in Nebraska

Fiscal Budgets Nebraska state budget and finances Tax policy in Nebraska Finance Financial regulation in Nebraska Pensions Public pensions in Nebraska Pension health in Nebraska Civil liberties Affirmative action in Nebraska Campaign finance requirements in Nebraska Campaign finance requirements for Nebraska ballot measures Nonprofit regulation in Nebraska Education Charter schools in Nebraska Higher education in Nebraska Public education in Nebraska School choice in Nebraska Elections Ballot access Ballot access requirements for political candidates in Nebraska Ballot access requirements for political parties in Nebraska Political parties in Nebraska Ballot access requirements for presidential candidates in Nebraska Redistricting in Nebraska Voting in Nebraska Energy and Environment Energy policy in Nebraska Fracking in Nebraska Oil and gas extraction on federal land in Nebraska Endangered species in Nebraska Environmental policy in Nebraska Healthcare Healthcare policy in Nebraska Medicaid spending in Nebraska Effect of the Affordable Care Act in Nebraska Immigration Immigration in Nebraska

---

This article does not contain the most recently published data on this subject. If you would like to help our coverage grow, consider donating to Ballotpedia.

---

The historical Nebraska pension information below applies to prior calendar years. The tabs below may contain information from several different fiscal years; for example, the tab labeled "As published 2015" contains information from fiscal years 2013 and 2012 (the most recent data available at the time of initial publication). For more current information regarding Nebraska's pension system, click here.

As published 2016[edit]

Nebraska information (2015)

Total contributions: $747,612,000

Employee contributions: $297,019,000

Government contributions: $450,593,000

Total payments: $955,070,000

Total cash and investment holdings: $15,734,220,000

Number of state and local pension systems: 31

Active membership: 75,456

Inactive membership: 30,410

Key terms

Actuarial value of assets (AVA) • Unfunded actuarial accrued liability (UAAL) • Annual required contribution (ARC) • Discount rate • Funded ratio • Rate of return • Active member • Inactive member • OPEB

Hover over the above terms for definitions.

Note: This page utilizes information from a variety of sources. The information presented on this page reflects the most recent data available as of August 2016.

Nebraska public pensions are the state mechanism by which state and many local government employees in Nebraska receive retirement benefits.

According to the United States Census Bureau, there were 31 public pension systems in Nebraska as of 2015. Of these, five were state-level programs, while the remaining 26 were administered at the local level. As of fiscal year 2015, membership in Nebraska's various pension systems totaled 105,866. Of these, 75,456 were active members.^[1]

According to a 2013 report by Morningstar, an independent financial research group, most states' pension plans continued to be funded below the 80 percent level considered necessary for a healthy fund. Decreased funding and increasing liabilities since the 2008 recession continued to put pressure on local and state budgets, in some cases leading to bankruptcy. Higher pension costs can have the following consequences:^[2]

• higher taxes
• less intergovernmental aid for services
• lower credit ratings
• higher interest rates on state borrowing

State pension systems can vary in their organization, management, and accounting principles, making them difficult to compare. The basic information on this page comes from the U.S. Census Bureau, as reported by the states and pension funds themselves for fiscal year 2015.

General information[edit]

See also: Pension data, U.S. Census

According to the U.S. Census Bureau, Nebraska had five state pension plans as of 2015:

1. Nebraska Employees Retirement System
2. Nebraska Judges Retirement System
3. Nebraska State Patrol Retirement System
4. Nebraska Schools Retirement System
5. Nebraska County Employees Retirement System

In addition to the aforementioned state-level pension systems, there were 26 locally administered pension systems in Nebraska.^[1]

The table below provides general pension system information for Nebraska and surrounding states.

General pension system information, 2015
State	Systems		Total members	Active members		Inactive members
	State	Local		Members	Percent of total	Members	Percent of total
Nebraska	5	26	105,866	75,456	71.28%	30,410	28.72%
Iowa	4	8	240,135	172,307	71.75%	67,828	28.25%
Kansas	4	N/A	205,436	157,483	76.66%	47,953	23.34%
South Dakota	1	2	57,109	40,441	70.81%	16,668	29.19%
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2015"

Contributions[edit]

See also: Pension contribution and payment data, U.S. Census

Pension contributions are the funds paid into pension systems. These contributions come from the employer (in the case of public pensions, the government) and employees. Investment earnings are the main source of increases in the fund and are listed separately in the rightmost column in the below table.

In fiscal year 2015, the most recent year for which information is available, total contributions of $747.6 million were made to Nebraska's state and local pension systems. Of this amount, $297.0 million came from employees. The remainder came from state and local governments. The table below provides information about pension contributions in Nebraska and surrounding states in fiscal year 2015.^[1]

Pension contributions, fiscal year 2015 (dollars in thousands)
State	Total contributions from employees and employers	Employee contributions		Government contributions		Earnings on investments
		Contributions	Percentage of total	Contributions	Percentage of total
Nebraska	$747,612	$297,019	39.73%	$450,593	60.27%	$785,570
Iowa	$1,257,655	$491,077	39.05%	$766,578	60.95%	$1,309,527
Kansas	$1,181,468	$401,212	33.96%	$780,256	66.04%	$740,133
South Dakota	$240,754	$114,544	47.58%	$126,210	52.42%	$477,991
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2015"

Payments[edit]

See also: Pension contribution and payment data, U.S. Census

Payments are the amounts paid to pension recipients by their pension plans. Pension payments include benefits and withdrawals. Benefits are the regular payments made by a pension plan to the plan's recipients. Pension beneficiaries may also withdraw funds before they are due to receive regular benefits.

In fiscal year 2015, Nebraska's state and local pension systems made payments totaling $955.1 million. The table below provides pension payment information for Nebraska and surrounding states in fiscal year 2015. The columns labeled "Benefits," "Withdrawals," and "Other" are subsets of total payments. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).^[1]

Pension payments, fiscal year 2015 (dollars in thousands)
State	Total payments	Benefits	Withdrawals	Other
Nebraska	$955,070	$850,318	$89,160	$15,591
Iowa	$2,069,216	$1,927,608	$48,238	$93,372
Kansas	$1,756,164	$1,610,783	$67,203	$78,177
South Dakota	$548,898	$493,718	$27,074	$28,106
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2015"

Other post-employment benefits[edit]

See also: Other post-employment benefits, data

In addition to standard pension payments, some plans may offer pensioners additional benefits. These benefits, sometimes referred to as "other post-employment benefits," or "OPEBs," consist of health insurance, life insurance or other benefits that the pensioner may have received while employed. The cost of these benefits can prove complicated for actuaries to calculate because of the changes in fields like medicine. This, coupled with the normal challenges in calculating and meeting pension requirements, can result in funding shortages for pension plans.

Unfunded liabilities totaled nearly $500 billion throughout the country for OPEBs. Nebraska was reported to have minimal unfunded liabilities for OPEBs. This amount was too small to equal more than 0.00 percent of the country's total unfunded liabilities for these other services.

The chart below displays the unfunded liabilities for Nebraska and its surrounding states. All dollar amounts displayed should be multiplied by 1,000,000. For instance, $300 translates to $300,000,000.

Unfunded actuarial accrued liabilities for other post-employment benefits, fiscal year 2013 (dollars in millions)
State	Unfunded liabilities	Percent of total
Nebraska	$0	0.00%
Iowa	$526	0.11%
Kansas	$278	0.06%
South Dakota	$68	0.01%
U.S. total	$497,693	100%
Source: National Association of State Retirement Administrators, "Retiree Health Care Benefits for State and Local Employees in 2014," accessed April 30, 2015. Note: Although this article was dated for 2014, all figures were reported to have come from fiscal year 2013 reports.

Cash and investment holdings[edit]

See also: Pension data, U.S. Census

Investments are a crucial part of the pension process. The goal is that, by investing pension contributions, the pensioner will receive more money when he or she retires than he or she and the employer were able to contribute. These investments can come in the form of cash investments, short-term investments, securities, or other investments. Cash investments are usually low-risk, short-term investments that have a lower rate of return than other types of investments. Other short-term investments are riskier than cash investments, but have the potential for greater returns. Securities can refer to stocks, bonds, or other types of financial certificates that hold some sort of financial value. As the values of these securities change, they can be traded to make a profit. While there are other applications of securities investments, this represents one of the most common practices.^[3][4][5]

As of fiscal year 2015, Nebraska's state and local pension systems held $15.7 billion in total cash and investment holdings. The table below summarizes pension system cash and investment holdings for Nebraska and surrounding states. The columns labeled "Total cash and short-term investments," "Total securities," and "Total other investments" are subsets of the grand total. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).^[1]

Total cash and investment holdings, fiscal year 2015 (dollars in thousands)
State	Grand total	Total cash and short-term investments	Total securities	Total other investments
Nebraska	$15,734,220	$331,825	$7,066,264	$8,336,131
Iowa	$31,377,203	$768,225	$26,856,771	$3,752,207
Kansas	$18,291,114	$209,701	$15,964,937	$2,116,476
South Dakota	$11,284,918	$835,045	$9,145,947	$1,303,926
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2015"

Pension fund management fees[edit]

See also: Public pension fund management fees

In July 2013, the Maryland Public Policy Institute (MPPI) and the Maryland Tax Education Foundation released a report detailing the fees paid for the management of state pension systems. According to MPPI, the 10 state pension funds that paid the most in management fees relative to net assets experienced lower returns over a five-year period than the 10 state pension funds that paid the least in management fees. For example, in fiscal year 2012, South Carolina's pension system paid approximately $296.1 million in total management fees (1.31 percent of total net assets at the beginning of the fiscal year) and its five-year rate of return was 1.46 percent. By contrast, Alabama's pension system paid roughly $13.3 million in management fees (0.05 percent of total net assets) and its five-year rate of return was 7.53 percent.^[6]

The table below presents the information collected by MPPI for Nebraska and surrounding states. For each state's pension system, total net assets are listed (both for the beginning and end of the fiscal year in question), as well as the total amount paid in management fees. In addition, the rates of return for the pension systems are presented. Compared to surrounding states, Nebraska has significantly lower total management fees.

Public pension fund management fees, 2011-2012
State	Fiscal year	Total net assets at the beginning of the year	Total net assets at the end of the year	Total management fees	Management fees as % of total net assets	Five-year rate of return
Nebraska	2011	$8,203,974,912	$9,617,727,238	$2,221,958	0.03%	N/A
Iowa	2012	$23,082,133,000	$23,243,541,000	$50,174,760	0.22%	3.18%
Kansas	2012	$13,468,852,806	$13,105,811,851	$42,225,662	0.31%	1.80%
South Dakota	2012	$7,936,269,496	$7,842,524,241	$35,142,279	0.44%	2.10%
1"Three states— Hawaii, Nevada and Rhode Island—were excluded because they hadn’t published CAFRs for fiscal years ending December 31, 2011 or later. West Virginia was excluded because its June 30, 2012 CAFR lacked sufficient disclosure."[6] Source: Maryland Public Policy Institute, "Wall Street Fees, Investment Returns, Maryland 49 Other State Pension Funds," accessed April 23, 2015. Note: To access this data, navigate to the list of links below the article and click "Exhibit A."

As published 2015[edit]

Public pensions in Nebraska

General information (2013)

Total contributions: $665,669,000

Employee contributions: $275,362,000

Government contributions: $390,307,000

Total payments: $837,538,000

Total cash and investment holdings: $12,748,146,000

Number of state and local pension systems: 13 (5 state systems, 8 local systems)

Active membership: 71,322

Inactive membership: 28,402

Pension health (2012)

Assets: $8,777,117,000

Actuarial accrued liability (AAL): $11,186,879,000

Unfunded actuarial accrued liability (UAAL): $2,409,761,000

Funded ratio: 78.5%

UAAL per capita: $1,339

Public pensions in the states

Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming

Public pensions • State public pension plans • Nebraska state budget and finances

Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of March 2015.

Nebraska public pensions are the state mechanism by which state and many local government employees in Nebraska receive retirement benefits.

According to the United States Census Bureau, there were 13 public pension systems in Nebraska as of 2013. Of these, five were state-level programs, while the remaining eight were administered at the local level. As of 2013, membership in Nebraska's various pension systems totaled 99,724. Of these, 71,322 were active members.^[1]

According to a 2013 report by Morningstar, an independent financial research group, most states' pension plans continued to be funded below the 80 percent level considered necessary for a healthy fund. Decreased funding and increasing liabilities since the 2008 recession continued to put pressure on local and state budgets, in some cases leading to bankruptcy. Higher pension costs can have the following consequences:^[2]

• higher taxes
• less intergovernmental aid for services
• lower credit ratings
• higher interest rates on state borrowing

Background[edit]

The basic information on this page comes from the U.S. Census Bureau, as reported by the states and pension funds themselves for fiscal year 2013. Also included are comparative data from three different reports, which looked at the states' Comprehensive Annual Financial Reports (CAFRs).

General information[edit]

See also: Pension data, U.S. Census

According to the U.S. Census, Nebraska had five state pension plans as of 2013:

1. Nebraska Employees Retirement System
2. Nebraska Judges Retirement System
3. Nebraska State Patrol Retirement System
4. Nebraska Schools Retirement System
5. Nebraska County Employees Retirement System^[8]

In addition to the aforementioned state-level pension systems, there were eight locally administered pension systems in Nebraska.^[1]

The table below provides general pension system information for Nebraska and surrounding states.

General pension system information, 2013
State	Systems		Total members	Active members		Inactive members
	State	Local		Members	Percent of total	Members	Percent of total
Nebraska	5	8	99,724	71,322	71.52%	28,402	28.48%
Iowa	4	5	243,064	169,987	69.94%	73,077	30.06%
Kansas	1	7	202,547	159,068	78.53%	43,479	21.47%
Missouri	10	56	330,705	266,395	80.55%	64,310	19.45%
South Dakota	2	2	55,061	39,700	72.1%	15,361	27.9%
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2013"

Contributions[edit]

See also: Pension contribution and payment data, U.S. Census

Pension contributions are the funds paid into pension systems. These contributions come from the employer (in the case of public pensions, the government) and employees. Investment earnings are the main source of increases in the fund and are listed separately in the rightmost column in the below table.

In fiscal year 2013, total contributions of $666 million were made to Nebraska's state and local pension systems. Of this amount, $275 million came from employees. The remainder came from state and local governments. The table below provides information about pension contributions in Nebraska and surrounding states in fiscal year 2013.^[1]

Pension contributions, fiscal year 2013 (dollars in thousands)
State	Total contributions from employees and employers	Employee contributions		Government contributions		Earnings on investments
		Contributions	Percentage of total	Contributions	Percentage of total
Nebraska	$665,669	$275,362	41.37%	$390,307	58.63%	$1,464,704
Iowa	$1,136,626	$447,065	39.33%	$689,561	60.67%	$2,723,164
Kansas	$969,933	$321,481	33.14%	$648,452	66.86%	$1,995,590
Missouri	$2,665,322	$907,805	34.06%	$1,757,518	65.94%	$9,005,066
South Dakota	$218,101	$104,925	48.11%	$113,176	51.89%	$1,563,340
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2013"

Payments[edit]

See also: Pension contribution and payment data, U.S. Census

Payments are the amounts paid to pension recipients by their pension plans. Pension payments include benefits and withdrawals. Benefits are the regular payments made by a pension plan to the plan's recipients. Pension beneficiaries may also withdraw funds before they are due to receive regular benefits.

In fiscal year 2013, Nebraska's state and local pension systems made payments totaling $837.5 million. The table below provides pension payment information for Nebraska and surrounding states in fiscal year 2013. The columns labeled "Benefits," "Withdrawals," and "Other" are subsets of total payments. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).

Pension payments, fiscal year 2013 (dollars in thousands)
State	Total payments	Benefits	Withdrawals	Other
Nebraska	$837,538	$765,354	$30,773	$41,411
Iowa	$1,951,837	$1,841,468	$43,842	$66,527
Kansas	$1,549,576	$1,431,143	$58,393	$60,040
Missouri	$4,781,070	$4,003,664	$101,554	$675,855
South Dakota	$486,617	$420,272	$25,161	$41,184
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2013"

Cash and investment holdings[edit]

See also: Pension data, U.S. Census

As of fiscal year 2013, Nebraska's state and local pension systems held $12.7 billion in total cash and investment holdings. The table below summarizes pension system cash and investment holdings for Nebraska and surrounding states. The columns labeled "Total cash and short-term investments," "Total securities," and "Total other investments" are subsets of the grand total. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).^[1]

Total cash and investment holdings, fiscal year 2013 (dollars in thousands)
State	Grand total	Total cash and short-term investments	Total securities	Total other investments
Nebraska	$12,748,146	$310,731	$11,811,507	$625,908
Iowa	$27,525,334	$814,794	$24,006,383	$2,704,157
Kansas	$15,918,274	$284,744	$13,579,191	$2,054,339
Missouri	$58,748,518	$3,131,578	$45,429,297	$10,187,644
South Dakota	$9,571,530	$12,376	$8,244,552	$1,314,602
Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2013"

Pension health[edit]

Pension health is a term used to describe the overall state of pension systems. It can be difficult to gauge pension health in each state, but many studies use calculations to determine the average liabilities, unfunded liabilities, funded ratio and other data. Most experts believe that pension systems need to be funded at least 80 percent to be considered healthy. This information is then used to provide a snapshot of the state's overall pension health. This section provides information from three studies regarding the health of pensions in Nebraska and neighboring states. They found the following:

• According to the Pew Charitable Trusts, Nebraska paid 91 percent of its required contribution and its funded ratio was only 79 percent in fiscal year 2012.
• According to Morningstar, the state had a per capita pension debt of $1,339 and a funded ratio of 78.5 percent in fiscal year 2012.
• According to State Budget Solutions, which assumed a lower rate of return, Nebraska had a per capita pension debt of $8,387 and a funded ratio of 38 percent in fiscal year 2013.

Pew research[edit]

See also: Pew Charitable Trusts pensions study, 2014

According to a 2014 report by the Pew Charitable Trusts, “many states are seeing their pension debt continue to increase, despite reform efforts, because of missed contributions and the continued impact of investment losses.” The funding gap between what state pension systems have promised in benefits (liabilities) and current funding (assets) increased by $158 billion from 2010 to 2012 (14 percent), leaving state-run retirement systems with $915 billion in unfunded liabilities. Only 15 states made at least 95 percent of the annual required contributions (ARCs) for their pensions between 2010 and 2012; the aggregate shortfall in funding for all state plans was $21 billion. Data on these state pensions come from the Comprehensive Annual Financial Reports (CAFRs) that each state’s pension plan prepared for fiscal year 2012; these reports include actuarial valuations based on “the expected rate of return on investments and estimates of employee life spans, retirement ages, salary growth, retention rates, and other demographic characteristics.”^[9]

All dollar amounts displayed should be multiplied by 1,000,000 ($240,000 is equal to $240,000,000,000).

Pension health metrics from the Pew Charitable Trusts report, 2010-2012 (dollars in millions)
State	2012			Funded ratio			Percent of ARC paid
	Liability	Unfunded	ARC	2010	2011	2012	2010	2011	2012
Nebraska	$11,484	$2,426	$249	84%	82%	79%	100%	91%	91%
Iowa	$30,097	$6,156	$593	81%	80%	80%	89%	82%	97%
Kansas	$23,531	$10,253	$843	62%	59%	56%	72%	74%	67%
Missouri	$56,986	$12,523	$1,295	77%	82%	78%	89%	93%	96%
South Dakota	$8,571	$638	$100	96%	96%	93%	98%	102%	99%
Totals in the U.S.	$3,298,643	$914,653	$87,213	75%	74%	72%	78%	77%	77%
Source: The Pew Charitable Trusts, "The Fiscal Health of State Pension Plans: Funding Gap Continues to Grow"

Morningstar report[edit]

See also: Pension data, 2013 Morningstar report

In 2013, independent investment research firm Morningstar released "The State of State Pension Plans 2013," a report detailing various metrics of pension system health in all 50 states. Morningstar found a $1.2 trillion gap in 2012 for the largest 100 U.S. public pension plans (according to the actuarial firm Milliman). Based on two key drivers in Morningstar’s analysis—the funded ratio and the unfunded actuarial accrued liability (UAAL) per capita—the fiscal solvency and management of these plans varied greatly. Overall, the firm found that "more than half of all states fall below Morningstar’s fiscally sound threshold of a 70 percent funded ratio" and all state plans combined were "72.6 percent funded with a UAAL per capita of roughly $2,600.”^[2]

According to Morningstar's research, Nebraska's state pension plans were funded at a rate of 78.5 percent in fiscal year 2012. The table below provides state pension system health metrics for Nebraska and surrounding states in fiscal year 2012. Figures in the columns labeled "Assets," "AAL," and "UAAL" are rendered in thousands of dollars (for example, $2,400,000 translates to $2,400,000,000). Figures in the remaining columns have not been abbreviated. To view the full report, click here.

Pension health metrics from the Morningstar report, fiscal year 2012
State	Assets	Liabilities (AAL)	Unfunded liabilities (UAAL)	Funded ratio	Unfunded liabilities per capita
Nebraska	$8,777,117	$11,186,879	$2,409,761	78.5%	$1,339
Iowa	$23,940,276	$30,096,586	$6,156,310	79.5%	$2,041
Kansas	$13,278,490	$23,531,423	$10,252,933	56.4%	$3,650
Missouri	$38,543,470	$50,101,293	$11,557,824	76.9%	$1,952
South Dakota	$7,927,002	$8,562,591	$635,589	92.6%	$795
Totals in the U.S.	$2,157,578,916	$2,979,267,860	$821,688,945	72.40%	N/A
Source: Morningstar, "The State of State Pension Plans 2013: A Deep Dive Into Shortfalls and Surpluses," accessed September 16, 2013

State Budget Solutions report[edit]

See also: Pension data, State Budget Solutions report

State Budget Solutions is "a nonpartisan, nonprofit, national public policy organization with the mission to change the way state and local governments do business."^[10] It should be noted that although the organization is technically nonpartisan, its ideology and mission have conservative leanings. In November 2014, the organization released a research report that used a fair market valuation based on a discount rate of 2.743 percent to determine the unfunded liabilities of public pension plans. The group concluded that "state public pension plans were underfunded by $4.7 trillion in 2014, up from $4.1 trillion in 2013. Overall, the combined plans' funded status ... dipped 3 percentage points to 36 percent. Split among all Americans, the unfunded liability [was] over $15,000 per person."^[11]

According to the State Budget Solutions report, Nebraska's pension plans were funded at a rate of 38 percent. This was lowerX than the Morningstar report's data, and below the Pew Center's recommended level of 80 percent.

To read the full report, click here.

Note that all dollar amounts displayed (excluding those under the "Unfunded liability per capita" column) should be multiplied by 1,000 (e.g., $240,000 is equal to $240,000,000).

Pension health metrics from the State Budget Solutions report, fiscal year 2013 (dollars in thousands)
State	Assets	Market liability*	Funding ratio	Unfunded liability	Unfunded liability per capita	Unfunded liability as % of 2013 gross state product
Nebraska	$9,581,947	$25,257,965	38%	$15,676,018	$8,387	14%
Iowa	$27,018,839	$66,592,672	41%	$39,573,833	$12,807	24%
Kansas	$14,562,765	$51,494,605	28%	$36,931,840	$12,762	26%
Missouri	$50,188,100	$135,964,067	37%	$85,775,967	$14,192	31%
South Dakota	$8,857,928	$16,894,527	52%	$8,036,599	$9,511	17%
Totals in the U.S.	$2,679,831,466	$7,416,319,293	36%	$4,736,487,827	$15,052	29%
Source: State Budget Solutions, "Promises Made', Promises Broken 2014: Unfunded Liabilities Hit $4.7 Trillion"

Other factors[edit]

Rate of return[edit]

According to a 2012 analysis by the Pew Center for the States, most state pension plans assumed an 8 percent rate of return on investments at that time. Proponents argued that an 8 percent rate of return would bear out over the long-term (15-30 years). Critics asserted that this assumption was unrealistic, citing changing market conditions and lower investment returns across the board in preceding years.^[12][13]

Assuming a lower rate of return to predict investment earnings increases current plan liabilities, thereby lowering the percent funded ratio and requiring increased employer contributions (ARCs). This is because future plan liabilities are discounted based on the rate of return, so smaller expected investment returns result in larger actuarially accrued liabilities.^[14] For example, on September 21, 2012, the Illinois Teachers Retirement System voted to lower its rate of return from 8.5 percent to 8.0 percent. This change increased the state's fiscal year 2014 ARC from $3.07 billion to $3.36 billion.^[15] Similarly, when California's CalPERS reduced its projected annual rate of return from 7.75 percent to 7.5 percent in March 2012, it cost the state an additional $303 million for fiscal year 2013.^[16]

Financial crisis[edit]

In the wake of the 2008 recession, proponents of a lower assumed rate of return argued that the standard 8 percent assumptions could cause pension fund managers to engage in more risky investments and imprudent stewardship of public funds. Jeffrey Friedman, a senior market strategist at MF Global, said, "To target 8 percent means some aggressive trading. Ten-year Treasury [bonds] are yielding around 2 percent, economists say we are headed for a double-dip, and house prices aren't getting back to 2007 levels for the next decade, maybe.".^{[17][18][19][20][21]}

Advocates of the 8 percent return rate argued that the dip following the 2008 financial crisis did not prove that there was a long-term downward trend in investment returns. According to Chris Hoene, executive director of the California Budget Project, "The problem with [the market rate] argument is there isn’t significant evidence other than the short term blip during the economic crisis that there’s been that shift. It’s a speculative argument coming out of a very deep recession."^[22]

The National Association of State Retirement Administrators researched the median annualized rate of return for public pensions for the 1-, 3-, 5-, 10-, 20- and 25-year periods ending in 2013 and found it was 7.9 percent over the 20-year period, and exceeded 8 percent for the 1-, 3- and 25-year periods. It is important to note that the NASRA data reported the median returns, which means that median annualized returns of investment portfolios for half of the examined public pension funds failed to meet an 8 percent assumed rate of return.^[23]

Studies and reports[edit]

Pension fund management fees[edit]

See also: Public pension fund management fees

In July 2013, the Maryland Public Policy Institute (MPPI) and the Maryland Tax Education Foundation released a report detailing the fees paid for the management of state pension systems. According to MPPI, the 10 state pension funds that paid the most in management fees relative to net assets experienced lower returns over a five-year period than the 10 state pension funds that paid the least in management fees. For example, in fiscal year 2012, South Carolina's pension system paid approximately $296.1 million in total management fees (1.31 percent of total net assets at the beginning of the fiscal year) and its five-year rate of return was 1.46 percent. By contrast, Alabama's pension system paid roughly $13.3 million in management fees (0.05 percent of total net assets) and its five-year rate of return was 7.53 percent.^[6]

The table below presents the information collected by MPPI for Nebraska and surrounding states. For each state's pension system, total net assets are listed (both for the beginning and end of the fiscal year in question), as well as the total amount paid in management fees. In addition, the rates of return for the pension systems are presented.

Public pension fund management fees, 2011-2012
State	Fiscal year	Total net assets at the beginning of the year	Total net assets at the end of the year	Total management fees	Management fees as % of total net assets	Five-year rate of return
Nebraska	2011	$8,203,974,912	$9,617,727,238	$2,221,958	0.03%	N/A
Iowa	2012	$23,082,133,000	$23,243,541,000	$50,174,760	0.22%	3.18%
Kansas	2012	$13,468,852,806	$13,105,811,851	$42,225,662	0.31%	1.80%
Missouri	2012	$43,421,121,472	$43,142,177,174	$407,748,659	0.94%	1.60%
South Dakota	2012	$7,936,269,496	$7,842,524,241	$35,142,279	0.44%	2.10%
1"Three states— Hawaii, Nevada and Rhode Island—were excluded because they hadn’t published CAFRs for fiscal years ending December 31, 2011 or later. West Virginia was excluded because its June 30, 2012 CAFR lacked sufficient disclosure."[6] Source: Maryland Public Policy Institute, "Wall Street Fees, Investment Returns, Maryland 49 Other State Pension Funds," accessed April 23, 2015. Note: To access this data, navigate to the list of links below the article and click "Exhibit A."

Other post-employment benefits[edit]

See also: Other post-employment benefits, data

In addition to standard pension payments, some plans may offer pensioners additional benefits. These benefits, sometimes referred to as "other post-employment benefits," or "OPEBs," consist of health insurance, life insurance or other benefits that the pensioner may have received while employed. The cost of these benefits can prove complicated for actuaries to calculate because of the changes in fields like medicine. This, coupled with the normal challenges in calculating and meeting pension requirements, can result in funding shortages for pension plans.

Unfunded liabilities totaled nearly $500 billion throughout the country for OPEBs. Nebraska was reported to have minimal unfunded liabilities for OPEBs. This amount was too small to equal more than 0.00 percent of the country's total unfunded liabilities for these other services.

The chart below displays the unfunded liabilities for Nebraska and its surrounding states. All dollar amounts displayed should be multiplied by 1,000,000. For instance, $300 translates to $300,000,000.

Unfunded actuarial accrued liabilities for other post-employment benefits, fiscal year 2013 (dollars in millions)
State	Unfunded liabilities	Percent of total
Nebraska	$0	0.00%
Iowa	$526	0.11%
Kansas	$278	0.06%
Missouri	$2,671	0.54%
South Dakota	$68	0.01%
U.S. total	$497,693	100%
Source: National Association of State Retirement Administrators, "Retiree Health Care Benefits for State and Local Employees in 2014," accessed April 30, 2015. Note: Although this article was dated for 2014, all figures were reported to have come from fiscal year 2013 reports.

Public pensions in 2012[edit]

In fiscal year 2012, according to the systems' Actuarial Valuation Reports, Nebraska had a total of 57,113 active members in its retirement plans. Membership figures divide plan participants into two broad categories: active and other. Active members are current employees contributing to the pension system. Other members include retirees, beneficiaries, and other inactive plan participants (usually terminated employees entitled to benefits but not yet receiving them).^[24]

The following information was collected from the state's 2012 Actuarial Valuation Reports, which measured fund status as of July 1, 2012. Valuation reports are annual reports produced by outside consultants, using unaudited data provided by the pension systems themselves, in order to determine what employers in the system should contribute in the coming year to maintain or improve the fiscal health of the pension funds. Nebraska’s Actuarial Valuation Reports for 2012 were produced by Buck Consultants, a global human resources consulting firm.^[25] The "percentage funded" was calculated by taking the current value of the fund and dividing by the estimated amount of total liabilities. The assumed rates of return used to calculate current fund value vary by system (see "Rate of return" for more information).

The Government Accountability Office (GAO) and Pew Research Centers cited a percent funded ratio of 80 percent as the minimum threshold for a healthy fund, though the American Academy of Actuaries suggested that all pension systems "have a strategy in place to attain or maintain a funded status of 100 percent or greater.^[26][27]

The column labeled "SBS figure" refers to a market liability calculation of the fund by the nonprofit organization State Budget Solutions. This analysis used a rate of return of 3.225 percent, which was based upon the 15-year Treasury bond yield. The organization called this a "risk-free" rate of return that would make it easier for states to achieve their pension funding requirements in the future. Beginning in 2006, all private sector corporate pension plans incorporated market costs into their funding schemes.^[28]

Basic pension plan information -- Nebraska Public Employees Retirement Systems
Plans	Current value	Percentage funded		Unfunded liabilities		Membership
		State figure	SBS figure[29]	State figure	SBS figure[29]
State Employees Retirement Benefit Fund[30]	$1,009,414,476	93.6%	N/A[31]	$68,543,296	N/A[31]	11,263 active members
Nebraska Judges' Retirement System[32]	$111,006,176	107.0%		$7,301,926		146 active members
Nebraska School Employees' Retirement System[33]	$7,358,964,135	76.6%		$2,250,192,999		39,886 active members
Nebraska State Patrol Retirement System[34]	$282,810,785	78.1%		$79,488,190		433 active members
County Employees' Retirement System[35]	$281,261,645	94.5%		$16,310,981		5,796 active members
TOTALS	$9,043,457,217	78.9 percent	40 percent	$2,421,837,392	$13,381,444,000	57,524 active members

Annual Required Contribution[edit]

Annual Required Contributions (ARC) are calculated annually and are a sum of two different costs. The first component is the "normal cost," or what the employer owes to the system in order to support the liabilities gained in the previous year of service. The second component is an additional payment in order to make up for previous liabilities that have not yet been paid for. According to a report by the Pew Center on the States, in 2010, Nebraska paid 100 percent of its annual required contribution.^[36][37]

On June 25, 2012, the Government Accounting Standards Board (GASB) approved a plan to reform the accounting rules for state and local pension funds. These revised standards were set to take effect in fiscal years 2013 and 2014.^[38] As a result, ARCs were removed as a reporting requirement. Instead, plan administrators and accountants were instructed to use an actuarially determined contribution or a statutory contribution for reporting purposes.^[39]

ARC historical data
Fiscal year	Nebraska Judges' Retirement System[32]		State Employees Retirement Benefit Fund[30]		Nebraska School Employees' Retirement System [33]		Nebraska State Patrol Retirement System[34]		County Employees' Retirement System[35]
	Annual Required Contribution (ARC)	Percentage contributed	Annual Required Contribution (ARC)	Percentage contributed	Annual Required Contribution (ARC)	Percentage contributed	Annual Required Contribution (ARC)	Percentage contributed	Annual Required Contribution (ARC)	Percentage contributed
2012	$3,483,614	100%	$32,096,097	100.0%	$192,478,407	88%	$7,774,506	100%	$12,696,338	100%
2011	$3,579,661	100%	$31,088,483	100.0%	$177,075,136	89%	$7,173,344	83%	$11,908,346	100%
2010	$3,615,291	100%	$30,679,003	100.0%	$150,225,779	100.0%	$6,260,122	100%	$11,370,059	100%
2009	$3,491,335	100%	$30,321,032	100.0%	$130,649,490	100.0%	$5,384,789	100%	$10,555,174	100%
2008	$3,353,208	100%	$29,208,772	100.0%	$121,810,495	100.0%	$4,855,700	100%	$9,839,409	100%

Public pensions in 2011[edit]

On June 27, 2013, Moody's Investor Service released its report on adjusted pension liabilities in the states. The Moody's report ranked states "based on ratios measuring the size of their adjusted net pension liabilities (ANPL) relative to several measures of economic capacity." In its calculations of net pension liabilities, Moody's employed market-determined discount rates (5.54 percent for Montana) instead of the state reported assumed rates of return (7.75 percent for Nebraska).^[40]

The report's authors found that adjusted net pension liabilities varied dramatically from state to state, from 6.8 (Nebraska) percent to 241 (Illinois) percent of governmental revenues in fiscal year 2011.^[40]

The adjusted net pension liability for Nebraska's pension system in fiscal year 2011 was ranked 50th.^[40] The following table presents key state-specific findings from the Moody's report, as well as the state's national rank with respect to each indicator.

Adjusted net pension liabilities (ANPL) relative to key economic indicators - Nebraska
	Governmental revenue*	Personal income	State GDP	Per capita
State findings	6.8%	0.7%	0.6%	$286
National ranking	50th	50th	50th	50th
*Moody's uses governmental revenues as reported in each state's consolidated annual financial reports; this includes not only state-generated revenue, but federal funds, as well.[40]

Historical pension plan data[edit]

Historical pension plan data - all systems
Year	Value of assets	Accrued liability	Unfunded liability	Funded ratio
2008	$8,139,492,345	$8,894,327,510	$767,113,470	97.28%
2010	$8,355,790,094	$9,969,090,553	$1,613,494,021	90.84%
2012	$9,058,378,564	$10,847,307,482	$2,426,072,604	86.88%
Change from 2008-2012	$918,886,219	$1,952,973,972	$1,658,959,134	-10.4%

Historical pension plan data - Nebraska Judicial Retirement System[32]
Year	Value of assets	Accrued liability	Unfunded liability	Funded ratio
2008	$119,961,758	$114,251,081	$5,710,677	105.0%
2010	$121,406,463	$121,309,682	$96,781	100.1%
2012	$125,927,523	$137,464,661	$ 11,537,138	91.6%
Change from 2008-2012	$5,965,765	$23,213,580	$5,826,461	-13.4%

Historical pension plan data - Nebraska School Employees' Retirement System[33]
Year	Value of assets	Accrued liability	Unfunded liability	Funded ratio
2008	$6,932,918,638	$7,654,536,359	$721,617,721	90.6%
2010	$7,040,908,599	$8,542,119,000	$1,501,210,401	82.4%
2012	$7,358,964,135	$9,609,157,134	$2,250,192,999	76.6%
Change from 2008-2012	$426,045,197	$1,954,620,775	$1,528,575,278	-14%

Historical pension plan data - Nebraska State Patrol Retirement System[34]
Year	Value of assets	Accrued liability	Unfunded liability	Funded ratio
2008	$273,393,928	$291,996,719	$18,602,791	93.6%
2010	$273,306,925	$321,901,446	$48,594,521	84.9%
2012	$282,810,785	$362,298,975	$79,488,190	78.1%
Change from 2008-2012	$9,416,857	$70,302,256	$60,885,399	-15.5%

Historical pension plan data - Nebraska County Employees' Retirement System[35]
Year	Value of assets	Accrued liability	Unfunded liability	Funded ratio
2008	$175,765,930	$175,293,953	$471,977	100.3%
2010	$206,036,302	$221,080,026	$15,043,724	93.2%
2012	$281,261,645	$297,572,626	$16,310,981	94.5%
Change from 2008-2012	$105,495,715	$122,278,673	$15,839,004	-5.8%

Historical pension plan data - Nebraska School Employees' Retirement System[33]
Year	Value of assets	Accrued liability	Unfunded liability	Funded ratio
2008	$637,539,094	$658,249,398	$20,710,304	96.9%
2010	$714,131,805	$762,680,399	$48,548,594	93.6%
2012	$1,009,414,476	$1,077,957,772	$68,543,296	93.6%
Change from 2008-2012	$371,875,382	$419,708,374	$47,832,992	-3.3%

Reforms[edit]

Enacted reforms[edit]

2013[edit]

NE L 553
This bill, which was enacted on May 14, 2013 after the Governor's veto was overridden, changes provisions relating to school employee retirement to include the determination of final average compensation for new members, changes the minimum number of hours worked per week to be determined a regular employee, changes the actual accrued liability to be determined for each employee on a level percentage of salary basis, repeals a state contribution requirement to the Annuity Reserve Fund, and adds provisions regarding the annual benefit determination for members or beneficiaries.^[41]

2012[edit]

NE L 916
This bill, signed into law on April 6, 2012, amended public retirement provisions, provides for the use of retirement benefits to pay civil damages for utilities district employees, police officers, firefighters, county employees, judges, participants in deferred compensation plans, school employees, court employees, officers of the Nebraska State Patrol, and state employees as prescribed, exempted per diems from the definition of compensation, clarified tax-qualification requirements, and amended rollover distributions and death benefits.^[41]

2011[edit]

Legislative Bill 382
This bill, approved by the governor on May 4, 2011, increased employee and employer contribution requirements for the School Employees Retirement System, the State Patrol Retirement System and the Omaha School Employees Retirement System.^[41]

Proposed reforms[edit]

2013[edit]

NE L 638
This act, which failed on January 23, 2013, would have provided a cash balance retirement system for school employees.^[41]

2012[edit]

NE L 1022

This bill, which failed on January 17, 2012, would have changed officer and employer contribution rates under the Nebraska State Patrol Retirement Act.^[41]

See also[edit]

• Public pensions in the United States
• Nebraska state budget and finances
• Tax policy in Nebraska
• Pension statistics
• Public pension health by state
• Public pensions

External links[edit]

• Pension Tsunami
• Pension Calculator from Public Sector Inc.'
• Center for Retirement Research at Boston College, "How did state/local plans get so underfunded?"
• Nebraska State Pension Fund Management - State Integrity Investigation
• NCSL, "Understanding New Public Pension Funding Guidelines and Calculations"
• Reason, "Pension Reform Handbook," July 2014

Footnotes[edit]

v • e Ballotpedia About Overview • What people are saying • Support Ballotpedia • Contact • Contribute • Job opportunities Executive: Leslie Graves, President • Gwen Beattie, Chief Operating Officer Communications: Alison Graves • Carley Allensworth • Abigail Campbell • Sarah Groat • Nathaniel Harwood • Dillon Redmond • Erica Shumaker External Relations: Andrew Heath • Hannah Nelson Operations: Meghann Olshefski • Amanda Herbert • Mandy Morris • Caroline Presnell • Kelly Rindfleisch Policy: Jimmy McAllister • Molly Byrne • Jon Dunn • Annelise Reinwald • Emma Soukup Content Strategy: Josh Altic Tech: Matt Latourelle • Ryan Burch • Kirsten Corrao • Beth Dellea • Travis Eden • Tate Kamish • Margaret Kearney • Eric Lotto • Joseph Sanchez • Mary Susmitha Contributors: Scott Rasmussen Editorial Content Geoff Pallay, Director of Editorial Content and Editor-in-Chief • Ken Carbullido, Vice President of Election Product and Technology Strategy • Daniel Anderson, Managing Editor • Ryan Byrne, Managing Editor • Cory Eucalitto, Managing Editor • Mandy Gillip, Managing Editor • Doug Kronaizl, Local Elections Project Manager • Jaclyn Beran • Marielle Bricker • Joseph Brusgard • Emma Burlingame • Kelly Coyle • Thomas Ellis • Frank Festa • Nicole Fisher • Brianna Hosea • Joseph Greaney • Thomas Grobben • Jaime Healy-Plotkin • Tyler King • Glorie Martinez • Nathan Maxwell • Ellie Mikus • Jackie Mitchell • Ellen Morrissey • Mackenzie Murphy • Kaley Platek • Samantha Post • Adam Powell • Ethan Rice • Spencer Richardson • Victoria Rose • Briana Ryan • Myj Saintyl • Maddy Salucka • Maddie Sinclair Johnson • Abbey Smith • Ethan Sorell • Janie Valentine • Joel Williams • Samuel Wonacott • Trenton Woodcox • Mercedes Yanora

	v • e State of Nebraska Lincoln (capital)
Elections	What's on my ballot? | Elections in 2024 | How to vote | How to run for office | Ballot measures
Government	Who represents me? | U.S. President | U.S. Congress | Federal courts | State executives | State legislature | State and local courts | Counties | Cities | School districts | Public policy