Public employees retirement system retirement plan contribution rates upon reaching full funding; to provide an appropriation; to provide for a transfer; to provide for application; and to provide an effective date.
The bill modifies several sections of the North Dakota Century Code regarding contributions and the management of retirement funds. It mandates the state treasurer to transfer specific funds to tackle the unfunded liability, particularly emphasizing a transfer of $250 million from the general fund to the public employees retirement system. The management of funds and benefits will now require compliance with updated contribution rates based on actuarial studies, which will ensure more sustainable funding for retirees while protecting the benefits of current employees.
House Bill 1486 focuses on the structure and funding of North Dakota's public employees retirement system. One of the key provisions in the bill is the closure of the defined benefit main plan to new eligible employees effective January 1, 2025. Instead, new employees will join a defined contribution retirement plan, signaling a significant shift in how public employees will save for retirement in the future. The bill aims to address and reduce the unfunded liability within the existing retirement system, which has been a growing concern among lawmakers and constituents alike.
There is notable contention surrounding HB 1486, particularly regarding the implications of closing the defined benefit plan. Some lawmakers argue that this transition is necessary for fiscal sustainability, while opponents express concerns about the potential reduction in benefits for future employees. Critics argue that defined contribution plans do not guarantee the same level of retirement security as defined benefit plans, which may lead to instability for employees after they retire. Overall, the bill represents a fundamental change to public employee retirement benefits and the financial strategies of the state.