ND House advances $5.5 billion bill to end state’s pension plan offering
BISMARCK, N.D. (KFYR) - The House of Representatives advanced what might be the most expensive bill in state history. House Bill 1040 is one of three bills geared toward solving the problem of the North Dakota Employees Retirement System pension plan.
The state employees’ pension plan is about $1.8 billion under water. So, in this session, there are competing proposals to resolve that issue. House Bill 1040 would put the state on track to pay off the debt over the next 20 years, and its passage would end the pension plan. Instead, the state would offer new employees who begin work after 2024 a 401(k)-style retirement package, but not a pension.
“If you look at the facts, there’s only one conclusion: moving from a defined benefit to a defined contribution. And the defined contribution plan that we’ve put together through TIAA is outstanding,” said Representative Mike Lefor, R-Dickinson.
But House Bill 1040 wasn’t met with applause all around. Some in the House were skeptical of the long-term cost, among other things. Opponents believe, by the end of the 20-year buy-down period, this will cost the state as much as $500 million per biennium.
“Half a billion dollars a biennium. Not only is that cost frightening, but then think of the opportunity costs that come with that. What could those dollars be spent on?” said Representative Cory Mock, D-Grand Forks.
After nearly an hour and a half of discussion, the bill passed with a vote of 77-16. A competing bill passed the Senate Tuesday. That would keep the pension plan in place and allow employees to opt into a defined contribution plan if they so choose. Now, the chambers trade bills.
It’s the halfway point, which means lawmakers head home for a six-day break. They’ll be back hearing bills again starting March 1.
Previous Coverage: ND Senate passes bill on state employee benefits, now heads to the House
Previous Coverage: Lawmakers mull changes to North Dakota Public Employees Retirement System plan
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