§ 79-958 — Employee; employer; required deposits and contributions

(1)(a) Beginning on September 1, 2012, and prior to July 1, 2025, for the purpose of providing the funds to pay for formula annuities, every employee shall be required to deposit in the School Retirement Fund nine and seventy-eight hundredths of one percent of compensation.
(b) Beginning in 2025 and each year thereafter, the employee contribution rate shall be calculated as of July 1 and based on the funded ratio of the actuarial value of assets in the School Retirement Fund in the most recent previous year as reported in the annual actuarial valuation report for the retirement system prepared for the retirement board pursuant to section 84-1503 . Beginning on July 1, 2025, for the purpose of providing the funds to pay for formula annuities, every employee shall deposit the following amounts into the School Retirement Fund:
(i) If the funded ratio on the actuarial value of assets in the School Retirement Fund is less than ninety-six percent, nine and three-quarters of one percent of compensation;
(ii) If the funded ratio on the actuarial value of assets in the School Retirement Fund is ninety-six percent or greater and less than ninety-eight percent, eight and three-quarters of one percent of compensation;
(iii) If the funded ratio on the actuarial value of assets in the School Retirement Fund is ninety-eight percent or greater and less than one hundred percent, eight percent of compensation; and
(iv) If the funded ratio on the actuarial value of assets in the School Retirement Fund is one hundred percent or greater, seven and one-quarter of one percent of compensation.
(c) Deposits under this subsection shall be transmitted at the same time and in the same manner as required employer contributions.
(2) For the purpose of providing the funds to pay for formula annuities, every employer shall be required to deposit in the School Retirement Fund one hundred one percent of the required contributions of the school employees of each employer. Such deposits shall be transmitted to the retirement board at the same time and in the same manner as such required employee contributions.
(3) The employer shall pick up the member contributions required by this section for all compensation paid on or after January 1, 1986, and the contributions so picked up shall be treated as employer contributions pursuant to section 414(h)(2) of the Internal Revenue Code in determining federal tax treatment under the code and shall not be included as gross income of the member until such time as they are distributed or made available. The contributions, although designated as member contributions, shall be paid by the employer in lieu of member contributions. The employer shall pay these member contributions from the same source of funds which is used in paying earnings to the member. The employer shall pick up these contributions by a compensation deduction through a reduction in the cash compensation of the member. Member contributions picked up shall be treated for all purposes of the School Employees Retirement Act in the same manner and to the same extent as member contributions made prior to the date picked up.
(4) The employer shall pick up the member contributions made through irrevocable payroll deduction authorizations pursuant to sections 79-921 and 79-933.03 to 79-933.06 , and the contributions so picked up shall be treated as employer contributions in the same manner as contributions picked up under subsection (3) of this section.

Legislative History

Source: Laws 1945, c. 219, § 32, p. 649; R.S.Supp.,1947, § 79-2932; Laws 1949, c. 256, § 465, p. 851; Laws 1951, c. 291, § 6, p. 968; Laws 1959, c. 414, § 2, p. 1388; Laws 1967, c. 546, § 9, p. 1806; Laws 1971, LB 987, § 24; Laws 1984, LB 457, § 3; Laws 1985, LB 353, § 3; Laws 1986, LB 325, § 11; Laws 1988, LB 160, § 4; Laws 1988, LB 1170, § 6; Laws 1991, LB 549, § 39; Laws 1994, LB 833, § 33; Laws 1995, LB 574, § 80; Laws 1996, LB 700, § 10; R.S.Supp.,1995, § 79-1531; Laws 1996, LB 900, § 593; Laws 1997, LB 623, § 27; Laws 1998, LB 1191, § 57; Laws 2001, LB 408, § 17; Laws 2002, LB 407, § 35; Laws 2005, LB 503, § 10; Laws 2007, LB596, § 2; Laws 2009, LB187, § 1; Laws 2011, LB382, § 1; Laws 2013, LB263, § 19; Laws 2013, LB553, § 8; Laws 2017, LB415, § 33; Laws 2025, LB645, § 2. Effective Date: May 7, 2025