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Council reviews code updates to police and fire pension definitions and purchase rules
Summary
Staff presented proposed changes to Lincoln Municipal Code related to police and fire pensions, including updates to the definition of total disability, language on cost-of-living adjustments and purchase of prior service credit, and procedural changes for disability and survivor payments.
City staff presented several proposed amendments to Lincoln’s police and fire pension code on Sept. 8 to update medical definitions, expand purchase options for prior service credit, and clarify payment procedures for disability and survivor benefits. The items were presented for council consideration; no final vote on the code text is recorded in the meeting transcript.
Paul Lutomski, police and fire pension officer in the City HR department, told the council the main technical change would update an outdated psychiatric reference in the “total disability” definition. The existing code cited a psychiatric manual from 1980 and a specific federal rating system; staff proposed replacing that citation with the current American Psychiatric Association Diagnostic and Statistical Manual and updating the associated rating language. Lutomski said the physical-disability language would remain unchanged.
The proposal would also expand the service-credit purchase program, first adopted several years ago, to allow part-time prior police or fire experience and military service to count pro rata for purchase toward pension service credit. Staff said employees purchasing service pay the full actuarial cost and that the change is intended to improve recruiting and retention.
Lutomski said staff also recommended changing how a purchase for a cost-of-living adjustment (COLA) is funded: a tax-advice opinion from outside counsel recommended that any COLA purchase be funded from a deferred compensation account or the city’s DROP (deferred retirement option plan) rather than from a traditional IRA to align with IRS expectations should a purchase ever be executed. Staff characterized these funding adjustments as actuarially neutral to the city.
Paul Lutomski noted corresponding amendments are proposed for both Plan A (current plan) and Plan B (an older benefit structure). Separately, staff presented changes to the disability pension review process (also under HR/pension authority) to: require applicants to apply before separation of employment with specified statutory exceptions (for example, heart-and-lung or cancer statutes), allow use of available medical records to make determinations when a member has died (rather than requiring an independent medical exam), and permit the disability review committee to recommend retroactive start dates for payments (no earlier than separation of employment) to reduce delays between approval and payment.
Staff emphasized that purchases of service credit are intended to be cost neutral because employees pay actuarial cost. Council members asked no substantive questions during the presentation. The record shows the items were presented and discussed; the transcript does not record formal adoption votes during the session.
