23-2317 Retirement system; future service retirement benefit; when payable; how computed; selection of annuity; board; provide tax information. - Nebraska Statutes

23-2317. Retirement system;future service retirement benefit; when payable; how computed; selection ofannuity; board; provide tax information.(1) Thefuture service retirement benefit shall be an annuity, payable monthly withthe first payment made no earlier than the annuity start date, which shallbe the actuarial equivalent of the retirement value as specified in section 23-2316 based on factors determined by the board, except that gender shallnot be a factor when determining the amount of such payments pursuant to subsection(2) of this section.Except as provided in section 42-1107, at any time beforethe annuity start date, the retiring employee may choose to receive his orher annuity either in the form of an annuity as provided under subsection(4) of this section or any optional form that is determined by the board.Except as provided in section 42-1107, in lieu of the futureservice retirement annuity, a retiring employee may receive a benefit notto exceed the amount in his or her employer and employee accounts as of thedate of final account value payable in a lump sum and, if the employee choosesnot to receive the entire amount in such accounts, an annuity equal to theactuarial equivalent of the remainder of the retirement value, and the employeemay choose any form of such annuity as provided for by the board.In any case, the amount of the monthly payment shall be suchthat the annuity chosen shall be the actuarial equivalent of the retirementvalue as specified in section 23-2316 except as provided in this section.The board shall provide to any county employee who is eligiblefor retirement, prior to his or her selecting any of the retirement optionsprovided by this section, information on the federal and state income taxconsequences of the various annuity or retirement benefit options.(2) Except as provided in subsection (4) of this section,the monthly income payable to a member retiring on or after January 1, 1984,shall be as follows:He or she shall receive at retirement the amount which maybe purchased by the accumulated contributions based on annuity rates in effecton the annuity start date which do not utilize gender as a factor, exceptthat such amounts shall not be less than the retirement income which can beprovided by the sum of the amounts derived pursuant to subdivisions (a) and(b) of this subsection as follows:(a) The income provided by the accumulated contributions madeprior to January 1, 1984, based on male annuity purchase rates in effect onthe date of purchase; and(b) The income provided by the accumulated contributions madeon and after January 1, 1984, based on the annuity purchase rates in effecton the date of purchase which do not use gender as a factor.(3) Any amount, in excess of contributions, which may be requiredin order to purchase the retirement income specified in subsection (2) ofthis section shall be withdrawn from the County Equal Retirement Benefit Fund.(4)(a) The normal form of payment shall be a single life annuitywith five-year certain, which is an annuity payable monthly during the remainderof the member's life with the provision that, in the event of his or her deathbefore sixty monthly payments have been made, the monthly payments will becontinued to his or her estate or to the beneficiary he or she has designateduntil sixty monthly payments have been made in total. Such annuity shall beequal to the actuarial equivalent of the member cash balance account or thesum of the employee and employer accounts, whichever is applicable, as ofthe date of final account value. As a part of the annuity, the normal formof payment may include a two and one-half percent cost-of-living adjustmentpurchased by the member, if the member elects such a payment option.Except as provided in section 42-1107, a member may electa lump-sum distribution of his or her member cash balance account as of thedate of final account value upon termination of service or retirement.For a member employed and participating in the retirementsystem prior to January 1, 2003, who has elected to participate in the cashbalance benefit pursuant to section 23-2308.01, or for a member employed andparticipating in the retirement system beginning on and after January 1, 2003,the balance of his or her member cash balance account as of the date of finalaccount value shall be converted to an annuity using an interest rate usedin the actuarial valuation as recommended by the actuary and approved by theboard.For an employee who is a member prior to January 1, 2003,who has elected not to participate in the cash balance benefit prior to January1, 2003, or on or after November 1, 2007, but before January 1, 2008, pursuantto section 23-2308.01, and who, at the time of retirement, chooses the annuityoption rather than the lump-sum option, his or her employee and employer accountsas of the date of final account value shall be converted to an annuity usingan interest rate that is equal to the lesser of (i) the Pension Benefits GuaranteeCorporation initial interest rate for valuing annuities for terminating plansas of the beginning of the year during which payment begins plus three-fourthsof one percent or (ii) the interest rate used in the actuarial valuation asrecommended by the actuary and approved by the board.(b) For the calendar year beginning January 1, 2003, and eachcalendar year thereafter, the actuary for the board shall perform an actuarialvaluation of the system using the entry age actuarial cost method. Under thismethod, the actuarially required funding rate is equal to the normal costrate plus the contribution rate necessary to amortize the unfunded actuarialaccrued liability on a level-payment basis. The normal cost under this methodshall be determined for each individual member on a level percentage of salarybasis. The normal cost amount is then summed for all members. The initialunfunded actual accrued liability as of January 1, 2003, if any, shall beamortized over a twenty-five-year period. During each subsequent actuarialvaluation, changes in the unfunded actuarial accrued liability due to changesin benefits, actuarial assumptions, the asset valuation method, or actuarialgains or losses shall be measured and amortized over a twenty-five-year periodbeginning on the valuation date of such change. If the unfunded actuarialaccrued liability under the entry age actuarial cost method is zero or lessthan zero on an actuarial valuation date, then all prior unfunded actuarialaccrued liabilities shall be considered fully funded and the unfunded actuarialaccrued liability shall be reinitialized and amortized over a twenty-five-yearperiod as of the actuarial valuation date. If the actuarially required contributionrate exceeds the rate of all contributions required pursuant to the CountyEmployees Retirement Act, there shall be a supplemental appropriation sufficientto pay for the difference between the actuarially required contribution rateand the rate of all contributions required pursuant to the act.(c) If the unfunded accrued actuarial liability under theentry age actuarial cost method is less than zero on an actuarial valuationdate, and on the basis of all data in the possession of the retirement board,including such mortality and other tables as are recommended by the actuaryengaged by the retirement board and adopted by the retirement board, the retirementboard may elect to pay a dividend to all members participating in the cashbalance option in an amount that would not increase the actuarial contributionrate above ninety percent of the actual contribution rate. Dividends shallbe credited to the employee cash balance account and the employer cash balanceaccount based on the account balances on the actuarial valuation date. Inthe event a dividend is granted and paid after the actuarial valuation date,interest for the period from the actuarial valuation date until the dividendis actually paid shall be paid on the dividend amount. The interest rate shallbe the interest credit rate earned on regular contributions.(5) At the option of the retiring member, any lump sum orannuity provided under this section or section 23-2334 may be deferred tocommence at any time, except that no benefit shall be deferred later thanApril 1 of the year following the year in which the employee has both attainedat least seventy and one-half years of age and has terminated his or her employmentwith the county, except thatfor members participating in the defined contribution benefit, no distributionis required to be made for the plan year commencing January 1, 2009, throughDecember 31, 2009. Such election by the retiring member may bemade at any time prior to the commencement of the lump-sum or annuity payments. SourceLaws 1965, c. 94, § 17, p. 407; Laws 1979, LB 416, § 2; Laws 1981, LB 462, § 2; Laws 1983, LB 210, § 1; Laws 1985, LB 347, § 8; Laws 1986, LB 311, § 6; Laws 1987, LB 60, § 2; Laws 1992, LB 543, § 1; Laws 1993, LB 417, § 3; Laws 1996, LB 1273, § 15; Laws 2002, LB 687, § 12; Laws 2003, LB 451, § 8; Laws 2006, LB 1019, § 4; Laws 2007, LB328, § 3; Laws 2009, LB188, § 4.