North Dakota House Bill HB1602

North Dakota 2025-2026 Regular Session

• Introduced: 1/20/25
• Refer: 1/20/25
• Report Pass: 2/17/25
• Engrossed: 2/20/25
• Refer: 2/20/25
• Report Pass: 3/21/25
• Enrolled: 3/27/25
• Passed: 4/4/25

Caption

AN ACT to amend and reenact section 54-52-02.15 of the North Dakota Century Code, relating to political subdivision participation in the public employees retirement system defined contribution retirement plan.

Summary

HB 1602 amends North Dakota law governing the Public Employees Retirement System (PERS) by clarifying how political subdivisions and their employees participate in the retirement system after the closure of the defined benefit main plan to new eligible employees effective January 1, 2025. The bill states that employees who were already participating or deferred members before that date remain in the defined benefit plan even if rehired later, while new eligible employees beginning employment on or after January 1, 2025 generally enter the defined contribution plan under chapter 54-52.6. The bill also preserves participation rules for employees covered by other retirement systems, including the law enforcement plan, judges' plan, highway patrol plan, teachers' fund for retirement, and the university system alternative retirement program. It directs the PERS board to adopt rules to implement the section and specifies that political subdivision participation in PERS, including the defined contribution plan, remains optional. In addition, the board is prohibited from charging political subdivisions fees or costs for withdrawing from the defined contribution plan.

Impact

HB 1602 primarily affects the administration of North Dakota's public retirement laws by reinforcing the transition from the PERS defined benefit main plan to the defined contribution plan for new eligible employees, while protecting the status of existing members and deferred members. It amends section 54-52-02.15 of the Century Code and clarifies that political subdivisions are not required to join the defined contribution plan even if they participate in PERS, and that no withdrawal fees or costs may be assessed against them. The bill therefore impacts state retirement governance, participating employers, and public employees hired on or after January 1, 2025.

Sentiment

The bill appears to have broad support overall, especially in the Senate, where it passed unanimously 46-0. The House vote was more divided at 72-18, indicating some reservations in that chamber, but the measure still cleared with a comfortable margin. The voting pattern suggests general acceptance of the retirement-system changes, with stronger consensus in the Senate than in the House.

Contention

The main points of contention likely center on the retirement-system transition itself: whether new public employees should be placed in the defined contribution plan, how existing members are protected, and whether political subdivisions should retain flexibility to opt in or out of participation. The explicit prohibition on charging withdrawal fees may also be a point of concern for entities administering the plan, since it limits cost recovery. The House opposition suggests some lawmakers may have objected to the policy shift away from the defined benefit structure or to the treatment of political subdivisions, even though the bill ultimately passed both chambers.