Attachment D - Benefit Adequacy Study 2000.pdf
PDF 2 MB Posted
- Solicitation number
- 120961 O5
- Issued by
- Lancaster County, Nebraska
About this file
This document is a Benefit Review Study of the Nebraska Retirement Systems, prepared by Buck Consultants, Inc. in August 2000, analyzing the retirement systems for state employees, school employees, county employees, judges, and state patrol employees. The study comprehensively evaluates the benefit structures, income replacement needs, and competitiveness of these retirement systems by comparing them to national average practices and regional state retirement systems. The analysis focuses on three key approaches: benefit adequacy (maintaining the same standard of living in retirement), competitiveness (providing benefits comparable to similar regional systems), and cost approach (providing the best retirement benefit within a fixed contribution level.
The study reveals significant variations across Nebraska's retirement systems, with some systems ranking above and others below median in different benefit categories. Key findings include that the School and Judges Systems are strongest in meeting employee adequacy needs, while the State and County Systems fall short of both benefit adequacy and competitiveness targets. The State Patrol System ranks above median for Normal and Post-Retirement Death benefits but below average for cost-of-living adjustments. The report recommends potential improvements such as increasing contribution rates, adding defined benefit elements, introducing guaranteed income options, and potentially expanding cost-of-living adjustments to maintain purchasing power throughout retirement. The analysis used consistent assumptions including 5% salary increases, 3.5% inflation, and a 7% investment return to ensure comparative accuracy across different retirement systems.
View the file
Other files
Show 40 more
Latest 50 of 51 listed here. See the rest on GovTribe.
On GovTribe
Work with this file
- Download the original file
- Contacts named in this file
- Similar government files
- Ask GovTribe AI about this file
Text version
Benefit Review Study of the Nebraska
Retirement Systems
August 2000
Buck Consultants, Inc
1200 17th Street, Suite 1200
Denver, Colorado 80202
(720) 359-7700
SECTION
Ι. Introduction
Table of Contents
PAGE
II. Benefit Review Findings
III. Benefit Adequacy
IV. Income Replacement Needs by System: Exhibits 1 Through 8
..4
.8
Exhibit 1. Nebraska State Employees Retirement System (Age 65 Retirement)
Exhibit 2. School Retirement System of the State of Nebraska (Age 65 Retirement)
Exhibit 3. Nebraska County Employees Retirement System (Age 65 Retirement)
Exhibit 4. Judges Retirement System of the State of Nebraska 15
Exhibit 5. Nebraska State Patrol Retirement System 16
Exhibit 6. Nebraska State Employees Retirement System (Age 62 Retirement)
Exhibit 7. School Retirement System of the State of Nebraska (Age 62 Retirement)
Exhibit 8. Nebraska County Employees Retirement System (Age 62 Retirement)
V. Calculation of Benefit Adequacy Achieved: Exhibits 9 through 27 20
Exhibit 9. Value of Retirement Benefit - Five to Ten Years of Service .24
Exhibit 10. Value of Retirement Benefit -- Age 35 to Age 65 25
Exhibit 11. Income Replacement Ratios - Age 35 to Age 65 26
Exhibit 12. Projection of Benefit Payments - Age 35 to Age 65 .27
Exhibit 13. Income Replacement Ratios - School Plan at Age 65. 28
Exhibit 14. Income Replacement Ratios - School Plan at Age 62. 29
Exhibit 15. Income Replacement Ratios - School Plan at Age 60 30
Exhibit 16. Income Replacement Ratios - Judges Plan at Age 65 .31
Exhibit 17. Income Replacement Ratios - State Patrol Current Plan at Age 55 32
Exhibit 18. Income Replacement Ratios - State Patrol Plan with 30 Year Service Cap, at age 55. 33
Exhibit 19. Income Replacement Ratios - State Plan at Age 65. 34
Exhibit 20. Income Replacement Ratios - State Plan at Age 62. 35
Exhibit 21. Income Replacement Ratios - County Plan at Age 65 36
Exhibit 22. Income Replacement Ratios - County Plan at Age 62 .37
Exhibit 23. Income Replacement Ratios - Alternative DC Plan at Age 65
P:\ADMIN2\DB\Reports\Nebraska Benefit Review Study.doc -i-
Table of Contents
Exhibit 24. Over/Under Target Comparison - School Plan 39
Exhibit 25. Over/Under Target Comparison - Judges Plan .40
Exhibit 26. Over/Under Target Comparison - State Patrol Current Plan 41
Exhibit 27. Over/Under Target Comparison - State Patrol Plan with 30 Year Service Cap .42
VI. Competitiveness of Retirement Systems 43
Exhibit 28. Ranking of State and Local Systems
Exhibit 29. Ranking of School Systems
Exhibit 30. Ranking of Judges Systems
50Exhibit 31. Ranking of Public Safety Systems.
VII. Comparison with National Average Practices: Exhibits 32 through 35
Exhibit 32. Public Retirement Practices for State and Local Employees 51
Exhibit 33. Public Retirement Practices for School Employees 52
Exhibit 34. Public Retirement Practices for Judicial Employees 53
Exhibit 35. Public Retirement Practices for Public Safety Employees 54
VIII. Contribution Rate Comparison for Regional Retirement Systems.
Exhibit 36. State and Local Employees.
Exhibit 37. School Employees
Exhibit 38. Judicial Employees
Exhibit 39. Public Safety Employees
IX. Meeting Benefit Adequacy and/or Competitiveness
APPENDICES .62
A. Summary of Benefit Provisions of Nebraska Retirement Systems .63
B. Summary of Benefit Provisions of Other Local Retirement Plans. .64
C. Summary of Benefit Provisions of Regional State Retirement Systems. .65
D. Summary of Benefit Provisions of School Retirement Systems .67
E. Summary of Benefit Provisions of State Judicial Systems .68
F. Summary of Benefit Provisions of Public Safety Systems .70
P:AADMIN2\DB\Reports\Nebraska Benefit Review Study.doc - ii-
I. Introduction
Earlier this year, the Nebraska Public Employees Retirement Board (PERB) recommended a coordinated strategy be developed for the long-term management of the Nebraska Retirement Systems. The coordinated strategy would include a review of benefit, funding, and investment management. The PERB received the support of the Legislative Retirement Committee to proceed with the study, and the Appropriations Committee approved it's funding. As the PERB's actuary, Buck Consultants was asked to perform the analysis. This report presents the results of Phase I of the coordinated strategy: a review of the benefits provided by the Nebraska Retirement Systems.
The five major public employee retirement systems of the State of Nebraska were included in the analysis as follows:
State Employees Retirement System
A defined contribution retirement plan requiring employee contributions of 4.33% of pay up to $19,954 of annual pay and 4.8% over $19,954. The state matches the employee contributions at the rate of 156%.
School Employees Retirement System
A defined benefit retirement plan providing a benefit at retirement of 1.90% times the average pay of the three highest years of pay times years of creditable service.
Employees contribute 7.25% of pay. Participating employers match the employee contributions at the rate of 101%. The State of Nebraska contributes .7% of pay, a fixed appropriation for purchasing power stabilization (approximately .6% of pay), and any other additional contributions as recommended by the actuary to fund the service annuity.
County Employees Retirement System
A defined contribution retirement plan requiring employee contributions of 4% of pay.
The employers match the employee contributions at a rate of 150%.
Judges Retirement System
A defined benefit retirement plan providing a benefit at retirement of 3.5% times the average pay of the three highest years of pay times years of creditable service. The maximum benefit is 70% of final average pay. Employee contributions are 6% of pay during the first 20 years of service. Certain court fees are directed to the plan to assist in the funding of benefits. The State of Nebraska contributes a fixed appropriation for purchasing power stabilization, and other additional contributions may be made as recommended by the actuary.
State Patrol Employees Retirement System
A defined benefit retirement plan providing a benefit at retirement of 3% times the average of the three highest years of pay times years of creditable service. The maximum benefit is 75% of final average pay. Employee and State of Nebraska contributions are each 11% of pay. The State of Nebraska also contributes a fixed appropriation for
P:ADMIN2\DB\Reports\Nebraska Benefit Review Study.doc -1-
File details come from the government source that posted it. Updated .