City of Lincoln & Lancaster County
Human Resources Department
Classification & Compensation, Police & Fire Pension
Mission & Goals
Police & Fire Pension:
The Police and Fire Pension is a defined benefit pension system providing retirement, disability and survivor benefits for Police Officers and Fire Fighters, and their families. The system operates under the rules of Internal Revenue Code section 401(a). The Fire Pension was established in 1895. In 1947, it closed to new members and the Police and Fire Pension was established. Members contributed 7% of salary on a "Post-Tax" basis. "Post-Tax"contributions are included in a member's taxable income. In 1981, retirement benefits increased from 50% to 54% of base salary, and the definition of base salary changed from the average of a member's last five years of salary to the average of a member's last three years of salary. In 1984, members were given the choice of continuing to contribute 7%, or switching to a new plan with a 7.6% contribution rate and a 58% retirement benefit. New members were enrolled in the 7.6% plan. In 1987, legislative control of the pension was transferred from the state of Nebraska to the City of Lincoln. At that time the Pension's six member Advisory Committee was established. In 1990, the pension system applied for and received Internal Revenue Service tax-qualified status. This status allowed members to contribute to their pension account on a "Pre-Tax" basis. "Pre-Tax" contributions are not included in a member's taxable income. Also in 1990, normal retirement age was decreased from 55 to 53, and pension benefits were based on the member's highest consecutive 26 biweekly pay periods (about 1 year) rather than the average of their last three years' salary. In 1995, members were given another opportunity to switch to a different plan. Members could chose to: 1) remain in their current plan, 2) switch to an enhanced version of their current plan offering the same benefits, but not requiring contributions after 21 years of service, or 3) switch to a new 8% contribution plan, officially known as Plan "A." Plan "A" provides a 64% retirement benefit at age 50 and 25 years of service, for an 8% contribution rate.