North Dakota 2025 2025-2026 Regular Session

North Dakota Senate Bill SB2121 Enrolled / Bill

Filed 03/14/2025

                    Sixty-ninth Legislative Assembly of North Dakota 
In Regular Session Commencing Tuesday, January 7, 2025
SENATE BILL NO. 2121
(State and Local Government Committee)
(North Dakota Public Employees Retirement System)
AN ACT to amend and reenact subsection 23 of section 54-52-01, section 54-52-17, subsection 2 of 
section 54-52-28, sections 54-52.1-03.1 and 54-52.2-06, subsection 8 of section 54-52.6-01, 
and subsection 1 of section 54-52.6-02.2 of the North Dakota Century Code, relating to 
administering the public employees retirement system.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. AMENDMENT. Subsection 23 of section 54-52-01 of the North Dakota Century Code 
is amended and reenacted as follows:
23."Temporary employee" means an employee who is not eligible to participate as a permanent 
employee, who is at least eighteen years old and not actively contributing to another 
employer-sponsored pensionretirement fund, and, if employed by a school district, occupies a 
noncertified teacher's position.
SECTION 2. AMENDMENT. Section 54-52-17 of the North Dakota Century Code is amended and 
reenacted as follows:
54-52-17. Formulation of plan. (Retroactive application - See note)
Participating members shall receive benefits according to this section and according to rules 
adopted by the board, not inconsistent with this chapter. No personAn individual is not entitled to 
receive a prior service benefit if the personindividual was not continuously employed by a governmental 
unit in North Dakota for a period of not less than two years immediately prior tobefore eligibility for 
retirement.
1.Participating members shall receive credit for full-time employment or its equivalent from the 
date they attain eligibility until their normal retirement date, postponed retirement date, or early 
retirement date, as defined in this section. Part-time employment will be recognized as 
full-time employment on a prorated basis as the board may prescribe.
2.Retirement benefits are calculated from the participating member's final average salary, which 
is the average of the highest salary received by the member for any thirty-six months 
employed during the last one hundred twenty months of employment. For members who 
terminate employment on or after August 1, 2010, final average salary is the average of the 
highest salary received by the member for any thirty-six months employed during the last one 
hundred eighty months of employment. For members who terminate employment between 
July 31, 2005, and August 1, 2010, final average salary is the average of the highest salary 
received by the member for any thirty-six months employed during the period for which the 
board has appropriate and accurate salary records on the board's electronic database, but 
that period may not be more than the last one hundred eighty months of employment. For 
members who terminate employment after December 31, 2019, final average salary is the 
higher of the final average salary calculated on December 31, 2019, or the average salary 
earned in the three highest periods of twelve consecutive months employed during the last 
one hundred eighty months of employment. Months without earnings are excluded for the 
purpose of computing an average. If the participating member has worked for less than 
thirty-six months at the normal retirement date, the final average salary is the average salary 
for the total months of employment.
3.Retirement dates are defined as follows: S. B. NO. 2121 - PAGE 2
a.Normal retirement date, except for a national guard security officer or firefighter, a 
firefighter employed by a political subdivision, a peace officer employed by the state, or a 
peace officer or correctional officer employed by a political subdivision, is:
(1)The first day of the month next following the month in which the member attains the 
age of sixty-five years; or
(2)When the member has a combined total of years of service credit and years of age 
equal to eighty-five and has not received a retirement benefit under this chapter.
b.Normal retirement date for members first enrolled after December 31, 2015, except for a 
national guard security officer or firefighter, a firefighter employed by a political 
subdivision, a peace officer employed by the state, a peace officer or correctional officer 
employed by a political subdivision, or a supreme court or district court judge, is:
(1)The first day of the month next following the month in which the member attains the 
age of sixty-five years; or
(2)When the member has a combined total of years of service credit and years of age 
equal to ninety and the member attains a minimum age of sixty and has not 
received a retirement benefit under this chapter.
c.Normal retirement date for a national guard security officer or firefighter is:
(1)The first day of the month next following the month in which the national guard 
security officer or firefighter attains the age of fifty-five years and has completed at 
least three eligible years of employment; or
(2)When the national guard security officer or firefighter has a combined total of years 
of service credit and years of age equal to eighty-five and has not received a 
retirement benefit under this chapter.
d.Normal retirement date for a peace officer, firefighter, or correctional officer employed by 
a political subdivision is:
(1)The first day of the month next following the month in which the peace officer, 
firefighter, or correctional officer attains the age of fifty-five years and has completed 
at least three eligible years of employment; or
(2)When the peace officer, firefighter, or correctional officer has a combined total of 
years of service credit and years of age equal to eighty-five and has not received a 
retirement benefit under this chapter.
e.(1)Normal retirement date for a peace officer employed by the bureau of criminal 
investigation is:
(a)[1]For a member employed before August 1, 2023, the first day of the 
month next following the month in which the peace officer attains the age 
of fifty-five years and has completed at least three eligible years of 
employment; and
[2]For a member employed after July 31, 2023, the first day of the month 
next following the month in which the peace officer attains the age of 
fifty-five years and has completed at least ten eligible years of 
employment; or
(b)When the peace officer has a combined total of years of service credit and 
years of age equal to eighty-five and has not received a retirement benefit 
under this chapter. S. B. NO. 2121 - PAGE 3
(2)Normal retirement date for a peace officer employed by the state, other than a 
peace officer employed by the bureau of criminal investigation, is:
(a)The first day of the month next following the month in which the peace officer 
attains the age of fifty-five years and has completed at least three eligible 
years of employment; or
(b)When the peace officer has a combined total of years of service credit and 
years of age equal to eighty-five and has not received a retirement benefit 
under this chapter.
f.Postponed retirement date is the first day of the month next following the month in which 
the member, on or after July 1, 1977, actually severs or has severed the member's 
employment after reaching the normal retirement date.
g.(1)Early retirement date, except for a national guard security officer or firefighter, a 
firefighter, peace officer, or correctional officer employed by a political subdivision, 
or a peace officer employed by the state, is the first day of the month next following 
the month in which the member attains the age of fifty-five years and has completed 
three years of eligible employment.
(2)For a national guard security officer or firefighter, early retirement date is the first 
day of the month next following the month in which the national guard security 
officer or firefighter attains the age of fifty years and has completed at least three 
years of eligible employment.
(3)For a peace officer employed by the state, other than a peace officer employed by 
the bureau of criminal investigation, or a firefighter, peace officer, or correctional 
officer employed by a political subdivision, early retirement date is the first day of 
the month next following the month in which the peace officer, firefighter, or 
correctional officer attains the age of fifty years and has completed at least three 
years of eligible employment.
(4)For a peace officer employed by the bureau of criminal investigation, early 
retirement date is the first day of the month next following the month in which the 
peace officer attains the age of fifty years and has completed:
(a)If hired before August   1, 2023, at least three years of eligible employment; or
(b)If hired after July  31, 2023, at least ten years of eligible employment 	.
h.Disability retirement date is the first day of the month after a member becomes 
permanently and totally disabled, according to medical evidence called for under the 
rules of the board, and has completed at least one hundred eighty days of eligible 
employment. For supreme and district court judges, permanent and total disability is 
based solely on a judge's inability to perform judicial duties arising out of physical or 
mental impairment, as determined pursuant to rules adopted by the board or as provided 
by subdivision a of subsection 3 of section 27-23-03.
(1)A member is eligible to receive disability retirement benefits only if the member 
became disabled during the period of eligible employment and applies for disability 
retirement benefits within twelve months of the date the member terminates 
employment.
(2)A member is eligible to continue to receive disability benefits as long as the 
permanent and total disability continues and the member submits the necessary 
documentation and undergoes medical testing required by the board, or for as long 
as the member participates in a rehabilitation program required by the board, or  S. B. NO. 2121 - PAGE 4
both. If the board determines a member no longer meets the eligibility definition, the 
board may discontinue the disability retirement benefit. The board may pay the cost 
of any medical testing or rehabilitation services the board deems necessary and 
these payments are appropriated from the retirement fund for those purposes. A 
member's receipt of disability benefits under this section is limited to receipt from 
the fund to which the member was actively contributing at the time the member 
became disabled.
4.The board shall calculate retirement benefits as follows:
a.Normal retirement benefits for all retireesa retiree, except a supreme andor district court 
judgesjudge, peace officersofficer employed by the bureau of criminal investigation, 
andor other peace officersofficer employed by the state, reaching normal retirement date 
equalequals an annual amount, payable monthly, comprised of a service benefit and a 
prior service benefit, as defined in this chapter, which is determined as follows:
(1)For membersa member first enrolled:
(a)Before January 1, 2020, service benefit equals two percent of final average 
salary multiplied by the number of years of service employment.
(b)After December 31, 2019, service benefit equals one and seventy-five 
hundredths percent of final average salary multiplied by the number of years 
of service employment.
(2)Prior service benefit equals two percent of final average salary multiplied by the 
number of years of prior service employment.
b.Normal retirement benefits for alla supreme andor district court judgesjudge under the 
public employees retirement system reaching normal retirement date equalequals an 
annual amount, payable monthly, comprised of a benefit as defined in this chapter, 
determined as follows:
(1)Benefits must be calculated from the time of appointment or election to the bench 
and must equal three and one-half percent of final average salary multiplied by the 
first ten years of judicial service, two and eighty hundredths percent of final average 
salary multiplied by the second ten years of judicial service, and one and one-fourth 
percent of final average salary multiplied by the number of years of judicial service 
exceeding twenty years.
(2)Service benefits must include, in addition, an amount equal to the percent specified 
in subdivision a of final average salary multiplied by the number of years of 
nonjudicial employee service and employment.
c.Normal retirement benefits for a peace officer employed by the bureau of criminal 
investigation reaching the normal retirement date equals an annual amount, payable 
monthly, comprised of a service benefit and a prior service benefit determined as follows:
(1)The first twenty years of credited service multiplied by three percent of final average 
salary.
(2)For years in excess of twenty years of credited service multiplied by one and 
seventy-five hundredths percent of final average salary.
d.Normal retirement benefits for a peace officer employed by the state, other than by the 
bureau of criminal investigation, reaching the normal retirement date equals an annual 
amount, payable monthly, comprised of a service benefit and a prior service benefit 
determined as follows: S. B. NO. 2121 - PAGE 5
(1)For membersa member first enrolled:
(a)Before January 1, 2020, service benefit equals two percent of final average 
salary multiplied by the number of years of service employment.
(b)After December 31, 2019, service benefit equals one and seventy-five 
hundredths percent of final average salary multiplied by the number of years 
of service employment.
(2)Prior service benefit equals two percent of final average salary multiplied by the 
number of years of prior service employment.
e.Postponed retirement benefits are calculated as for single life benefits for those members 
who retired on or after July 1, 1977.
f.Early retirement benefits are calculated as for single life benefits accrued to the date of 
termination of employment, but must be actuarially reduced to account for benefit 
payments beginning before the normal retirement date, as determined under 
subsection 3. Except for a national guard security officer or firefighter, a firefighter, peace 
officer, or correctional officer employed by a political subdivision, a peace officer 
employed by the state, or a supreme court or district court judge, early retirement 
benefits for members first enrolled after December 31, 2015, are calculated for single life 
benefits accrued to the date of termination of employment, but must be reduced by fixed 
rate of eight percent per year to account for benefit payments beginning before the 
normal retirement date. A retiree, other than a supreme or district court judge, or a peace 
officer employed by the bureau of criminal investigation and hired after July   31, 2023, is 
eligible for early retirement benefits only after having completed three years of eligible 
employment. A supreme or district court judge retiree is eligible for early retirement 
benefits only after having completed five years of eligible employment. A peace officer 
employed by the bureau of criminal investigation and hired after July   31, 2023, is eligible  
for early retirement benefits only after having completed ten years of eligible 
employment.
g.Except for a supreme andor district court judgesjudge, disability retirement benefits are 
twenty-five percent of the member's final average salary. Disability retirement benefits for 
a supreme andor district court judgesjudge are seventy percent of final average salary 
reduced by the member's primaryany social security benefits and by any workforce 
safety and insurance benefits paid to the member. The minimum monthly disability 
retirement benefit under this section is one hundred dollars.
5.Upon termination of employment after completing three years of eligible employment, except 
for a supreme andor district court judgesjudge, who must complete five years of eligible 
employment, or a peace officer employed by the bureau of criminal investigation and hired 
after July  31, 2023, who must complete ten years of eligible employment 	, but before normal 
retirement date, a member who does not elect to receive early retirement benefits is eligible to 
receive deferred vested retirement benefits payable commencing on the member's normal 
retirement date in one of the optional forms provided in subsection 9. Members who have 
delayed or inadvertently failed to apply for retirement benefits to commence on their normal 
retirement date may choose to receive either a lump sum payment equal to the amount of 
missed payments, or an actuarial increase to the form of benefit the member has selected, 
which increase must reflect the missed payments.
6.If before retiring a member dies after completing three years of eligible employment, except for 
a supreme andor district court judgesjudge, who must have completed five years of eligible 
employment, or a peace officer employed by the bureau of criminal investigation and hired 
after July  31, 2023, who must complete ten years of eligible employment,  the board shall pay 
the member's account balance to the member's designated beneficiary as provided in this  S. B. NO. 2121 - PAGE 6
subsection. If the member has designated an alternate beneficiary with the surviving spouse's 
written consent, the board shall pay the member's account balance to the named beneficiary. 
If the member has named more than one primary beneficiary, the board shall pay the 
member's account balance to the named primary beneficiaries in the percentages designated 
by the member or, if the member has not designated a percentage for the beneficiaries, in 
equal percentages. If one or more of the primary beneficiaries has predeceased the member, 
the board shall pay the predeceased beneficiary's share to the remaining primary 
beneficiaries. If any beneficiary survives the member, yet dies before distribution of the 
beneficiary's share, the beneficiary must be treated as if the beneficiary predeceased the 
member. If there are no remaining primary beneficiaries, the board shall pay the member's 
account balance to the contingent beneficiaries in the same manner. If there are no remaining 
designated beneficiaries, the board shall pay the member's account balance to the member's 
estate. If the member has not designated an alternate beneficiary or the surviving spouse is 
the beneficiary, the surviving spouse of the member may select a form of payment as follows:
a.If the member was a supreme or district court judge, the surviving spouse may select one 
of the following optional forms of payment:
(1)A lump sum payment of the member's retirement account as of the date of death.
(2)Payments as calculated for the deceased member as if the member was of normal 
retirement age at the date of death, payable until the spouse dies.
b.The surviving spouse of all other members may select one of the following options:
(1)A lump sum payment of the member's retirement account as of the date of death.
(2)Payment of a monthly retirement benefit equal to fifty percent of the deceased 
member's accrued single life retirement benefits until the spouse dies.
(3)If the member dies on or after the member's normal retirement date, the payment of 
a monthly retirement benefit equal to an amount that would have been paid to the 
surviving spouse if the member had retired on the day of the member's death and 
had selected a one hundred percent joint and survivor annuity, payable until the 
spouse dies. A surviving spouse who received a benefit under this subsection as of 
July 31, 1995, is entitled to the higher of that person's existing benefit or the 
equivalent of the accrued benefit available under the one hundred percent joint and 
survivor provision as if the deceased member were of normal retirement age, with 
the increase payable beginning August 1, 1995.
7.If a member not coming under the provisions of subsection 6 terminates employment because 
of death, permanent and total disability, or any voluntary or involuntary reason prior to 
retirement, the member or the member's designated beneficiary is entitled to the member's 
account balance at termination. The board automatically shall refund a member's account 
balance if the member has completed less than three years of eligible employment, has an 
account balance of less than one thousand dollars, and was not a supreme or district court 
judge or a peace officer employed by the bureau of criminal investigation and hired after 
July   31, 2023 . If the member was a supreme or district court judge, the board automatically 
shall refund a member's account balance if the member completed less than five years of 
eligible employment and has an account balance of less than one thousand dollars. If the 
member was a peace officer employed by the bureau of criminal investigation and hired after 
July   31, 2023, the board automatically shall refund a member's account balance if the member  
completed less than ten years of eligible employment and has an account balance of less than 
one thousand dollars. A member may waive the refund if the member submits a written 
statement to the board, within thirty days after termination, requesting that the member's 
account balance remain in the fund. S. B. NO. 2121 - PAGE 7
8.The surviving spouse of a member receiving retirement benefits must be the member's 
primary beneficiary unless there is no surviving spouse or the surviving spouse designates an 
alternate beneficiary in writing. If a member receiving retirement benefits or the member's 
surviving spouse receiving retirement benefits dies before the total amount of benefits paid to 
either or both equals the amount of the member's account balance at retirement, the 
difference must be paid to the named beneficiary of the recipient or, if there is no named 
beneficiary, to the recipient's estate. A benefit payment owed to the member, surviving spouse, 
or alternate beneficiary which was not paid before the death of the member, surviving spouse, 
or alternate beneficiary must be paid to the named beneficiary of the recipient or, if there is no 
named beneficiary, to the recipient's estate.
9.a.The board shall adopt rules providing for the receipt of retirement benefits in the following 
optional forms:
a.(1)Single life.
b.(2)An actuarially equivalent joint and survivor option, with fifty percent or one hundred 
percent options.
c.(3)Actuarially equivalent life with ten-year or twenty-year certain options.
d.(4)An actuarially equivalent partial lump sum distribution option with a twelve-month 
maximum lump sum distribution.
e.(5)An actuarially equivalent graduated benefit option with either a one percent or two 
percent increase to be applied the first day of January of each year.
b.Except for a supreme andor district court judgesjudge, unless a member specifically 
requests that the member receive benefits according to one of these options at the time 
of applying for retirement, all retirement benefits must be in the form of a single life 
benefit. For a supreme andor district court judgesjudge, unless a member specifically 
requests that the member receive benefits according to one of these options at the time 
of applying for retirement, all retirement benefits must be in the form of a lifetime monthly 
pension with fifty percent of the benefit continuing for the life of the surviving spouse, if 
any.
10.The fund may accept rollovers from other eligible plans under rules adopted by the board for 
the purchase of additional service credit, but only to the extent the transfer is a rollover 
contribution that meets the requirement of section 408 of the Internal Revenue Code.
11.The board may accept trustee-to-trustee transfers as permitted by Internal Revenue Code 
section 403(b)(13) and section 457(e)(17) from an Internal Revenue Code section 403(b) 
annuity or Internal Revenue Code section 457 deferred compensation plan for the purchase of 
permissive service credit, as defined in Internal Revenue Code section 415(n)(3)(A) or as 
repayment of a cashout from a governmental plan under Internal Revenue Code section 
415(k)(3).
12.The board may establish individual retirement accounts and individual retirement annuities as 
permitted under section 408(q) of the Internal Revenue Code to allow employees to make 
voluntary employee contributions. The board may adopt rules to implement and administer the 
accounts and annuities under this section.
SECTION 3. AMENDMENT. Subsection 2 of section 54-52-28 of the North Dakota Century Code is 
amended and reenacted as follows:
2.The minimum distribution rules under section 401(a)(9) of the Internal Revenue Code, 
including the incidental death benefit requirements under section 401(a)(9)(G), and the 
regulations issued under that provision to the extent applicable to governmental plans, as  S. B. NO. 2121 - PAGE 8
amended. Accordingly, benefits must be distributed or begin to be distributed no later than a 
member's required beginning date, and the required minimum distribution rules override any 
inconsistent provision of this chapter. For a member who attains age seventy and one-half 
before January 1, 2020, the member's required beginning date is April first of the calendar 
year following the later of the calendar year in which the member attains age seventy and 
one-half or terminates employment. For a member who attains age seventy and one-half after 
December 31, 2019, the member's required beginning date is April first of the calendar year 
following the later of the calendar year in which the member attains age seventy-two or 
terminates employment.
SECTION 4. AMENDMENT. Section 54-52.1-03.1 of the North Dakota Century Code is amended 
and reenacted as follows:
54-52.1-03.1. Certain political subdivisions authorized to join uniform group insurance 
program - Employer contribution.
If eligible under federal law, a political subdivision may extend the benefits of the uniform group 
insurance program under this chapter to its permanent employees, subject to minimum requirements 
established by the board and a minimum period of participation of sixty months. If the political 
subdivision withdraws from participation in the uniform group insurance program, before completing 
sixty months of participation, unless federal or state laws or rules are modified or interpreted in a way 
that makes participation by the political subdivision in the uniform group insurance program no longer 
allowable or appropriate, the political subdivision shall make payment to the board in an amount equal 
to any expenses incurred in the uniform group insurance program that exceed income received on 
behalf of the political subdivision's employees as determined under rules adopted by the board. The 
Garrison Diversion Conservancy District, and district shall participate in the uniform group insurance 
program under the same terms and conditions as state agencies. District health units required to 
participate in the public employees retirement system under section 54-52-02, which were participating 
in the uniform group insurance program at the time the Affordable Care Act was enacted, shall 
participate in the uniform group insurance program under the same terms and conditions as state 
agencies. A retiree who has accepted a retirement allowance from a participating political subdivision's 
retirement plan may elect to participate in the uniform group under this chapter without meeting 
minimum requirements at age sixty-five, when the employee's spouse reaches age sixty-five, upon the 
receipt of a benefit, when the political subdivision joins the uniform group insurance plan if the retiree 
was a member of the former plan, or when the spouse terminates employment. If a retiree or surviving 
spouse does not elect to participate at the times specified in this section, the retiree or surviving spouse 
must meet the minimum requirements established by the board. Each retiree or surviving spouse shall 
pay directly to the board the premiums in effect for the coverage then being provided. The board may 
require documentation that the retiree has accepted a retirement allowance from an eligible retirement 
plan other than the public employees retirement system.
SECTION 5. AMENDMENT. Section 54-52.2-06 of the North Dakota Century Code is amended and 
reenacted as follows:
54-52.2-06. Deferred compensation program - Benefits - Taxation - Exemption from judicial 
process - Assignment.
The deferred compensation program established by this chapter shall exist and serve in addition to 
retirement, pension, or benefit systems established by the state, county, city, town, or other political 
subdivision, and no deferral of income under the deferred compensation program shall effect a 
reduction of any retirement, pension, or other benefit provided by law. However, with the exception of 
Roth contributions, any sum deferred under the deferred compensation program is not subject to 
taxation until distribution is actually made to the employee. Any unpaid benefits under the deferred 
compensation program established by this chapter are not subject to execution, garnishment, 
attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, except 
as provided by section 54-52.2-03.3. Neither the employee, the employee's beneficiary, nor any  S. B. NO. 2121 - PAGE 9
designee of the employee or the employee's beneficiary has the right to commute, sell, assign, transfer, 
or otherwise convey the right to receive payments under this chapter.
SECTION 6. AMENDMENT. Subsection 8 of section 54-52.6-01 of the North Dakota Century Code 
is amended and reenacted as follows:
8."Wages" and "salaries" means earnings in eligible employment under this chapter reported as 
salary on a federal income tax withholding statement plus any salary reduction or salary 
deferral amounts under 26 U.S.C. 125, 401(k), 403(b), 414(h), or 457. "Salary" does not 
include fringe benefits such as payments for unused sick leave, personal leave, vacation leave 
paid in a lump sum, overtime, housing allowances, transportation expenses, early retirement, 
incentive pay, severance pay, medical insurance, workforce safety and insurance benefits, 
disability insurance premiums or benefits, or salary received by a member in lieu of previously 
employer-provided fringe benefits under an agreement between an employee and a 
participating employer. Bonuses may be considered as salary under this section if reported 
and annualized pursuant to rules adopted by the board.
SECTION 7. AMENDMENT. Subsection 1 of section 54-52.6-02.2 of the North Dakota Century 
Code is amended and reenacted as follows:
1.As used in this section, "eligible employee" means a permanent state employee who on 
December 31, 2024, is a participating member of the public employees retirement system 
main system plan under chapter 54-4254 - 52 , who has been a participating member under 
chapter 54-52 for no more than five years, and who is at least eighteen years of age. S. B. NO. 2121 - PAGE 10
____________________________ ____________________________
President of the Senate	Speaker of the House
____________________________ ____________________________
Secretary of the Senate	Chief Clerk of the House
This certifies that the within bill originated in the Senate of the Sixty-ninth Legislative Assembly of North 
Dakota and is known on the records of that body as Senate Bill No. 2121.
Senate Vote:Yeas 47 Nays 0 Absent  0
House Vote: Yeas 90 Nays 0 Absent  4
____________________________
Secretary of the Senate
Received by the Governor at ________M. on _____________________________________, 2025.
Approved at ________M. on __________________________________________________, 2025.
____________________________
Governor
Filed in this office this ___________day of _______________________________________, 2025,
at ________ o’clock ________M.
____________________________
Secretary of State