The Trillion Dollar Gap: Nebraska
Underfunded State Retirement Systems and the Roads to Reform
Nebraska is managing its long-term pension liability well. The state has funded nearly 92 percent of its total pension bill—well above the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts.
Since 2002, the state has paid more than 90 percent of the actuarially required contribution each year. State and county employees were in a defined contribution plan until 2003, when Nebraska switched to a cash balance plan, a hybrid between a defined benefit and defined contribution plan.
In 2009, in an effort to boost the state's pension assets, the legislature passed a law temporarily increasing employee and employer annual contribution rates for certain state pension plans, including the School Retirement Fund. Increased contributions started July 1, 2009, and will last through 2014, when the rate will decrease to its current level. These funding increases are expected to yield $241.8 million.
Nebraska does not calculate its liability for retiree health care and other benefits.
