With the passage of LB198 in 2024, there are changes to the return-to-work guidelines for School Plan members. Members who have terminated employment but are NOT taking a distribution or applying for a retirement benefit are now allowed to provide unlimited substitute and voluntary service, as well as temporary service, following the termination of regular employment. If you are retired AND receiving your retirement benefits, and thinking about subbing, coaching, or helping with school programs like the OPS radio station, follow these rules to protect your retirement benefits: You’re good to go if you: · Wait 180 days after retiring before taking any paid job in a Nebraska school · Don’t pre-arrange any return-to-work plans BEFORE your retirement date · Do substitute or volunteer work only, and for no more than 8 days per month total You could lose retirement benefits if you: · Take a regular paid job (like coaching or radio staff) within 180 days of retiring. · Work for OPS for more than 8 days a month, even if it’s just subbing · Had a deal to return to work before you officially retired Example: Coaching a team or helping with the school radio is considered a regular job. You can’t do either of these within 180 days of retiring for longer than 8 days a month. If you have questions about the new rules, call Nebraska Public Employee Retirement Systems, 1-402-481-2053 or (800) 245-5712, option #1. More information can be found on the NPERS website, npers.ne.gov.

OSERS benefits are defined in state law. Over the years, there have been multiple changes in the benefit structure for new hires. The benefits that you have are determined by the date that you became a member of OSERS (which is the same date that you signed a contract with OPS).

There are four "tiers" of OSERS benefits, based on when you became a member. The effective date for each of the tiers, as well as the benefit structure for each tier, are outlined in the table below.

If you were hired before July 1, 2018, you are eligible to retire and receive reduced benefits at or following age 55 if you have at least 10 years of credit (5 of which must be with Omaha Public Schools).

You are eligible for unreduced retirement benefits as follows:

• at or following age 65 with at least 5 years of credit

• at or following age 62 with at least 10 years of credit

• at or following age 55 when your age plus service equals or exceeds 85.

If you were hired on or after July 1, 2018, you are eligible to retire and receive reduced benefits at or following age 60 if you have at least 5 years of credit.

You are eligible to retire with unreduced benefits as follows:

• at or following age 65 with five years of credit

• at or following age 60 when your age plus service credit equals or exceeds 85

Vesting establishes a right to a future retirement benefit without additional service. You will be vested in OSERS as soon as you acquire five years of creditable service with Omaha Public Schools. Once vested, you may cease covered employment at any age, hold your membership by leaving your contributions with the Retirement System, and claim a monthly lifetime retirement benefit when you meet minimum eligibility requirements. Your benefit will be calculated under the formula in effect when you end employment. You may, of course, request a refund of your contributions and earned interest after termination of service but before retirement payments start. By doing so you give up your vested status and your right to a monthly benefit based on the credit established before the refund.

Your benefits will come from two sources: the Omaha retirement system, OSERS, and the State Service Annuity. Monthly benefits are calculated using the following formulas:

OSERS

• Multiply your years of retirement system credit by 2%

• Multiply this number by your Highest Average Salary. If you were hired before July 1, 2013 use the highest 3 year's salary; if hired on or after July 1, 2013 use the highest 5 year's salary

• Divide this annual Omaha benefit by 12 to obtain the monthly Omaha benefit

• If you have not yet reached the Rule of 85 (or have not reached "normal retirement age") when you retire, your Omaha benefits will be reduced for early retirement. The FAQ about the four benefit tiers has additional information on the age requirements to receive benefits for each tier.

Example: for a 30-year career, $60,000 annual salary, at age 60 (Rule of 85 applies)

30 x 2% x $60,000 = $36,000 annual benefit for life

$36,000 divided by 12 = $3,000 per month for life

State Service Annuity

• Multiply your years of retirement system credit by $3.50

• If you are not age 65, your State benefits will be reduced for early retirement.

Example: for a 30-year career at age 65:

30 x $3.50 = $105 per month for life

$105 times 12 = $1,260 annual benefit for life

The State Service Annuity is a payment that comes from the State of Nebraska, not from OSERS. It is automatically added to your retirement benefit. The State Service Annuity pays $3.50 per month for each year of service credit that you have. This payment is added to your total retirement benefit when you retire. It is not available to members who were hired after July 1, 2016. The State Service Annuity is reduced if you are younger than 65 (the reduction is determined by the State, not OSERS) unless you have 35 years of service credit and were hired before July19, 1996. Since the State Service Annuity comes from the State, the reduction does not follow the Rule of 85.

Before the first Omaha School Employees' Retirement System benefit payment is made, you must elect one of the six monthly annuity payment options. The payment options are: (A) 5-years Certain; (B) 10-years Certain; (C) 100% Joint and Survivor; (D) 75% Joint and Survivor; (E) 50% Joint and Survivor; and (F) Pop-up Joint and Survivor.

All of the payment options pay for the lifetime of the retiree. The 10-years certain option guarantees 120 monthly payments to either you or a named beneficiary. All other payment options guarantee 60 monthly payment options to either you or a named beneficary. In the event of your death before 60 monthly payments (or 120 monthly payments for the 10-year certain option) have been made, the monthly payments will be continued to your designated beneficiary(ies) or if no beneficiary(ies) has been named, to your estate, until the appropriate total number of monthly payments have been made.

All of the Joint and Survivor forms of payment guarantee a lifetime income to either you or your named joint survivor, whoever lives longer.

You can download a complete description of the six payment options on the link below.

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Your first retirement payment will be issued the third of the month following the month in which your retirement becomes effective. For example, if your effective retirement date is July 1, and all your records are complete, your first retirement payment will be issued on August 3rd. Subsequent payments will be issued on the third day of each month.

Before the first Omaha School Employees' Retirement System benefit payment is made, you must elect one of the six monthly annuity payment options. The 10-years certain option guarantees 120 monthly payments to either you or your designated beneficiary. All other payment options guarantee 60 monthy payments to either you or your designated beneficiary.

In the event of your death before 60 monthly payments (or 120 monthly payments for 10-years certain) have been made, the monthly payments will continue to be paid to your designated beneficiary(ies) until the appropriate number of payments have been made. If no beneficiary(ies) has been named, payments will be made to your estate until the appropriate total number of monthly payments have been made. A complete description of the six payments options can be found in the FAQ about the six payment options .

If you die while still an active employee, there are two alternatives:

• If you have less than 20 years of creditable service in the Retirement System, your contributions plus interest will be refunded to your beneficiary(ies). If no beneficiary card is on file in the Retirement Office, the refund is paid to your estate.

• If you have 20 or more years of creditable service in the Retirement System and have elected as your sole primary beneficiary your spouse (of any age) or any other individual whose attained age at the time of your death is no more than 10 years less than your attained age at death, that one beneficiary is automatically provided with a choice of a pre-retirement survivor's lifetime annuity benefit or the refund of contributions and interest.

If you die after you have begun receiving your retirement benefits, the payment option you chose at retirement governs the amount of the after-death benefits and to whom they will be paid.

You will reach Rule of 85 when the sum of your age and creditable service equals 85. One-half year of service can be combined with one-half year of age to also reach the Rule of 85 (i.e. 55 ½ years of age added to 29 ½ years of service equal 85).

For individuals who were hired before July 1, 2018, retirement under the Rule of 85, as well as all other forms of early retirement, requires the retiree to have reached at least 55 years of age.

For indivduals who were hired on or after July 1, 2018, retirement under the Rule of 85, as well as all other forms of early retirement, requires the retiree to have reached at least 60 years of age.

The Rule of 85 is the time when your age plus your years of service totals 85. When you reach the Rule of 85, your benefits will not be reduced when you retire.

If you were hired before July 1, 2018 you need to be at least 55 years old to retire with unreduced benfits and the Rule of 85.

If you were hired on or after July 1, 2018 you need to be at least 60 years old to retire with unreduced benefits and the Rule of 85.

There is a 3% actuarial reduction in benefits for each year you are short of normal retirement age if you do not have the Rule of 85 when you retire. Your "normal retirement age" depends on when you were hired.

If you were hired before July 1, 2016, your normal retirement age is 62 with 10 years of service credit. (Tiers 1 and 2)

If you were hired on or after July 1, 2016, your normal retirement age is 65 with 5 years of service credit. (Tiers 3 and 4)

The chart below shows the actuarial reduction for each age if you do NOT have Rule of 85:

On January 3rd of each year, a general cost of living adjustment (COLA) will be made to each retirement benefit being paid. This general COLA will either be 1.5% of the Omaha retirement benefit (for retirees who were hired before July 1, 2013), or 1.0% of the Omaha retirement benefit (for retirees who were hired on or after July 1, 2013), not to exceed the actual increase in the consumer price index over the preceding year. If the consumer price index has increased more than 1.5% (or 1.0%) and if the Board of Trustees determines that a supplemental COLA is prudent and actuarially permissible, then upon recommendation of the Board of Trustees, the Board may authorize a supplemental COLA payment. Again, this supplemental COLA cannot exceed the increase in the consumer price index.

In addition to the general COLA, which is paid to both members and beneficiaries, a medical cost of living adjustment is paid on October 3rd of each year, but only to members who have been retired 10 years or more and who were hired before July 1, 2016. The Medical COLA requires 20 years of service credit to receive the full benefit. It is prorated if you have less than 20 years of service credit. The Medical COLA is paid using the following formula:

A. Years of Retirement System Service Credit (how many years did you make retirement system contributions) divided by 20 (number cannot be larger than 1)

B. Multiply the product of Step A by the number of years the member has been retired

C. Multiply the product of Step B by $10

Sample calculation: For a member with 25 years of service credit who has been retired for ten years:

(25/20) x 10 x $10 = (1) x 10 x $10 = $100 per month for Medical COLA

Sample calculation: For a member with 10 years of service credit who has been retired for ten years:

(10/20) x 10 x $10 = (1/2) x 10 x $10 = $50 per month for Medical COLA

The full Medical COLA adds $100 per month to your retirement check beginning October 3rd in your 11th year of retirement (after you have been retired for 10 years), and increases by $10 per month each October 3rd after that. The maximum Medical COLA is $250 per month (in your 26th year of retirement), and stays at that amount for the rest of your life.

If you had less than 20 years of service credit when you retired, your Medical COLA will be prorated, but will be paid on the same October 3rd schedule.

The Medical COLA is a member-only benefit, and is not paid to surviving spouses or other joint annuitants when a member dies.

Upon reemployment, credit for past service in the Omaha Public Schools that has been previously refunded to you can be purchased (Buy-Back). In accordance with State statute, the purchase must be fully completed within five years of the date of re-employment. To reacquire this previous service credit, all contributions and interest that were refunded at the time of resignation must be repaid to the system. Interest is charged on that amount for the period the money was out of the Retirement System. Repayments may be made in a lump sum or in equal installments over a period of up to five years from the date of re-employment. Additional interest is charged on installment payments. The decision and arrangements concerning repayment should be made as soon as possible following the effective date of re-employment.

Up to ten years of previous creditable service in another public school system or Educational Service Unit may be purchased at the time of initial employment by Omaha Public Schools, so long as that service is not used in the calculation of any other retirement or disability benefit having been paid, being paid, or payable in the future. This would include full-time service that gave rise to membership in the Nebraska School Employees Retirement System. In the computation of a member’s retirement benefits, the number of years of “buy-in” service cannot be greater than the number of years of Omaha Public Schools service.

In accordance with State statute, the purchase must be fully completed within five years of the date of employment. The cost of the "buy-in" is calculated based on the salary received at the other public school (if that salary can be verified, otherwise the current salary of the employee in the Omaha School District) and the Omaha School Employees' Retirement System contribution rates in effect for those years of service. Interest is charged on that amount for the period of the years of service through the date of "buy-in".

Payments can be made in a lump sum or in equal installments over a period of up to five years from the date of employment. Additional interest is charged on installment payments. The decision concerning the "buy-in" and arrangements for paying for the "buy-in" should be made as soon as possible following employment. If the employee has more than ten years of membership in a retirement system elsewhere, it is suggested the employee investigate deferred retirement possibilities in that system before withdrawing his/her contributions from that system.

To obtain an official calculation, contact the Retirement Office.

A full-time member of the retirement system who has completed 5 or more years of Omaha Public School service may purchase up to five years of service credit at any time prior to retirement. The member does not need to have any previous teaching years to qualify for this purchase.

In accordance with State statute, payment for the purchase must be fully completed within five years of the date of initiating the purchase. The cost to purchase additional years of service is the present value of the added benefits that are anticipated to be provided as a result of the service purchase. This calculation is based on the member's salary (including actuarial assumptions for salary increases), the date the member would become eligible for unreduced retirement benefits, and the member's life expectancy (using current actuarial tables). Payments can be made in a lump sum or in equal installments over a period of up to five years from the date that this purchase of service credit is approved. Additional interest is charged on installment payments.

You may purchase credit in increments of one-half year.

To help defray the cost to purchase the actuarial computer program needed to make this calculation, a $25.00 charge is assessed to each member requesting an all-purpose buy-in calculation. To obtain an official calculation contact the Retirement Office.

If you leave full-time employment with Omaha Public Schools, all tax-deferred contributions (those deducted from your wages after January 1, 1985), all service purchases paid with tax deferred rollovers and tax deferred payroll deductions, and all interest credited to your account would be eligible to be rolled into an Individual Retirement Account. Any contribution on which taxes have already been paid (those deducted from your wages before January 1, 1985 and any service purchases paid with after tax dollars) cannot be rolled into an Individual Retirement Account. If you choose not to roll the tax-deferred portion of your refund into an IRA or other eligible retirement plan, federal law requires OSERS to withhold 20% of your refund for federal income taxes. If you withdraw your money before you reach age 59½, a 10% federal tax penalty may apply when you file your tax return, in addition to the ordinary income tax owed. Certain exemptions to this rule apply so, as with all tax matters, consult your tax professional for advice.

The answer to this question depends on whether you have worked for Omaha Public Schools for at least 5 years and therefore have become vested in your retirement benefits. If you leave full-time Omaha Public Schools employment before you are vested, you have the right to request a refund of your contributions and interest. If you do not make that request, the Internal Revenue Service requires that we roll over your contributions and interest to an Individual Retirement Account in your name.

If you leave full-time Omaha Public Schools employment after you are vested, you may leave your contributions with the system and, when you meet retirement eligibility requirements, request a monthly lifetime retirement benefit. Your benefit will be calculated under the formula in effect when you left full-time employment with Omaha Public Schools. You may, of course, request a refund or rollover of your contributions at any time before retirement payments start, and give up your right to a monthly lifetime benefit.

The School Board's matching contributions and any State contributions are not paid out unless you retire and take a lifetime retirement income. These contribuitons are not credited to your account, and are not refundable to you, your beneficiary or the School Board. The contributions from the School Board and the State are placed in the Retirement Fund to help pay monthly lifetime benefits to retirees and to the beneficiaries of deceased members.

The law does not permit loans from your retirement account.

According to Nebraska State Statutes, all full-time employees of Omaha Public Schools must be members of the Retirement System. If you leave the employment of Omaha Public Schools before retirement, you are eligible to withdraw all of your retirement system contributions plus credited interest and forfeit all of your OSERS benefits. If you are granted a leave of absence, you are still classified as a full-time employee and therefore are not eligible to withdraw your retirement system monies. The law does not permit partial withdrawals.

There are two main kinds of retirement plans: defined contibution (DC plans); and defined benefit (DB plans). There are major differences between the two kinds of retirement plans.

For a defined contribution plan, members contributed a fixed amount (a defined contribution) to the plan. They generally have some control of where to invest the money, and how much to contribute. When they retire, their retirement income is dependent on several factors:

• How much they contributed to the plan

• How much their contributions earned

• When they start to take retirement payments

• How much they decide to withdraw each year

For a defined benefit plan, members contribute to their retirement plan, but the contribution amount is fixed by law, and the investment choices are determined by professional investment managers. With a DB plan, the benefit that the member receives on retirement is defined in law. With OSERS, that benefit is a fixed percentage of your final average salary. OSERS guarantees to pay retirees a percentage of their final average salary for as long as they live.

In general, defined benefit retirement plans produce a higher retirement income than defined contribution plans for several reasons. Among the reasons:

• Professional investment management generally produces higher returns

• Professional investment management generally has lower fees

• All members of the retirement system are in the same investment "pool," with an infinite time horizon, which allows a DB plan to take a long-term view of the investment market. There is no change in investment stragegy as members retire or get close to retirement age. Individuals with a DC plan generally change investment stragegy as they get close to retirement age.

• There is no "longevity risk" with a DB plan. That means that you can never outlive your retirement income.

With a DB plan, you get your "defined benefit" until the day you die. With a DC plan, your benefit stops when your investment account is depleted, which may occur before you die.

Call Nebraska Public Employees Retirement Systems, NPERS, at 800-245-5712