GI City Council Reaches Pension Agreement


After a seven hour debate over a remedy for the overpayment of past police retirees, Grand Island City Council met again for a special meeting Thursday evening; and in 38 minutes reached a decision.

In 2005, things began to change on how the police pension committee calculates retirement benefits, and Grand Island's city council is calling those actions "incorrect and illegal."

The council legally had the option in asking for those dollars back from four retired officers., but then faced the possibility of being sued by those retired officers.

City officials discovered the error that cost them millions of dollars two months ago, in late November of 2012. They saw that retirees have been receiving the wrong type of pension benefits, but council members agreed they won't ask for the money back.

Council members said it was the police pension committee taking matters into their own hands and changing the allowed straight life annuity to a joint life annuity.

In 1983, the Nebraska Legislature passed LB237 which contained the Police Officers Retirement Act. It states in part, "the retiring police officer may elect to receive his or her retirement date, a pension benefit either in the form of a straight life annuity, or any option form annuity benefit established by the retirement committee…" but it goes on to state "[I]f the minimum pension benefit is paid in a form other than straight life annuity, such benefit shall be actuarial equivalent of the straight life annuity that would otherwise be paid to the officer."

That joint annuity means more dollars from the city to retired officers, and Grand Island's council voted to call those joint life annuities illegal, and from this point stated current and future retirees will be based on straight life annuity.

"Two words in state law says it ‘shall be' in straight life annuity, and everything points to straight life annuity. It's the way it should've always been, because we did nothing as a government agency to change that ever," council member Scott Dugan said.

Council members voted unanimously on that resolution, and on a resolution to keep the overpaid dollars as is.

"There has been a lot of emotional stress on some people, and it's unfair to taxpayers. It's been unfair to our retirees who had to go through this. The good news is we've learned a lot in these last several weeks; a lot of things that have gone wrong. We have made changes and we'll continue to make changes," council member Mitch Nickerson said.

Though they didn't authorize the overpayments the city is still vulnerable, and they have not dodged what could come of this situation. It's possible they may find themselves in a lawsuit with the state for overpayments.