Legislative interim committee looking at changing retirement plan for new government employees
A Legislative interim committee is looking at whether the pension plan for public employees should become a “defined contribution” plan.
Right now, it’s a “defined benefit” plan. But the current plan has an unfunded liability. And the Committee will be looking at requiring new hires after January first, 2024 to be on a “defined contribution” plan.
The panel will also look at how much it will cost to make the current plan whole for those still on that plan.
"We'll ask the tough questions, and the right questions," said Retirement Committee chairman Rep. Mike Lefor (R-Dickinson). "This will not be a runaway train. This will be a thoughtful, deliberative process, with input every step of the way."
The most recent estimate showed the current plan is 68.3 percent funded.
Some are questioning whether the change is a good idea. North Dakota League of Cities Executive Director Blake Crosby told the Committee he has concerns over making a change.
"There is an incredible labor shortage out there," Crosby said. "Everybody's shopping. And having a defined benefit program is very much an advantage for cities and counties."
North Dakota Association of Counties Executive Director Terry Traynor said in an interview it’s not only a matter of recruitment, it’s a matter of retention.
"One of the things our county officials are telling us is, when they have a mid-to-long time employee, that understands what they have in the defined benefit plan, that is a real good retention tool," Traynor said. "Obviously, this proposal wouldn't affect those employees, but it would affect employees coming on that would become long-time employees. So how does that affect us?"
The Committee plans to hire consultants, to look at plans in other states, and see what might fit North Dakota.