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12-11-2012 City Council Study Session Packet City of Grand Island Tuesday, December 11, 2012 Study Session Packet City Council: Linna Dee Donaldson Scott Dugan John Gericke Peg Gilbert Chuck Haase Julie Hehnke Vaughn Minton Mitchell Nickerson Bob Niemann Mike Paulick Mayor: Jay Vavricek City Administrator: Mary Lou Brown City Clerk: RaNae Edwards 7:00 PM Council Chambers - City Hall 100 East 1st Street Grand Island Study Session - 12/11/2012 Page 1 / 68 City of Grand Island Tuesday, December 11, 2012 Call to Order This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open Meetings Act in conducting business. A copy of the Open Meetings Act is displayed in the back of this room as required by state law. The City Council may vote to go into Closed Session on any agenda item as allowed by state law. Invocation Pledge of Allegiance Roll Call A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS Individuals who have appropriate items for City Council consideration should complete the Request for Future Agenda Items form located at the Information Booth. If the issue can be handled administratively without Council action, notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given. B - RESERVE TIME TO SPEAK ON AGENDA ITEMS This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve time to speak. Please come forward, state your name and address, and the Agenda topic on which you will be speaking. Grand Island Study Session - 12/11/2012 Page 2 / 68 City of Grand Island Tuesday, December 11, 2012 Study Session Item -1 Update on Metropolitan Planning Organization (MPO) Staff Contact: Chad Nabity Grand Island Study Session - 12/11/2012 Page 3 / 68 Council Agenda Memo From:Chad Nabity, AICP Meeting:December 11, 2012 Subject:Metropolitan Planning Organization Item #’s:1 Presenter(s):Chad Nabity, AICP and Terry Brown P.E Background In March of 2012 the U.S. Census Department published the new list of urbanized areas for the United States, based on the decennial Census of Population and Housing from 2010. Near the bottom of that list with a population of 50,440 was Grand Island, Nebraska. The Census Department made the determination that Grand Island along with the surrounding urbanized area including the east lakes, the subdivisions across Gunbarrel Road into Merrick County and the Village of Alda have a population of more than 50,000 people. As a result of that determination many things will be changing for the City of Grand Island. One of the most immediate of those changes is the requirement to form a Metropolitan Planning Organization (MPO) to coordinate transportation planning in the Grand Island Urbanized area and its 20 year growth boundary. The Grand Island MPO must be formed and approved by the Governor of Nebraska no later than March 26, 2013. Discussion City staff, including representatives from the City Public Works Department, Regional Planning Department and City Finance Department has been meeting with representatives from the Federal Highways and Federal Transit along with representatives from the Nebraska Department of Roads since July of this year regarding the formation of an MPO for the area. The following people representing the Federal Highway Administration, Federal Transit Administration and Nebraska Department of Roads will be in attendance and presenting information regarding the formation of the MPO to serve Grand Island and the surrounding area. Grand Island Study Session - 12/11/2012 Page 4 / 68 Joseph Werning Division Administrator - Nebraska Federal Highway Administration Justin Luther Transportation Planner Federal Highways Administration Joni Roeseler, Planning/Program Development Team Leader Federal Transit Administration Randy Peters, Director Nebraska Department of Roads Brad Zumwalt, Highway Planning Manager Nebraska Department of Roads The presentation this evening is designed to further answer questions by Council and the public regarding the formation of the MPO and to provide guidance regarding what needs to be completed and in what timeframe regarding the formation of the MPO. Conclusion This item is presented to the City Council in a Study Session to allow for any questions to be answered and to create a greater understanding of the issue at hand. It is the intent of City Administration to bring this issue to a future council meeting for approval of the planning contract with the Nebraska Department of Roads and eventually for approval of the MPO structure and designation. Grand Island Study Session - 12/11/2012 Page 5 / 68 MPO Timeline 2012 July 12 first MPO Organizational Meeting August 15 MPO Organizational Meeting September 12 MPO Organizational Meeting September 25 Transit Meeting September 26 2012 Council Approves Request to Designate Grand Island as recipient of 5307 Transit Dollars October 11 MPO Organizational Meeting October 16-18 FWHA MPO Training at Mahoney State Park November 6 City Council Study Session “What the Heck is an MPO?” November 8 MPO Organizational Meeting November 13 Information requested at Study Session is sent to Council Members November 29 MPO Organizational Meeting 10 to 12 in the Fishbowl December 11 Study Session with representative of FHWA, NDOR and FTA December 18 Contract for Planning Funds is approved by Council at Meeting December 20 MPO Organizational Meeting at 10 to 12 NDOR offices 2013 January 3 MPO Organizational Meeting at 10 to 12 NDOR offices January 8 Council Meeting January 10 MPO Organizational Meeting at 10 to 12 NDOR offices January 15 Study Session Review and Discuss Jurisdiction Map for MPO and make up of Technical Committee January 22 Council Meeting January 24 MPO Organizational Meeting at 10 to 12 NDOR offices February 5 Study Session Review and Discuss make up of MPO Policy Committee and submittals to Governor for designation Grand Island Study Session - 12/11/2012 Page 6 / 68 Federal Highways MPO Database You can use this to find the websites and info for all the MPO’s in the US. You can even sort them by population I used up to 140,000 and it returned 157 http://www.planning.dot.gov/mpo.asp Association of Metropolitan Planning Organizations http://www.ampo.org/ Staffing and Administrative Capacity of MPO’s from AMPO http://www.cutr.usf.edu/programs/pcm/files/2010-05- Staffing_and_Administrative_Capacity_of_MPOs.pdf AMPO MPO Profiles http://www.ampo.org/assets/1023_ampompoprofiles.pdf MPO Websites Lincoln http://www.lincoln.ne.gov/city/plan/mpo/ Omaha http://www.mapacog.org/ Sioux City IA http://www.simpco.org/transportation/index.html Manhattan KS http://www.ci.manhattan.ks.us/index.aspx?NID=2021 Ames IA http://www.cityofames.org/index.aspx?page=211 Lawrence KS http://www.lawrenceks.org/mpo/ Topeka KS http://www.topekampo.org/ Newspaper story on Cape Girardeau MPO Formation http://www.semissourian.com/story/1885742.html Grand Island Study Session - 12/11/2012 Page 7 / 68 MPO Metropolitan Planning Organization MPO Start-Up Committee has been meeting for a few months. Major Members include: ◦Chad Nabity – Regional Planning Director ◦Terry Brown – Interim Grand Island City Public Works Director ◦Steve Riehle – Hall County Engineer ◦Jerry Wray – NDOR Transit Liasion Manager ◦Brad Zumwalt – NDOR Hwy Planning Manager ◦Justin Luther – FHWA Transportation Planner ◦Mark Bechtel & Joni Roeseler with Federal Transit Administration ◦ Marco Floreani – GI Community Development Administrator ◦Tonja Carey – GI Community Development Specialist ◦Theresa Englehardt & Dustin Butler with Hall County Public Transportation ◦And others from City County NDOR Hall County Public Transportation Interests Grand Island Study Session - 12/11/2012 Page 8 / 68 MPO Metropolitan Planning Organization Brad Zumwalt Nebraska Department of Roads Highway Planning Manager Grand Island Study Session - 12/11/2012 Page 9 / 68 MPO Metropolitan Planning Organization An MPO is a “The forum for cooperative transportation decision making for the metropolitan planning area” Grand Island Study Session - 12/11/2012 Page 10 / 68 Five Core Functions of an MPO Establish a setting Evaluate Alternatives Maintain a Long Range Transportation Plan (LRTP) Develop a Transportation Improvement Program (TIP) Involve the public Grand Island Study Session - 12/11/2012 Page 11 / 68 Nebraska MPO Planning Boundaries Grand Island Study Session - 12/11/2012 Page 12 / 68 Grand Island Urbanized Area (UZA) Grand Island Study Session - 12/11/2012 Page 13 / 68 MPO Structure An MPO is required to have a decision-making “policy board” Beyond this, there is no required structure for an MPO, but most are made up of ØA Policy Board ØTechnical Advisory Committee ØMPO staff Grand Island Study Session - 12/11/2012 Page 14 / 68 FHWA Staffing Survey 133 Participated, 31 MPOs with 50-100k Pop Small MPOs (under 100k) averaged 9 policy board Members 81% of all MPOs have County Commissioners on Policy board, 65% include State DOTs, FHWA/FTA, usually non-voting members (e.g. Ames/Lincoln) Component MPO most common type of structure Small MPOs have an average of 2.9 employees (1 employee per 48,000 people) Staff Specialties/Percent of staff time spent on… Pay scales Appendix B New MPO FAQ (e.g. board composition) Grand Island Study Session - 12/11/2012 Page 15 / 68 Federal and State Planning Programs/Documents Unified Planning Work Program (UPWP) Long Range Transportation Plan (LRTP) Transportation Improvement Program (TIP) Public Participation Plan Title VI and Environmental Justice Federal Funding State Funding Grand Island Study Session - 12/11/2012 Page 16 / 68 Unified Planning Work Program (UPWP) Developed annually by MPO in cooperation with the State and Transit operators. The UPWP documents planning activities, discusses planning priorities facing the area, and describes all metropolitan transportation planning activities. Grand Island Study Session - 12/11/2012 Page 17 / 68 Long Range Transportation Plan (LRTP) •20+ year planning horizon Ø Predicts travel growth based on future land use Ø Plans for future transportation programs and projects based upon the forecasts •Completed/updated every 5 years •Fiscally constrained Ø Can only include projects where there is a reasonable chance of funding Ø Other needed projects can be listed in the plan as unfunded (“illustrative”) Grand Island Study Session - 12/11/2012 Page 18 / 68 Transportation Improvement Program (TIP) The TIP should include only projects which are consistent with the long-range transportation plan. The TIP must include all regionally significant transportation projects which involve FHWA or FTA funding or approval. The TIP must be developed with public involvement. The TIP must be approved by the MPO and the Governor. Grand Island Study Session - 12/11/2012 Page 19 / 68 Public Participation Plan Outlines MPO goals, activities and process pertaining to public outreach activities ØPublic comment periods ØOutreach efforts ØAdvertising methods and time periods for new documents or amendments Grand Island Study Session - 12/11/2012 Page 20 / 68 MPO Planning Funding FHWA Statewide Planning and Research (SPR) (Start-up) funding this year ($50,000 Federal) Estimated FY 2014 federal funding available for Grand Island MPO is: $84,000 for standard planning activities from FHWA PL; and an additional $19,200 in FTA Section 5303 planning funds These funds require a 20% match Grand Island Study Session - 12/11/2012 Page 21 / 68 MPO Planning Funding How Funds Are Spent Planning funds are spent on eligible planning activities as defined by 23CFR 420 and 450 Typical tasks are: Traffic volume counts, street system changes, transit system data, mapping, travel time studies, parking inventory, bicycle & pedestrian facilities inventory, travel model updates, and staff time to prepare the required documents mentioned earlier. Grand Island Study Session - 12/11/2012 Page 22 / 68 Grand Island First Year Tasks Designate a recipient for FTA Section 5307 Funds (approval of eligible public agency by the Governor) by October 2012. Agreement for SPR startup funds (Council and NDOR) Set up MPO Organizational Structure (establish MPO Housing/lead agency/support staff and form policy board). (Approved by Council) Determine Metropolitan Planning Area (Approved by Council) Draft articles of agreement between GI and State of NE (Approved by Council) Secure resolutions of adoption from local government (Approved by Council) Submit articles of agreement, map, and letter requesting designation to Governor’s office after February Council Meeting submit to Governor no later than March 4 Grand Island Study Session - 12/11/2012 Page 23 / 68 Grand Island First Year Tasks Begin UPWP Development in February 2013 (Staff with NDOR and FHWA) New MPO designated by the Governor by no later than March 26, 2013 Policy board establishes TAC. After Creation by Governor Draft bylaws (Done by MPO Policy Board) Submit UPWP to State (Done by MPO Policy Board) Write Job Descriptions, Advertise and Hire MPO Staff (City of GI with MPO Policy Board and impacted Department Director) Develop a plan Method and Methodology to Transition from Rural Transportation Services to Urban Transportation Services (TBD) Grand Island Study Session - 12/11/2012 Page 24 / 68 Public Transportation for the MPO Joni Roeseler Federal Transit Administration Planning/Program Development Team Leader Grand Island Study Session - 12/11/2012 Page 25 / 68 Public Transportation for the MPO Transit Decision Making Process Transit 5307 Circular - FTA MAP 21 Fact Sheet Grantee Qualification Grantee Handbook Grant Application Relationship btw MPO and Transit Funds 6 Month Apportionment Grand Island Study Session - 12/11/2012 Page 26 / 68 MPO Questions? Grand Island Study Session - 12/11/2012 Page 27 / 68 City of Grand Island Tuesday, December 11, 2012 Study Session Item -2 Pre-84 Public Safety Pension Plan Discussion Staff Contact: Jaye Monter Grand Island Study Session - 12/11/2012 Page 28 / 68 Council Agenda Memo From:Jaye Monter, Finance Director Meeting:December 11, 2012 Subject:Pre-84 Public Safety Pension Plan Discussion Item #’s:2 Presenter(s):Jaye Monter, Finance Director Background The Nebraska State Legislature changed the public safety defined benefit retirement plan to a defined contribution retirement plan effective January 1, 1984. With that change, state statutes outline for the City how to fund public safety pension benefits for employees who retire today that were employed with the City of Grand Island prior to January 1, 1984. Of our current 166 full-time employees in the police and fire departments, there remain eight (7 police, 1 fire) employees that were employed prior to January 1, 1984. Our study session topic will focus on the funding requirements of state statutes and funding options of those eight employees in addition to discussing a potential change to the most recent claim. Council members may find it helpful to bring their budget books to this study session. Discussion The City recently processed a pension retirement contribution payment to a retiring pre- 84 police officer that brought concern to City Staff, and consequently, additional questions regarding the City’s future financing needs for the remaining eight pre-84 employees. Council member Haase also raised questions on the calculation of the recently processed pension retirement payment. History shows a change occurred in January 2005 with regard to calculating pre-84 retiree lump sum payments for police officers. Before 2005, annuity quotes obtained on the open market for police retirees were based upon a straight life annuity. Since January 2005, annuities quoted on the open market for the police retirees were based upon the joint life of the retiree and spouse. Grand Island Study Session - 12/11/2012 Page 29 / 68 Attending the study session to help Council understand today’s funding needs; the timing of those needs and the funding requirements for the police and fire reserve funds is Gregg Rueschhoff, ASA Principal and Consulting Actuary with Milliman, Inc. Milliman performed the Actuarial Valuation of the City of Grand Island Police Officers and Firefighters Plans as of January 1, 2011. Terry Galloway, CPA, CGFM, CFA, CVA, PFS with Almquist Maltzahn Galloway & Luth, CPAs will also be attending the study session. Conclusion This item is presented to the City Council in a Study Session to allow for any questions to be answered and to create a greater understanding of the issue at hand. It is the intent of City Administration to bring this issue to the December 18, 2012 Council meeting based upon Council direction. Grand Island Study Session - 12/11/2012 Page 30 / 68 FINANCEPre-84 Public Safety Pension Plan DiscussionGrand IslandStudy Session - 12/11/2012Page 31 / 68 FINANCETerry GallowayCPA, CGFM, CFE, CVA, PFSAlmquist Maltzahn Galloway & Luth, CPAsGregg RueschhoffASA, Principal & Consulting ActuaryMilliman, Inc.Grand IslandStudy Session - 12/11/2012Page 32 / 68 FINANCECouncil Understanding of Prior Retiree PaymentsDiscussion of Straight Life and Joint Life Annuity calculations to determine lump sum payment optionBudget Timeline / Funding OptionsDetermine Financial Needs of Police Reserve FundDetermine Financial Needs of Fire Reserve FundGoals of Study SessionGrand IslandStudy Session - 12/11/2012Page 33 / 68 FINANCEAnnuityContract issued by a life insurance company in order to provide periodic retirement benefitsStraight / Single Life AnnuityAnnuity paid to an individual over their lifetimeJoint / J&S (Joint & Survivor) Life AnnuityAnnuity will transfer annuity income to a spouse in the event of the death of the annuity buyerTerms DefinedGrand IslandStudy Session - 12/11/2012Page 34 / 68 FINANCEWhat brought us to tonight’s study session?History of Processing pre-84 Retirement ClaimsPrior Retiree PaymentsGrand IslandStudy Session - 12/11/2012Page 35 / 68 FINANCEPolice Lump Sum PaymentsNameRetirement Date Quote TypeAverage of Quotes ReceivedParticipant Account BalanceBalance Paidby CityRetiree 1 10/2003 Straight 514,980$ 315,058$ 199,922$ Retiree 2 11/2003 Straight 378,577 179,808 198,769 Retiree 3 12/2003 Straight 514,075 401,539 112,536 Retiree 4 01/2004 Straight 491,984 405,482 86,502 Retiree 5 10/2005 Joint 664,299 423,356 240,943 Retiree 6 02/2010 Joint 520,238 434,665 85,573 Retiree 7 06/2010 Joint 378,619 277,607 101,012 Retiree 8 08/2010 Joint 607,152 394,592 212,560 Retiree 9 08/2010 Joint 498,718 228,901 269,817 Retiree 10 11/2012 Joint 901,785 442,866 458,919 Grand IslandStudy Session - 12/11/2012Page 36 / 68 FINANCEFire Lump Sum PaymentsNameRetirement Date Quote TypeAverage of Quotes ReceivedParticipant Account BalanceBalance Paidby CityRetiree 1 *05/2004 Straight 295,737$ 297,752$ -$ Retiree 2 10/2004 Joint 449,626 402,221 47,405 Retiree 3 11/2004 Joint 441,007 441,702 - Retiree 4 10/2006 Joint 509,148 524,166 - Retiree 5 09/2006 Joint 579,534 377,598 201,936 Retiree 6 01/2007 Joint 438,647 367,233 71,414 Retiree 7 12/2008 Joint 456,708 250,486 206,222 Retiree 8 10/2008 Joint 730,657 529,542 201,115 Retiree 9 04/2009 Joint 465,223 256,333 208,890 Retiree 10 11/2009 Joint 636,686 519,396 117,290 Retiree 11 12/2009 Joint 656,626 498,116 158,510 Retiree 12 12/2009 Joint 538,262 446,642 91,620 Retiree 13 03/2010 Joint 583,360 361,044 222,316 * single employeeGrand IslandStudy Session - 12/11/2012Page 37 / 68 FINANCEPension PlansDefined Benefit PlansType of pension plan in which employer promises a specified monthly benefit on retirement based on the employee’s earnings history, tenure of service and age.Defined Contribution Type of pension plan in which an employee’s benefits during retirement depend on the contributions made to and the investment performance of the assets in his or her account.Grand IslandStudy Session - 12/11/2012Page 38 / 68 FINANCE800 Fund -Police and Fire Pension Fund - accounts for direct pension payments to personnel who retired prior to 84 under a defined benefit plan805 Fund -Police Reserve Fund - accounts for administration of the pre-84 police officers pension benefits under a defined benefit plan810 Fund -Fire Reserve Fund - accounts for administration of the pre-84 firefighters pension benefits under a defined benefit planCity Maintains Three Trust FundsGrand IslandStudy Session - 12/11/2012Page 39 / 68 FINANCESummary of Actuarial Projections of LiabilityData used for projections as of November 20, 2012SCENARIO 1Present Valueof City LiabilityExpected Future City Liability by Fiscal Year (assuming retirement age of 60 for police, 55 for fire)Straight Joint 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017Straight Joint Straight Joint Straight Joint Straight Joint Straight JointPOLICE 702,096 1,424,188 448,399 776,971 222,059 386,437 - - 7,496 114,964 64,382 274,277 7 employees2 employees 1 employee 1 employee 1 employeeNote: 2 police employees turn 60 after 2017 but have no expected liability to the cityFIRE - 35,322 - - - - - 42,546 - - - - 1 employee1 employee702,096 1,459,510 448,399 776,971 222,059 386,437 - 42,546 7,496 114,964 64,382 274,277 Assumptions: 3.0% annual pay increase; 2.25% annuity interest rateGrand IslandStudy Session - 12/11/2012Page 40 / 68 FINANCESummary of Actuarial Projections of LiabilityData used for projections as of November 20, 2012SCENARIO 2Present Valueof City LiabilityExpected Future City Liability by Fiscal Year (assuming retirement age of 60 for police, 55 for fire)Straight Joint 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017Straight Joint Straight Joint Straight Joint Straight Joint Straight JointPOLICE 354,646 761,603 241,931 472,949 125,797 239,224 - - - - - 98,571 7 employees2 employees 1 employee 1 employee 1 employeeNote: 2 police employees turn 60 after 2017 but have no expected liability to the cityNote: 1 fire employee has no expected liability to the cityAssumptions: 3.0% annual pay increase; 4.0% annuity interest rateGrand IslandStudy Session - 12/11/2012Page 41 / 68 FINANCESummary of Actuarial Projections of LiabilityData used for projections as of November 20, 2012SCENARIO 3Present Valueof City LiabilityExpected Future City Liability by Fiscal Year (assuming retirement age of 60 for police, 55 for fire)Straight Joint 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017Straight Joint Straight Joint Straight Joint Straight Joint Straight JointPOLICE 144,353 393,220 90,658 262,263 59,660 143,391 - - - - - 3,362 7 employees2 employees 1 employee 1 employee 1 employeeNote: 2 police employees turn 60 after 2017 but have no expected liability to the cityNote: 1 fire employee has no expected liability to the cityAssumptions: 4.0% annual pay increase; 5.5% annuity interest rateGrand IslandStudy Session - 12/11/2012Page 42 / 68 FINANCEDecisions Regarding:Straight Life vs. Joint Life AnnuitiesReview of Most Recent Police ClaimUse of Public Safety Trust FundsFuture Council ActionGrand IslandStudy Session - 12/11/2012Page 43 / 68 § 16-1001. Applicability of sections Sections 16-1001 to 16-1019 shall be known and may be cited as the Police Officers Retirement Act and shall apply to all police officers of a city of the first class. Cite as Neb. Rev. Stat. § 16-1001 Source: Laws 1983, LB 237, § 1. History. Amended by Laws 2012, LB 1082, §1, eff. 4/17/2012. § 16-1002. Terms, defined For purposes of the Police Officers Retirement Act, unless the context otherwise requires: (1) Actuarial equivalent means equality in value of the aggregate amount of benefit expected to be received under different forms of benefit or at different times determined as of a given date as adopted by the city or the retirement committee for use by the retirement system. Actuarial equivalencies shall be specified in the funding medium established for the retirement system, except that if benefits under the retirement system are obtained through the purchase of an annuity contract, the actuarial equivalent of any such form of benefit shall be the amount of pension benefit which can be purchased or otherwise provided by the police officer's retirement value. All actuarial and mortality assumptions adopted by the city or retirement committee shall be on a sex-neutral basis; (2) Beneficiary means the person or persons designated by a police officer, pursuant to a written instrument filed with the retirement committee before the police officer's death, to receive death benefits which may be payable under the retirement system; (3) Funding agent means any bank, trust company, life insurance company, thrift institution, credit union, or investment management firm selected by the city or retirement committee to hold or invest the funds of the retirement system; (4) Regular interest means the rate of interest earned each calendar year equal to the rate of net earnings realized for the calendar year from investments of the retirement fund. Net earnings means the amount by which income or gain realized from investments of the retirement fund exceeds the amount of any realized losses from such investments during the calendar year; (5) Regular pay means the average salary of the police officer for the period of five consecutive years preceding elective retirement, death, or date of disability which produces the highest average; (6) Salary means all amounts paid to a participating police officer by the employing city for personal services as reported on the participant's federal income tax withholding statement, including the police officer's contributions picked up by the city as provided in subsection (2) of section 16-1005 and any salary reduction contributions which are excludable from income for federal income tax purposes pursuant to section 125 or 457 of the Internal Revenue Code; (7) Retirement committee means the retirement committee created pursuant to section 16-1014; (8) Retirement system means a retirement system established pursuant to the act; (9) Retirement value means the accumulated value of the police officer's employee account and employer account. The retirement value consists of the sum of the contributions made or transferred to such accounts by the police officer and by the city on the police officer's behalf and the regular interest credited to the accounts as of the date of computation, reduced by any realized losses which were not taken into account in determining regular interest in any year, and further adjusted each year to reflect the pro rata share for the accounts of the appreciation or depreciation of the fair market value of the assets of the retirement system as determined by the retirement committee. The retirement value shall be reduced by the amount of all distributions made to or on the behalf of the police officer from the retirement system. Such valuation shall be computed annually as of December 31. If separate investment accounts are established pursuant to subsection (3) of section 16-1004, a police officer's retirement value with respect to such accounts shall be equal to the value of his or her separate investment accounts as determined under such subsection; (10) Annuity contract means the contract or contracts issued by one or more life insurance companies and purchased by the retirement system in order to provide any of the benefits described in the act. Annuity conversion rates contained in any such contract shall be specified on a sex-neutral basis; and (11) Straight life annuity means an ordinary annuity payable for the life of the primary annuitant only and terminating at his or her death without refund or death benefit of any kind. Cite as Neb. Rev. Stat. § 16-1002 Source: Grand Island Study Session - 12/11/2012 Page 44 / 68 Laws 1983, LB 237, § 2; Laws 1992, LB 672, § 7; Laws 1995, LB 574, § 17. History. Amended by Laws 2012, LB 1082, §2, eff. 4/17/2012. § 16-1003. Police officer; prior service; how treated A police officer shall be credited with all years of his or her service after the year 1965 for the purpose of determining vested retirement benefits under the Police Officers Retirement Act. Cite as Neb. Rev. Stat. § 16-1003 Source: Laws 1983, LB 237, § 3. History. Amended by Laws 2012, LB 1082, §3, eff. 4/17/2012. § 16-1004. Police Officers Retirement System Fund; administration; transfer of contributions; system funding; separate investment accounts (1) Each city of the first class shall keep and maintain a Police Officers Retirement System Fund for the purpose of investing payroll deductions and city contributions to the retirement system. The fund shall be maintained separate and apart from all city money and funds. The fund shall be administered under the direction of the city and the retirement committee exclusively for the purposes of the retirement system and for the benefit of participating police officers and their beneficiaries. The fund shall be established as a trust under the laws of this state for all purposes of section 401(a) of the Internal Revenue Code. Regular interest shall accrue on any contributions transferred into the fund. Such funds shall be invested in the manner prescribed in section 16-1016. (2) The city shall establish a medium for funding of the retirement system, which may be a pension trust fund, custodial account, group annuity contract, or combination thereof, for the purpose of investing money for the retirement system in the manner prescribed by section 16-1016 and to provide the retirement, death, and disability benefits for police officers pursuant to the Police Officers Retirement Act. The trustee or custodian of any trust fund may be a designated funding agent which is qualified to act as a fiduciary or custodian in this state, the city treasurer, a city officer authorized to administer funds of the city, or a combination thereof. (3) Upon direction of the city, there may be established separate investment accounts for each participating police officer for the purpose of allowing each police officer to direct the investment of all or a portion of his or her employee account or employer account subject to the requirements of section 16-1016 and any other rules or limitations that may be established by the city or the retirement committee. If separate investment accounts are established, each account shall be separately invested and reinvested, separately credited with all earnings and gains with respect to the investment of the assets of the investment account, and separately debited with the losses of the account. Each investment account shall be adjusted each year to reflect the appreciation or depreciation of the fair market value of the assets held in such account as determined by the retirement committee. The expenses incurred by the retirement system when a police officer directs the investment of all or a portion of his or her individual investment account shall be charged against the police officer's investment account and shall reduce the police officer's retirement value. Cite as Neb. Rev. Stat. § 16-1004 Source: Laws 1983, LB 237, § 4; Laws 1992, LB 672, § 8; Laws 1995, LB 574, § 18. History. Amended by Laws 2012, LB 1082, §4, eff. 4/17/2012. § 16-1005. Contribution by police officer; amount; city; pick up officers' contributions; voluntary contributions (1) Until October 1, 2013, each police officer shall contribute to the retirement system a sum equal to six percent of his or her salary. Beginning October 1, 2013, until October 1, 2015, each police officer shall contribute to the retirement system a sum equal to six and one-half percent of his or her salary. Beginning October 1, 2015, each police officer shall contribute to the retirement system a sum equal to seven percent of his or her salary. Such payment shall be made by regular payroll deductions from the police officer's periodic salary and shall be credited to his or her employee account on a monthly basis. Each such account shall also be credited with regular interest. (2) Each city of the first class shall pick up the police officers' contributions required by subsection (1) of this section, and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the Internal Revenue Code, except that the city shall continue to withhold federal income taxes based upon these contributions until the Internal Revenue Service or the federal courts rule that, pursuant to section 414(h) of the Internal Revenue Code, these contributions shall not be included as gross income of the employee until such time as they are distributed from the retirement system. The city shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The city shall pick up these contributions by a salary deduction either through a reduction in the cash salary of the employee or a combination of a reduction in salary and offset against a future salary increase. A police officer shall not be given Grand Island Study Session - 12/11/2012 Page 45 / 68 an option to choose to receive the amount of the required contribution in lieu of having such contribution paid directly to the retirement system. (3) Each police officer shall be entitled to make voluntary cash contributions to the retirement system in an amount not to exceed the contribution limitations established by the Internal Revenue Code. Voluntary contributions shall be credited to the police officer's employee account and shall thereafter be credited with regular interest. A police officer's voluntary contribution shall become a part of the Police Officers Retirement System Fund and shall be held, administered, invested, and distributed in the same manner as any other employee contribution to the retirement system. Cite as Neb. Rev. Stat. § 16-1005 Source: Laws 1983, LB 237, § 5; Laws 1992, LB 672, § 9; Laws 1995, LB 574, § 19. History. Amended by Laws 2012, LB 1082, §5, eff. 4/17/2012. § 16-1006. Contributions by city; amount; how credited; interest; when Each city of the first class shall contribute to the retirement system a sum equal to one hundred percent of the amounts deducted, in accordance with subsection (1) of section 16-1005, from each such police officer's periodic salary. Such payment shall be contributed as provided in subsection (1) of section 16-1005 for employee contributions and shall be credited to the police officer's employer account on a monthly basis. Each such account shall also be credited with regular interest. The city shall also contribute to the employer account of any police officer employed by the city on January 1, 1984, an amount equal to the employee contributions of such police officer that were made to the city prior to January 1, 1984, without interest, with such contribution to be made at the time the police officer retires or terminates employment with the city. The city may contribute such amount before the police officer's retirement or termination of employment or credit interest on such contribution. Cite as Neb. Rev. Stat. § 16-1006 Source: Laws 1983, LB 237, § 6; Laws 1992, LB 672, § 10. History. Amended by Laws 2012, LB 1082, §6, eff. 4/17/2012. § 16-1007. Retiring officer; annuity options; how determined; lump-sum payment option (1) At any time before the retirement date, the retiring police officer may elect to receive at his or her retirement date a pension benefit either in the form of a straight life annuity or any optional form of annuity benefit established by the retirement committee and provided under a purchased annuity contract. The optional annuity benefit shall be specified in the funding medium for the retirement system and shall include a straight life annuity with a guarantee of at least sixty monthly payments or an annuity payable for the life of the retiring police officer and, after the death of the retiree, monthly payments, as elected by the retiring police officer, of either one hundred percent, seventy-five percent, or fifty percent of the amount of annuity payable to the retiring police officer during his or her life, to the beneficiary selected by the retiring police officer at the time of the original application for an annuity. The optional benefit forms for the retirement system shall include a single lump-sum payment of the police officer's retirement value. The retiring police officer may further elect to defer the date of the first annuity payment or lump-sum payment to the first day of any specified month prior to age seventy. If the retiring police officer elects to receive his or her pension benefit in the form of an annuity, the amount of annuity benefit shall be the amount paid by the annuity contract purchased or otherwise provided by his or her retirement value as of the date of the first payment. Any such annuity contract purchased by the retirement system may be distributed to the police officer and, upon such distribution, all obligations of the retirement system to pay retirement, death, or disability benefits to the police officer and his or her beneficiaries shall terminate, without exception. (2) (a) For all officers employed on January 1, 1984, and continuously employed by the city from such date through the date of their retirement, the amount of the pension benefit, when determined on the straight life annuity basis, shall not be less than the following amounts: (i) If retirement occurs following age sixty and with twenty-five years of service with the city, fifty percent of regular pay; or (ii) If retirement occurs following age fifty-five but before age sixty and with twenty-five years of service with the city, forty percent of regular pay. (b) A police officer entitled to a minimum pension benefit under this subsection may elect to receive such pension benefit in any form permitted by subsection (1) of this section, including a single lump-sum payment. If the minimum pension benefit is paid in a form other than a straight life annuity, such benefit shall be the actuarial equivalent of the straight life annuity that would otherwise be paid to the officer pursuant to this subsection. (c) If the police officer chooses the single lump-sum payment option, the officer can request that the actuarial Grand Island Study Session - 12/11/2012 Page 46 / 68 equivalent be equal to the average of the cost of three annuity contracts purchased on the open market. Of the three annuity contracts used for comparison, one shall be chosen by the police officer, one shall be chosen by the retirement committee, and one shall be chosen by the city. (3) If the retirement value of an officer entitled to a minimum pension benefit under subsection (2) of this section is not sufficient at the time of the first payment to purchase or provide the required pension benefit, the city shall transfer such funds as may be necessary to the employer account of the police officer so that the retirement value of such officer is sufficient to purchase or provide for the required pension benefit. (4) Any retiring police officer whose pension benefit is less than twenty-five dollars per month on the straight life annuity option shall be paid a lump-sum settlement equal to the retirement value and shall not be entitled to elect to receive annuity benefits. Cite as Neb. Rev. Stat. § 16-1007 Source: Laws 1983, LB 237, § 7; Laws 1992, LB 672, § 11. History. Amended by Laws 2012, LB 1082, §7, eff. 4/17/2012. § 16-1008. Retirement options; retirement date (1) A police officer of a city of the first class may: (a) Elect to retire and receive the applicable pension benefit provided in section 16-1007 based on his or her full retirement value upon the attainment of age sixty; (b) Elect to take early retirement and receive the applicable pension benefit provided in section 16-1007 if he or she has attained the age of fifty-five and has completed twenty-five years of service with the city; or (c) Retire as a result of disability while in the line of duty, as determined under section 16-1011, at any age, and receive the applicable pension benefit provided in section 16-1011. (2) A police officer who is eligible to retire pursuant to subsection (1) of this section but does not, shall continue to contribute to his or her employee account, and the city shall continue to contribute to his or her employee account and to his or her employer account. (3) The first of the month immediately following the last day of work shall be the retirement date. Cite as Neb. Rev. Stat. § 16-1008 Source: Laws 1983, LB 237, § 8; Laws 1992, LB 672, § 12. § 16-1009. Police officer; death other than in the line of duty; pension benefit payable (1) When prior to retirement any police officer dies other than in the line of duty and except as provided in subsection (2) of this section, the entire retirement value shall be payable to the beneficiary or beneficiaries specified by the deceased police officer prior to his or her death or to the deceased police officer's estate if no beneficiary was specified. The retirement value or portion thereof to be received by the beneficiary may be paid in the form of a single lump-sum payment, straight life annuity, or other optional form of benefit specified in the retirement system's funding medium. If benefits are paid in the form of an annuity, the annuity shall be the amount paid by the annuity contract purchased or otherwise provided by the amount of the beneficiary's share of the retirement value as of the date of the first payment. Upon the purchase and distribution of such annuity contract to the beneficiary, all obligations of the retirement system to the beneficiary shall terminate, without exception. (2) If any police officer employed by such city as a member of its paid police department on January 1, 1984, except those who were formerly employed in such department who are now in military service, dies while employed by the city as a police officer, other than in the line of duty, after becoming fifty-five years of age and before electing to retire, and after serving in the paid police department of such city for at least twenty-one years, then a pension of at least twenty-five percent of his or her regular pay in the form of a straight life annuity shall be paid to the surviving spouse of such deceased police officer. If the deceased police officer is not survived by a spouse or if the surviving spouse dies before the children of the police officer attain the age of majority, the pension benefit shall be paid to the police officer's minor children until they attain the age of majority. Each such child shall share equally in the total pension benefit to the age of his or her majority, except that as soon as a child attains the age of majority, such pension as to such child shall cease. To the extent that the retirement value at the date of death exceeds the amount required to purchase the specified pension, the excess shall be paid in the manner provided in subsection (1) of this section. If the actuarial equivalent of the pension benefit payable under this subsection exceeds the retirement value at the time of the first payment, the city shall contribute such additional amounts as may be necessary to purchase or provide for the required pension benefit. If a deceased police officer described in this subsection is not survived by a spouse or minor children, his or her death benefits shall be provided under subsection (1) of this section as if such officer was not employed by the city on January 1, 1984. (3) Any payments for the benefit of a minor child shall be made on behalf of the child to the surviving parent or, if Grand Island Study Session - 12/11/2012 Page 47 / 68 there is no surviving parent, to the legal guardian of the child. Cite as Neb. Rev. Stat. § 16-1009 Source: Laws 1983, LB 237, § 9; Laws 1992, LB 672, § 13. History. Amended by Laws 2012, LB 1082, §8, eff. 4/17/2012. § 16-1010. Police officer; death in the line of duty; beneficiaries; retirement benefits When prior to retirement any police officer dies in the line of duty or his or her death is caused by or is the result of injuries received while in the line of duty and if such police officer is not survived by a spouse or by minor children, the entire retirement value shall be payable to the beneficiary specified by the deceased police officer prior to his or her death or to the deceased police officer's estate if no beneficiary was specified. The retirement value or portion thereof to be received by the beneficiary may be paid in the form of a single lump-sum payment, straight life annuity, or other optional form of benefit specified in the retirement system's funding medium. For a police officer who is survived by a spouse or minor children, a retirement pension of fifty percent of regular pay shall be paid to the surviving spouse or, upon his or her remarriage or death, to the minor children during each child's minority subject to deduction of the amounts paid as workers' compensation benefits on account of death as provided in section 16-1012. Each such child shall share equally in the total pension benefit to the age of his or her majority, except that as soon as a child attains the age of majority, such pension as to such child shall cease. Any payments for the benefit of a minor child shall be made on behalf of such child to the surviving parent or, if there is no surviving parent, to the legal guardian of the child. To the extent that the retirement value at the date of death exceeds the amount required to purchase or provide the specified retirement pension, as reduced by any amounts paid as workers' compensation benefits, the excess shall be paid in the manner provided in subsection (1) of section 16-1009. If the actuarial equivalent of the pension benefit payable to a surviving spouse or minor children under this section exceeds the retirement value at the time of the first payment, the city shall contribute such additional amount as may be necessary to purchase or provide for the required pension benefit. Cite as Neb. Rev. Stat. § 16-1010 Source: Laws 1983, LB 237, § 10; Laws 1986, LB 811, § 3; Laws 1992, LB 672, § 14. History. Amended by Laws 2012, LB 1082, §9, eff. 4/17/2012. § 16-1011. Police officer; disability in the line of duty; benefit; requirements (1) If any police officer becomes disabled, such police officer shall be placed upon the roll of pensioned police officers at the regular retirement pension of fifty percent of regular pay for the period of such disability. For purposes of this section, disability shall mean the complete inability of the police officer, for reasons of accident or other cause while in the line of duty, to perform the duties of a police officer. (2) No disability benefit payment shall be made except upon adequate proof furnished to the city, such proof to consist of a medical examination conducted by a competent, disinterested physician who is duly licensed to practice medicine and surgery in this state and who certifies to the city that the police officer is unable to perform the duties of a police officer. The city, during the first three years of the payment of such benefits, shall have the right, at reasonable times, to require the disabled police officer to undergo a medical examination at the city's expense to determine the continuance of the disability claimed. After such three-year period, the city may request the district court to order the police officer to submit proof of the continuance of the disability claimed if the city has reasonable grounds to believe the police officer is fraudulently receiving disability payments. The city shall have the right to demand a physical examination of the police officer by a competent, disinterested physician who is duly licensed to practice medicine and surgery in this state, and who is chosen by the city. The expense of such examination shall be borne by the city. (3) In case of temporary disability of a police officer received while in the line of duty, he or she shall receive his or her salary during the continuance of such disability for a period not to exceed twelve months, except that if it is ascertained by the city council or other proper municipal authorities within twelve months that such temporary disability has become a disability as defined in this section, then the salary shall cease and he or she shall be entitled to the benefits for pensions in case of disability as provided in this section. (4) All payments of pension or salary provided by this section shall be subject to deduction of amounts paid under the Nebraska Workers' Compensation Act. Such payments shall not commence until all credit for unused annual or sick leave and other similar credits have been fully utilized by the disabled police officer if there will be no impairment to his or her salary during the period of disability. Total payments to a disabled police officer, in excess of amounts paid as workers' compensation benefits, shall not be less than the retirement value at the date of disability. If the actuarial equivalent of the disability pension payable under this section exceeds the police officer's retirement value at the time of the first payment, the city shall contribute such additional Grand Island Study Session - 12/11/2012 Page 48 / 68 amounts as may be necessary, from time to time, to provide for the required disability pension. (5) If a police officer who was pensioned under this section is later determined to be no longer disabled, the pension provided for under this section shall terminate and the police officer's vested retirement value, as reduced by any disability payments made from the retirement system, shall thereafter be held and administered in the same manner as for any nondisabled police officer or former police officer. (6) If a police officer who has pensioned under this section is later determined to be no longer disabled during the first three years when disability benefit payments are being paid the police officer may return to duty with the police force under the following conditions: (a) If a vacancy exists on the police force for which the police officer is qualified and the police officer wishes to return to the police force, the city shall hire the police officer to fill the vacancy at a pay grade of not less than his or her previous pay grade; or (b) If no vacancy exists on the police force and the police officer wishes to return to the police force, the city may create a vacancy under the city's reduction in force policy adopted under the Civil Service Act and rehire the officer at a pay grade of not less than his or her previous pay grade. The provisions of this subsection shall not apply to a police officer whose disability benefit payments are terminated because of fraud on the part of the police officer. Cite as Neb. Rev. Stat. § 16-1011 Source: Laws 1983, LB 237, § 11; Laws 1986, LB 811, § 4; Laws 1992, LB 672, § 15. Cross References: Civil Service Act, see section 19-1825. Nebraska Workers' Compensation Act, see section 48-1,110. § 16-1012. Police officer; temporary disability; workers' compensation benefits; how treated No police officer shall be entitled during any period of temporary disability to receive in full both his or her salary and his or her benefits under the Nebraska Workers' Compensation Act. All Nebraska workers' compensation benefits shall be payable in full to such police officer as provided in the Nebraska Workers' Compensation Act, but all amounts paid by the city or its insurer under the Nebraska Workers' Compensation Act to any disabled police officer entitled to receive a salary during such disability shall be considered as payments on account of such salary and shall be credited thereon. The remaining balance of such salary, if any, shall be payable as otherwise provided in the Police Officers Retirement Act. Cite as Neb. Rev. Stat. § 16-1012 Source: Laws 1983, LB 237, § 12; Laws 1985, LB 3, § 1; Laws 1986, LB 811, § 5. History. Amended by Laws 2012, LB 1082, §10, eff. 4/17/2012. Cross References: Nebraska Workers' Compensation Act, see section 48-1,110. § 16-1013. Police officer; termination of employment; benefits; how treated; vesting schedule (1) If a police officer quits or is discharged before his or her normal or early retirement date, the officer may request and receive as a lump-sum payment an amount equal to the retirement value of his or her employee account as determined at the valuation date preceding his or her termination of employment. Such police officer, if vested, shall also receive a deferred pension benefit in an amount purchased or provided by the retirement value at the date of retirement. The retirement value at such retirement date shall consist of the accumulated value of the police officer's employee account, as reduced by any lump-sum distributions received prior to retirement, together with a vested percentage of the accumulated value of the police officer's employer account at the date of retirement. (2) Until July 1, 2012, the vesting schedule shall be as follows: (a) If the terminated police officer has been a member of the retirement system for less than four years, such vesting shall be nil; (b) If the terminating officer has been a member of the paid department of the city of the first class for at least four years, such vesting percentage shall be forty percent. Such vesting percentage shall be fifty percent after five years, sixty percent after six years, seventy percent after seven years, eighty percent after eight years, ninety percent after nine years, and one hundred percent after ten years; and (c) All police officers shall be one hundred percent vested upon attainment of age sixty while employed by the city as a police officer. (3) Beginning July 1, 2012, the vesting schedule shall be as follows: Grand Island Study Session - 12/11/2012 Page 49 / 68 (a) If the terminated police officer has been a member of the retirement system for less than two years, such vesting shall be nil; (b) If the terminating officer has been a member of the paid department of the city of the first class for at least two years, such vesting percentage shall be forty percent. Such vesting percentage shall be sixty percent after four years, eighty percent after five years, and one hundred percent after seven years; and (c) All police officers shall be one hundred percent vested upon attainment of age sixty while employed by the city as a police officer. (4) The deferred pension benefit shall be payable on the first of the month immediately following the police officer's sixtieth birthday. At the option of the terminating police officer, such pension benefit may be paid as of the first of the month after such police officer attains the age of fifty-five. Such election may be made by the police officer any time prior to the payment of the pension benefits. The deferred pension benefit shall be paid in the form of the benefit options specified in subsection (1) of section 16-1007 as elected by the police officer. If the police officer's vested retirement value at the date of his or her termination of employment is less than three thousand five hundred dollars, the city may elect to pay such police officer his or her vested retirement value in the form of a single lump-sum payment. (5) A police officer may elect upon his or her termination of employment to receive his or her vested retirement value in the form of a single lump-sum payment. (6) Upon any lump-sum payment of a terminating police officer's retirement value under this section, such police officer will not be entitled to any deferred pension benefit and the city and the retirement system shall have no further obligation to pay such police officer or his or her beneficiaries any benefits under the Police Officers Retirement Act. (7) If the terminating police officer is not credited with one hundred percent of his or her employer account, the nonvested portion of the account shall be forfeited and first used to meet the expense charges incurred by the city in connection with administering the retirement system and the remainder shall then be used to reduce the city contribution which would otherwise be required to fund pension benefits. Cite as Neb. Rev. Stat. § 16-1013 Source: Laws 1983, LB 237, § 13; Laws 1992, LB 672, § 16. History. Amended by Laws 2012, LB 1082, §11, eff. 4/17/2012. § 16-1014. Retirement committee; established; governing body; responsibilities A retirement committee shall be established to supervise the general operation of the retirement system established pursuant to the Police Officers Retirement Act. The governing body of the city shall continue to be responsible for the general administration of such retirement system unless specific functions or all functions with regard to the administration of the retirement system are delegated, by ordinance, to the retirement committee. Whenever duties or powers are vested in the city or the retirement committee under the act or whenever the act fails to specifically allocate the duties or powers of administration of the retirement system, such powers or duties shall be vested in the city unless such powers or duties have been delegated by ordinance to the retirement committee. The city and the retirement committee shall have all powers which are necessary for or appropriate to establishing, maintaining, managing, and administering the retirement system. Cite as Neb. Rev. Stat. § 16-1014 Source: Laws 1983, LB 237, § 14; Laws 1992, LB 672, § 17. History. Amended by Laws 2012, LB 1082, §12, eff. 4/17/2012. § 16-1015. Retirement committee; members; terms; vacancy Each retirement committee established pursuant to section 16-1014 shall consist of members from both the police force and designees of the city council. The committee shall consist of six members of which four members shall be selected by the officers from the police force of the city. Two members shall be designated by the city council. The members who are not participants in such retirement system shall have a general knowledge of retirement plans. Members of the governing body of such city may serve on the retirement committee. The committee members shall be appointed to four-year terms. Vacancies shall be filled for the remainder of the term by a person with the same representation as his or her predecessor. Members of the retirement committee shall receive no salary and shall not be compensated for expenses. Cite as Neb. Rev. Stat. § 16-1015 Source: Laws 1983, LB 237, § 15. § 16-1016. Retirement system funds; contracts for investments The funds of the retirement system shall be invested under the general direction of the retirement committee. Grand Island Study Session - 12/11/2012 Page 50 / 68 The city or the retirement committee if delegated such function by the city shall select and contract with a funding agent or agents to hold or invest the assets of the retirement system and to provide for the benefits provided by the Police Officers Retirement Act. The city or committee may select and contract with investment managers registered under the federal Investment Advisers Act of 1940 to invest, reinvest, and otherwise manage such portion of the assets of the retirement system as may be assigned by the city or committee. All funds of the retirement system shall be invested pursuant to the policies established by the Nebraska Investment Council. Cite as Neb. Rev. Stat. § 16-1016 Source: Laws 1983, LB 237, § 16; Laws 1991, LB 2, § 2; Laws 1992, LB 672, § 18. History. Amended by Laws 2012, LB 1082, §13, eff. 4/17/2012. § 16-1017. Retirement committee; duties (1) It shall be the duty of the retirement committee to: (a) Provide each employee a summary of plan eligibility requirements and benefit provisions; (b) Provide, within thirty days after a request is made by a participant, a statement describing the amount of benefits such participant is eligible to receive; and (c) Make available for review an annual report of the retirement system's operations describing both (i) the amount of contributions to the retirement system from both employee and employer sources and (ii) an identification of the total assets of the retirement system. (2)(a) Beginning December 31, 1998, and each December 31 thereafter, the chairperson of the retirement committee shall file with the Public Employees Retirement Board a report on each retirement plan established pursuant to section 401(a) of the Internal Revenue Code and administered by a retirement system established pursuant to the Police Officers Retirement Act and shall submit copies of such report to the Auditor of Public Accounts. The Auditor of Public Accounts may prepare a review of such report pursuant to section 84-304.02 but is not required to do so. The annual report shall be in a form prescribed by the Public Employees Retirement Board and shall contain the following information for each such retirement plan: (i) The number of persons participating in the retirement plan; (ii) The contribution rates of participants in the plan; (iii) Plan assets and liabilities; (iv) The names and positions of persons administering the plan; (v) The names and positions of persons investing plan assets; (vi) The form and nature of investments; (vii) For each defined contribution plan, a full description of investment policies and options available to plan participants; and (viii) For each defined benefit plan, the levels of benefits of participants in the plan, the number of members who are eligible for a benefit, and the total present value of such members' benefits, as well as the funding sources which will pay for such benefits. If a plan contains no current active participants, the chairperson may file in place of such report a statement with the Public Employees Retirement Board indicating the number of retirees still drawing benefits and the sources and amount of funding for such benefits. (b) Beginning December 31, 1998, and every four years thereafter, if such retirement plan is a defined benefit plan, the retirement committee shall cause to be prepared a quadrennial report and the chairperson shall file the same with the Public Employees Retirement Board and submit to the Auditor of Public Accounts a copy of such report. The Auditor of Public Accounts may prepare a review of such report pursuant to section 84-304.02 but is not required to do so. The report shall consist of a full actuarial analysis of each such retirement plan administered by a retirement system established pursuant to the act. The analysis shall be prepared by an independent private organization or public entity employing actuaries who are members in good standing of the American Academy of Actuaries, and which organization or entity has demonstrated expertise to perform this type of analysis and is unrelated to any organization offering investment advice or which provides investment management services to the retirement plan. Cite as Neb. Rev. Stat. § 16-1017 Source: Laws 1983, LB 237, § 17; Laws 1998, LB 1191, § 18; Laws 1999, LB 795, § 7. History. Amended by Laws 2012, LB 1082, §14, eff. 4/17/2012. Amended by Laws 2011, LB 474, §7, eff. 8/27/2011. § 16-1018. Termination of employment; transfer of benefits; when If a police officer terminates his or her employment for the purpose of becoming a police officer employed by Grand Island Study Session - 12/11/2012 Page 51 / 68 another city of the first class in Nebraska and such new employment commences within one hundred twenty days of such termination, such police officer shall be entitled to transfer to the Police Officers Retirement System Fund of the city by which he or she is newly employed, the full amount of his or her employee account and the vested portion of the value of his or her employer account at the time of termination. The transferred funds shall be directly transferred to the police officer's employee account in the retirement system of the city to which transferred and administered by the retirement committee of the city to which transferred. Upon such transfer, the city and the retirement system shall have no further obligation to such police officer or his or her beneficiary. Following the commencement of new employment, the transferring police officer shall be deemed a new employee for all purposes of the retirement system of the city to which he or she transferred. Cite as Neb. Rev. Stat. § 16-1018 Source: Laws 1983, LB 237, § 18; Laws 1992, LB 672, § 19. § 16-1019. Exemption from legal process; administration; requirements; retirement committee; powers and duties; review of adjustment; tax levy authorized (1) Except as provided in subsection (6) of this section, the right to any benefits under the retirement system and the assets of any fund of the retirement system shall not be assignable or subject to execution, garnishment, attachment, or the operation of any bankruptcy or insolvency laws, except that the retirement system may comply with the directions set forth in a qualified domestic relations order meeting the requirements of section 414(p) of the Internal Revenue Code. Any payment of benefits subject to such order shall take priority over any payment made pursuant to subsection (6) of this section. The city or retirement committee may require appropriate releases from any person as a condition to complying with any such order. The retirement system shall not recognize any domestic relations order which alters or changes benefits, provides for a form of benefit not otherwise provided for by the retirement system, increases benefits not otherwise provided by the retirement system, or accelerates or defers the time of payment of benefits. No participant or beneficiary shall have any right to any specific portion of the assets of the retirement system. (2) The retirement system shall be administered in a manner necessary to comply with the tax-qualification requirements applicable to government retirement plans under section 401(a) of the Internal Revenue Code, including section 401(a)(9) relating to the time and manner in which benefits are required to be distributed and section 401(a)(9)(G) relating to incidental death benefit requirements, section 401(a)(16) relating to compliance with the maximum limitation on the plan benefits or contributions under section 415, section 401(a)(17) which limits the amount of compensation which can be taken into account under a retirement plan, section 401(a)(25) relating to the specification of actuarial assumptions, section 401(a)(31) relating to direct rollover distributions from eligible retirement plans, and section 401(a)(37) relating to the death benefit of a police officer who dies while performing qualified military service. Any requirements for compliance with section 401(a) of the Internal Revenue Code may be set forth in any trust or funding medium for the retirement system. This subsection shall be in full force and effect only so long as conformity with section 401(a) of the Internal Revenue Code is required for public retirement systems in order to secure the favorable income tax treatment extended to sponsors and beneficiaries of tax-qualified retirement plans. (3) If the retirement committee determines that the retirement system has previously overpaid or underpaid a benefit payable under the Police Officers Retirement Act, it shall have the power to correct such error. In the event of an overpayment, the retirement system may, in addition to any other remedy that the retirement system may possess, offset future benefit payments by the amount of the prior overpayment, together with regular interest thereon. (4) A police officer whose benefit payment is adjusted by the retirement committee pursuant to subsection (3) of this section may request a review by the city council of the adjustment made by the retirement committee. (5) In order to provide the necessary amounts to pay for or fund a pension plan established under the act, the mayor and council may make a levy which is within the levy restrictions of section 77-3442. (6) If a member of the retirement system is convicted of or pleads no contest to a felony that is defined as assault, sexual assault, kidnapping, child abuse, false imprisonment, or theft by embezzlement and is found liable for civil damages as a result of such felony, following distribution of the member's benefits or the assets of any fund of the member from the retirement system, the court may order the payment of the member's benefits or the assets of any fund of the member under the retirement system for such civil damages, except that the benefits or assets to the extent reasonably necessary for the support of the member or any of his or her beneficiaries shall be exempt from such payment. Any order for payment of benefits or assets shall not be stayed on the filing of any appeal of the conviction. If the conviction is reversed on final judgment, all benefits or assets paid as civil damages shall be forfeited and returned to the member. The changes made to this section by this legislative bill shall apply to persons convicted of or who have pled no contest to such a felony and who have been found liable for civil damages as a result of Grand Island Study Session - 12/11/2012 Page 52 / 68 such felony prior to, on, or after the effective date of this act. Cite as Neb. Rev. Stat. § 16-1019 Source: Laws 1983, LB 237, § 19; Laws 1992, LB 672, § 20; Laws 1995, LB 574, § 20; Laws 1996, LB 1114, § 29. History. Amended by Laws 2012, LB 1082, §15, eff. 4/17/2012. Amended by Laws 2012, LB 916, §2, eff. 4/7/2012. Grand Island Study Session - 12/11/2012 Page 53 / 68 § 16-1020. Applicability of sections Except as provided in section 16-1039, sections 16-1020 to 16-1038 shall apply to all firefighters of a city of the first class. Cite as Neb. Rev. Stat. § 16-1020 Source: Laws 1983, LB 531, § 1. § 16-1021. Terms, defined For the purposes of sections 16-1020 to 16-1042, unless the context otherwise requires: (1) Actuarial equivalent shall mean equality in value of the aggregate amount of benefit expected to be received under different forms or at different times determined as of a given date as adopted by the city or the retirement committee for use by the retirement system. Such actuarial equivalencies shall be specified in the funding medium established for the retirement system, except that if benefits under the retirement system are obtained through the purchase of an annuity contract, the actuarial equivalency of any such form of benefit shall be the amount of pension benefit which can be purchased or otherwise provided by such contract. All actuarial and mortality assumptions adopted by the city or retirement committee shall be on a sex-neutral basis; (2) Annuity contract shall mean the contract or contracts issued by one or more life insurance companies or designated trusts and purchased by the retirement system in order to provide any of the benefits described in such sections. Annuity conversion rates contained in any such contract shall be specified on a sex-neutral basis; (3) Beneficiary shall mean the person or persons designated by a firefighter, pursuant to a written instrument filed with the retirement committee before the firefighter's death, to receive death benefits which may be payable under the retirement system; (4) Funding agent shall mean any bank, trust company, life insurance company, thrift institution, credit union, or investment management firm selected by the retirement committee, subject to the approval of the city, to hold or invest the funds of the retirement system; (5) Regular interest shall mean the rate of interest earned each calendar year commencing January 1, 1984, equal to the rate of net earnings realized for the calendar year from investments of the retirement fund. Net earnings shall mean the amount by which income or gain realized from investments of the retirement fund exceeds the amount of any realized losses from such investments during the calendar year. The retirement committee shall annually report the amount of regular interest earned for such year; (6) Regular pay shall mean the salary of a firefighter at the date such firefighter elects to retire or terminate employment with the city; (7) Retirement committee shall mean the retirement committee created pursuant to section 16-1034; (8) Retirement system shall mean a retirement system established pursuant to sections 16-1020 to 16-1042; (9) Retirement value shall mean the accumulated value of the firefighter's employee account and employer account. The retirement value at any time shall consist of the sum of the contributions made or transferred to such accounts by the firefighter and by the city on the firefighter's behalf and the regular interest credited to the accounts through such date, reduced by any realized losses which were not taken into account in determining regular interest in any year, and as further adjusted each year to reflect the accounts' pro rata share of the appreciation or depreciation of the assets of the retirement system as determined by the retirement committee at their fair market values, including any account under subsection (2) of section 16-1036. Such valuation shall be undertaken at least annually as of December 31 of each year and at such other times as may be directed by the retirement committee. The value of each account shall be reduced each year by the appropriate share of the investment costs as provided in section 16-1036.01. The retirement value shall be further reduced by the amount of all distributions made to or on the behalf of the firefighter from the retirement system; (10) Salary shall mean the base rate of pay, excluding overtime, callback pay, clothing allowances, and other such benefits as reported on the participant's federal income tax withholding statement including the firefighters' contributions picked up by the city as provided in subsection (2) of section 16-1024 and any salary reduction contributions which are excludable from income for federal income tax purposes pursuant to section 125 or 457 of the Internal Revenue Code; and (11) Straight life annuity shall mean an ordinary annuity payable for the life of the primary annuitant only, and terminating at his or her death without refund or death benefit of any kind. Cite as Neb. Rev. Stat. § 16-1021 Source: Laws 1983, LB 531, § 2; Laws 1993, LB 724, § 1; Laws 1995, LB 574, § 21. Grand Island Study Session - 12/11/2012 Page 54 / 68 § 16-1022. Firefighter; prior service; how treated A firefighter shall be credited with all years of his or her service after August 7, 1965, for the purpose of determining vested retirement benefits under sections 16-1020 to 16-1038. Cite as Neb. Rev. Stat. § 16-1022 Source: Laws 1983, LB 531, § 3. § 16-1023. Firefighters Retirement System Fund; city maintain; transfer of contributions; funding of system (1) Commencing on January 1, 1984, each city of the first class having a paid fire department shall keep and maintain a Firefighters Retirement System Fund for the purpose of investing payroll deductions and city contributions to the retirement system. The fund shall be maintained separate and apart from all city money and funds. The fund shall be administered exclusively for the purposes of the retirement system and for the benefit of participating firefighters and their beneficiaries and so as to establish the fund as a trust under the law of this state for all purposes of section 401(a) of the Internal Revenue Code. Upon the passage of sections 16-1020 to 16-1038 all of the contributions made by a firefighter under section 35-203.01 as it formerly existed and interest accrued at five percent per annum on such contributions prior to January 1, 1984, shall be transferred to the firefighter's employee account. Regular interest shall begin to accrue on the contributions transferred into the fund. Such funds shall be invested in the manner prescribed in section 16-1036. (2) The city shall establish a medium for funding the retirement system which, with the approval of the retirement committee, may be a pension trust fund, custodial account, group annuity contract, or combination thereof, for the purpose of investing money for the retirement system in the manner prescribed by section 16-1036 and to provide the retirement, death, and disability benefits for firefighters granted by sections 16-1020 to 16-1042. The trustee or custodian of any trust fund shall be a designated funding agent which is qualified to act as a fiduciary or custodian in this state, the city treasurer, an appropriate city officer authorized to administer funds of the city, or a combination thereof. Cite as Neb. Rev. Stat. § 16-1023 Source: Laws 1983, LB 531, § 4; Laws 1993, LB 724, § 2; Laws 1995, LB 574, § 22. § 16-1024. Contribution by firefighter; amount; interest; city; pick up firefighters' contributions; voluntary contribution (1) Each firefighter participating in the retirement system shall contribute to the retirement system a sum equal to six and one-half percent of his or her salary. Such payment shall be made by regular payroll deductions from his or her periodic salary and shall be credited to his or her employee account on a monthly basis. Each such account shall also be credited with regular interest. (2) Each city of the first class with firefighters participating in a retirement system shall pick up the firefighters' contributions required by subsection (1) of this section for all compensation paid on or after January 1, 1984, and the contributions so picked up shall be treated as employer contributions in determining federal income tax treatment under the Internal Revenue Code, except that the city shall continue to withhold federal income taxes based upon such contributions until the Internal Revenue Service or the federal courts rule that, pursuant to section 414(h) of the Internal Revenue Code, such contributions shall not be included as gross income of the employee until such time as they are distributed from the retirement system. The city shall pay the employee contributions from the same source of funds which is used in paying compensation to the employee. The city shall pick up the employee contributions by a salary deduction either through a reduction in the cash salary of the employee or a combination of a reduction in salary and offset against a future salary increase. In no event shall a firefighter be given an option to choose to receive the amount of the required contribution in lieu of having such contribution paid directly to the retirement system. (3) Each firefighter participating in the retirement system shall be entitled to make voluntary cash contributions to the retirement system in an amount not to exceed the contribution limitations established by the Internal Revenue Code. Voluntary contributions shall be credited to the employee account and shall thereafter be credited with regular interest. A voluntary contribution shall become a part of the Firefighters Retirement System Fund and shall be held, administered, invested, and distributed in the same manner as any other employee contribution to the retirement system. Cite as Neb. Rev. Stat. § 16-1024 Source: Laws 1983, LB 531, § 5; Laws 1993, LB 724, § 3; Laws 1995, LB 574, § 23. § 16-1025. Contributions by city; amount; how credited; interest (1) Beginning January 1, 1984, each city of the first class with firefighters participating in a retirement system shall contribute to the retirement system a sum equal to thirteen percent of each such participating firefighter's periodic salary. Such payment shall be credited to his or her employer account on a monthly basis. Each such Grand Island Study Session - 12/11/2012 Page 55 / 68 account shall also be credited with regular interest. The city shall also contribute to the employer account of any firefighter employed by the city on January 1, 1984, an amount equal to the employee's contributions, without interest, that were made to the city prior to January 1, 1984, with such contribution to be made at the time the firefighter retires or terminates employment with the city. The city may contribute such amount before the firefighter's retirement or termination of employment or credit interest on such contribution. (2) Each such city shall contribute any additional amounts necessary to fund retirement or other retirement plan benefits not provided by employee contributions or city contributions to the employer account required by subsection (1) of this section. Such additional contributions shall be accumulated in an unallocated employer account of the Firefighters Retirement System Fund and used to provide the benefits, if any, specified in sections 16-1027 and 16-1029 to 16-1031 which are not otherwise funded by the firefighter's retirement value. Funds needed to provide for a firefighter's benefits shall be transferred from the unallocated employer account when and as such funds are needed. All funds committed by the city to the funding of a firefighter pension system on January 1, 1984, that are not transferred to the firefighters employee accounts shall be transferred to the unallocated employer account. Cite as Neb. Rev. Stat. § 16-1025 Source: Laws 1983, LB 531, § 6; Laws 1993, LB 724, § 4. § 16-1026. Repealed Cite as Neb. Rev. Stat. § 16-1026 History. Laws 1998, LB 1191,§85. § 16-1027. Retiring firefighter; annuity options; how determined; lump-sum payment (1) At any time before the retirement date, the retiring firefighter may elect to receive his or her pension benefit at retirement either in the form of a straight life annuity or any optional form of annuity benefit established by the retirement committee and provided under a purchased annuity contract. Such optional annuity benefit shall be specified in the funding medium for the retirement system and shall include a straight life annuity with a guarantee of at least sixty monthly payments or an annuity payable for the life of the retiring firefighter and, after the death of the retiree, monthly payments, as elected by the retiring firefighter, of one hundred percent, seventy-five percent, or fifty percent of the amount of annuity payable to the retiring firefighter during his or her life, to the beneficiary selected by the retiring firefighter at the time of the original application for an annuity. For any firefighter whose retirement date is on or after January 1, 1997, the optional benefit forms for the retirement system shall include a single lump-sum payment of the firefighter's retirement value. For firefighters whose retirement date is prior to January 1, 1997, a single lump-sum payment shall be available only if the city has adopted such distribution option in the funding medium established for the retirement system. The retiring firefighter may further elect to defer the date of the first payment or lump-sum distribution to the first day of any specified month prior to age seventy. In the event the retiring firefighter elects to receive his or her pension benefit in the form of an annuity, the amount of such annuity benefit shall be the amount provided by the annuity contract purchased or otherwise provided by the firefighter's retirement value as of the date of the first payment. Any such annuity contract purchased by the retirement system may be distributed to the retiring firefighter. Upon the payment of a lump sum or the distribution of a paid-up annuity contract, all obligations of the retirement system to pay retirement benefits to the firefighter and his or her beneficiaries shall terminate, without exception. (2) For all firefighters employed on January 1, 1984, the amount of the pension benefit at the retirement date shall not be less than the following amounts: (a) If retirement from the city occurs following age fifty-five with twenty-one years of service with the city, fifty percent of regular pay; (b) If retirement from the city occurs following age fifty but before age fifty-five with at least twenty-one years of service with the city, such firefighter shall receive the actuarial equivalent of the benefit which would otherwise be provided at age fifty-five; (c) If retirement from the city occurs on or after age fifty-five with less than twenty-one years of service with the city, such firefighter shall receive a pension of at least fifty percent of the salary he or she was receiving at the time of retirement multiplied by the ratio of the years of service to twenty-one; (d) For terminations of employment from the city on or after September 9, 1993, if such termination of employment as a firefighter occurs before age fifty-five but after completion of twenty-one years of service with the city, such firefighter shall receive upon the attainment of age fifty-five a pension benefit of fifty percent of regular pay; (e) Unless an optional annuity benefit is selected by the retired firefighter, at the death of any such retired firefighter the same rate of pension as is provided for in this section shall be paid to the surviving spouse of such deceased firefighter during such time as the surviving spouse remains unmarried and, in case there is no surviving spouse, then the minor children, if any, of such deceased firefighter shall equally share such pension benefit during their minority, except that as soon as a Grand Island Study Session - 12/11/2012 Page 56 / 68 child of such deceased firefighter ceases to be a minor, such pension as to such child shall cease; or (f) In the event a retired firefighter or his or her surviving beneficiaries die before the aggregate amount of pension payments received by the firefighter and his or her survivor beneficiaries, if any, equals the total amount in the firefighter's employee account, at the time of the first benefit payment the difference between the total amount in the employee's account and the aggregate amount of pension payments received by the retired firefighter and his or her surviving beneficiaries, if any, shall be paid in a single sum to the firefighter's estate. A firefighter entitled to a minimum pension benefit under this subsection may elect to receive such pension benefit in any form permitted by subsection (1) of this section, including a single lump-sum payment, if the firefighter retires on or after January 1, 1997, or if the city has adopted a lump-sum distribution option for firefighters retiring before January 1, 1997, in the funding medium for the retirement system. If the minimum pension benefit is paid in the form of an optional annuity benefit or a single lump-sum payment, such benefit or payment shall be the actuarial equivalent of the annuity that would otherwise be paid to the firefighter pursuant to this subsection. If the firefighter chooses the single lump-sum payment option, the firefighter may request that the actuarial equivalent be equal to the average of the cost of two annuity contracts purchased on the open market, if the difference between the cost of the two annuity contracts does not exceed five percent. Of the two annuity contracts used for comparison, one shall be chosen by the firefighter and one shall be chosen by the city. If the difference between the two annuity contracts exceeds five percent, the retirement committee shall review the costs of the two annuity contracts and make a recommendation to the city council as to the amount of the lump-sum payment to be made to the firefighter. The city council shall, after a hearing, determine the amount of the single lump-sum payment due the firefighter. (3) If the retirement value of a firefighter entitled to a minimum pension benefit under subsection (2) of this section is not sufficient at the time of the first payment to purchase or provide the required pension benefit, the city shall utilize such funds as may be necessary from the unallocated employer account of the retirement system to purchase or provide for the required pension benefit. (4) Any retiring firefighter whose pension benefit is less than twenty-five dollars per month on the straight life annuity option shall be paid a lump-sum settlement equal to the retirement value in lieu of annuity and shall not be entitled to elect to receive annuity benefits. Cite as Neb. Rev. Stat. § 16-1027 Source: Laws 1983, LB 531, § 8; Laws 1992, LB 672, § 22; Laws 1993, LB 724, § 5; Laws 1994, LB 1068, § 1. § 16-1028. Retirement options; retirement date (1) A firefighter of a city of the first class may: (a) Retire or be retired and receive the applicable retirement pension benefit upon the attainment of age fifty-five while employed by the city as a firefighter; (b) Elect to retire after he or she has attained the age of fifty and has completed at least twenty-one years of service with the city and receive the actuarial equivalent of the pension benefit he or she would otherwise receive upon the attainment of age fifty-five; (c) After twenty-one years of service with the city, terminate employment with the city and, upon the attainment of age fifty-five, receive the applicable retirement pension benefit; or (d) Retire or be retired as a result of disability while in the line of duty, as determined under section 16-1031, at any age and receive the applicable pension benefit provided in such section. (2) A firefighter who is eligible to retire pursuant to subdivision (1)(a) of this section but does not shall continue to contribute to his or her employee account and the city shall continue to contribute to its employer account. (3) For purposes of subdivisions (1)(a), (b), and (d) of this section, the first of the month immediately following the last day of work shall be the retirement date. For purposes of subdivision (1)(c) of this section, the first of the month immediately following the attainment of age fifty-five shall be the retirement date. Cite as Neb. Rev. Stat. § 16-1028 Source: Laws 1983, LB 531, § 9; Laws 1993, LB 724, § 6; Laws 1994, LB 1068, § 2. § 16-1029. Firefighter; death other than in the line of duty; pension benefit payable (1) When prior to the commencement of retirement benefits any firefighter participating in the retirement system dies other than in the line of duty, and except as provided in subsection (2) of this section, the entire retirement value shall be payable to the beneficiary or beneficiaries specified by the deceased firefighter prior to his or her death or to the deceased firefighter's estate in the event that no beneficiary was specified. The retirement value or portion thereof may be received by the beneficiary in the form of a single lump-sum payment, a straight life annuity, or any other optional form of benefit specified in the retirement system's Grand Island Study Session - 12/11/2012 Page 57 / 68 funding medium. In the event benefits are paid in the form of an annuity, such annuity shall be the amount provided by the annuity contract purchased or otherwise provided by the amount of retirement value to be paid to the beneficiary as of the date of the first payment. Upon the payment of a lump-sum distribution or the purchase and distribution of such annuity contract to the beneficiary, all obligations of the retirement system to the beneficiary shall terminate, without exception. (2) If any firefighter employed by such city as a member of its paid fire department on January 1, 1984, and any firefighter reemployed thereafter who, while employed in such department entered military service and is still in military service, dies while employed by the city as a firefighter other than in the line of duty after becoming fifty years of age and before electing to retire, and after serving in the paid fire department of such city for at least twenty-one years, then a pension of at least twenty-five percent of his or her regular pay as defined in section 16-1021, in the form of a straight life annuity, shall be paid to the surviving spouse or minor children of such deceased firefighter. If the deceased firefighter is not survived by a spouse or in the event such surviving spouse dies before the minor children of such firefighter attain the age of majority, such pension benefit shall be paid to the firefighter's minor children until they have attained the age of majority. Each such child shall share equally in the total pension benefit to the age of majority, except that as soon as a child attains the age of majority, such pension benefit to such child shall cease and be reallocated among the remaining minor children until the last remaining child dies or reaches the age of majority. In the event that the actuarial equivalent of the pension benefit payable under this subsection exceeds the retirement value at the time of the first payment, the city shall utilize such funds as may be necessary from the unallocated employer account of the retirement system to purchase or provide for the required pension benefit. In the event a deceased firefighter described in this subsection is not survived by a spouse or minor children, his or her death benefits shall be provided under the provisions of subsection (1) of this section as if such firefighter were not employed by the city on January 1, 1984. (3) In the event the surviving spouse or minor children of such deceased firefighter die before the aggregate amount of pension payments received by the firefighter and his or her survivor beneficiaries, if any, equals the total amount in the firefighter's employee account at the time of the first benefit payment, the difference between such total amount in the employee's account and the aggregate amount of pension payments received by the retired firefighter and his or her surviving beneficiaries, if any, shall be paid in a single sum to the firefighter's beneficiary, or in the absence of a surviving beneficiary, his or her estate. (4) To the extent that the retirement value at the date of death exceeds the amount required to purchase or provide the specified pension under subsection (2) of this section, the excess shall be paid in the manner provided in subsection (1) of this section. (5) Any payments for the benefit of a minor child shall be made on behalf of such child to the surviving spouse or, if there is none, to the legal guardian of the child. Cite as Neb. Rev. Stat. § 16-1029 Source: Laws 1983, LB 531, § 10; Laws 1992, LB 672, § 23; Laws 1993, LB 724, § 7. § 16-1030. Firefighter; death in the line of duty; retirement benefits When prior to commencement of retirement benefits any firefighter participating in the retirement system dies in the line of duty or in case death is caused by or is the result of injuries received while in the line of duty and such firefighter is not survived by a spouse or minor children, the entire retirement value shall be payable to the beneficiary or beneficiaries specified by the deceased firefighter prior to his or her death or to the deceased firefighter's estate in the event that no beneficiary was specified. The retirement value or portion thereof may be paid in the form of a single lump-sum payment, a straight life annuity, or any other optional form of benefit specified in the retirement system's funding medium. For a firefighter who is survived by a spouse or minor children, a retirement pension of fifty percent of regular pay shall be paid to the surviving spouse or, upon his or her remarriage or death, to the minor child or children during such child's or children's minority subject to deduction of the amounts paid as workers' compensation benefits on account of death as provided in section 16-1032. Each such child shall share equally in the total pension benefit to the age of majority, except that as soon as a child attains the age of majority, such pension benefit to such child shall cease and be reallocated among the remaining minor children until the last remaining child dies or reaches the age of majority. Any payments for the benefit of a minor child shall be made on behalf of such child to the surviving spouse or, if there is none, to the legal guardian of the child. In the event the surviving spouse or minor children of such deceased firefighter die before the aggregate amount of pension payments received by the firefighter and his or her survivor beneficiaries, if any, equals the total amount in the firefighter's employee account at the time of the first benefit payment, the difference between the total amount in the employee account and the aggregate amount of pension payments received by the retired firefighter and his or her surviving beneficiaries, if any, shall be paid in a single sum to the firefighter's Grand Island Study Session - 12/11/2012 Page 58 / 68 beneficiary or, in the absence of a surviving beneficiary, his or her estate. To the extent that the retirement value at the date of death exceeds the amount required to purchase the specified retirement pension, reduced by any amounts paid as workers' compensation benefits, the excess shall be paid in the manner provided in subsection (1) of section 16-1029. Cite as Neb. Rev. Stat. § 16-1030 Source: Laws 1983, LB 531, § 11; Laws 1986, LB 811, § 6; Laws 1992, LB 672, § 24; Laws 1993, LB 724, § 8. § 16-1031. Firefighter; disability in the line of duty; disability benefit; return to duty; conditions (1) Except as provided in subsection (3) of this section for temporary disability, if any firefighter becomes disabled, such firefighter shall be placed upon the roll of pensioned firefighters at the regular retirement pension of fifty percent of regular pay for the period of such disability. For purposes of this section, disability shall mean the complete inability of the firefighter, for reasons of accident or other cause while in the line of duty, to perform the duties of a firefighter as defined by fire department job descriptions or ordinance. (2) No disability benefit payment shall be made except upon adequate proof furnished to the city, consisting of a medical examination conducted by a competent, disinterested physician who is duly licensed to practice medicine and surgery in this state and who certifies to the city that the firefighter is unable to perform the duties of a firefighter. The city, during the first three years of the payment of such benefits, shall have the right, at reasonable times, to require the disabled firefighter to undergo a medical examination at the city's expense to determine the continuance of the disability claimed. After such three-year period, the city may request the district court to order the firefighter to submit proof of the continuance of the disability claimed if the city has reasonable grounds to believe the firefighter is fraudulently receiving disability payments. The city shall have the right to demand a physical examination of the firefighter by a competent, disinterested physician who is duly licensed to practice medicine and surgery in this state and who is chosen by the city. The expense of such examination shall be borne by the city. (3) In case of temporary disability of a firefighter received while in the line of duty, he or she shall receive his or her salary during the continuance of such disability for a period not to exceed twelve months, except that if it is ascertained by the city within twelve months that such temporary disability has become a disability as defined in this section, then the salary shall cease and he or she shall be entitled to the benefits for pensions in case of disability as provided in this section. (4) All payments of pension or salary provided by this section shall be subject to deduction of amounts paid under the Nebraska Workers' Compensation Act. Total payments to a disabled firefighter, in excess of amounts paid as workers' compensation benefits, shall not be less than the retirement value at the date of disability. If the actuarial equivalent of the disability pension payable under this section exceeds the firefighter's retirement value at the time of the first payment, the city shall contribute such additional amounts as may be necessary, from time to time, to provide for the required disability pension. (5) If a firefighter who was receiving a pension under this section is later determined to be no longer disabled, the pension provided for under this section shall terminate and the firefighter's vested retirement value, as reduced by any disability payments made from the retirement system, shall thereafter be held and administered in the same manner as for any nondisabled firefighter or former firefighter. (6) If a firefighter who was receiving a pension under this section is later determined to be no longer disabled during the first three years when disability benefit payments are being paid, the firefighter may return to duty with the fire department under the following conditions: (a) If a vacancy exists on the fire department for which the firefighter is qualified and the firefighter wishes to return to the fire department, the city shall hire the firefighter to fill the vacancy at a pay grade of not less than his or her previous pay grade; or (b) If no vacancy exists in the fire department and the firefighter wishes to return to the fire department, the city shall place the firefighter on a waiting list and rehire the firefighter at a pay grade of not less than his or her previous pay grade when a vacancy occurs for which the firefighter is qualified. The provisions of this subsection shall not apply to a firefighter whose disability benefit payments are terminated because of fraud on the part of the firefighter. Cite as Neb. Rev. Stat. § 16-1031 Source: Laws 1983, LB 531, § 12; Laws 1986, LB 811, § 7; Laws 1993, LB 724, § 9. Cross References: Nebraska Workers' Compensation Act, see section 48-1,110. § 16-1032. Firefighter; temporary disability; workers' compensation benefits; how treated Grand Island Study Session - 12/11/2012 Page 59 / 68 No firefighter shall be entitled during any period of temporary disability to receive in full both his or her salary and his or her benefits under the Nebraska Workers' Compensation Act. All Nebraska workers' compensation benefits shall be payable in full to such firefighter as provided in the Nebraska Workers' Compensation Act, but all amounts paid by the city or its insurer under the Nebraska Workers' Compensation Act to any disabled firefighter entitled to receive a salary during such disability shall be considered as payments on account of such salary and shall be credited thereon. The remaining balance of such salary, if any, shall be payable as otherwise provided in sections 16-1020 to 16-1038. Cite as Neb. Rev. Stat. § 16-1032 Source: Laws 1983, LB 531, § 13; Laws 1985, LB 3, § 2; Laws 1986, LB 811, § 8. Cross References: Nebraska Workers' Compensation Act, see section 48-1,110. § 16-1033. Firefighter; termination of employment; benefits; how treated; vesting schedule In the event a firefighter quits or is discharged before his or her retirement date as defined in subsection (3) of section 16-1028, the firefighter may request and receive, as a lump-sum payment, an amount equal to the value of his or her employee account as determined at the valuation date preceding his or her termination of employment pursuant to subdivision (9) of section 16-1021. Such firefighter, if vested, may, in lieu thereof, receive a deferred pension benefit or lump-sum benefit in an amount purchased or provided by the vested retirement value at the date of retirement. The retirement value at such retirement date shall consist of the then accumulated value of the firefighter's employee account at the date of the retirement as reduced by any lump-sum distributions received prior to retirement, together with a vested percentage of the accumulated value of the firefighter's employer account at the date of retirement. The vesting schedule shall be as follows: (1) If the terminating firefighter has been a member of the system for less than four years, the vesting percentage shall be zero; and (2) If the terminating firefighter has been a member of the paid department of the city for at least four years, the vesting percentage shall be forty percent. The vesting percentage shall be sixty percent after five years, eighty percent after six years, and one hundred percent after seven years. The deferred pension benefit shall be payable on the first of the month immediately following the terminating firefighter's fifty-fifth birthday. At the option of the firefighter, such pension benefit may be paid as of the first of the month after he or she attains the age of fifty. Such election may be made by the firefighter any time prior to the payment of the pension benefits. The deferred pension benefit shall be paid in the optional benefit forms specified at subsection (1) of section 16-1027 as elected by the firefighter. Notwithstanding anything in sections 16-1020 to 16-1042 to the contrary, if the firefighter's vested retirement value at the date of his or her termination of employment is less than three thousand five hundred dollars, such firefighter shall, upon request within one year of such termination, be paid his or her vested retirement value in the form of a single lump-sum payment. Effective January 1, 1997, a firefighter may elect, upon his or her termination of employment, to receive his or her vested retirement value in the form of a single lump-sum payment. For a firefighter whose termination of employment is prior to January 1, 1997, this election shall be available only if the city has adopted a lump-sum distribution option for terminating firefighters in the funding medium established for the retirement system. Upon any lump-sum payment of a terminating firefighter's retirement value under this section, such firefighter will not be entitled to any deferred pension benefit and the city and the retirement system shall have no further obligation to pay such firefighter or his or her beneficiaries any benefits under sections 16-1020 to 16-1042. In the event that the terminating firefighter is not credited with one hundred percent of his or her employer account, the remaining nonvested portion of the account shall be forfeited and shall be deposited in the unallocated employer account. If the actuarial analysis required by section 16-1037 shows that the assets of the unallocated employer account are sufficient to provide for the projected plan liabilities, such forfeitures shall instead be used to meet the expenses incurred by the city in connection with administering the retirement system, and the remainder shall then be used to reduce the city contribution which would otherwise be required to fund pension benefits. Cite as Neb. Rev. Stat. § 16-1033 Source: Laws 1983, LB 531, § 14; Laws 1993, LB 724, § 10; Laws 1994, LB 1068, § 3; Laws 1998, LB 1191, § 19. § 16-1034. Retirement committee; established; governing body; responsibilities; powers and duties; allocation A retirement committee shall be established to supervise the general operation of the retirement system. The Grand Island Study Session - 12/11/2012 Page 60 / 68 governing body of the city shall be responsible for the general administration of such retirement system unless specific functions or all functions with regard to the administration of the retirement system are delegated, by ordinance, to the retirement committee. All costs incurred with regard to the administration of the retirement system shall be paid by the city from the unallocated employer account as provided in section 16-1036.01. The city and retirement committee shall have all powers which are necessary for or appropriate to establishing, maintaining, managing, and administering the retirement system. Whenever sections 16-1020 to 16-1042 fail to address the allocation of duties or powers in the administration of the retirement system, such powers or duties shall be vested in the city unless such powers or duties have been delegated by ordinance to the retirement committee. Cite as Neb. Rev. Stat. § 16-1034 Source: Laws 1983, LB 531, § 15; Laws 1992, LB 672, § 25; Laws 1993, LB 724, § 11. § 16-1035. Retirement committee; members; terms; vacancy; expenses Each retirement committee established pursuant to section 16-1034 shall consist of six members of which four members shall be selected by the active paid firefighters excluding firefighters identified in section 16-1039. Two members shall be designated by the city council. The members who are not participants in such retirement system shall have a general knowledge of retirement plans. Members of the governing body of such city, active members of the fire department, and members of the general public may serve on the retirement committee. The committee members shall be appointed to four-year terms. Vacancies shall be filled for the remainder of the term by a person with the same representation as his or her predecessor. Members of the retirement committee shall, subject to approval by the city council, be reimbursed for their actual and necessary expenses incurred in carrying out their duties. Cite as Neb. Rev. Stat. § 16-1035 Source: Laws 1983, LB 531, § 16; Laws 1992, LB 672, § 26. § 16-1036. Firefighters Retirement System Fund; authorized investments; retirement committee; powers and duties (1) The funds in the Firefighters Retirement System Fund shall be invested by the retirement committee. The city, subject to the approval of the retirement committee, shall contract with a funding agent or agents to hold or invest the assets of the retirement system and to provide for the benefits provided by sections 16-1020 to 16-1042. The retirement committee, subject to the approval of the city, may also select an investment manager. The city, subject to approval of the retirement committee, may contract with investment managers registered under the Investment Advisers Act of 1940 to invest, reinvest, and otherwise manage such portion of the assets of the retirement system as may be assigned by the city or retirement committee. (2) The retirement committee shall establish an investment plan which allows each member of the retirement system to allocate all contributions to his or her employee account and, if he or she commenced his or her employment after January 1, 1984, his or her employer account to the various investment options or combinations of investment options described in such plan. Each firefighter shall have the option of investing his or her employee account and, if he or she commenced his or her employment after January 1, 1984, his or her employer account in any proportion, including full allocation, in any investment option offered by the plan. Upon the direction of the city, firefighters employed on January 1, 1984, may have the option to allocate their employer account to various investment options or combinations of investment options in any proportion, including full allocation, in any investment option offered by the plan. Each firefighter shall be given a summary of the investment plan and a detailed current description of each investment option prior to making or revising his or her allocation. (3) The funds in the Firefighters Retirement System Fund shall be invested pursuant to the policies established by the Nebraska Investment Council. Cite as Neb. Rev. Stat. § 16-1036 Source: Laws 1983, LB 531, § 17; Laws 1991, LB 2, § 3; Laws 1992, LB 672, § 27; Laws 1993, LB 724, § 12; Laws 2004, LB 1097, § 1. § 16-1036.01. Firefighters Retirement System Fund; schedule of investment costs; allocation The city and the retirement committee shall develop a schedule of investment costs relating to the investment of the funds in each of the accounts in the Firefighters Retirement System Fund, which costs shall be paid out of the funds in such accounts or assessed to the firefighters as provided in such schedule. The schedule of investment costs shall provide for the allocation of the administrative or record-keeping costs of the various investment options available to the members of the retirement system and shall assess such costs so that each member pays a fair proportion of the costs based upon his or her choice of options and number of transfers among options. All other costs related to the general operation of the retirement Grand Island Study Session - 12/11/2012 Page 61 / 68 system established pursuant to sections 16-1020 to 16-1038 and not allocated or assessed pursuant to the schedule of investment costs shall be considered administrative costs and shall be paid by the city from the unallocated employer account. Cite as Neb. Rev. Stat. § 16-1036.01 Source: Laws 1992, LB 672, § 29. § 16-1037. Retirement committee; officers; duties (1) It shall be the duty of the retirement committee to: (a) Elect a chairperson, a vice-chairperson, and such other officers as the committee deems appropriate; (b) Hold regular quarterly meetings and special meetings upon the call of the chairperson; (c) Conduct meetings pursuant to the Open Meetings Act; (d) Provide each employee a summary of plan eligibility requirements, benefit provisions, and investment options available to such employee; (e) Provide, within thirty days after a request is made by a participant, a statement describing the amount of benefits such participant is eligible to receive; and (f) Make available for review an annual report of the system's operations describing both (i) the amount of contributions to the system from both employee and employer sources and (ii) an identification of the total assets of the retirement system. (2)(a) Beginning December 31, 1998, and each December 31 thereafter, the chairperson of the retirement committee shall file with the Public Employees Retirement Board an annual report on each retirement plan established pursuant to section 401(a) of the Internal Revenue Code and administered by a retirement system established pursuant to sections 16-1020 to 16-1042 and shall submit copies of such report to the Auditor of Public Accounts. The Auditor of Public Accounts may prepare a review of such report pursuant to section 84-304.02 but is not required to do so. The annual report shall be in a form prescribed by the Public Employees Retirement Board and shall contain the following information for each such retirement plan: (i) The number of persons participating in the retirement plan; (ii) The contribution rates of participants in the plan; (iii) Plan assets and liabilities; (iv) The names and positions of persons administering the plan; (v) The names and positions of persons investing plan assets; (vi) The form and nature of investments; (vii) For each defined contribution plan, a full description of investment policies and options available to plan participants; and (viii) For each defined benefit plan, the levels of benefits of participants in the plan, the number of members who are eligible for a benefit, and the total present value of such members' benefits, as well as the funding sources which will pay for such benefits. If a plan contains no current active participants, the chairperson may file in place of such report a statement with the Public Employees Retirement Board indicating the number of retirees still drawing benefits, and the sources and amount of funding for such benefits. (b) Beginning December 31, 1998, and every four years thereafter, if such retirement plan is a defined benefit plan, the retirement committee shall cause to be prepared a quadrennial report and the chairperson shall file the same with the Public Employees Retirement Board and submit to the Auditor of Public Accounts a copy of such report. The Auditor of Public Accounts may prepare a review of such report pursuant to section 84-304.02 but is not required to do so. The report shall consist of a full actuarial analysis of each such retirement plan administered by a system established pursuant to sections 16-1020 to 16-1042. The analysis shall be prepared by an independent private organization or public entity employing actuaries who are members in good standing of the American Academy of Actuaries, and which organization or entity has demonstrated expertise to perform this type of analysis and is unrelated to any organization offering investment advice or which provides investment management services to the retirement plan. Cite as Neb. Rev. Stat. § 16-1037 Source: Laws 1983, LB 531, § 18; Laws 1992, LB 672, § 28; Laws 1998, LB 1191, § 20; Laws 1999, LB 795, § 8; Laws 2004, LB 821, § 8. History. Amended by Laws 2011, LB 474, §8, eff. 8/27/2011. Cross References: Open Meetings Act, see section 84-1407. § 16-1038. Retirement benefits; exemption from legal process; exception; tax-qualification requirements; benefit error; correction; appeal; tax levy authorized (1) Except as provided in subsection (6) of this section, Grand Island Study Session - 12/11/2012 Page 62 / 68 the right to any benefits under the retirement system and the assets of any fund of the retirement system shall not be assignable or subject to execution, garnishment, attachment, or the operation of any bankruptcy or insolvency laws, except that the retirement system may comply with the directions set forth in a qualified domestic relations order meeting the requirements of section 414(p) of the Internal Revenue Code. Any payment of benefits subject to such order shall take priority over any payment made pursuant to subsection (6) of this section. The city or retirement committee may require appropriate releases from any person as a condition to complying with any such order. The retirement system shall not recognize any domestic relations order which alters or changes benefits, provides for a form of benefit not otherwise provided for by the retirement system, increases benefits not otherwise provided by the retirement system, or accelerates or defers the time of payment of benefits. No participant or beneficiary shall have any right to any specific portion of the assets of the retirement system. (2) The retirement system shall be administered in a manner necessary to comply with the tax-qualification requirements applicable to government retirement plans under section 401(a) of the Internal Revenue Code, including section 401(a)(9) relating to the time and manner in which benefits are required to be distributed and section 401(a)(9)(G) relating to incidental death benefit requirements, section 401(a)(16) relating to compliance with the maximum limitation on the plan benefits or contributions under section 415, section 401(a)(17) which limits the amount of compensation which can be taken into account under a retirement plan, section 401(a)(25) relating to the specification of actuarial assumptions, section 401(a)(31) relating to direct rollover distribution from eligible retirement plans, and section 401(a)(37) relating to the death benefit of a firefighter who dies while performing qualified military service. Any requirements for compliance with section 401(a) of the Internal Revenue Code may be set forth in any trust or funding medium for the retirement system. This subsection shall be in full force and effect only so long as conformity with section 401(a) of the Internal Revenue Code is required for public retirement systems in order to secure the favorable income tax treatment extended to sponsors and beneficiaries of tax-qualified retirement plans. (3) If the retirement committee determines that the retirement system has previously overpaid or underpaid a benefit payable under sections 16-1020 to 16-1042, it shall have the power to correct such error. In the event of an overpayment, the retirement system may, in addition to any other remedy that the retirement system may possess, offset future benefit payments by the amount of the prior overpayment, together with regular interest thereon. (4) A firefighter whose benefit payment is adjusted by the retirement committee pursuant to subsection (3) of this section may request a review by the city council of the adjustment made by the retirement committee. (5) In order to provide the necessary amounts to pay for or fund a pension plan established under sections 16-1020 to 16-1042, the mayor and council may make a levy which is within the levy restrictions of section 77-3442. (6) If a member of the retirement system is convicted of or pleads no contest to a felony that is defined as assault, sexual assault, kidnapping, child abuse, false imprisonment, or theft by embezzlement and is found liable for civil damages as a result of such felony, following distribution of the member's benefits or the assets of any fund of the member from the retirement system, the court may order the payment of the member's benefits or the assets of any fund of the member under the retirement system for such civil damages, except that the benefits or assets to the extent reasonably necessary for the support of the member or any of his or her beneficiaries shall be exempt from such payment. Any order for payment of benefits or assets shall not be stayed on the filing of any appeal of the conviction. If the conviction is reversed on final judgment, all benefits or assets paid as civil damages shall be forfeited and returned to the member. The changes made to this section by this legislative bill shall apply to persons convicted of or who have pled no contest to such a felony and who have been found liable for civil damages as a result of such felony prior to, on, or after the effective date of this act. Cite as Neb. Rev. Stat. § 16-1038 Source: Laws 1983, LB 531, § 19; Laws 1993, LB 724, § 13; Laws 1995, LB 574, § 24; Laws 1996, LB 1114, § 30. History. Amended by Laws 2012, LB 1082, §16, eff. 4/17/2012. Amended by Laws 2012, LB 916, §3, eff. 4/7/2012. § 16-1039. Firefighter serving on August 7, 1965; pension benefits (1) All cities of the first class having a paid fire department shall pension all firefighters of the paid fire department who were serving as such on August 7, 1965, and who did not elect coverage under the provisions of sections 35-204 to 35-215 as they existed prior to January 1, 1984, whenever such firefighters shall have first served in such fire department for the period of twenty-one years and shall elect to retire from active service and go upon the retired list. (2) Such pension shall be paid by the city in the same manner as firefighters upon the active list are paid. Such pension shall be at least fifty percent of the amount of Grand Island Study Session - 12/11/2012 Page 63 / 68 salary such retiring firefighter is receiving at the time he or she goes upon such pension list. (3) Any such firefighter who retires on or after age fifty-five with less than twenty-one years of service shall receive a pension of at least fifty percent of the salary he or she was receiving at the time of his or her retirement multiplied by the ratio of the years of service to twenty-one. (4) At the death of any such retired firefighter, the same rate of pension, as is herein provided for, shall be paid to the surviving spouse of such deceased firefighter during such time as the surviving spouse shall remain unmarried and, in case there be no surviving spouse, then the minor children, if any, of such deceased firefighter, shall be paid such pension during their minority to the age of eighteen years, except that as soon as a child of such deceased firefighter shall become eighteen years of age, such pension as to such child shall cease. (5) Firefighters subject to subsection (1) of this section shall be subject to sections 16-1029 to 16-1032 but shall be exempt from sections 16-1024, 16-1025, 16-1027, 16-1028, and 16-1033. Cite as Neb. Rev. Stat. § 16-1039 Source: Laws 1983, LB 531, § 20. § 16-1040. Firefighter subject to prior law; contributions; reimbursement After August 7, 1965, every firefighter subject to the provisions of sections 35-201 to 35-203 as they existed prior to January 1, 1984, shall contribute to the city an amount equal to five percent of his or her salary until he or she shall be entitled to retire or otherwise become eligible for a pension. No such firefighter continuing in the employment of the city as a member of such department after becoming eligible to retire shall be required to make any further contribution. Any such firefighter whose employment shall terminate, whether by discharge or otherwise, prior to the time he or she shall become entitled to a pension, and who shall have made contributions from his or her salary as provided in this section shall, upon demand, be reimbursed by the city for the amount of such contributions plus interest at five percent per annum. Cite as Neb. Rev. Stat. § 16-1040 Source: Laws 1983, LB 531, § 21. § 16-1041. Benefits under prior law, how construed Nothing in sections 16-1020 to 16-1042 shall in any manner affect the right of any person now receiving or entitled to receive, now or in the future, pension or other benefits provided for in sections 35-201 to 35-216, as they exist immediately prior to January 1, 1984, to receive such pension or other benefits in all respects the same as if such sections remained in full force and effect. Cite as Neb. Rev. Stat. § 16-1041 Source: Laws 1983, LB 531, § 22; Laws 1985, LB 6, § 1. § 16-1042. Termination of employment; transfer of benefits; when In the event that after four or more years of employment a firefighter terminates his or her employment for the purpose of becoming a firefighter employed by another city of the first class in Nebraska and such new employment commences within ninety days of such termination, such firefighter shall be entitled to transfer to the Firefighters Retirement System Fund of the city by which he or she is newly employed the full amount of his or her contribution and his or her vested portion of the value of his or her employer account at the time of termination. The transferred funds shall be administered by the retirement committee of the city to which transferred. Upon such transfer, the city and the retirement system from which the firefighter transferred shall have no further obligation to such firefighter or his or her beneficiary. Following the commencement of new employment, the transferring firefighter shall be deemed a new employee for all purposes of the retirement system of the city to which he or she transferred. Beginning January 1, 1993, a firefighter who is to receive an eligible rollover distribution, within the meaning of section 401(a)(31) of the Internal Revenue Code, from the retirement system may choose to have such distribution made in the form of a direct transfer to the trustee or custodian of a retirement plan eligible to receive the transfer under the code if the election is made in the form and within the time period required by the retirement committee and the plan to which such transfer is to be made will accept such transfer. Cite as Neb. Rev. Stat. § 16-1042 Source: Laws 1983, LB 531, § 23; Laws 1993, LB 724, § 14; Laws 1995, LB 574, § 25. Grand Island Study Session - 12/11/2012 Page 64 / 68 From:Jaye Monter To:Electeds Subject:FW: Claim on Police Pension-Council Meeting 11/13/12 Date:Monday, November 26, 2012 5:37:00 PM Good Afternoon, After researching additional questions from Council member Haase on the calculation of our last pre-84 pension contribution, we have discovered in the fall of 2004 there was a change to the calculation of pre-84 retiree lump sum payouts. Before 2004, annuity quotes obtained by the retirement committee, the city and the retiree were based upon a straight life annuity. During 2004 there was a change that all annuities quoted on the open market were based upon the joint life of the retiree and spouse. After this large payout, my concern was immediately directed to the funding of the remaining seven pre-84 police employees. Our actuarial valuation from January of 2011 showed the city as being fully funded, meaning the employee’s retirement accounts along with the unallocated account balance would be sufficient to cover the remaining eight payments. We have ordered a new actuarial calculation and are planning a December 11, 2012 study session to discuss with Council future financial needs. The police retirement committee will be meeting tomorrow morning at 10:00 a.m. at city hall to discuss this topic, understand the changes that occurred in 2004 and to be informed this topic will be brought to Council for discussion. Thank you. Jaye Monter City Treasurer/Finance Director City of Grand Island 308-385-5444 ext. 169 308-385-5565 fax jmonter@grand-island.com From: Jaye Monter Sent: Tuesday, November 13, 2012 2:34 PMTo: Council C HaaseCc: ElectedsSubject: RE: Claim on Police Pension Inquiry Hi Chuck, Sorry, I took so long, eleven auditors arrived at our doorsteps this morning. The claim to Wells Fargo Advisors on behalf of retiring pre-1984 officer Kerry Cole Grand Island Study Session - 12/11/2012 Page 65 / 68 represents an accounting transaction of pension contribution expense of $458,919.35 and other revenue of $359,000 to the Police Reserve fund for a cash payout of $99,919.35 out of the Police Reserve 805 Fund. Mr. Cole was one of the eight remaining pre-1984 hired police officers that are referred to in the Police Reserve fund 805 on page 189 in the budget book under the Pension and Trust Fund tab. The contribution of $458K represents the difference between the amount in the retiring police officers Wells Fargo pension account and the cost to the City to provide the pre-1984 officer with the statutory minimum benefits described under Neb. Rev. Stat. Sections 16- 1001 through 16-1019 known as the Police officers Retirement Act for retiring officers who were employed before 1984. Pension contributions of Police officers who leave employment before fully vested are transferred to a separate Wells Fargo unallocated retirement account. The city may use these unallocated funds if they are transferred directly to the retiree’s account which according to our Police Officers’ Retirement Plan representative Greg Anderson avoids the legal issue of a prohibited reversion of plan assets to the employer. In the 2013 budget we have a transfer budgeted from the General Fund to the Police Reserve Fund of $100,000 to cover retiree contributions. Hope that makes sense on the accounting transactions shown below in the schedule of bills. If you need additional details about our plan, I’ll have to contact our Wells Fargo plan representative Greg Anderson. Thank you. 74795 OTHER REVENUE 10 2967 WELLS FARGO ADVISORS KERRY COLE-PRE 84 RETIREMENT POLICE PLAN NOV 2012 174891 (359,000.00) 85480 UNALLOCATED RESERVE CONTR 10 2967 WELLS FARGO ADVISORS KERRY COLE-PRE 84 RETIREMENT POLICE PLAN NOV 2012 174891 458,919.3580551401 Org Total 99,919.35 Jaye Monter City Treasurer/Finance Director City of Grand Island 308-385-5444 ext. 169 308-385-5565 fax jmonter@grand-island.com From: Council C Haase Sent: Monday, November 12, 2012 8:08 PM Grand Island Study Session - 12/11/2012 Page 66 / 68 To: Jaye MonterCc: ElectedsSubject: Claim on Police Pension Inquiry Jaye, I see we have a claim for $458,919.35 (see below) Would you please summarize this claim for me andperhaps other council members. It has the appearance of the city contribution of near a half a millionfor 1 police officer retirement. So wanted to ask to be sure my understanding is accurate or not. Thanks for your help clarifying. \85480 UNALLOCATED RESERVE CONTR10 2967 WELLS FARGO ADVISORS KERRY COLE-PRE 84 RETIREMENT POLICE PLAN NOV 2012 174891 458,919.35 Council Haase Grand Island Study Session - 12/11/2012 Page 67 / 68 From:Council C Haase To:Robert Sivick; Jaye Monter Subject:Pension Reserve Claim - November 13, 2012 meeting - Remedy Requested Date:Wednesday, November 14, 2012 9:28:58 PM Bob & Jaye, During last nights Council meeting, I voted not to approve claim # 85480 on page 143 of the Schedule of Bills to Wells Fargo for$459,919.35 for the Kerry Cole Retirement from the Police Reserve Fund. The basis of the "No" vote was there was insufficientdocumentation to support the claim amount at the time. Preceding the meeting, I had discussions with Jaye on the claim, which is a part of the lump sum police pension payout for retiringPolice Sergeant Kerry Cole. I had a discussion with Dick Rabe, a member of the police pension committee, who was did not recall anypolice officer retiring recently. Several hours before the meeting, I had requested to Jaye that the claim be removed from Council consideration last night so we couldwork thru the appropriateness of the claim. Jaye assured me that the claim was correct and that the payment had already beenmade, and she did not pull the claim from Council consideration before or during the meeting. Additional information was provided today, and a review of the additional information and statute references provided following lastnights meeting, I contend the claim is not correct and request the claim to be remedied. Please advise on the correct process to correct the claim and remedy the Council approved referenced claim from last night. Council HaaseWard 5 Representative Grand Island Study Session - 12/11/2012 Page 68 / 68