An interim Legislative committee tasked with drafting legislation to change the public employees’ pension plan to “defined contribution” from “defined benefit” will be looking at hiring a consultant to help draft the new plan.
The Retirement Committee is considering proposals to change to “defined contribution” for all new employees hired after January first, 2024.
Committee chairman Rep. Mike Lefor (R-Dickinson) said that new plan could also be some sort of hybrid plan. Lefor said there are a number of issues to work through.
"How do you fund the defined benefit plan going forward?" Lefor said. "Those who are in that plan will stay there. Those hired after Jan. 1, 2024, would be in a defined contribution plan, or a hybrid plan. So what is the dollar amount to facilitate the plans?"
The Committee had a “request for proposals” for consultants. One firm – Milliman – applied.
Meanhwile, the director of the Public Employees Retirement System says thanks to a strong return on investment in 2021, the plan’s unfunded liability is looking better.
"Right now, our projections are that we may be fully funded by the year 2060," said Scott Miller. "In 2020, the thought was that the plan would never be 100 percent funded."
Miller said right now, he's feeling very good about where the fund is at. He said the new projection makes it a little less expensive to close out the current plan. But he said it is still a pricey proposition.
"I think we're still looking for a number well into the billions," Miller said.
Miller said in the discussions over changing the retirement plan, not a lot of attention is being paid to whether a defined benefit plan helps attract public employees. He said he saw it when he worked in Phoenix, Arizona, and the plan was changed.
"That was incredibly detrimental to attracting employees," Miller said. "I don't see any of that kind of research being done."
Miller said an analysis should be conducted to see what kind of retirement plan will get qualified employees to apply and stay in those jobs.