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Summary of Legislative Proposals

Posted 5/04/18 (Fri)

The following summarizes the bills submitted to the interim Employee Benefits Programs Committee. This interim committee provides the opportunity for thorough study of these proposed bills. Based on the committee’s input, the NDPERS Board will decide what final bills to submit to the 2019 - 2021 legislative session.

Proposed Bills 1 through 3: Main System Funding Options

If any one of these bills were passed, the Defined Benefit Hybrid Retirement Plan, also known as the Main Plan, would be back on track to reach 100% funded status.

Proposed Bill 1. Increases the employee and employer contributions by 1% each effective January 2020. The contributions made by the employee and employer to the Defined Contribution (DC) Retirement Plan would also increase by 1% each.

Proposed Bill 2. Reduces the retirement multiplier to 1.75% for new employees hired on or after January 1, 2020 in the Main and Public Safety plan.

Proposed Bill 3. Discontinues the Retiree Health Insurance Credit (RHIC) benefit for new employees hired on or after August 1, 2019 and transfers the employer contribution to the Main and Defined Contribution plans prospectively.

Proposed Bill 4: Final Average Salary

Modify the methodology used to calculate Final Average Salary (FAS) to look at the three highest 12-month consecutive periods instead of the 36 highest salaries out of the last 180 months of service for those retiring effective January 1, 2022. This would address fluctuations in salaries reported by employers. It applies to members of the Main, Judges, Public Safety and Highway Patrol Retirement System.

Proposed Bill 5: Technical Corrections Bill

This bill clarifies the following:

  • A Highway Patrol (HP) retirement plan member must be vested in order to purchase service. HP vesting is 10 years.
  • The RHIC may be used for any after-tax dental, vision, and long-term care coverage, not only those plans offered by NDPERS.
  • If NDPERS elects to self-insure the prescription drug coverage only, the plan is not required to have stop loss coverage and does not need to be lower cost than a fully insured plan.