Nebraska legislators, in a rare move, reject hiring by a state agency

LINCOLN — In a rare move, state lawmakers voted Wednesday to reconsider, and then reject, a state agency appointment — the hiring of Jason Hayes as the new director of the Nebraska Public Employees Retirement Systems (NPERS).

His hiring had been approved by the governing board of NPERS, as well as Gov. Jim Pillen and the Legislature’s Retirement Systems Committee. His hiring was also confirmed a week ago on a 29-4 vote by the Nebraska Legislature.

But voting Wednesday rescinded the approval, leaving uncertain what happens next at the agency that administers state retirement plans.

Hayes has worked for NSEA, Lancaster GOP

Hayes currently works as a lobbyist for the Nebraska State Education Association and has worked as legal counsel for the Lancaster County Republican Party, which led a takeover of the State GOP last year.

He was endorsed by State Auditor Mike Foley and the Nebraska Council of School Administrators. Hayes was slated to replace Randy Gerke, who is retiring as director of NPERS. The job paid $185,000 last year.

On Wednesday, State Sen. Danielle Conrad of Lincoln, who was present and not voting last week on Hayes’ hiring, asked that the confirmation be reconsidered.

Conrad, a leading Democrat in the Legislature, told her colleagues that additional consideration was needed about the hiring due to the “compressed nature” of the 2023 session and because there were concerns about the confirmation that weren’t evident a week ago.

Right work experience?

That prompted a debate about the work experience and qualifications of Hayes, whose past jobs include legal counsel for NPERS and chief deputy for the State Treasurer’s Office.

Omaha Sen. Lou Ann Linehan, who scrapped with the teachers union this year over the issue of school choice, asked if Hayes had ever managed an organization like the public retirement agency, which has 56 employees.

“I just don’t like how quickly this came up,” Linehan said.

 The full Legislature voted last week on the confirmation only a day after it had been approved by the Retirement Committee.

Linehan added that running a pension system is a big job and that mismanagement at the Omaha Public Schools retirement system caused big problems there.

Omaha Sen. Kathleen Kauth also wondered about Hayes’ experience handling investment accounts.

NPERS administers the state’s retirement plans, though investing state pension funds is handled by the state investment council.

Sen. Mike McDonnell of Omaha, who chairs the Legislature’s Retirement Systems Committee, defended Hayes’ selection, saying he emerged from a field of 16 candidates and had been unanimously recommended by the Public Employees Retirement Board (PERB), which oversees NPERS.

‘Process was fair’

“I think the process was fair, and his qualifications and experience are outstanding,” McDonnell said. “We should not change our votes.”

But that’s what happened. Legislators voted 38-10 to reconsider the confirmation of Hayes, then voted 20-14 to approve his confirmation — five short of the majority needed.

What happens next with the retirement agency and the hiring of a new director was unclear Thursday.

McDonnell said there are lots of questions and lots of options. Could Hayes be hired as interim NPERS director and his confirmation reconsidered next year? Will the second finalist for the job be hired? Or must PERB start the application process over?

“It all starts and stops with the PERB board,” McDonnell said.

Hayes did not immediately return a request for comment Thursday morning.

Gerke, who had planned to retire as early as Friday, said that no decision has been made on how to proceed but that all the options mentioned by McDonnell are being considered.

“This has never happened before is one of the problems,” he said.