House wants to study converting state employee retirement plan to 'defined contribution'
The House has passed a series of measures designed to shore up the Public Employees Retirement System.
The system is still recovering from the economic downturn of 2008.
One bill reduces the “multiplier” for employees hired after December 31 from 2 to 1.75. Another bill ends the health credit, instead keeping that money in the main retirement plan. A third increases the employee and employer contributions to the retirement plan by 1 percent per year. But the House Appropriations Committee added a study to that measure, to look at changing from a “defined benefit” to a “defined contribution plan.”
Rep. Pamela Anderson (D-Fargo) argued against the study. Anderson said the issue has been studied a lot in the past.
"What will another study do?" Anderson said. "It will do nothing but unnecessarily spend money and further delay a solution to the PERS funding crisis."
Anderson said previous Legislatures had the chance to fix the problem, but "kicked the can down the road."
House Appropriations Committee Chairman Jeff Delzer (R-Underwood) argued the study is necessary.
"At some point, if we ever want to get away from the unfunded liability, we will have to go to defined contribution," Delzer said. "The study will be about figuring out how to do it."
Delzer said the study would also look at switching the University System from the current PERS plan to the TIAA-CREF plan, which is a defined contribution plan.
The amendment with the study passed 69 to 22 – and the amended bill was approved 76 to 15.
The measure will go back to the Senate to see if it agrees with the changes.