North Dakota 2025-2026 Regular Session

North Dakota House Bill HB1146 Compare Versions

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1		-	Sixty-ninth Legislative Assembly of North Dakota
2		-	In Regular Session Commencing Tuesday, January 7, 2025
3		-	HOUSE BILL NO. 1146
4		-	(Representatives Lefor, Dockter, Schauer, Stemen, M. Ruby)
5		-	(Senators Davison, Dever, Hogue)
6		-	AN ACT to amend and reenact sections 54-52-02.1, 54-52-06, 54-52.6-01, 54-52.6-02.2, 54-52.6-05,
7		-	and 54-52.6-09.5 of the North Dakota Century Code, relating to employer eligibility to participate
8		-	in the public employees retirement system defined contribution retirement plan, employer
9		-	contribution requirements for the defined benefit and defined contribution retirement plans, and
10		-	employee eligibility to elect to transfer to the defined contribution retirement plan; to provide for
11		-	retroactive application; and to declare an emergency.
	1	+	25.0743.03000
	2	+	Sixty-ninth
	3	+	Legislative Assembly
	4	+	of North Dakota
	5	+	Introduced by
	6	+	Representatives Lefor, Dockter, Schauer, Stemen, M. Ruby
	7	+	Senators Davison, Dever, Hogue
	8	+	A BILL for an Act to amend and reenact sections 54-52-02.1, 54-52-06, 54-52.6-01,
	9	+	54-52.6-02.2, 54-52.6-05, and 54-52.6-09.5 of the North Dakota Century Code, relating to
	10	+	employer eligibility to participate in the public employees retirement system defined contribution
	11	+	retirement plan, employer contribution requirements for the defined benefit and defined
	12	+	contribution retirement plans, and employee eligibility to elect to transfer to the defined
	13	+	contribution retirement plan; to provide for retroactive application; and to declare an emergency.
12	14		BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
13		-	SECTION 1. AMENDMENT. Section 54-52-02.1 of the North Dakota Century Code is amended and
14		-	reenacted as follows:
15		-	54-52-02.1. Political subdivisions authorized to join public employees retirement system.
16		-	1.A political subdivision may, on behalf of its permanent employees, on behalf of its peace
17		-	officers, firefighters, and correctional officers separately from its other employees, and
18		-	permanent noncertified employees only in the case of school districts, enter agreements with
19		-	the retirement board for the purpose of extending the benefits of the public employees
20		-	retirement system, as provided in this chapter or chapter 54 - 52.6 , to those employees. The
21		-	agreement may, in accordance with this chapter and chapter 54 - 52.6 , contain provisions
22		-	relating to benefits, contributions, effective date, modification, administration, and other
23		-	appropriate provisions as the retirement board and the political subdivision agree upon, but
24		-	the agreement must provide:
25		-	a.The political subdivision will contribute on behalf of each eligible employee an amount
26		-	equal to that provided in section 54-52-06 or 54-52-06.3 for peace officers, firefighters,
27		-	and correctional officers participating separately from other political subdivision
28		-	employees.
	15	+	SECTION 1. AMENDMENT. Section 54-52-02.1 of the North Dakota Century Code is
	16	+	amended and reenacted as follows:
	17	+	54-52-02.1. Political subdivisions authorized to join public employees retirement
	18	+	system.
	19	+	1.A political subdivision may, on behalf of its permanent employees, on behalf of its
	20	+	peace officers, firefighters, and correctional officers separately from its other
	21	+	employees, and permanent noncertified employees only in the case of school districts,
	22	+	enter agreements with the retirement board for the purpose of extending the benefits
	23	+	of the public employees retirement system, as provided in this chapter or chapter
	24	+	54 - 52.6 , to those employees. The agreement may, in accordance with this chapter and
	25	+	chapter 54 - 52.6 , contain provisions relating to benefits, contributions, effective date,
	26	+	modification, administration, and other appropriate provisions as the retirement board
	27	+	and the political subdivision agree upon, but the agreement must provide:
	28	+	a.The political subdivision will contribute on behalf of each eligible employee an
	29	+	amount equal to that provided in section 54-52-06 or 54-52-06.3 for peace
	30	+	Page No. 1 25.0743.03000
	31	+	ENGROSSED HOUSE BILL NO. 1146
	32	+	FIRST ENGROSSMENT
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	56	+	officers, firefighters, and correctional officers participating separately from other
	57	+	political subdivision employees.
29	58		b.A portion of the moneys paid by the political subdivision may be used to pay
30	59		administrative expenses of the retirement board.
31		-	2.Notwithstanding any other provision of law, a political subdivision having an existing police or
32		-	firefighter pension plan may merge that plan into the public employees retirement system
33		-	under rules adopted by and in a manner determined by the board.
34		-	3.Notwithstanding any other provision of this chapter, a political subdivision of this state not
35		-	currently participating in the public employees retirement system may not become a
36		-	participant in the retirement system until an actuarial study is performed under the direction of
37		-	the board to calculate the required employer contribution for any past service liability and the
38		-	required employer contribution must be an amount determined sufficient to amortize and fund
39		-	any past service liability over a period not to exceed thirty years as determined by the board.
40		-	Any fees incurred in performing the actuarial study must be paid for by the political subdivision
41		-	in a manner determined by the board.
42		-	SECTION 2. AMENDMENT. Section 54-52-06 of the North Dakota Century Code is amended and
43		-	reenacted as follows: H. B. NO. 1146 - PAGE 2
44		-	54-52-06. Employer's contribution to retirement plan - Report to the employee benefits
45		-	programs committee. (Effective through December 31, 2025)
46		-	1.Each governmental unit shall contribute an amount equal to four and twelve-hundredths
47		-	percent of the monthly salary or wage of a participating member. Governmental unit
48		-	contributions increase by one percent of the monthly salary or wage of a participating member
49		-	beginning with the monthly reporting period of January 2012; with an additional increase of
50		-	one percent, beginning with the reporting period of January 2013; with an additional increase
51		-	of one percent, beginning with the monthly reporting period of January 2014; and with an
52		-	additional increase of one percent, beginning with the monthly reporting period of January
53		-	2024. For a participating member who first enrolls after December 31, 2019, the governmental
54		-	unit shall contribute an additional amount equal to one and fourteen-hundredths percent of the
55		-	monthly salary or wage of the participating member.
	60	+	2.Notwithstanding any other provision of law, a political subdivision having an existing
	61	+	police or firefighter pension plan may merge that plan into the public employees
	62	+	retirement system under rules adopted by and in a manner determined by the board.
	63	+	3.Notwithstanding any other provision of this chapter, a political subdivision of this state
	64	+	not currently participating in the public employees retirement system may not become
	65	+	a participant in the retirement system until an actuarial study is performed under the
	66	+	direction of the board to calculate the required employer contribution for any past
	67	+	service liability and the required employer contribution must be an amount determined
	68	+	sufficient to amortize and fund any past service liability over a period not to exceed
	69	+	thirty years as determined by the board. Any fees incurred in performing the actuarial
	70	+	study must be paid for by the political subdivision in a manner determined by the
	71	+	board.
	72	+	SECTION 2. AMENDMENT. Section 54-52-06 of the North Dakota Century Code is
	73	+	amended and reenacted as follows:
	74	+	54-52-06. Employer's contribution to retirement plan - Report to the employee
	75	+	benefits programs committee. (Effective through December 31, 2025)
	76	+	1.Each governmental unit shall contribute an amount equal to four and
	77	+	twelve-hundredths percent of the monthly salary or wage of a participating member.
	78	+	Governmental unit contributions increase by one percent of the monthly salary or
	79	+	wage of a participating member beginning with the monthly reporting period of
	80	+	January 2012; with an additional increase of one percent, beginning with the reporting
	81	+	period of January 2013; with an additional increase of one percent, beginning with the
	82	+	monthly reporting period of January 2014; and with an additional increase of
	83	+	one percent, beginning with the monthly reporting period of January 2024. For a
	84	+	participating member who first enrolls after December 31, 2019, the governmental unit
	85	+	shall contribute an additional amount equal to one and fourteen-hundredths percent of
	86	+	the monthly salary or wage of the participating member.
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56	120		2.For those members who elect to exercise their rights under section 54-52-17.14, the
57	121		employing governmental unit, or in the case of a member not presently under covered
58		-	employment the most recent employing governmental unit, shall pay the associated employer
59		-	contribution. If the employee's contribution is paid by the governmental unit under
60		-	subsection 3 of section 54-52-05, the employer unit shall contribute, in addition, an amount
61		-	equal to the required employee's contribution. Each governmental unit shall pay the
62		-	contribution monthly, or in the case of an election made pursuant to section 54-52-17.14 a
63		-	lump sum, into the retirement fund from the governmental unit's funds appropriated for payroll
64		-	and salary or any other funds available for these purposes. Any governmental unit failing to
65		-	pay the contributions monthly, or in the case of an election made pursuant to section
66		-	54-52-17.14 a lump sum, or failing to otherwise comply with the board's established wage
67		-	reporting or payroll reporting process requirements, is subject to a civil penalty of fifty dollars
68		-	and, as interest, one percent of the amount due for each month of delay or fraction of a month
69		-	after the payment became due. In lieu of assessing a civil penalty or one percent per month,
70		-	or both, interest at the actuarial rate of return may be assessed for each month the
	122	+	employment the most recent employing governmental unit, shall pay the associated
	123	+	employer contribution. If the employee's contribution is paid by the governmental unit
	124	+	under subsection 3 of section 54-52-05, the employer unit shall contribute, in addition,
	125	+	an amount equal to the required employee's contribution. Each governmental unit
	126	+	shall pay the contribution monthly, or in the case of an election made pursuant to
	127	+	section 54-52-17.14 a lump sum, into the retirement fund from the governmental unit's
	128	+	funds appropriated for payroll and salary or any other funds available for these
	129	+	purposes. Any governmental unit failing to pay the contributions monthly, or in the
	130	+	case of an election made pursuant to section 54-52-17.14 a lump sum, or failing to
	131	+	otherwise comply with the board's established wage reporting or payroll reporting
	132	+	process requirements, is subject to a civil penalty of fifty dollars and, as interest,
	133	+	one percent of the amount due for each month of delay or fraction of a month after the
	134	+	payment became due. In lieu of assessing a civil penalty or one percent per month, or
	135	+	both, interest at the actuarial rate of return may be assessed for each month the
71	136		contributions are delinquent. If contributions are paid within ninety days of the date the
72		-	contributions became due, penalty and interest to be paid on delinquent contributions ~~may be~~
73		-	waived.
74		-	3.An employer is required to submit contributions for any past eligible employee who ~~was~~
75		-	employed after July 1, 1977, for which contributions were not made if the ~~employee would~~
76		-	have been eligible to become vested had the employee participated ~~and if the employee~~
77		-	elects to join the public employees retirement system. Employer ~~contributions may not be~~
78		-	assessed for eligible service that an employee has waived ~~pursuant to subsection 1 of section~~
79		-	54-52-05.
	137	+	contributions became due, penalty and interest to be paid on delinquent contributions
	138	+	may be waived.
	139	+	3.An employer is required to submit contributions for any past eligible employee who
	140	+	was employed after July 1, 1977, for which contributions were not made if the
	141	+	employee would have been eligible to become vested had the employee participated
	142	+	and if the employee elects to join the public employees retirement system. Employer
	143	+	contributions may not be assessed for eligible service that an employee has waived
	144	+	pursuant to subsection 1 of section 54-52-05.
80	145		4.Annually, the board shall report to the employee benefits programs committee the
81		-	contributions necessary, as determined by the actuarial study, to maintain the fund's actuarial
82		-	soundness.
83		-	Employer's contribution to retirement plan - Report to the employee benefits programs
84		-	committee. (Effective after December 31, 2025)
	146	+	contributions necessary, as determined by the actuarial study, to maintain the fund's
	147	+	actuarial soundness.
	148	+	Employer's contribution to retirement plan - Report to the employee benefits
	149	+	programs committee. (Effective after December 31, 2025)
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85	182		1.a.As determined by actuarial valuations, each state governmental unit that receives
86		-	budgetary approval from the legislative assembly shall contribute to the defined benefit
87		-	plan an amount on a level percent of compensation basis for all main system defined
88		-	benefit retirement plan employees and all defined contribution retirement plan employees
89		-	sufficient under the actuarial valuation to meet both the normal cost plus the actuarially
90		-	determined amount required to amortize the unfunded accrued liability of the main plan
91		-	over a closed period of thirty and one-half years, beginning January 1, 2026, and
92		-	continuing through June 30, 2056. By November fifteenth of each even-numbered year
93		-	the board shall publish the contribution rate required under this subsection. The board
94		-	shall calculate this rate based on the July first actuarial report of that year. In lieu of each H. B. NO. 1146 - PAGE 3
95		-	state governmental unit that receives budgetary approval from the legislative assembly
96		-	contributing the additional actuarially determined rate, the legislative assembly may
97		-	authorize a transfer to the public employees retirement system fund in an amount equal
98		-	to or greater than the actuarially determined amount as most recently published by the
99		-	board for the succeeding biennium.
100		-	b.Each participating political subdivision and state governmental unit that does not receive
101		-	budgetary approval from the legislative assembly shall contribute an amount equal to
102		-	eight and twelve-hundredths percent of the monthly salary or wage of a participating
103		-	member.
104		-	c.For a participating member who first enrolls after December 31, 2019, a participating
105		-	political subdivision shall contribute an additional amount equal to one and fourteen-
106		-	hundredths percent of the monthly salary or wage of the participating member.
	183	+	budgetary approval from the legislative assembly shall contribute to the defined
	184	+	benefit plan an amount on a level percent of compensation basis for all main
	185	+	system defined benefit retirement plan employees and all defined contribution
	186	+	retirement plan employees sufficient under the actuarial valuation to meet both
	187	+	the normal cost plus the actuarially determined amount required to amortize the
	188	+	unfunded accrued liability of the main plan over a closed period of thirty and
	189	+	one-half years, beginning January 1, 2026, and continuing through June 30,
	190	+	2056. By November fifteenth of each even-numbered year the board shall publish
	191	+	the contribution rate required under this subsection. The board shall calculate this
	192	+	rate based on the July first actuarial report of that year. In lieu of each state
	193	+	governmental unit that receives budgetary approval from the legislative assembly
	194	+	contributing the additional actuarially determined rate, the legislative assembly
	195	+	may authorize a transfer to the public employees retirement system fund in an
	196	+	amount equal to or greater than the actuarially determined amount as most
	197	+	recently published by the board for the succeeding biennium.
	198	+	b.Each participating political subdivision and state governmental unit that does not
	199	+	receive budgetary approval from the legislative assembly shall contribute an
	200	+	amount equal to eight and twelve-hundredths percent of the monthly salary or
	201	+	wage of a participating member.
	202	+	c.For a participating member who first enrolls after December 31, 2019, a
	203	+	participating political subdivision shall contribute an additional amount equal to
	204	+	one and fourteen-hundredths percent of the monthly salary or wage of the
	205	+	participating member.
107	206		2.For those members who elect to exercise their rights under section 54-52-17.14, the
108	207		employing governmental unit, or in the case of a member not presently under covered
109		-	employment the most recent employing governmental unit, shall pay the associated employer
110		-	contribution. If the employee's contribution is paid by the governmental unit under
111		-	subsection 3 of section 54-52-05, the employer unit shall contribute, in addition, an amount
112		-	equal to the required employee's contribution. Each governmental unit shall pay the
113		-	contribution monthly, or in the case of an election made pursuant to section 54-52-17.14 a
114		-	lump sum, into the retirement fund from the governmental unit's funds appropriated for payroll
115		-	and salary or any other funds available for these purposes. Any governmental unit failing to
116		-	pay the contributions monthly, or in the case of an election made pursuant to section
117		-	54-52-17.14 a lump sum, or failing to otherwise comply with the board's established wage
118		-	reporting or payroll reporting process requirements, is subject to a civil penalty of fifty dollars
119		-	and, as interest, one percent of the amount due for each month of delay or fraction of a month
120		-	after the payment became due. In lieu of assessing a civil penalty or one percent per month,
121		-	or both, interest at the actuarial rate of return may be assessed for each month the
	208	+	employment the most recent employing governmental unit, shall pay the associated
	209	+	employer contribution. If the employee's contribution is paid by the governmental unit
	210	+	under subsection 3 of section 54-52-05, the employer unit shall contribute, in addition,
	211	+	an amount equal to the required employee's contribution. Each governmental unit
	212	+	shall pay the contribution monthly, or in the case of an election made pursuant to
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	246	+	section 54-52-17.14 a lump sum, into the retirement fund from the governmental unit's
	247	+	funds appropriated for payroll and salary or any other funds available for these
	248	+	purposes. Any governmental unit failing to pay the contributions monthly, or in the
	249	+	case of an election made pursuant to section 54-52-17.14 a lump sum, or failing to
	250	+	otherwise comply with the board's established wage reporting or payroll reporting
	251	+	process requirements, is subject to a civil penalty of fifty dollars and, as interest, one
	252	+	percent of the amount due for each month of delay or fraction of a month after the
	253	+	payment became due. In lieu of assessing a civil penalty or one percent per month, or
	254	+	both, interest at the actuarial rate of return may be assessed for each month the
122	255		contributions are delinquent. If contributions are paid within ninety days of the date the
123		-	contributions became due, penalty and interest to be paid on delinquent contributions ~~may be~~
124		-	waived.
125		-	3.An employer is required to submit contributions for any past eligible employee who ~~was~~
126		-	employed after July 1, 1977, for which contributions were not made if the ~~employee would~~
127		-	have been eligible to become vested had the employee participated ~~and if the employee~~
128		-	elects to join the public employees retirement system. Employer ~~contributions may not be~~
129		-	assessed for eligible service that an employee has waived ~~pursuant to subsection 1 of section~~
130		-	54-52-05.
	256	+	contributions became due, penalty and interest to be paid on delinquent contributions
	257	+	may be waived.
	258	+	3.An employer is required to submit contributions for any past eligible employee who
	259	+	was employed after July 1, 1977, for which contributions were not made if the
	260	+	employee would have been eligible to become vested had the employee participated
	261	+	and if the employee elects to join the public employees retirement system. Employer
	262	+	contributions may not be assessed for eligible service that an employee has waived
	263	+	pursuant to subsection 1 of section 54-52-05.
131	264		4.Annually, the board shall report to the employee benefits programs committee the
132		-	contributions necessary, as determined by the actuarial study, to maintain the fund's ~~actuarial~~
133		-	soundness.
134		-	SECTION 3. AMENDMENT. Section 54-52.6-01 of the North Dakota Century Code is ~~amended and~~
135		-	reenacted as follows:
	265	+	contributions necessary, as determined by the actuarial study, to maintain the fund's
	266	+	actuarial soundness.
	267	+	SECTION 3. AMENDMENT. Section 54-52.6-01 of the North Dakota Century Code is
	268	+	amended and reenacted as follows:
136	269		54-52.6-01. Definition of terms.
137	270		As used in this chapter, unless the context otherwise requires:
138	271		1."Board" means the public employees retirement system board.
139		-	2."Deferred member" means a personan individual who elected to receive deferred vested
140		-	retirement benefits under chapter 54-52. H. B. NO. 1146 - PAGE 4
141		-	3."Eligible employee", for employees who become participating members after December 31,
142		-	2024, has the same meaning as provided under section 54-52-02.15. For employees who
143		-	elected to join the defined contribution retirement plan under this chapter before January 1,
144		-	2025, the term includes a permanent state employee, except an employee of the judicial
145		-	branch or an employee of the board of higher education and state institutions under the
146		-	jurisdiction of the board of higher education, who is at least eighteen years of age and who is
147		-	in a position not classified by the North Dakota human resource management services.
148		-	4."Employee" means any personan individual employed by the state, whose compensation is
149		-	paid out of state funds, or funds controlled or administered by the state or paid by the federal
150		-	government through any of its executive or administrative officials.
151		-	5."Employer" means the state of North Dakota, except the highway patrol for members of the
152		-	retirement plan created under chapter 39 - 03.1, or a participating political subdivision of the
153		-	state.
154		-	6."Participating member" means an eligible employee who elects to participate in the defined
155		-	contribution retirement plan established under this chapter.
156		-	7."Permanent employee" means a state employee whose services are not limited in duration
157		-	and who is filling an approved and regularly funded position and is employed twenty hours or
158		-	more per week and at least five months each year.
159		-	8."Wages" and "salaries" means earnings in eligible employment under this chapter reported as
160		-	salary on a federal income tax withholding statement plus any salary reduction or salary
161		-	deferral amounts under 26 U.S.C. 125, 401(k), 403(b), 414(h), or 457. "Salary" does not
162		-	include fringe benefits such as payments for unused sick leave, personal leave, vacation leave
163		-	paid in a lump sum, overtime, housing allowances, transportation expenses, early retirement,
164		-	incentive pay, severance pay, medical insurance, workforce safety and insurance benefits,
165		-	disability insurance premiums or benefits, or salary received by a member in lieu of previously
166		-	employer-provided fringe benefits under an agreement between an employee and a
167		-	participating employer. Bonuses may be considered as salary under this section if reported
168		-	and annualized pursuant to rules adopted by the board.
169		-	SECTION 4. AMENDMENT. Section 54-52.6-02.2 of the North Dakota Century Code is amended
170		-	and reenacted as follows:
	272	+	2."Deferred member" means a personan individual who elected to receive deferred
	273	+	vested retirement benefits under chapter 54-52.
	274	+	3."Eligible employee", for employees who become participating members after
	275	+	December 31, 2024, has the same meaning as provided under section 54-52-02.15.
	276	+	For employees who elected to join the defined contribution retirement plan under this
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	310	+	chapter before January 1, 2025, the term includes a permanent state employee,
	311	+	except an employee of the judicial branch or an employee of the board of higher
	312	+	education and state institutions under the jurisdiction of the board of higher education,
	313	+	who is at least eighteen years of age and who is in a position not classified by the
	314	+	North Dakota human resource management services.
	315	+	4."Employee" means any personan individual employed by the state, whose
	316	+	compensation is paid out of state funds, or funds controlled or administered by the
	317	+	state or paid by the federal government through any of its executive or administrative
	318	+	officials.
	319	+	5."Employer" means the state of North Dakota, except the highway patrol for members
	320	+	of the retirement plan created under chapter 39 - 03.1, or a participating political
	321	+	subdivision of the state.
	322	+	6."Participating member" means an eligible employee who elects to participate in the
	323	+	defined contribution retirement plan established under this chapter.
	324	+	7."Permanent employee" means a state employee whose services are not limited in
	325	+	duration and who is filling an approved and regularly funded position and is employed
	326	+	twenty hours or more per week and at least five months each year.
	327	+	8."Wages" and "salaries" means earnings in eligible employment under this chapter
	328	+	reported as salary on a federal income tax withholding statement plus any salary
	329	+	reduction or salary deferral amounts under 26 U.S.C. 125, 401(k), 403(b), 414(h), or
	330	+	457. "Salary" does not include fringe benefits such as payments for unused sick leave,
	331	+	personal leave, vacation leave paid in a lump sum, overtime, housing allowances,
	332	+	transportation expenses, early retirement, incentive pay, severance pay, medical
	333	+	insurance, workforce safety and insurance benefits, disability insurance premiums or
	334	+	benefits, or salary received by a member in lieu of previously employer-provided fringe
	335	+	benefits under an agreement between an employee and a participating employer.
	336	+	Bonuses may be considered as salary under this section if reported and annualized
	337	+	pursuant to rules adopted by the board.
	338	+	SECTION 4. AMENDMENT. Section 54-52.6-02.2 of the North Dakota Century Code is
	339	+	amended and reenacted as follows:
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171	372		54-52.6-02.2. Election after December 31, 2024 - Additional employer contribution.
172		-	1.As used in this section, "eligible employee" means a permanent state employee of a state
173		-	entity that as of January 1, 2025, receives budgetary approval from the legislative assembly,
174		-	who on December 31, 2024, is a participating member of the public employees retirement
175		-	system main system plan under chapter 54-4254-52, who has been a participating member
176		-	under chapter 54-52 for no more than five years, and who is at least eighteen years of age.
177		-	2.The board shall provide a three-month election period, from January 1, 2025, through March
178		-	31, 2025, for an eligible employee to transfer to the defined contribution plan under this
179		-	chapter pursuant to the rules and policies adopted by the board.
180		-	a.An election under this section made by a member of the public employees retirement
181		-	system under chapter 54-52 to transfer to the defined contribution retirement plan under
182		-	this chapter is irrevocable.
183		-	b.For an eligible employee who elects to transfer from the public employees retirement
184		-	system under chapter 54-52 to the defined contribution retirement plan under this
185		-	chapter, the board shall transfer a lump sum amount from the public employees
186		-	retirement system fund to the member's account in the defined contribution retirement
187		-	plan under this chapter. However, if the eligible employee terminates employment before H. B. NO. 1146 - PAGE 5
188		-	receiving the lump sum transfer under this section, the election made is ineffective and
189		-	the eligible employee remains a member of the public employees retirement system
190		-	under chapter 54-52 and retains all the rights and privileges under that chapter.
191		-	c.The board shall calculate the lump sum amount to be transferred based on the actuarial
192		-	present value of the eligible employee's accumulated benefit obligation under the public
193		-	employees retirement system based on the assumption the eligible employee will retire
194		-	under the earlier applicable normal retirement age, plus interest from January 1, 2025, to
195		-	the date of transfer, at the rate of one-half of one percent less than the actuarial interest
196		-	assumption at the time of the election.
197		-	d.This section does not affect an eligible individual's right to health benefits under chapter
198		-	54-52.1.
199		-	3.The state employer of an eligible employee who elects under this section to participate in the
200		-	defined contribution retirement plan under this chapter shall pay an additional annual
201		-	contribution of three thousand three hundred and thirty-three dollars for up to three years.
202		-	Under this subsection, the employer shall pay the additional contribution each year the eligible
203		-	employee continues permanent employment with the state, beginning January 2026, and
204		-	extending no further than January 2028.
205		-	4.If the board receives notification from the internal revenue service that this section or any
206		-	portion of this section will cause the public employees retirement system or the retirement plan
207		-	established under this chapter to be disqualified for tax purposes under the Internal Revenue
208		-	Code, that portion that will cause the disqualification does not apply.
209		-	SECTION 5. AMENDMENT. Section 54-52.6-05 of the North Dakota Century Code is amended and
210		-	reenacted as follows:
	373	+	1.As used in this section, "eligible employee" means a permanent state employee of a
	374	+	state entity that as of January 1, 2025, receives budgetary approval from the
	375	+	legislative assembly, who on December 31, 2024, is a participating member of the
	376	+	public employees retirement system main system plan under chapter 54-4254-52, who
	377	+	has been a participating member under chapter 54-52 for no more than five years, and
	378	+	who is at least eighteen years of age.
	379	+	2.The board shall provide a three-month election period, from January 1, 2025, through
	380	+	March 31, 2025, for an eligible employee to transfer to the defined contribution plan
	381	+	under this chapter pursuant to the rules and policies adopted by the board.
	382	+	a.An election under this section made by a member of the public employees
	383	+	retirement system under chapter 54-52 to transfer to the defined contribution
	384	+	retirement plan under this chapter is irrevocable.
	385	+	b.For an eligible employee who elects to transfer from the public employees
	386	+	retirement system under chapter 54-52 to the defined contribution retirement plan
	387	+	under this chapter, the board shall transfer a lump sum amount from the public
	388	+	employees retirement system fund to the member's account in the defined
	389	+	contribution retirement plan under this chapter. However, if the eligible employee
	390	+	terminates employment before receiving the lump sum transfer under this
	391	+	section, the election made is ineffective and the eligible employee remains a
	392	+	member of the public employees retirement system under chapter 54-52 and
	393	+	retains all the rights and privileges under that chapter.
	394	+	c.The board shall calculate the lump sum amount to be transferred based on the
	395	+	actuarial present value of the eligible employee's accumulated benefit obligation
	396	+	under the public employees retirement system based on the assumption the
	397	+	eligible employee will retire under the earlier applicable normal retirement age,
	398	+	plus interest from January 1, 2025, to the date of transfer, at the rate of one-half
	399	+	of one percent less than the actuarial interest assumption at the time of the
	400	+	election.
	401	+	d.This section does not affect an eligible individual's right to health benefits under
	402	+	chapter 54-52.1.
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	436	+	3.The state employer of an eligible employee who elects under this section to participate
	437	+	in the defined contribution retirement plan under this chapter shall pay an additional
	438	+	annual contribution of three thousand three hundred and thirty-three dollars for up to
	439	+	three years. Under this subsection, the employer shall pay the additional contribution
	440	+	each year the eligible employee continues permanent employment with the state,
	441	+	beginning January 2026, and extending no further than January 2028.
	442	+	4.If the board receives notification from the internal revenue service that this section or
	443	+	any portion of this section will cause the public employees retirement system or the
	444	+	retirement plan established under this chapter to be disqualified for tax purposes
	445	+	under the Internal Revenue Code, that portion that will cause the disqualification does
	446	+	not apply.
	447	+	SECTION 5. AMENDMENT. Section 54-52.6-05 of the North Dakota Century Code is
	448	+	amended and reenacted as follows:
211	449		54-52.6-05. Direction of investments.
212	450		1.Each participating member shall direct the investment of the individual's accumulated
213		-	employer and employee contributions and earnings to one or more investment choices ~~within~~
214		-	available categories of investment provided by the board.
	451	+	employer and employee contributions and earnings to one or more investment choices
	452	+	within available categories of investment provided by the board.
215	453		2.The board shall provide an investment menu of investment options. In establishing the
216	454		investment options, the board shall:
217		-	a.Include predetermined investment portfolio options constructed to reflect different risk
218		-	profiles that automatically reallocate and rebalance contributions as a participating
219		-	member ages.
220		-	b.Allow a participating member to construct an investment portfolio using some or all of the
221		-	investment options.
222		-	3.The board shall provide a diversified menu of mutual fundsinvestment solutions and in-plan
223		-	lifetime annuity options that may include in-plan and out-of-plan options, either fixed, variable,
224		-	or a combination of both. In selecting an annuity provider the board shall comply with section
225		-	54-52.6-05.1.
226		-	SECTION 6. AMENDMENT. Section 54-52.6-09.5 of the North Dakota Century Code is amended
227		-	and reenacted as follows:
228		-	54-52.6-09.5. Employer contribution for defined benefit plan. (Effective after December 31,
229		-	2025)
230		-	In addition to the employer contribution under section 54-52.6-09, a state employer that receives
231		-	budgetary approval from the legislative assembly shall contribute to the defined benefit retirement plan
232		-	under chapter 54-52, an amount equal to the contribution rate calculated under section 54-52-06 less H. B. NO. 1146 - PAGE 6
233		-	the amount of the required employer contribution under sections 54-52.2-09 and 54-52.6-09. If a state
234		-	employer uses federal funds to pay any or all of an employee's wages, the employer shall use state
235		-	funds to pay this additional contribution.
	455	+	a.Include predetermined investment portfolio options constructed to reflect different
	456	+	risk profiles that automatically reallocate and rebalance contributions as a
	457	+	participating member ages.
	458	+	b.Allow a participating member to construct an investment portfolio using some or
	459	+	all of the investment options.
	460	+	3.The board shall provide a diversified menu of mutual fundsinvestment solutions and
	461	+	in-plan lifetime annuity options that may include in-plan and out-of-plan options , either
	462	+	fixed, variable, or a combination of both. In selecting an annuity provider the board
	463	+	shall comply with section 54-52.6-05.1.
	464	+	SECTION 6. AMENDMENT. Section 54-52.6-09.5 of the North Dakota Century Code is
	465	+	amended and reenacted as follows:
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	498	+	54-52.6-09.5. Employer contribution for defined benefit plan. (Effective after
	499	+	December 31, 2025)
	500	+	In addition to the employer contribution under section 54-52.6-09, a state employer that
	501	+	receives budgetary approval from the legislative assembly shall contribute to the defined benefit
	502	+	retirement plan under chapter 54-52, an amount equal to the contribution rate calculated under
	503	+	section 54-52-06 less the amount of the required employer contribution under sections
	504	+	54-52.2-09 and 54-52.6-09. If a state employer uses federal funds to pay any or all of an
	505	+	employee's wages, the employer shall use state funds to pay this additional contribution.
236	506		SECTION 7. RETROACTIVE APPLICATION. Section 4 of this Act applies retroactively to
237	507		January 1, 2025.
238		-	SECTION 8. EMERGENCY. Section 4 of this Act is declared to be an emergency measure. H. B. NO. 1146 - PAGE 7
239		-	____________________________ ____________________________
240		-	Speaker of the House President of the Senate
241		-	____________________________ ____________________________
242		-	Chief Clerk of the House Secretary of the Senate
243		-	This certifies that the within bill originated in the House of Representatives of the Sixty-ninth Legislative
244		-	Assembly of North Dakota and is known on the records of that body as House Bill No. 1146 and that
245		-	two-thirds of the members-elect of the House of Representatives voted in favor of said law.
246		-	Vote: Yeas 82 Nays 7 Absent 5
247		-	____________________________ ____________________________
248		-	Speaker of the House Chief Clerk of the House
249		-	This certifies that two-thirds of the members-elect of the Senate voted in favor of said law.
250		-	Vote: Yeas 46 Nays 0 Absent 1
251		-	____________________________ ____________________________
252		-	President of the Senate Secretary of the Senate
253		-	Received by the Governor at ________M. on _____________________________________, 2025.
254		-	Approved at ________M. on __________________________________________________, 2025.
255		-	____________________________
256		-	Governor
257		-	Filed in this office this ___________day of _______________________________________, 2025,
258		-	at ________ o’clock ________M.
259		-	____________________________
260		-	Secretary of State
	508	+	SECTION 8. EMERGENCY. Section 4 of this Act is declared to be an emergency measure.
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