Teachers Keep More Take Home Pay; Retirement Plan Fully Funded

LINCOLN, NE – A new report presented to Governor Jim Pillen provides reassuring news to teachers. The most recent actuarial valuation of the School Retirement System indicates that the School Employees Retirement System (the Plan) is more than 100% funded, translating to money in their pockets, as well as a stable funding pool for retirement.

The report, authored annually and submitted to the Public Employees Retirement Board (PERB), is the first since the passage of LB645, introduced last legislative session by Senator Beau Ballard on the Governor’s behalf. The new law applies to all state teachers, except those in the Omaha School District, who are covered under a separate retirement plan. It stipulates the contribution rate by employees, their employers and the state, based on the funded ratio of the actuarial value of assets in the previous year.

Prior to passage of LB645, the state was making a 2% contribution to the fund, regardless of its status. Based on results of the most recent actuarial valuation and the current statutory contribution rates for fiscal year (FY) 2026, no additional state contribution is required in the current plan year. That translates to a reduction of more than $45 million in state spending, which is required through the new legislation to be invested in education.

The rate of contribution for teachers is 7.25% and for school districts 7.32%. But with the plan fully funded, it enables teachers to retain an additional $1,000 a year average in take home pay.

“The ability to modify contributions based on the fund’s status provides much needed flexibility,” said Gov. Pillen. “This allows us to be good stewards of our tax dollars, make further investments in education and it provides teachers stability in the amount of contribution they are required to make.”   
In addition to members of PERB, the report is also provided to Gov. Pillen for his review.