Interim Legislative Committee examining changes to the pension plan for new government employees

An interim legislative committee is considering whether the civil service pension plan should become a “defined contribution” plan.

Currently, it is a “defined benefit” plan. But the current plan has an unfunded liability. And the committee will examine the possibility of requiring new recruits after January 1, 2024 to join a “defined contribution” plan.

The panel will also consider how much it will cost to make the current plan full for those who are still on this plan.

“We’ll ask the tough questions and the right questions,” said pension committee chair Rep. Mike Lefor (R-Dickinson). “It will not be a runaway train. It will be a thoughtful and deliberative process, with input every step of the way.”

The most recent estimate showed that the current plan is 68.3 percent funded.

Some wonder if the change is a good idea. North Dakota League of Cities executive director Blake Crosby told the committee he was concerned about making a change.

“There is an incredible labor shortage out there,” Crosby said. “Everyone’s shopping. And having a defined benefit program is really a plus for cities and counties. “

North Dakota County Association executive director Terry Traynor said in an interview that it’s not just about recruiting, it’s about retention.

“One of the things our county officials tell us is that when they have a mid to long term employee who understands what they have in the defined benefit plan, that’s a really good retention tool, ”Traynor said. “Obviously, this proposal would not affect these employees, but it would affect the employees who would become long-tenured employees. So how does this affect us? “

The committee plans to hire consultants, review plans from other states, and see what might work for North Dakota.

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