Governor Burgum signs major pension reform bill into law
The House passed the bill on a 76-17 vote
BISMARCK, N.D. (Valley News Live) – Governor Doug Burgum signed a major pension reform bill into law Today, aimed at protecting the retirement benefits of existing public employees and retirees, while also addressing the $1.9 billion unfunded liability in the North Dakota Public Employees Retirement System.
The legislation, known as House Bill 1040, closes the state’s existing defined benefit plan and injects $200 million into NDPERS to begin reducing the $1.9 billion unfunded liability, which will help the state meet its future obligations to more than 53,000 employees and retirees from state and local governments enrolled in the plan. The bill also shifts new hires to a defined contribution plan, similar to the 401(k) plans offered to employees in the private sector.
Governor Burgum said, “This bill allows us to ensure our ongoing obligations to current and former team members enrolled in the state pension plan while finally addressing the $1.9 billion in pension debt looming over taxpayers. House Bill 1040 will help in recruiting new team members and give them greater flexibility and portability in their retirement accounts, while also maintaining and protecting pension benefits for existing team members and retirees. Taking the off-ramp from defined benefits now will save North Dakota taxpayers billions more down the road.”
The Governor first proposed switching to a defined contribution plan and injecting $265 million into the pension fund in 2019. In his executive budget proposal for the 2023-2025 biennium, he recommended a $250 million infusion into the pension fund. House Bill 1040 infuses $200 million into the fund and adjusts contribution rates to ensure the plan can cover ongoing benefit payments and pension debt.
The House passed the bill on a 76-17 vote and the Senate approved it 28-19. The legislation was praised by House Majority Leader Mike Lefor and the interim Retirement Committee for bringing the plan forward and ushering it through the Legislature with thoughtful debate.
The new law will help secure the financial future of public employees and retirees while also easing the burden on taxpayers.
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