Sen. Joe Zarelli’s SB 5908 to throw out PERS 2 and PERS 3 and replace it with what’s basically a PERS 4 has not been scheduled for a vote in the Senate Ways and Means Committee.
At a hearing late Wednesday, the Zarelli bill got no support except from Zarelli.
It would create a new Public Employees Savings Plan (PSEP) for all new state employees hired effective Jan. 1, 2013. This would be a defined contribution plan, not a defined benefit plan like PERS 2 and half of PERS 3. Employees would contribute 5 percent up to age 35, 7.5 percent from 35 to 55 and 10 percent after that.
But as the Federation and other allies testified, Zarelli’s PERS 4 plan would provide less benefits and higher costs.
John Kwamme said Nebraska has a defined contribution plan for public employees, except for teachers who have a defined benefit plan. Over 30 years, the teachers with a defined benefit plan have come out further ahead.
And as Sen. Steve Conway of the 29th District pointed out, Social Security is a defined benefit plan and no one is advocating replacing it with a defined contribution plan.
The problem with unfunded liability doesn’t come from employees – in fact PERS 2 and 3 are fully funded. It comes because the Legislature failed to make its contributions to the system and instead gave away $3 billion tax breaks over the past 10 years.
At a hearing late Wednesday, the Zarelli bill got no support except from Zarelli.
It would create a new Public Employees Savings Plan (PSEP) for all new state employees hired effective Jan. 1, 2013. This would be a defined contribution plan, not a defined benefit plan like PERS 2 and half of PERS 3. Employees would contribute 5 percent up to age 35, 7.5 percent from 35 to 55 and 10 percent after that.
But as the Federation and other allies testified, Zarelli’s PERS 4 plan would provide less benefits and higher costs.
John Kwamme said Nebraska has a defined contribution plan for public employees, except for teachers who have a defined benefit plan. Over 30 years, the teachers with a defined benefit plan have come out further ahead.
And as Sen. Steve Conway of the 29th District pointed out, Social Security is a defined benefit plan and no one is advocating replacing it with a defined contribution plan.
The problem with unfunded liability doesn’t come from employees – in fact PERS 2 and 3 are fully funded. It comes because the Legislature failed to make its contributions to the system and instead gave away $3 billion tax breaks over the past 10 years.
CALL YOUR SENATOR: We assume nothing with Sen. Zarelli. So call 1-800-562-6000 and urge your senator to oppose SB 5908, the PERS 4 bill. It costs more and provides lower benefits to retirees.
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