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.
HB 1602 amends North Dakota law governing the Public Employees Retirement System (PERS) to clarify how political subdivisions and employees participate in retirement plans after the state’s transition away from the defined benefit main plan for new hires. The bill confirms that, effective January 1, 2025, the PERS defined benefit main plan is closed to new eligible employees, while new eligible employees generally enter the defined contribution retirement plan under chapter 54-52.6. Employees who were already participating or deferred members before January 1, 2025, remain in the defined benefit plan, even if rehired later.
The bill also addresses employees who move between different retirement systems. It preserves participation rules for members of the law enforcement plan, judges’ plan, highway patrol plan, teachers’ fund for retirement plan, and the university system alternative retirement program, and it directs the PERS board to adopt rules to implement the section. In addition, the bill states that political subdivision participation in PERS, including the defined contribution plan, is optional and prohibits the board from charging fees or costs to a political subdivision that withdraws from the defined contribution plan.
HB 1602 primarily affects Chapter 54-52 of the North Dakota Century Code and related PERS administration by codifying the post-2024 retirement enrollment structure for public employees. It reinforces the closure of the defined benefit main plan to new eligible employees, directs new eligible employees into the defined contribution plan, and preserves grandfathered status for existing members. It also limits administrative authority by barring fees or costs for political subdivisions that withdraw from the defined contribution plan and by clarifying that local government participation in PERS remains optional.
The bill appears to have been broadly supported, with strong bipartisan approval in both chambers and no recorded committee opposition in the materials provided. The House passed it 72-18 and the Senate passed it 46-0, suggesting general agreement with the retirement-system clarification and the continued shift toward defined contribution coverage for new hires. The voting pattern indicates overall favorable sentiment, especially around simplifying participation rules and protecting existing members’ retirement status.
The main policy issue is the treatment of political subdivisions and whether they should be required or financially discouraged from participating in the defined contribution plan. HB 1602 resolves that question in favor of local flexibility by making participation optional and prohibiting withdrawal fees, which likely addresses concerns from political subdivisions about being locked into the system or penalized for leaving. Another point of interest is the preservation of benefits for employees already in the defined benefit plan, which helps avoid disruption for current members while still moving new employees into the defined contribution structure.