Bill Summary – FastDemocracy

0907.01000
     Sixty-sixth
     Legislative Assembly                    HOUSE BILL NO. 1419
     of North Dakota
     Introduced by
       Representatives Steiner, Delzer, Ertelt, Headland, Kasper, Kempenich, B. Koppelman,
       Louser, D. Ruby
       Senators Kannianen, G. Lee
  A BILL for an Act to create and enact a new section to chapter 54-27 and section 54-52.6-02.1
  of the North Dakota Century Code, relating to transfers from the strategic investment and
  improvements fund and membership in the public employee defined contribution retirement
  plan; to amend and reenact sections 54-52-01, 54-52-02.5, 54-52-02.9, 54-52.6-01, 54-52.6-02,
  54-52.6-03, and 54-52.6-10 of the North Dakota Century Code, relating to closure of the public
  employee defined benefit retirement plan for state employees and participation in the defined
  contribution retirement plan; to repeal section 54-52-06.5 of the North Dakota Century Code,
  relating to the retirement fund one hundred percent trigger; to provide for a legislative
  management study; to provide for an estimate of accumulated value transfer; to provide an
 effective date; and to provide a contingent expiration date.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
     SECTION 1. A new section to chapter 54-27 of the North Dakota Century Code is created
 and enacted as follows:
     Transfer from strategic investment and improvements fund to public employees
 retirement system.
     On January first of each year, the state treasurer shall transfer twenty million dollars from
 the strategic investment and improvements fund to the public employees retirement system
 main system retirement fund.
     SECTION 2. AMENDMENT. Section 54-52-01 of the North Dakota Century Code is
 amended and reenacted as follows:
     54-52-01. Definition of terms.
     As used in this chapter, unless the context otherwise requires:
                                               Page No. 1                         19.0907.01000
     Sixty-sixth
     Legislative Assembly
      1.   "Account balance" means the total contributions made by the employee, vested
           employer contributions under section 54-52-11.1, the vested portion of the vesting
           fund as of June 30, 1977, and interest credited thereon at the rate established by the
           board.
      2.   "Beneficiary" means any person in receipt of a benefit provided by this plan or any
           person designated by a participating member to receive benefits.
      3.   "Correctional officer" means a participating member who is employed as a correctional
           officer by a political subdivision.
      4.   a.   "Eligible employee" means alla permanent employeesemployee who meetis a
               participating member before January 1, 2025, and who meets all of the eligibility
               requirements set by this chapter and who areis eighteen years or more of age,
               and includes an appointive and elective officialsofficial under sections 54-52-02.5,
               54-52-02.11, and 54-52-02.12 who is a participating member before January 1,
               2025, and a nonteaching employeesemployee of the superintendent of public
               instruction, including the superintendent of public instruction, who electelected to
               transfer from the teachers' fund for retirement to the public employees retirement
               system under section 54-52-02.13, and employeesan employee of the state
               board for career and technical education who electelected to transfer from the
               teachers' fund for retirement to the public employees retirement system under
               section 54-52-02.14.
          b.   "Eligible employee" does not include nonclassified state employees who elect to
               become members of the retirement plan established under chapter 54-52.6 but
               does include employees of the judicial branch and employees of the board of
               higher education and state institutions under the jurisdiction of the board:
               (1)   A state employee who is first employed after December 31, 2024, and is not
                     a participating member;
               (2)   An employee eligible to participate in the national guard retirement plan or a
                     law enforcement retirement plan; or
               (3)   An employee of a political subdivision.
     5.   "Employee" means any individual employed by a governmental unit, whose
          compensation is paid out of the governmental unit's funds, or funds controlled or
                                                Page No. 2                       19.0907.01000
     Sixty-sixth
     Legislative Assembly
           administered by a governmental unit, or paid by the federal government through any of
           its executive or administrative officials; licensed employees of a school district means
           those employees eligible to participate in the teachers' fund for retirement who, except
           under subsection 2 of section 54-52-17.2, are not eligible employees under this
           chapter.
      6.   "Employer" means a governmental unit.
      7.   "Firefighter" means a participating member who is employed as a firefighter by a
           political subdivision and, notwithstanding subsection 13, for an individual employed
           after July 31, 2017, is employed at least thirty-two hours per week and at least twenty
          weeks each year of employment. A firefighter who is a participating member of the law
          enforcement retirement plan created by this chapter who begins employment after
          July 31, 2017, is ineligible to participate concurrently in any other retirement plan
          administered by the public employees retirement system. The term does not include a
          firefighter employee of the North Dakota national guard.
     8.   "Funding agent" or "agents" means an investment firm, trust bank, or other financial
          institution which the retirement board may select to hold and invest the employers' and
          members' contributions.
     9.   "Governmental unit" means the state of North Dakota, except the highway patrol for
          members of the retirement plan created under chapter 39-03.1, or a participating
          political subdivision thereof.
    10.   "National guard security officer or firefighter" means a participating member who is:
          a.   A security police employee of the North Dakota national guard; or
          b.   A firefighter employee of the North Dakota national guard.
    11.   "Participating member" means an eligible employee who through payment into the
          plan has established a claim against the plan.
    12.   "Peace officer" means a participating member who is a peace officer as defined in
          section 12-63-01 and is employed as a peace officer by the bureau of criminal
          investigation or by a political subdivision and, notwithstanding subsection 13, for
          personsindividuals employed after August 1, 2005, is employed thirty-two hours or
          more per week and at least twenty weeks each year of employment. A peace officer
          who is a participating member of the law enforcement retirement plan created by this
                                               Page No. 3                         19.0907.01000
     Sixty-sixth
     Legislative Assembly
           chapter who begins employment after August 1, 2005, is ineligible to participate
           concurrently in any other retirement plan administered by the public employees
           retirement system.
     13.   "Permanent employee" means a governmental unit employee whose services are not
           limited in duration and who is filling an approved and regularly funded position in an
           eligible governmental unit, and is employed twenty hours or more per week and at
           least twenty weeks each year of employment.
     14.   "Prior service" means service or employment before July 1, 1966.
     15.   "Prior service credit" means such credit toward a retirement benefit as the retirement
          board may determine under the provisions of this chapter.
    16.   "Public employees retirement system" means the retirement plan and program
          established by this chapter.
    17.   "Retirement" means the acceptance of a retirement allowance under this chapter upon
          either termination of employment or termination of participation in the retirement plan.
    18.   "Retirement board" or "board" means the governing authority created under section
          54-52-03.
    19.   "Seasonal employee" means a participating member who does not work twelve
          months a year.
    20.   "Service" means employment on or after July 1, 1966.
    21.   "Service benefit" means the credit toward retirement benefits as determined by the
          retirement board under the provisions of this chapter.
    22.   "Temporary employee" means a governmental unit 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 pension fund, and, if employed by
          a school district, occupies a noncertified teacher's position.
    23.   "Wages" and "salaries" means the member's earnings in eligible employment under
          this chapter reported as salary on the member's federal income tax withholding
          statements 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,
                                              Page No. 4                        19.0907.01000
     Sixty-sixth
     Legislative Assembly
           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 the member and
           participating employer. Bonuses may be considered as salary under this section if
           reported and annualized pursuant to rules adopted by the board.
      SECTION 3. AMENDMENT. Section 54-52-02.5 of the North Dakota Century Code is
  amended and reenacted as follows:
      54-52-02.5. Newly elected and appointed state officials.
      After December 31, 1999, a personand before January 1, 2025, an individual elected or
 appointed to a state office for the first time must, from and after the date that personindividual
 qualifies and takes office, must be a participating member of the public employees retirement
 system unless that personindividual makes an election at any time during the first six months
 after the date the personindividual takes office to participate in the retirement plan established
 under chapter 54-52.6. After December 31, 2024, an individual elected or appointed to a state
 office, from and after the individual qualified and takes office, must be a participating member of
 the retirement plan established under chapter 54-52.6 unless the individual is a participating
 member under this chapter. As used in this section, the phrase "for the first time" means a
 personan individual appointed, who, after December 31, 1999, does not hold office as an
 appointed official at the time of that person'sindividual's appointment.
     SECTION 4. AMENDMENT. Section 54-52-02.9 of the North Dakota Century Code is
 amended and reenacted as follows:
     54-52-02.9. Participation by temporary employees.
     ABefore January 1, 2025, a temporary employee may elect, within one hundred eighty days
 of beginning employment, to participate in the public employees retirement system under this
 chapter and receive credit for service after enrollment. The temporary employee shall pay
 monthly to the fund an amount equal to eightfourteen and twelve-hundredths percent times the
 temporary employee's present monthly salary. The amount required to be paid by a temporary
 employee increases by two percent times the temporary employee's present monthly salary
 beginning with the monthly reporting period of January 2012, and with an additional two percent
 increase, beginning with the reporting period of January 2013, and with an additional increase
 of two percent, beginning with the monthly reporting period of January 2014. The temporary
                                               Page No. 5                         19.0907.01000
     Sixty-sixth
     Legislative Assembly
  employee shall also pay the required monthly contribution to the retiree health benefit fund
  established under section 54-52.1-03.2. This contribution must be recorded as a member
  contribution pursuant to section 54-52.1-03.2. An employer may not pay the temporary
  employee's contributions. A temporary employee who is a participating member before
  January 1, 2025, may continue to participate as a temporary employee in the public employees
  retirement system until termination of employment or reclassification of the temporary employee
  as a permanent employee. A temporary employee may not purchase any additional credit,
  including additional credit under section 54-52-17.4 or past service under section 54-52-02.6.
      SECTION 5. AMENDMENT. Section 54-52.6-01 of the North Dakota Century Code is
 amended and reenacted as follows:
     54-52.6-01. Definition of terms.
     As used in this chapter, unless the context otherwise requires:
     1.   "Board" means the public employees retirement system boardgoverning authority
          created under section 54-52-03.
     2.   "Deferred member" means a personan individual who elected to receive deferred
          vested retirement benefits under chapter 54-52.
     3.   a.   "Eligible employee" means a permanent state employee, except an employee of
               the judicial branch or an employee of the board of higher education and state
               institutions under the jurisdiction of the board, who is eighteen years or more of
               age and who is in a position not classified by North Dakota human resource
               management services. If a participating member loses permanent employee
               status and becomes a temporary employee, the member may still participate in
               the defined contribution retirement plan.
          b.   "Eligible employee" does not include a supreme court judge or a district court
               judge, an employee eligible to participate in the national guard retirement plan or
               a law enforcement retirement plan, an employee of a political subdivision, or an
               employee of the board of higher education and state institutions under the
               jurisdiction of the board who is participating in the teachers' insurance and
               annuity association of America - college retirement equities fund retirement plan.
     4.   "Employee" means any personan individual employed by the state, whose
          compensation is paid out of state funds, or funds controlled or administered by the
                                              Page No. 6                        19.0907.01000
     Sixty-sixth
     Legislative Assembly
           state or paid by the federal government through any of its executive or administrative
           officials.
      5.   "Employer" means the state of North Dakota.
      6.   "Participating member" means an eligible employee who elects to
           participateparticipates in the defined contribution retirement plan established under
           this chapter.
      7.   "Permanent employee" means a state employee whose services are not limited in
           duration and who is filling an approved and regularly funded position and is employed
           twenty hours or more per week and at least five months each year.
     8.   "Temporary employee" means a governmental unit 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 pension fund, and, if employed by
          a school district, occupies a noncertified teacher's position.
     9.   "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 6. AMENDMENT. Section 54-52.6-02 of the North Dakota Century Code is
 amended and reenacted as follows:
    54-52.6-02. Election.
     1.   The board shall provide an opportunity for each eligible employee who is first
          employed before January