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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1103
Introduced by Bostar, 29.
Read first time January 16, 2026
Committee: Nebraska Retirement Systems
A BILL FOR AN ACT relating to the Nebraska State Patrol Retirement Act;1
to amend sections 81-2025 and 81-2041, Reissue Revised Statutes of2
Nebraska; to raise the mandatory retirement age as prescribed; to3
change provisions relating to deferred retirement option plans; and4
to repeal the original sections. 5
Be it enacted by the people of the State of Nebraska,6
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Section 1. Section 81-2025, Reissue Revised Statutes of Nebraska, is1
amended to read: 2
81-2025 (1) Every officer who has been in the employ of the state as3
such and who becomes disabled and physically unfit to perform the duties4
of an officer shall be entitled to retire and receive an annuity as5
provided by law. 6
(2) Every officer who has been in the employ of the state as such7
for ten years or more, as calculated in section 81-2033, and has attained8
the age of fifty years or more shall be entitled to retire and receive an9
annuity as provided by law. The right to retire at the age of fifty years10
shall be at the option of the officer but such retirement shall be11
mandatory upon the officer attaining the age of sixty-five sixty years.12
(3) Any officer who has attained the age of sixty-five sixty years13
upon his or her separation from state service but who has not been in the14
employ of the state for ten years as such shall be entitled to the15
annuity as provided for in the Nebraska State Patrol Retirement Act.16
(4) Every officer who has been in the employ of the state as such17
for twenty-five years or more, as calculated in section 81-2033, and has18
attained the age of fifty years shall be entitled to retire and receive19
an annuity as provided by law. The right to retire at the age of fifty20
years with twenty-five years or more of creditable service shall be at21
the option of the officer but such retirement shall be mandatory upon the22
officer attaining the age of sixty-five sixty years.23
(5) Every officer who has been in the employ of the state as such24
for thirty years or more, as calculated in section 81-2033, shall be25
entitled to retire and receive an annuity as provided by law. The right26
to retire with thirty years or more of creditable service shall be at the27
option of the officer but such retirement shall be mandatory upon the28
officer attaining the age of sixty-five sixty years.29
(6) Payment of any benefit provided under the act shall not be30
deferred later than the required beginning date. 31
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(7) The effective date of retirement payments shall be the first day1
of the month following (a) the date a member qualifies for retirement as2
provided in this section or (b) the date upon which a member's request3
for retirement is received on an application form provided by the system,4
whichever is later. An application may be filed no more than one hundred5
twenty days in advance of qualifying for retirement.6
(8) The board shall make reasonable efforts to locate the officer or7
the officer's beneficiary and distribute benefits by the required8
beginning date. If the board is unable to make such a distribution, the9
account shall be distributed pursuant to the Uniform Disposition of10
Unclaimed Property Act and no amounts may be applied to increase the11
benefits any officer would otherwise receive under the Nebraska State12
Patrol Retirement Act. 13
Sec. 2. Section 81-2041, Reissue Revised Statutes of Nebraska, is14
amended to read: 15
81-2041 (1) Any officer who became a member prior to July 1, 2016,16
and who meets the participation requirements of subsection (2) of this17
section may participate in DROP. DROP provides that subsequent to18
attaining normal age and service retirement eligibility, a member may19
voluntarily choose to participate in DROP upon its adoption which, for20
purposes of this section, shall be the earlier of September 1, 2008, or21
the first of the month following a favorable letter determination by the22
Internal Revenue Service. If the member chooses to participate in DROP,23
the member shall be deemed to have retired but shall not be deemed to be24
terminated, and the member may continue in active employment for up to a25
five-year period. During the DROP period, the member's retirement benefit26
payments shall be deposited into the DROP account for the benefit of the27
member until the member actually retires from active employment at or28
before the expiration of the DROP period. Thereafter, future retirement29
benefit payments shall be made directly to the member, and the member30
shall have access to all funds in the DROP account designated for the31
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benefit of the member. DROP funds shall be held and invested in a defined1
contribution account under section 414(k) of the Internal Revenue Code2
and shall meet the limitations in section 415 of the code.3
(2) To participate in the DROP program, a member shall meet the4
following requirements: 5
(a) A member shall be eligible to enter DROP at any time subsequent6
to the date when the member has (i) attained normal retirement age and7
(ii) completed twenty-five years of service. Members having attained8
normal retirement age and completed twenty-five years of service on or9
before the date of adoption of DROP shall be eligible to enter DROP at10
any future date; 11
(b) A member who elects to enter DROP shall be entitled to receive12
regular age and service retirement benefits in accordance with section13
81-2026. A member is entitled to remain in DROP for a maximum of five14
years subsequent to the date of the member's DROP election. A member may15
separate from service and thereby exit DROP at any time during the DROP16
period. On or before the completion of the DROP period, the member must17
separate from active employment and exit DROP. During the DROP period, a18
member's retirement benefit shall be payable to the DROP account vendor19
designated in the member's name. Amounts transferred or paid to a20
participating member's DROP account shall not constitute annual additions21
under section 415 of the Internal Revenue Code; 22
(c) A member electing to enter DROP shall choose an annuity payment23
option. After the option is chosen, the member shall not be entitled to24
any retirement benefit changes, for reasons including, but not limited25
to, wage increases, promotions, and demotions, except that the26
restriction on retirement benefit changes shall not apply in the event of27
duty-related death or duty-related disability. The benefit amount shall28
be fixed as of the date of election and shall be payable as if the29
employee retired on that date and separated from active employment. Upon30
the death of a member during the DROP period, monthly benefits shall be31
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provided as a percentage of the amount of the member's annuity as set1
forth in subsection (3) of section 81-2026 based upon the annuity benefit2
calculation made at commencement of the DROP period. In addition, the3
balance of the DROP account, if any, shall be provided to the beneficiary4
or beneficiaries of the member in accordance with subsection (6) of5
section 81-2026 or, if no beneficiary is provided, to the estate of the6
member. Upon the disability of a member during the DROP period, the7
member shall be deemed to have completed the DROP period, shall begin8
receiving the annuity benefit as calculated at the commencement of the9
DROP period, and shall be paid the balance of the DROP account, if any;10
(d) No member shall be allowed to continue making the required11
contributions while the member is enrolled in DROP;12
(e) During the DROP period, the Nebraska State Patrol shall not be13
assessed the amount required under subsection (2) of section 81-2017 nor14
shall such amount be credited to the State Patrol Retirement Fund;15
(f) The member shall be paid the balance of the DROP account upon16
the member's separation from active employment or at the expiration of17
the DROP period thereby ending the member's participation in DROP. If a18
member has not voluntarily separated from active employment on or before19
the completion of the DROP period, the member's retirement benefit shall20
be paid directly to the member thereby ending the member's active21
employment. The member's DROP account shall consist of accrued retirement22
benefits and interest on such benefits; 23
(g) Any member that is enrolled in DROP shall be responsible for24
directing the DROP account designated for the benefit of the member by25
investing the account in any DROP investment options. There shall be no26
guaranteed rate of investment return on DROP account assets. Any losses,27
charges, or expenses incurred by the participating DROP member in such28
member's DROP account by virtue of the investment options selected by the29
participating DROP member shall not be made up by the retirement system30
but all of the same shall be borne by the participating DROP member. The31
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retirement system, the state, the board, and the state investment officer1
shall not be responsible for any investment results under the DROP2
agreement. Transfers between investment options shall be in accordance3
with the rules and regulations of DROP. A DROP account shall be4
established for each participating DROP member. Such DROP account shall5
be adjusted no less frequently than annually for the member's retirement6
benefit distributions and net investment earnings and losses;7
(h) If the DROP account is subject to administrative or other fees8
or charges, such fees or charges shall be charged to the participating9
DROP member's DROP account; and 10
(i) Cost-of-living adjustments or payments as provided for in11
section 81-2027.08 or 81-2027.09 and 81-2027.10 shall not be applied to12
retirement benefits during the DROP period. ; and 13
(j) Any officer who became a member on or after July 1, 2016, is14
specifically prohibited from participating in DROP.15
Sec. 3. Original sections 81-2025 and 81-2041, Reissue Revised16
Statutes of Nebraska, are repealed. 17
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