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LEGISLATIVE BILL 821
Approved by the Governor February 24, 2026
Introduced by Nebraska Retirement Systems Committee: Ballard, 21, Chairperson;
Clements, 2; Hardin, 48; Juarez, 5; Sorrentino, 39.
A BILL FOR AN ACT relating to retirement; to amend sections 84-1309.01 and
84-1503, Reissue Revised Statutes of Nebraska, and section 72-1243,
Revised Statutes Cumulative Supplement, 2024; to eliminate provisions
relating to certain verifications performed by the Public Employees
Retirement Board and certain written plans of action; to provide for an
annual report prepared by the Nebraska Investment Council; to provide for
an annual report prepared by the Public Employees Retirement Board; and to
repeal the original sections.
Be it enacted by the people of the State of Nebraska,
Section 1. Section 72-1243, Revised Statutes Cumulative Supplement, 2024,
is amended to read:
72-1243 (1) Except as otherwise specifically provided by law, the state
investment officer shall direct the investment and reinvestment of money in all
state funds not currently needed and all funds described in section 83-133 and
order the purchase, sale, or exchange of securities for such funds. He or she
shall notify the State Treasurer of any payment, receipt, or delivery that may
be required as a result of any investment decision, which notification shall be
the authorization and direction for the State Treasurer to make such
disbursement, receipt, or delivery from the appropriate fund.
(2)(a) No later than March 31 of each year, the Nebraska Investment
Council (2) The council shall:
(i) Have have an analysis made of the investment returns that have been
achieved on the assets of each retirement system administered by the Public
Employees Retirement Board as provided in section 84-1503 and on the assets of
each retirement system provided for under the Class V School Employees
Retirement Act; and .
(ii) Present such By March 31 of each year, the analysis shall be
presented to the board and the Nebraska Retirement Systems Committee of the
Legislature.
(b) Such The analysis shall be prepared by an independent organization:
(i) That which has demonstrated expertise to perform the this type of
analysis required by this subsection; and
(ii) For for which there exists no conflict of interest in the analysis
being provided.
(c) The analysis may be waived by the council for any retirement system
with assets of less than one million dollars.
(3) No later than By April 10 of each year, the council shall:
(a) Prepare an annual report that includes prepare a written plan of
action and shall present such plan to the Nebraska Retirement Systems Committee
of the Legislature at a public hearing. The plan shall include, but is not be
limited to, the council's investment portfolios, investment strategies, the
duties and limitations of the state investment officer, and an organizational
structure of the council's office, and the analysis made pursuant to subsection
(2) of this section; and .
(b) Present such annual report to the Nebraska Retirement Systems
Committee of the Legislature at a public hearing.
Sec. 2. Section 84-1309.01, Reissue Revised Statutes of Nebraska, is
amended to read:
84-1309.01 The board shall provide benefit liability information and other
assistance to the Nebraska Investment Council for the establishment of policy
portfolio objectives for the investing and reinvesting of the assets of the
retirement system. The board shall verify that the investments of the assets of
the retirement system by the council and the state investment officer are
invested and reinvested for the exclusive purposes of providing benefits to
members and members' beneficiaries and that the assets of the retirement system
are not invested with the sole or primary investment objective of economic
development or social purposes or objectives. Such verification shall be
included in the written plan of action pursuant to subsection (3) of section
84-1503.
Sec. 3. Section 84-1503, Reissue Revised Statutes of Nebraska, is amended
to read:
84-1503 (1) It shall be the duty of the Public Employees Retirement Board:
(a) To administer the retirement systems provided for in the County
Employees Retirement Act, the Judges Retirement Act, the Nebraska State Patrol
Retirement Act, the School Employees Retirement Act, the State Employees
Retirement Act, and, beginning September 1, 2024, the Class V School Employees
Retirement Act. The agency for the administration of the retirement systems and
under the direction of the board shall be known and may be cited as the
Nebraska Public Employees Retirement Systems;
(b) To appoint a director to administer the systems under the direction of
the board. The appointment shall be subject to the approval of the Governor and
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a majority of the Legislature. Director qualifications shall include, but not
be limited to, (i) supervisory or management experience and (ii) training in,
experience with, or a demonstrated knowledge of qualified public employee
retirement plan administration. The director shall not be a member of the
board. The salary of the director shall be set by the board. The director shall
serve without term and may be removed by the board;
(c) To provide for an equitable allocation of expenses among the
retirement systems administered by the board, and all expenses shall be
provided from the investment income earned by the various retirement funds
unless alternative sources of funds to pay expenses are specified by law;
(d) To administer the deferred compensation program authorized in section
84-1504;
(e) To hire an attorney to advise the board in the administration of the
retirement systems listed in subdivision (a) of this subsection. The attorney
shall be admitted to practice law in Nebraska, except that the board shall have
the discretion to hire an attorney for a probationary period not to exceed six
months pending such attorney's admission to practice law in Nebraska;
(f) To hire an internal auditor to perform the duties described in section
84-1503.04 who meets the minimum standards as described in section 84-304.03;
and
(g) To adopt and implement procedures for reporting information by
employers, as well as testing and monitoring procedures in order to verify the
accuracy of such information. The information necessary to determine membership
shall be provided by the employer. The board may adopt and promulgate rules and
regulations and prescribe such forms necessary to carry out this subdivision.
Nothing in this subdivision shall be construed to require the board to conduct
onsite audits of political subdivisions for compliance with statutes, rules,
and regulations governing the retirement systems listed in subdivision (1)(a)
of this section regarding membership and contributions.
(2) In administering the retirement systems listed in subdivision (1)(a)
of this section, it shall be the duty of the board:
(a) To determine, based on information provided by the employer, the prior
service annuity, if any, for each person who is an employee of the county on
the date of adoption of the retirement system;
(b) To determine the eligibility of an individual to be a member of the
retirement system and other questions of fact in the event of a dispute between
an individual and the individual's employer;
(c) To adopt and promulgate rules and regulations, as the board may deem
necessary, for the management of the board;
(d) To keep a complete record of all proceedings taken at any meeting of
the board;
(e) To obtain, by a competitive, formal, and sealed bidding process
through the materiel division of the Department of Administrative Services,
actuarial services on behalf of the State of Nebraska as may be necessary in
the administration and development of the retirement systems, including, but
not limited to, preparation of an annual actuarial valuation report of each of
the defined benefit and cash balance plans administered by the board. Such
annual valuation reports shall be presented by the actuary to the Nebraska
Retirement Systems Committee of the Legislature at a public hearing or
hearings. Any contract for actuarial services shall contain a provision
allowing the actuary, without prior approval of the board, to perform actuarial
studies of the systems as requested by entities other than the board, if
notice, which does not identify the entity or substance of the request, is
given to the board, all costs are paid by the requesting entity, results are
provided to the board, the Nebraska Retirement Systems Committee of the
Legislature, and the Legislative Fiscal Analyst upon being made public, and
such actuarial studies do not interfere with the actuary's ongoing
responsibility to the board. The term of the contract shall be for up to three
years. A competitive, formal, and sealed bidding process shall be completed at
least once every three years, unless the board determines that such a process
would not be cost effective under the circumstances and that the actuarial
services performed have been satisfactory, in which case the contract may also
contain an option for renewal without a competitive, formal, and sealed bidding
process for up to two additional three-year periods. An actuary under contract
for the State of Nebraska shall be a member of the American Academy of
Actuaries and meet the academy's qualification standards to render a statement
of actuarial opinion;
(f) To direct the State Treasurer to transfer funds, as an expense of the
retirement systems, to the Legislative Council Retirement Study Fund. Such
transfer shall be in such amounts as the Legislature shall direct;
(g) To adopt and promulgate rules and regulations, as the board may deem
necessary, to carry out the provisions of each retirement system described in
subdivision (1)(a) of this section, which includes, but is not limited to, the
crediting of military service, direct rollover distributions, and the
acceptance of rollovers;
(h) To obtain auditing services for a separate compliance audit of the
retirement systems to be completed by December 31, 2028, and from time to time
at the request of the Nebraska Retirement Systems Committee of the Legislature,
to be completed not more than every four years but not less than every ten
years. The compliance audit shall be in addition to the annual audit conducted
by the Auditor of Public Accounts. The compliance audit shall include, but not
be limited to, an examination of records, files, and other documents and an
evaluation of all policies and procedures to determine compliance with all
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state and federal laws. A copy of the compliance audit shall be given to the
Governor, the board, and the Nebraska Retirement Systems Committee of the
Legislature and shall be presented to the committee at a public hearing;
(i) To adopt and promulgate rules and regulations, as the board may deem
necessary, for the adjustment of contributions or benefits, which includes, but
is not limited to: (i) The procedures for refunding contributions, adjusting
future contributions or benefit payments, and requiring additional
contributions or repayment of benefits; (ii) the process for a member, member's
beneficiary, employee, or employer to dispute an adjustment to contributions or
benefits; (iii) establishing materiality and de minimus amounts for agency
transactions, adjustments, and inactive account closures; and (iv) notice
provided to all affected persons. Following an adjustment, a timely notice
shall be sent that describes the adjustment and the process for disputing an
adjustment to contributions or benefits;
(j)(i) To amend the deferred compensation plan to require that in the
event of a member's death, except as provided in section 42-1107, the death
benefit shall be paid to the following, in order of priority:
(A) To the member's surviving designated beneficiary on file with the
board;
(B) To the spouse married to the member on the member's date of death if
there is no surviving designated beneficiary on file with the board; or
(C) To the member's estate if the member is not married on the member's
date of death and there is no surviving designated beneficiary on file with the
board; and
(ii) The priority designations described in subdivision (2)(j)(i) of this
section shall not apply if the member has retired under a joint and survivor
benefit option;
(k) To make a thorough investigation through the director or the
director's designee, of any overpayment of a benefit, when in the judgment of
the director 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 director or the 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; and
(l) To administer all retirement system plans in a manner that which will
maintain each plan's status as a qualified plan pursuant to the Internal
Revenue Code, as defined in section 49-801.01, including: Section 401(a)(9) of
the Internal Revenue Code relating to the time and manner in which benefits are
required to be distributed, including the incidental death benefit distribution
requirement of section 401(a)(9)(G) of the Internal Revenue Code; section
401(a)(25) of the Internal Revenue Code relating to the specification of
actuarial assumptions; section 401(a)(31) of the Internal Revenue Code relating
to direct rollover distributions from eligible retirement plans; section 401(a)
(37) of the Internal Revenue Code relating to the death benefit of a member
whose death occurs while performing qualified military service; and section
401(a) of the Internal Revenue Code by meeting the requirements of section
414(d) of the Internal Revenue Code relating to the establishment of retirement
plans for governmental employees of a state or political subdivision thereof.
The board may adopt and promulgate rules and regulations necessary or
appropriate to maintain such status including, but not limited to, rules or
regulations that which restrict discretionary or optional contributions to a
plan or that which limit distributions from a plan.
(3) No later than By April 10 of each year, the board shall:
(a) Prepare an annual report that includes prepare a written plan of
action and shall present such plan to the Nebraska Retirement Systems Committee
of the Legislature at a public hearing. The plan shall include, but is not be
limited to, the board's funding policy, the administrative costs and other fees
associated with each fund and plan overseen by the board, member education and
informational programs, the director's duties and limitations, an
organizational structure of the office of the Nebraska Public Employees
Retirement Systems, and the internal control structure of such office to ensure
compliance with state and federal laws; and .
(b) Present such annual report to the Nebraska Retirement Systems
Committee of the Legislature at a public hearing.
(4)(a) Beginning in 2016, and at least every four years thereafter in
even-numbered years or at the request of the Nebraska Retirement Systems
Committee of the Legislature, the board shall obtain an experience study.
Within thirty business days after presentation of the experience study to the
board, the actuary shall present the study to the Nebraska Retirement Systems
Committee at a public hearing. If the board does not adopt all of the
recommendations in the experience study, the board shall provide a written
explanation of its decision to the Nebraska Retirement Systems Committee and
the Governor. The explanation shall be delivered within ten business days after
formal action by the board to not adopt one or more of the recommendations.
(b) The director shall provide an electronic copy of the first draft and a
final draft of the experience study and annual valuation reports to the
Nebraska Retirement Systems Committee and the Governor when the director
receives the drafts from the actuary. The drafts shall be deemed confidential
information. The draft copies obtained by the Nebraska Retirement Systems
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Committee and the Governor pursuant to this section shall not be considered
public records subject to sections 84-712 to 84-712.09.
(c) For purposes of this subsection, business days shall be computed by
excluding the day the request is received, after which the designated period of
time begins to run. A business day shall not include a Saturday or a Sunday or
a day during which the Nebraska Public Employees Retirement Systems office is
closed.
(5) It shall be the duty of the board to direct the State Treasurer to
transfer funds, as an expense of the retirement system provided for under the
Class V School Employees Retirement Act, to and from the Class V Retirement
System Payment Processing Fund and the Class V School Employees Retirement Fund
for the benefit of a retirement system provided for under the Class V School
Employees Retirement Act to implement section 79-986. The agency for the
administration of this provision and under the direction of the board shall be
known and may be cited as the Nebraska Public Employees Retirement Systems.
(6) Pursuant to section 79-9,121, it shall be the duty of the board to
carry out the work plan, file the report, and contract with, bill, and receive
payment from an employer of any Class V school employees retirement system
established under the Class V School Employees Retirement Act for all services
performed in the conduct, completion, and report of such work plan regarding
the transfer of management of any such Class V school employees retirement
system.
(7) It shall be the duty of the board to complete the additional
identification and examination of issues pursuant to section 79-9,124, to enter
and carry out the plan for the transfer and transition of the management and
administration of any Class V school employees retirement system established
under the Class V School Employees Retirement Act pursuant to section
79-979.01, and to bill and receive payment from an employer of any such
retirement system for the costs and expenses of the board in carrying out the
plan and the transfer of the management and administration of the Class V
school employees retirement system to the board.
Sec. 4. Original sections 84-1309.01 and 84-1503, Reissue Revised
Statutes of Nebraska, and section 72-1243, Revised Statutes Cumulative
Supplement, 2024, are repealed.
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