79-9,124. Work plan; additional examination and evaluation; by whom; contents; expenses; compliance audit report; additional issues; powers and duties.
(1) The Legislature finds that following completion and submission of the work plan by the retirement board pursuant to section 79-9,121, additional issues have emerged related to transfer of the management of any Class V school employees retirement system to the retirement board. Further examination and evaluation are necessary and shall be completed by the entities described in this section. Such additional examination and evaluation shall include, but not be limited to:
(a) Completion of a compliance audit of the retirement system as described in this section;
(b) Completion of the audits of the retirement system by the Auditor of Public Accounts pursuant to subsection (1)(b) of section 79-987; and
(c) Identification and examination of issues by the retirement board as described in subsection (8) of this section.
(2) The board of trustees shall obtain a compliance audit of the retirement system to be completed no later than November 15, 2021. The compliance audit shall be in addition to the annual audit conducted by the Auditor of Public Accounts pursuant to subsection (1)(b) of section 79-987.
(3) The compliance audit shall include an examination of records, files, and any other documents or resources of the retirement system and an evaluation of all policies and procedures of the retirement system, the school district, the board of education, and the board of trustees related to the administration and operation of the retirement system to determine compliance with all state and federal laws. The compliance audit shall also include, but not be limited to, an examination and evaluation of:
(a) Eligibility and enrollment to ensure eligible individuals are properly and timely enrolled in the plan;
(b) Contributions, compensation, service hours, and other records to ensure that members are making the correct contributions, that only eligible compensation and eligible service hours are reported at the time and in the manner specified in plan documents, and that only the authorized interest is being recorded;
(c) Termination of employment to ensure that only terminated members are taking distributions from the plan at the time and in the manner specified in the plan documents;
(d) Reemployment after retirement to ensure that retirees and members who have terminated employment who reemploy have complied with plan documents;
(e) Benefit calculations and benefit payments to ensure that the correct benefits are calculated for members and paid on a timely basis; and
(f) Disability retirements to ensure:
(i) The determination of the member's disability status and any accrual of additional disability benefits due to deferred distribution of such benefits are conducted in accordance with the act; and
(ii) The amount of the disability retirement benefits is correctly calculated for members and paid on a timely basis.
(4) The examination of each of the issues listed in subsection (3) of this section shall also include, but not be limited to, a review of:
(a) The plan documents and training that the retirement system has provided to the staff of the retirement system and employees who provide services to the retirement system to ensure proper compliance with the procedures and processes;
(b) Oversight practices or processes used by the board of trustees and administrator of the retirement system to identify whether the employer properly followed the plan documents; and
(c) Practices and processes used by the board of trustees and administrator of the retirement system to correct any errors made.
(5) The board of trustees, the board of education, the school district, and the retirement system shall provide:
(a) The compliance auditors with the documents identified in this section and access to personnel who perform or have knowledge of duties related to the practices, procedures, operations, and administration of the retirement system to facilitate timely completion of the compliance audit; and
(b) The Auditor of Public Accounts with documents and access to personnel as requested by the auditor to facilitate timely completion of the audit required by subsection (1)(b) of section 79-987.
(6) Expenses related to obtaining the compliance audit shall be charged to the retirement system.
(7) The board of trustees shall submit an electronic copy of the compliance audit report to the Clerk of the Legislature, the board of education, the Nebraska Retirement Systems Committee of the Legislature, the Governor, and the retirement board no later than November 15, 2021. The compliance audit report shall be presented to the Nebraska Retirement Systems Committee of the Legislature at a public hearing.
(8)(a) The Public Employees Retirement Board shall identify and examine additional issues which have emerged since the completion of the work plan conducted pursuant to section 79-9,121. Such identification and examination shall include, but are not limited to, issues related to the transition and transfer of management of any Class V school employees retirement system to the retirement board and the board's duties to administer such retirement system pursuant to section 84-1503 in a manner which will maintain the transferred retirement system plan's status as a qualified plan and address any concerns in meeting the retirement board's fiduciary duties and responsibilities pursuant to section 84-1503.02.
(b) The retirement board may retain the services of consultants, if necessary, to carry out its responsibilities under this subsection.
(c) The retirement board shall timely respond to any written communications from the Nebraska Retirement Systems Committee of the Legislature regarding its ongoing examinations under this subsection and advise the committee if additional areas of examination related to the transfer of management as required under this section should be addressed.
(d) The retirement board may bill an employer of any Class V school employees retirement system established under the Class V School Employees Retirement Act on a monthly basis as provided in section 79-9,123 for all services and related expenses incurred in carrying out its responsibilities under this section.
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