Omaha Public Schools has dug itself into a gigantic financial hole: a pension shortfall of $771 million. Now, the district is looking at options to slowly recover. The process will take years. A prudent proposal before the Legislature this session offers the possibility of a small measure of help.
Legislative Bill 31, by State Sen. Mark Kolterman of Seward, would have a study done to see if savings can be achieved by transferring management of the OPS pension system to the state board that currently administers six other public-employee pension funds. OPS would cover the costs for the $140,000 study.
Kolterman emphasizes that LB 31 would not merge the OPS pension system with the state pension fund for non-OPS teachers, nor would it shift any of the pension liability onto the state. Those need to be central principles, indeed; OPS brought this problem on itself by failing to manage its pension obligations properly, and the district needs to fully shoulder that burden.
Kolterman, who chairs the Legislature’s Retirement Systems Committee, has made those points clear to OPS leaders. At the same time, he has shown a responsible willingness to explore options that might provide a measure of relief to OPS without placing any financial burden on non-OPS taxpayers.
LB 31 is a small effort along that line. The proposed study would compare OPS’s current pension fund administrative costs with those of the state Public Employees Retirement Board, and analyze the costs of transferring management to the state board.
If the study finds that administrative cost savings are likely, the transfer could serve the public interest. The study is to be completed by June 2020 so the Legislature could consider a possible transfer in the 2021 session.
Such a step would generally be in line with the state’s transfer in 2016 of investment authority from the OPS pension management entity to the state’s investment officer. That move is already yielding positive results, Marque Snow, president of the OPS Board, said this week in testifying in support of LB 31 before a legislative committee.
The Legislature’s Retirement Systems Committee, which scrutinizes Nebraska public-sector pension issues closely, has designated LB 31 as one of its two priority bills, boosting the proposal’s chances for consideration.
It’s up to OPS to meet its massive pension obligations. But LB 31 is a small, sensible step to see if efficiencies are possible to provide a modest amount of relief. The measure deserves approval by lawmakers.
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