement system which is equal to the market value of the retirement system assets divided by the actuarial accrued liability of the retirement system, times the actuarial accrued liability of the service annuity, as determined pursuant to section 79-966.01, of the employees who are members of the retirement system established pursuant to the Class V School Employees -13- LB820 LB820 2026 Retirement Act.

Beginning July 1, 2013, such actuarial accrued liability shall be determined for each employee on a level percentage of salary basis.

On or before July 1 of each fiscal year, the state shall contribute to transfer into the Service Annuity Fund such amounts as may be necessary to pay the normal cost and amortize the unfunded actuarial accrued liability of the service annuity, as determined pursuant to section 79-966.01, as of the end of the previous fiscal year of the employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act.

Based on the fiscal year of the retirement system established pursuant to the Class V School Employees Retirement Act, the administrator of such system shall provide all membership information needed for the actuary engaged by the retirement board to determine the normal cost and the amortization payment of the unfunded actuarial accrued liability, as determined pursuant to section 79-966.01, to be paid by the state to the Service Annuity Fund each fiscal year as required by this subdivision.

(b) At the time of retirement of any employee who is a member of the retirement system established pursuant to the Class V School Employees Retirement Act and who was hired prior to July 1, 2016, the retirement board shall, upon receipt of a certification of the administrator of such retirement system of the name, identification number, date of birth, retirement date, last date of employment, type of retirement, and number of years of service credited to such eligible employee at the date of retirement, transfer from the Service Annuity Fund to the Class V school district for transfer to the retirement system the actuarial accrued liability of the service annuity to be paid to the Class V school district by the state for transfer to the eligible employee for the years of service thus certified as provided for members of the School Employees Retirement System of the State of Nebraska under sections 79-933 and 79-952.

Such transfer of the actuarial accrued liability to the Class V school district for transfer to the retirement system established pursuant to the Class V School Employees Retirement Act shall be in lieu of the payment of the service annuity to which the employee would be entitled.

(c) The Service Annuity Fund is created.

The fund shall consist of the amounts paid by the state and transferred from the School Retirement Fund to the Class V school district for transfer to the retirement system pursuant to this section to pay the service annuity to the Class V school district for transfer to employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act.

Any money in the Service Annuity 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)(a) For each fiscal year prior to July 1, 2025, in addition to the contribution transfer of the actuarial accrued liability of the service annuity pursuant to subsection (1) of this section, the state shall also contribute transfer to the funds of the Class V school district for transfer to the district's retirement system an amount determined by multiplying the compensation of all members of such retirement system by the percent specified in subsection (2) of section 79-966 for determining the amount of the state's payment to the School Retirement Fund plus the amount determined under subdivision (1)(b) of section 79-966.

The transfer shall be made annually on or before July 1 of each fiscal year.

(b) For each fiscal year beginning July 1, 2025, in addition to the contribution transfer pursuant to subsection (1) of this section, the state shall also contribute transfer to the funds of the Class V school district for transfer to the district's retirement system an amount equal to two percent of the compensation of all members of such retirement system plus the amount determined under subdivision (1)(b) of section 79-966.

The contribution transfer shall be made annually on or before July 1 of each fiscal year.

(c) It is the intent of the Legislature that the state contribution transfer of two percent of the compensation of all members of the district's retirement system does not mean that the state assumes any additional financial responsibility or liability for funding obligations of the retirement system that remain the responsibility of the district as described in the Class V School Employees Retirement Act.

Sec.

21.

Section 79-930, Reissue Revised Statutes of Nebraska, is amended to read:

79-930 (1)(a) A member who experiences a separation from service with the member's employer but has not submitted a retirement application or a request for distribution pursuant to section 79-955, or received a retirement benefit, disability retirement benefit, or distribution pursuant to section 79-955, from the retirement system, may return to work as a temporary employee, substitute employee, or volunteer for any employer participating in the retirement system.

Such an employee:

(i) Shall be deemed to have incurred a termination for purposes of sections 79-921, 79-932, 79-933.02 to 79-933.06, and 79-933.08;

(ii) Shall not be deemed to have incurred a termination for purposes of sections 79-933, 79-951, and 79-955, and shall not be eligible to receive a retirement benefit, disability retirement benefit, or distribution pursuant to section 79-955, from the retirement system, until the member incurs a termination of employment as described in subdivision (45) of section 79-902;

and (iii) Except as provided in subdivision (1)(b) of this section, shall not be eligible to contribute to the retirement system pursuant to section 79-958 or accrue service credit in the retirement system pursuant to section 79-927.

-14- LB820 LB820 2026 (b)(i) A member as described in subdivision (1)(a) of this section who becomes a regular employee for an employer participating in the retirement system shall immediately begin making contributions pursuant to section 79-958 on all compensation paid by such employer and accrue service credit pursuant to section 79-927 for all such service performed for such employer, including any work as a temporary employee or substitute employee.

(ii) A member as described in subdivision (1)(a) of this section who has not established eligibility as a regular employee at another employer shall not make contributions pursuant to section 79-958 on all compensation paid by such employer nor accrue service credit pursuant to section 79-927 for work performed by the member as a temporary employee or substitute employee for such employer.

(c) Work performed while the member is not contributing to the retirement system pursuant to subdivision (1)(a) of this section shall not accrue service credit in the retirement system pursuant to section 79-927 and cannot be purchased as service credit under sections 79-933.03 to 79-933.06 and 79-933.08.

(2)(a) A member who experiences a separation from service with the member's employer and has submitted a retirement application or a request for distribution pursuant to section 79-955, or received a retirement benefit, disability retirement benefit, or distribution pursuant to section 79-955, from the retirement system, shall not be deemed to have incurred a termination of employment if the member subsequently returns to work for any employer participating in the retirement system within one hundred eighty days after separating from service, unless such work is limited to:

(i) Intermittent work as a volunteer or substitute employee.

For purposes of this subsection:

(A) Intermittent work means work provided on a day-to-day basis that is not greater than eight days of work during a calendar month;

and (B) Day of work means any length of work as a volunteer or substitute employee provided during a single calendar day;

or (ii) Work as authorized by, and performed in accordance with, section 79-920.

(b) The one-hundred-eighty-day period begins on the later of:

(i) The date the member experienced a bona fide separation from service of all employment with all employers participating in the retirement system;

or (ii) The date the Nebraska Public Employees Retirement Systems receives the member's retirement application or request for distribution pursuant to section 79-955.

(c)(i) A member may seek a determination from the executive director of the Nebraska Public Employees Retirement Systems that it has been at least one hundred eighty days since the member satisfied the requirements described in this subsection.

The executive director shall make such determination if the member produces clear and convincing evidence that is received by the executive director within forty-five days after the later of:

(A) The date the member experienced a bona fide separation of service of all employment with all employers participating in the retirement system;

or (B) The date the member's retirement application or request for distribution pursuant to section 79-955 is received by the Nebraska Public Employees Retirement Systems.

(ii) A member may appeal the executive director's determination to the board within thirty days after receiving such determination.

(iii) The board's determination on the appeal shall be final and shall not be appealable to any court.

Sec.

22.

Section 79-958, Revised Statutes Supplement, 2025, is amended to read:

79-958 (1)(a) Beginning on September 1, 2012, and prior to July 1, 2025, for the purpose of providing the funds to pay for formula annuities, every employee shall be required to deposit in the School Retirement Fund nine and seventy-eight hundredths of one percent of compensation.

(b) Beginning in 2025 and each year thereafter, the employee contribution rate shall be calculated as of July 1 and based on the funded ratio of the actuarial value of assets in the School Retirement Fund in the most recent previous year as reported in the annual actuarial valuation report for the retirement system prepared for the retirement board pursuant to section 84-1503.

(c)(i) The employee contribution rate that is calculated as of July 1, 2025, shall apply beginning July 1, 2025, and prior to July 1, 2026.

(ii) The employee contribution rate that is calculated as of July 1, 2026, shall apply beginning July 1, 2026, and prior to September 1, 2027.

(iii) Beginning in 2027 and each year thereafter, the employee contribution rate that is calculated as of July 1 of such year shall apply beginning September 1 of such year and prior to September 1 of the next year after such year.

(d) Beginning on July 1, 2025, for the purpose of providing the funds to pay for formula annuities, every employee shall deposit the following amounts into the School Retirement Fund:

(i) If the funded ratio on the actuarial value of assets in the School Retirement Fund is less than ninety-six percent, nine and three-quarters of one percent of compensation;

(ii) If the funded ratio on the actuarial value of assets in the School Retirement Fund is ninety-six percent or greater and less than ninety-eight percent, eight and three-quarters of one percent of compensation;

-15- LB820 LB820 2026 (iii) If the funded ratio on the actuarial value of assets in the School Retirement Fund is ninety-eight percent or greater and less than one hundred percent, eight percent of compensation;

and (iv) If the funded ratio on the actuarial value of assets in the School Retirement Fund is one hundred percent or greater, seven and one-quarter of one percent of compensation.

(e) (c) Deposits under this subsection shall be transmitted at the same time and in the same manner as required employer contributions.

(2) For the purpose of providing the funds to pay for formula annuities, every employer shall be required to deposit in the School Retirement Fund one hundred one percent of the required contributions of the school employees of each employer.

Such deposits shall be transmitted to the retirement board at the same time and in the same manner as such required employee contributions.

(3) The employer shall pick up the member contributions required by this section for all compensation paid on or after January 1, 1986, and the contributions so picked up shall be treated as employer contributions pursuant to section 414(h)(2) of the Internal Revenue Code in determining federal tax treatment under the code and shall not be included as gross income of the member until such time as they are distributed or made available.

The contributions, although designated as member contributions, shall be paid by the employer in lieu of member contributions.

The employer shall pay these member contributions from the same source of funds which is used in paying earnings to the member.

The employer shall pick up these contributions by a compensation deduction through a reduction in the cash compensation of the member.

Member contributions picked up shall be treated for all purposes of the School Employees Retirement Act in the same manner and to the same extent as member contributions made prior to the date picked up.

(4) The employer shall pick up the member contributions made through irrevocable payroll deduction authorizations pursuant to sections 79-921 and 79-933.03 to 79-933.06, and the contributions so picked up shall be treated as employer contributions in the same manner as contributions picked up under subsection (3) of this section.

Sec.

23.

Section 79-963, Reissue Revised Statutes of Nebraska, is amended to read:

79-963 Every employer and school employee shall send to the executive director of the Nebraska Public Employees Retirement Systems, as specified in section 79-906, upon request and in the manner required by the executive director, such information as he or she may require (1) for the identification of school employees and (2) for the determination of the membership of the retirement system and the obligations of the employer and school employee to the retirement system.

Sec.

24.

Section 79-966, Revised Statutes Supplement, 2025, is amended to read:

79-966 (1)(a) On the basis of all data in the possession of the retirement board, including such mortality and other tables as are recommended by the actuary engaged by the retirement board and adopted by the retirement board, the retirement board shall annually, on or before July 1, determine the state deposit to be made by the state in the School Retirement Fund for that fiscal year.

The amount of such state deposit shall be determined pursuant to section 79-966.01.

The retirement board shall thereupon certify the amount of such state deposit, and on the warrant of the Director of Administrative Services, the State Treasurer shall, as of July 1 of such year, transfer from funds appropriated by the state for that purpose to the School Retirement Fund the amount of such state deposit.

(b) Beginning July 1, 2016, the contingent state contribution transfer described in this subsection shall be calculated as a percent of compensation of all members of the retirement system.

For any year in which a contribution deposit is made to the School Retirement Fund under this subsection, if the actuary for a retirement system provided for under the Class V School Employees Retirement Act determines that the actuarially required contribution rate, for the fiscal year of the retirement system that begins before the state deposit, exceeds the rate of all contributions required pursuant to the Class V School Employees Retirement Act, using the amortization period specified in section 79-966.01, the Class V district school board may request a public hearing of the Appropriations Committee of the Legislature to ask the state to contribute transfer to the Class V school district for contribution transfer to the funds of the retirement system provided for under the Class V School Employees Retirement Act an amount determined by multiplying the compensation of all members of such retirement system by the lesser of the percent of compensation transferred into the School Retirement Fund under this subsection or the percent of compensation of the members of the retirement system provided for under the Class V School Employees Retirement Act needed to meet the actuarially required contribution rate for such system, using the amortization period specified in section 79-966.01.

Any additional amount of contribution transfer so calculated, recommended by the Appropriations Committee of the Legislature, and approved by the Legislature, shall be added to the percent specified in subsection (2) of this section for the amount required by subsection (2) of section 79-916 to be contributed transferred to the Class V school district, which shall contribute transfer such amount to the funds of the retirement system provided for under the Class V School Employees Retirement Act.

(2)(a) For each fiscal year beginning July 1, 2014, and prior to July 1, 2025, in addition to the state contributions transfers required by subsections -16- LB820 LB820 2026 (1) and (3) of this section, the state shall contribute transfer into the School Retirement Fund an amount equal to two percent of the compensation of all members of the retirement system.

(b) Beginning in 2025 and each year thereafter, the state contribution rate under this subsection shall be calculated as of July 1 and based on the funded ratio of the actuarial value of assets in the School Retirement Fund in the most recent previous year as reported in the annual actuarial valuation report for the retirement system produced for the retirement board pursuant to section 84-1503.

In addition to the state contributions transfers required by subsections (1) and (3) of this section, the state shall contribute deposit the following amounts into the School Retirement Fund:

(i) If the funded ratio on the actuarial value of assets in the School Retirement Fund is less than ninety-six percent, an amount equal to two percent of the compensation of all members of the retirement system;

(ii) If the funded ratio on the actuarial value of assets in the School Retirement Fund is ninety-six percent or greater and less than one hundred percent, an amount equal to seven-tenths of one percent of the compensation of all members of the retirement system;

and (iii) If the funded ratio on the actuarial value of assets in the School Retirement Fund is one hundred percent or greater, no contribution transfer shall be made under this subsection.

(3) In addition to the state deposits and contributions transfers required by subsections (1) and (2) of this section, beginning on July 1, 2005, and each fiscal year thereafter for employees who become members prior to July 1, 2016, the state shall contribute transfer into the Service Annuity Fund such amounts as may be necessary to pay the normal cost and amortize the unfunded actuarial accrued liability of the service annuity benefit established pursuant to sections 79-933 and 79-952 as accrued through the end of the previous fiscal year of the school employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act.

Sec.

25.

Section 79-978, Revised Statutes Supplement, 2025, is amended to read:

79-978 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;

(3) Actuarial tables means:

(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 (b) For joint and survivorship annuities: