Via The Associated Press:
A bill that would overhaul the pension system for firefighters and police officers in Nebraska’s two largest cities drew criticism Tuesday from their unions, while conservative groups pitched it as a way to keep the plans solvent.
The measure pending before a legislative committee would offer a cash-balance retirement plan to newly hired officers and firefighters in Omaha and Lincoln, rather than a traditional pension.
Cash-balance plans are similar to pension plans but also have characteristics of 401(k)-style plans. Participants still receive a defined benefit, and supporters note that they’re portable, unlike traditional pensions. But longtime employees could receive less when they retire than they would with a traditional pension.
Sen. Mark Kolterman of Seward said he introduced the measure to keep both cities’ pension plans “solvent and sustainable” while allowing employees to collect a defined benefit. Employees could accept their payout as an annuity or a lump sum.
“It is not my intent to take any retirement benefit from current plan members,” Kolterman said in testimony to the Legislature’s Retirement Systems Committee. “My motive for introducing this bill is to ensure that current plan members receive what they’ve been promised.”
Omaha’s civilian employees have already switched to cash balance plans, said Jim Vokal, a former Omaha city councilman and CEO of the Platte Institute, a free market advocacy groups that has been critical of unions.
The cities’ firefighter and police unions said the bill would endanger public safety by making it harder to recruit new firefighters and police officers. Employees who are able to move would also be more likely to leave for other cities that offer better benefits, said John Wells, president of the Omaha Police Officers Association.