The state Senate has passed a measure to keep the “defined benefit” plan for new state employees – but giving the new hires a chance to choose a “defined contribution” plan.
The current plan has a $1.9 billion liability, and is about 65 percent funded.
The House is considering a measure to close the defined benefit plan to new state employees hired after Jan. first, 2025.
"I believe this bill is an improvement to our current situation, because it offers an expanded choice between a defined contribution plan and a defined benefit plan, by appropriately funding the defined benefit plan into the future," said the bill's author, Sen. Sean Cleary (R-Bismarck). "And I believe it does this in a most fiscally responsible way."
Cleary’s bill calls for a general fund appropriation of $250 million, to help reduce the liability. He said state employees would contribute one percent of their salary to the plan, and the state would chip-in 3.6 percent.
"It does present a path to solvency over the next 30 years," Cleary said.
The bill – SB 2239 – passed on a 34 to 13 vote. The House has not yet voted on its retirement plan.
