Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Reemployment Rules topic
No spam. Unsubscribe anytime.
State shortens required separation for school retirees to 120 days; NPERS warns against coaching and pre‑arrangements
Summary
NPERS trainers said LB824 reduced the required separation period for retirees who apply for benefits from 180 to 120 days, removed substitution allowances during the separation, and warned that pre‑arranged reemployment (especially coaching assignments) can trigger audits and large repayment liabilities.
John Tidwell, NPERS training specialist, told webinar attendees that the legislature recently enacted LB824 and the governor signed it, shortening the bonafide separation period for retirees who apply for benefits from 180 days to 120 days. "See, LB824 reduced the separation period down from 180 days down to 120 days," he said, and he added that substitution allowances previously permitted during the separation were eliminated.
Why it matters: NPERS said the change tightens the period a retiree must genuinely be off payroll before returning to regular employment with the Nebraska public school system. Tidwell warned that failing to follow the separation rules or engaging in pre‑arranged rehiring can trigger IRS scrutiny, audits and, in one cited example, catastrophic financial liability for a retiree who was later found by audit to have been ineligible.
Coaching and pre‑arrangement risk: Tidwell detailed common problem scenarios that have prompted audits in the past — for example, coaching positions or work that resembles a continuation of one’s prior duties — and he advised retirees to verify that any post‑retirement position was posted and filled through normal hiring procedures to avoid being treated as a sham termination.
Voluntary substitution and termination timing: Tidwell also explained LB198 and a related allowance: a person who has terminated employment but has not yet filed for a retirement distribution may perform voluntary substitute work (because they have not yet applied for benefits). He stressed that the clock for the 120‑day separation starts when NPERS receives a completed application for monthly benefits, and that members who applied prior to May 1 under earlier rules might have different timing in some cases.
What members should do: Tidwell urged members to take a real break from regular school employment once they file for benefits, to confirm termination and hiring paperwork if a school seeks to rehire them, and to call NPERS for case‑specific guidance before accepting assignments that might jeopardize a monthly pension check.
