Section 88-64 - Retroactive reinstatement; retroactive rescission of suspension; retroactive payments(a) Upon certification by the system, the retroactive reinstatement, retroactive rescission of suspension, and retroactive payment provided to an employee pursuant to a final resolution of claims shall be considered service under section 88-21, compensation under section 88-21.5, or both; provided that:(1) For the reinstatement, rescission of suspension, or payment to be considered:(A) Service under section 88-21, the employee shall appeal the employee's involuntary termination or unpaid suspension, be retroactively reinstated to employment or have the suspension rescinded in whole or in part, and be provided back pay, pursuant to a final resolution of claims; provided further that:(i) The dates of retroactive employment or retroactive recission of suspension for which back pay is provided pursuant to a final resolution of claims and paid by the State or county do not precede or succeed the dates the employee would have provided service if the employee had not been suspended or terminated;(ii) A final resolution of claims specifies the dates of retroactive employment or retroactive rescission of suspension, and the amount, purpose, and nature of retroactive payments for each monthly period in which the employee would have provided service if the employee had not been suspended or terminated;(iii) The dates of retroactive employment or retroactive rescission of suspension provided pursuant to a final resolution of claims would otherwise have been considered service as provided in this chapter; and(iv) The service shall be credited to the extent it would otherwise have been credited as provided in this chapter; and(B) Compensation under section 88-21.5, the employee shall challenge an involuntary termination, unpaid suspension, or the employee's compensation and be subsequently provided a retroactive payment pursuant to a final resolution of claims; provided further that: (i) The amount, purpose, nature, and duration of a retroactive payment provided pursuant to a final resolution of claims and paid by the State or county do not exceed the amount, purpose, nature, and duration of compensation available to comparable employees (including but not limited to employees with similar positions, class, title, pay range or wage scale, step, bargaining unit, contract type, function, job category, and pay rate code through the same employer, department, or agency, available by pay schedule, or comparable to the employee's own history of compensation), less any compensation actually paid to the employee and reported to the system by the State or county, where applicable; do not exceed the compensation attributable to the number of workdays for which retroactive payment is owed; and when added to the compensation actually paid to the employee by the State or county and reported to the system, if any, results in compensation to the employee that does not exceed the compensation that the employee would have earned had the employee not been suspended or terminated, or had the employee received the compensation available to comparable employees;(ii) Retroactive payments provided pursuant to a final resolution of claims would otherwise have been considered compensation, as provided in section 88-21.5(a) or (b), respectively, depending on when the employee became a member, and this chapter; and(iii) Any amounts provided to the employee for damages, attorney's fees, interest or penalties, payments for failure to hire, or payments made as part of an agreement for the employee to resign or otherwise terminate employment shall not be considered compensation for purposes of the system;(2) The requirements of section 88-103.7 and this chapter shall be satisfied with respect to any retroactive reinstatement, retroactive rescission of suspension, retroactive pay differential, or back pay pursuant to a final resolution of claims and paid by the State and county, including but not limited to an allocation of the amount, purpose, and nature of a retroactive payment for each monthly period in which it would have been earned had the employee not been suspended or terminated, or had the employee received the compensation available to comparable employees, subject to the retroactive payments provided pursuant to a final resolution of claims and paid by the State or county as set forth in paragraphs (1)(A) and (B);(3) The employer has made a lump sum payment to the system in the amount of the actuarial present value, as determined by the system, of contributions that the employee would have contributed, as provided in this chapter, for the service and compensation to be certified pursuant to this section, which shall include compound interest thereon at the assumed rate of return; provided further that: (A) Class C service shall be credited at no cost; and(B) Any portion of the lump sum payment in excess of the actuarial present value, as determined by the system, of contributions that the employee would have contributed, as provided in this chapter, for the service and compensation certified pursuant to this section, shall be returned to the employer;(4) As a condition of the employer's obligation under paragraph (3), the employee has paid to the employer the contributions the employee would have contributed, as provided in this chapter, for the service and compensation to be certified pursuant to this section;(5) The employer has made a lump sum payment to the system in the amount of the actuarial present value, as determined by the system, of contributions that the employer would have contributed, as provided in this chapter, for the service and compensation to be certified pursuant to this section, which shall include compound interest thereon at the assumed rate of return; provided further that any portion of the lump sum payment in excess of the actuarial present value, as determined by the system, of contributions that the employer would have contributed, as provided in this chapter, for the service and compensation certified pursuant to this section, shall be returned to the employer;(6) An employee who appeals an involuntary termination, is retroactively reinstated to employment pursuant to a final resolution of claims, and has:(A) Been paid their accumulated contributions or hypothetical account balance after the involuntary termination date and as a result of the involuntary termination, has made a lump sum payment to the system in the amount of the actuarial present value, as determined by the system, of the accumulated contributions or hypothetical account that were paid to the employee; or(B) Received an allowance on service retirement, ordinary disability retirement, or service-connected disability retirement after the involuntary termination date and as a result of the involuntary termination, has made a lump sum payment to the system in the amount of the actuarial present value, as determined by the system, of any allowance on service retirement, ordinary disability retirement, or service-connected disability retirement received by the employee; and(7) Notwithstanding this section, if the system determines that a contribution exceeds the limits of any Internal Revenue Code requirements that apply to the system, the system shall not accept the contributions and shall return the contributions.(b) As used in this section, "final resolution of claims" means:(1) The final decision of a court, an administrative proceeding, or an arbitration proceeding from which either no appeal may be filed or no appeal has been filed within the time allowed;(2) A stipulated judgment;(3) A settlement of claims, including but not limited to a settlement of a labor grievance, that is in writing, signed, and dated by the parties to the settlement, and a court-approved settlement;(4) A settlement adopted by court order or referenced in an order of dismissal;(5) A third-party arbitrator's decision from which either no appeal may be filed or no appeal has been filed within the time allowed; or(6) A settlement or other final resolution of an appeal or challenge from which either no appeal may be filed or no appeal has been filed within the time allowed.Added by L 2023, c 46,§ 2, eff. 6/1/2023.