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Senate advances plan to change state employee retirement plans

The state Senate has voted to advance a plan to close the “defined benefit” plan for state employees.

The bill – HB 1040 – would require new hires after January first, 2025 to be enrolled in a “defined contribution” plan.

Supporters of the bill say it will be attractive to new hires, because of its portability, and because the employees would have more of an ownership stake in the plan. Senate Majority Leader David Hogue (R-Minot) told the Senate the defined benefit plan hasn’t lived up to its promise of helping attract employees to public service.

"Within three years of beginning employment, 46 percent of our people (in state government) are gone," Hogue said. "Less than 15 percent make it to the rule of 90. To me, that's the data that tells me it's not serving one of its core purposes, which is to retain people in state government."

Sen. Dick Dever (R-Bismarck) has a different view. He told the Senate that he’s had a couple of state employees approach him in the past few weeks.

"We were out shopping, and somebody came up to me and said, 'I want to thank you for your work on PERS (Public Employee Retirement System)," Dever said. "He said, 'I've been with the state for 21 years, and I would not have stayed with the state, except for the defined benefit. So the argument that defined contribution is a real recruitment tool is fallacious."

On a 29 to 18 vote, the Senate agreed to send it to the Senate Appropriations Committee for further work.

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