Nebraska Administrative Code
Topic - PUBLIC EMPLOYEES RETIREMENT SYSTEMS
Title 303 - PUBLIC EMPLOYEES RETIREMENT BOARD
Chapter 14 - CAPPING OF RETIREMENT COMPENSATION
Section 303-14-003 - Conventions for Calculation of Final Average Compensation or Final Average Monthly Compensation
Universal Citation: 303 NE Admin Rules and Regs ch 14 ยง 003
Current through March 20, 2024
003.01 DETERMINATION OF 12-MONTH PERIODS .
003.01(a) The
calculation of a School Plan member's final average compensation shall commence
by dividing the entirety of the member's service with all public schools into a
succession of 12 month periods, with the last such period ending the month
during which the member's final compensation date occurs.
003.01(b) The calculation of a Patrol Plan
member's final average monthly compensation shall commence by dividing the
entirety of the member's service with the Nebraska State Patrol into a
succession of 12 month periods, with the last such period ending the month
during which the member's compensation is paid.
003.01(c) For example, and illustrative
purposes only, if a member's final compensation date occurs during August of a
given year, the member's service shall be divided into a series of the 12-month
periods, each of which shall begin with the month of September and end with the
month of August.
003.02 ADJUSTMENT OF COMPENSATION RECEIVED DURING THE CAPPING PERIOD
Solely for purposes of calculating a member's final average compensation or final average monthly compensation, as applicable, the compensation received by a member during the capping period shall be limited by excluding the portion, if any, of such member's compensation for a plan year that exceeds the member's compensation for the preceding plan year, as adjusted below, by more than eight percent. The capping period begins with the first year following the base year and ends with the most recent year. Such limitation of compensation during the capping period shall be calculated as follows:
003.02(a) Compensation for
the first year of the capping period shall be equal to the lesser of:
003.02(a)(i) the member's compensation for
such year; or
003.02(a)(ii) an
amount equal to the member's compensation for the base year multiplied by
108%.
003.02(a)(iii) This amount is
referred to as the member's adjusted compensation for the first year of the
capping period.
003.02(b) Compensation for the second year of
the capping period shall be equal to the lesser of:
003.02(b)(i) the member's compensation for
such year; or
003.02(b)(ii) an
amount equal to 108% of the lesser of:
003.02(b)(ii)(A) the member's compensation
for the first year of the capping period; or
003.02(b)(ii)(B) the member's adjusted
compensation for the first year of the capping period.
003.02(b)(iii) This amount is referred to as
the member's adjusted compensation for the second year of the capping
period.
003.02(c)
Compensation for the third year of the capping period shall be equal to the
lesser of:
003.02(c)(i) the member's
compensation for such year; or
003.02(c)(ii) an amount equal to 108% of the
lesser of:
003.02(c)(ii)(A) the member's
compensation for the second year of the capping period; or
003.02(c)(ii)(B) the member's adjusted
compensation for the second year of the capping period.
003.02(c)(iii) This amount is referred to as
the member's adjusted compensation for the third year of the capping
period.
003.02(d)
Compensation for the fourth year of the capping period shall be equal to the
lesser of:
003.02(d)(i) the member's
compensation for such year; or
003.02(d)(ii) an amount equal to 108% of the
lesser of:
003.02(d)(ii)(A) the member's
compensation for the third year of the capping period; or
003.02(d)(ii)(B) the member's adjusted
compensation for the third year of the capping period.
003.02(d)(iii) This amount is referred to as
the member's adjusted compensation for the fourth year of the capping
period.
003.02(e)
Compensation for the fifth year of the capping period shall be equal to the
lesser of:
003.02(e)(i) the member's
compensation for such year; or
003.02(e)(ii) an amount equal to 108% of the
lesser of:
003.02(e)(ii)(A) the member's
compensation for the fourth year of the capping period; or
003.02(e)(ii)(B) the member's adjusted
compensation for the fourth year of the capping period.
003.02(e)(iii) This amount is referred to as
the member's adjusted compensation for the fifth year of the capping
period.
003.03 COMPUTATION OF FINAL AVERAGE COMPENSATION OR FINAL AVERAGE MONTHLY COMPENSATION
After determining the twelve-month (12-month) periods pursuant to 303 NAC § 14-003.01 and adjusting compensation for the capping period pursuant to 303 NAC § 14-003.02, final average compensation or final average monthly compensation, as applicable, shall be computed as follows:
003.03(a) School Plan Members
003.03(a)(i) For an individual who became a
School Plan member before July 1, 2013, and who has thirty-six months of
compensation or more, NPERS shall compare all of the 12-month periods during
the member's service to determine the three 12-month periods during which the
member's compensation (including any adjustments pursuant to 303 NAC §
14-003.02 ) was the greatest. The total amount of such compensation for such
three 12-month periods shall be divided by thirty-six. The result of such
calculation shall be the member's final average compensation.
003.03(a)(ii) For an individual who became a
School Plan member before July 1, 2013, and who has less than thirty-six months
of compensation, the sum of the member's total compensation in all months of
creditable service as a school employee shall be divided by the member's total
number of months of creditable service. The result of such calculation shall be
the member's final average compensation.
003.03(a)(iii) For an individual who became a
School Plan member on or after July 1, 2013, and who has sixty months of
compensation or more, NPERS shall compare all of the 12-month periods during
the member's service to determine the five 12-month periods during which the
member's compensation (including any adjustments pursuant to 303 NAC §
14-003.02 ) was the greatest. The total amount of such compensation for such
five 12-month periods shall be divided by sixty. The result of such calculation
shall be the member's final average compensation.
003.03(a)(iv) For an individual who became a
School Plan member after July 1, 2013, and who has less than sixty months of
compensation, the sum of the member's total compensation in all months of
creditable service as a school employee shall be divided by the number of the
member's total months of creditable service. The result of such calculation
shall be the member's final average compensation.
003.03(b) Patrol Plan members
003.03(b)(i) For an individual who became a
Patrol Plan member on or after July 1, 2016, and who has sixty months of
compensation or more, NPERS shall compare all of the 12-month periods during
the member's service to determine the five 12-month periods during which the
member's compensation (including any adjustments pursuant to 303 NAC §
14-003.02 ) was the greatest. The total amount of such compensation for such
five 12-month periods shall be divided by sixty. The result of such calculation
shall be the member's final average monthly compensation.
003.03(b)(ii) For an individual who became a
Patrol Plan member on or after July 1, 2016, and who has less than sixty months
of compensation, the sum of the member's total compensation in all months of
creditable service as a member of the Nebraska State Patrol shall be divided by
the member's total number of months of creditable service. The result of such
calculation shall be the member's final average monthly compensation.
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