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Senate rejects plan to add legislators, state officials to the PERS board

The state Senate has rejected a bill to change the makeup of the Public Employees Retirement System Board.

The current 9 member board has two state Legislators on it, along with seven state employees. HB 1321 would change it to an 11 member board, with five Legislators and four executive branch representatives, leaving two state employees.

Sen. Doug Larsen (R-Mandana) said this came about because of issues when the PERS board voted to change the state employees’ health insurance plan, from Blue Cross-Blue Shield to Sanford Health, several years ago.

"The cost used to be $600 million," Larsen told the Senate. "They (PERS board) did not go forward with a competing bid — they just asked for a re-bid, and it came in at about 21 percent over the old bid. They re-negotiated that down to about 16 percent."

Larsen said that brought the cost to around $700 million.

"It could be argued that non-elected officials voted to spend an additional $100 million of state revenue," Larsen argued.

But Sen. Dick Dever (R-Bismarck) said this bill isn’t about insurance – it’s about the fiscal note on the measure to close the “defined benefit” retirement plan for new state hires, replacing it with a “defined contribution” plan.

"We don't like that fiscal note," Dever said. "I don't like it either. It's huge. But because it came to us from the director of PERS, some think that he made it up. He didn't make it up — it came from the actuary."

Dever said when the change was part of an interim study, he and others on the interim committee had asked for an actuary’s estimate of the cost – but that was not provided to the committee.

The measure received a 5-0 “do pass” recommendation from the Senate Industry, Business and Labor Committee – but the full Senate rejected it on a 14 to 33 vote.

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