On April 3, 2025, the Nebraska Retirement Systems Committee convened to discuss critical updates regarding the state's retirement systems, focusing on the implications of changing interest rates and demographic trends on funding and retirement projections. The meeting highlighted the ongoing adjustments to the expected return rates for the retirement portfolio, which have shifted from 6.3% to 6.9% due to higher interest rates on bonds. This change is significant as approximately 30% of the portfolio is invested in fixed income, making it sensitive to fluctuations in interest rates.

Committee members expressed concerns about the stability of interest rates, noting that if rates were to decline, it could adversely affect the net portfolio. The discussions underscored the importance of maintaining a stable funding status and contributions, with hopes that the current return rate would provide a more predictable financial outlook moving forward. The committee aims to finalize these assumptions by June, marking a pivotal step in their long-term planning.

Another key topic was the demographic shifts within the workforce, particularly the impending retirements of baby boomers. As many in this generation approach retirement age, the committee is closely monitoring the potential impact on the retirement systems. The analysis indicates that while the baby boomer generation is largely retired, the retirement probabilities for younger cohorts are already factored into the system's calculations. This proactive approach aims to ensure that the retirement systems remain sustainable despite demographic changes.

Additionally, the committee discussed the potential effects of future educational policy changes on teacher retirements. With ongoing debates about the structure of public education in Nebraska, there is uncertainty about how these changes might influence the number of teachers choosing to retire. The committee acknowledged the difficulty in predicting these shifts but emphasized the importance of data-driven decisions in their ongoing experience studies, which occur every four years.

In conclusion, the Nebraska Retirement Systems Committee's meeting highlighted the critical interplay between interest rates, demographic trends, and educational policies in shaping the future of the state's retirement systems. As they prepare for upcoming changes, the committee remains committed to ensuring the stability and sustainability of retirement benefits for Nebraska's public employees. The next steps will involve finalizing the return assumptions and continuing to monitor demographic trends to adapt to any significant shifts in the workforce.