23.0700.01000
Sixty-eighth
Legislative Assembly HOUSE BILL NO. 1219
of North Dakota
Introduced by
Representatives Kempenich, Conmy, Kreidt
Senator Schaible
1 A BILL for an Act to amend and reenact subsection 9 of section 15-39.1-04, subsection 7 of
2 section 15-39.1-05.2, subsection 2 of section 15-39.1-12.2, sections 15-39.1-15 and
3 15-39.1-16, subsection 2 of section 15-39.1-18, and sections 15-39.1-19.1, 15-39.1-19.2, and
4 15-39.1-27 of the North Dakota Century Code, relating to the teachers' fund for retirement board
5 authority and teachers' fund for retirement benefits.
6 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
7 SECTION 1. AMENDMENT. Subsection 9 of section 15-39.1-04 of the North Dakota
8 Century Code is amended and reenacted as follows:
9 9. "Retirement annuity" means the payments made by the fund to a member after
10 retirement, these payments beginning on the first or fifteenth day of the month
11 following eligibility for a benefit.
12 SECTION 2. AMENDMENT. Subsection 7 of section 15-39.1-05.2 of the North Dakota
13 Century Code is amended and reenacted as follows:
14 7. Shall, through resolution, inform the state investment board, which is the
15 administrative board of the retirement and investment office, the levels of services,
16 goals, and objectives expected to be provided through the retirement and investment
17 office.
18 SECTION 3. AMENDMENT. Subsection 2 of section 15-39.1-12.2 of the North Dakota
19 Century Code is amended and reenacted as follows:
20 2. A "qualified domestic relations order" for purposes of this section means any
21 judgment, decree, or order, including approval of a property settlement agreement,
22 which relates to the provision of child support, spousal support, or marital property
23 rights to a spouse, former spouse, child, or other dependent of the teacher, which is
24 made pursuant to a North Dakota domestic relations law, and which creates or
Page No. 1 23.0700.01000
 Sixty-eighth
Legislative Assembly
1 recognizes the existence of an alternate payee's right to, or assigns to an alternate
2 payee the right to, receive all or a part of the benefits payable to the teacher. A
3 qualified domestic relations order may not require the board to provide any type or
4 form of benefit, or any option, not otherwise provided under the fund, or to provide
5 increased benefits as determined on the basis of actuarial value. However, a qualified
6 domestic relations order may require the payment of benefits at the early retirement
7 date notwithstanding that the teacher has not terminated eligible employment. A
8 qualified domestic relations order must specify:
9 a. The name and last-known mailing address of the teacher and the name and
10 mailing address of each alternate payee covered by the order;
11 b. The amount or percentage of the teacher's benefits to be paid by the board to
12 each alternate payee;
13 c. The number of payments or period to which the order applies; and
14 d. Each retirement plan to which the order applies.
15 SECTION 4. AMENDMENT. Section 15-39.1-15 of the North Dakota Century Code is
16 amended and reenacted as follows:
17 15-39.1-15. Withdrawal from fund - Return to teaching.
18 A teacher who has withdrawn from the fund as set forth in this chapter, by returning to teach
19 in a public school or state institution of this state, may, by returning to teach in a public school or
20 state institution of this state, regain service credit for prior teaching by making the required
21 payment. The required payment, if made within five years of returning to teach in covered
22 employment, is the amount that was withdrawn with interest. In all other cases, the purchase
23 cost must be on an actuarial equivalent basis. If the teacher returns to teach in covered
24 employment after June 30, 2008, the teacher becomes a tier two member regardless of whether
25 the teacher repurchases service credit earned while the teacher was a tier one member.
26 SECTION 5. AMENDMENT. Section 15-39.1-16 of the North Dakota Century Code is
27 amended and reenacted as follows:
28 15-39.1-16. Option of teachers eligible to receive annuities.
29 1. The board shall adopt rules providing for the receipt of retirement benefits in the
30 following optional forms:
Page No. 2 23.0700.01000
 Sixty-eighth
Legislative Assembly
1 a. Option one. Upon the death of the teacher, the reduced retirement allowance
2 must be continued throughout the life of, and paid to, the teacher's designated
3 beneficiary named at the time of retirement. If the personindividual designated to
4 receive the teacher's reduced retirement allowance predeceases the teacher, the
5 reduced retirement allowance must be converted to a single life retirement
6 annuity under which benefit payments, if the personindividual designated died
7 prior tobefore July 1, 1989, must begin on July 1, 1989, or, if the personindividual
8 designated dies on or after July 1, 1989, must begin on the first day of the month
9 following the death of the personindividual designated.
10 b. Option two. Upon the death of the teacher, one-half of the reduced retirement
11 allowance must be continued throughout the life of, and paid to, the teacher's
12 designated beneficiary named at the time of retirement. If the personindividual
13 designated to receive the teacher's reduced retirement allowance predeceases
14 the teacher, the reduced retirement allowance must be converted to a single life
15 retirement annuity under which benefit payments, if the personindividual
16 designated died prior tobefore July 1, 1989, must begin on July 1, 1989, or, if the
17 designated beneficiary dies on or after July 1, 1989, must begin on the first day of
18 the month following the death of the personindividual designated.
19 c. Option three. Upon the death of the teacher within twenty years of the
20 commencement of annuity payments, the payments must be continued for the
21 remainder of the twenty-year period to the teacher's designated beneficiary. This
22 payment option is available to teachers who retire after July 31, 2003.
23 d. Option four. Upon the death of the teacher within ten years of the
24 commencement of annuity payments, the payments must be continued for the
25 remainder of the ten-year period to the teacher's designated beneficiary.
26 e. Option five. Level retirement income with social security option, which is available
27 to teachers retiring before social security is payable.
28 Option six. Partial lump sum distribution option. A member who is eligible for an unreduced
29 service retirement annuity under section 15-39.1-10 and who retires after July 31,
30 2003, may make a one-time election to receive a portion of the retirement annuity
Page No. 3 23.0700.01000
 Sixty-eighth
Legislative Assembly
1 paid in a lump sum distribution upon retirement, pursuant to rules adopted by the
2 board.
3 1. (1) The eligible member may select a standard service retirement annuity or an
4 optional service retirement annuity described in this sectionsubsection,
5 together with a partial lump sum distribution. The partial lump sum
6 distribution option is not available to members who have selected option
7 five, the level income retirement option. This option is not available to
8 disabled members or beneficiaries of deceased members. The partial lump
9 sum distribution option may be elected only once by a member and may not
10 be elected by a retiree.
11 2. (2) The amount of the partial lump sum distribution under this
12 sectionsubdivision is twelve months of a standard service retirement annuity
13 computed under section 15-39.1-10 and payable at the same time that the
14 first monthly payment of the annuity is paid.
15 3. (3) The service retirement annuity selected by the member must be actuarially
16 reduced to reflect the partial lump sum distribution option selected by the
17 member.
18 4. (4) Before a retiring member selects a partial lump sum distribution under this
19 sectionsubdivision, the fund shall provide a written notice to the member of
20 the amount by which the member's annuity will be reduced because of the
21 selection.
22 2. The amount of the reduced retirement allowance payable upon the exercise of any of
23 these options must be computed upon an actuarial basis through the use of standard
24 actuarial tables and based upon the ages of the teacher and the teacher's designated
25 beneficiary. A member's spouse, if designated as beneficiary, mustshall consent in
26 writing to the member's choice of benefit payment option for any benefit payments
27 commencing after June 30, 1999. The board may rely on the member's
28 representations about that person'smember's marital status in determining the
29 member's marital status. The spouse's written consent must be witnessed by a notary
30 or a plan representative. If the spouse does not consent, or cannot be located, the
Page No. 4 23.0700.01000
 Sixty-eighth
Legislative Assembly
1 member's annuity benefit must be paid using option two, the fifty percent joint and
2 survivor option.
3 SECTION 6. AMENDMENT. Subsection 2 of section 15-39.1-18 of the North Dakota
4 Century Code is amended and reenacted as follows:
5 2. The amount of the disability annuity is the amount computed by the retirement formula
6 in section 15-39.1-10 without consideration of age. A member determined eligible for a
7 disability annuity under this section may elect to receive an annuity under any of the
8 options allowed in section 15-39.1-16, except the level retirement income with social
9 security option or the partial lump sum option.
10 SECTION 7. AMENDMENT. Section 15-39.1-19.1 of the North Dakota Century Code is
11 amended and reenacted as follows:
12 15-39.1-19.1. Retired teachers return to active service - Annuities discontinued on
13 resumption of teaching over annual hour limit.
14 1. a. Except as otherwise provided in section 15-39.1-19.2, a retired teacher who is
15 receiving a retirement annuity under chapter 15-39, 15-39.1, or 15-39.2 may not
16 return to covered employment until thirty calendar days have elapsed from the
17 member's retirement date. A retired member may then return to covered
18 employment under an annual hour limit and continue receiving a monthly
19 retirement benefit. The annual hour limit is based on the length of the
20 re-employed retiree's contract as follows:
21 (1) Retiree reemploymentre-employment of nine months or less, annual limit is
22 seven hundred hours;
23 (2) Retiree reemploymentre-employment of ten months, annual limit is eight
24 hundred hours;
25 (3) Retiree reemploymentre-employment of eleven months, annual limit is nine
26 hundred hours; or
27 (4) Retiree reemploymentre-employment of twelve months, annual limit is one
28 thousand hours.
29 b. Employment as a noncontracted substitute teacher does not apply to the annual
30 hour limit. Professional, professional development, and extracurricular duties do
Page No. 5 23.0700.01000
 Sixty-eighth
Legislative Assembly
1 not apply to the annual hour limit. The fund may not collect contributions for these
2 activities.
3 c. The retired member and the retired member's employer must notify the fund
4 office in writing within thirty days of the retired member's return to covered
5 employment.
6 d. A retired member who returns to teaching shall pay the member contributions
7 required by section 15-39.1-09 on the salary received by the retired member. The
8 member contributions must be included in the retired member's account value
9 and may not be refunded except as provided under subdivision a of subsection 2
10 of section 15-39.1-19.1 and section 15-39.1-17.
11 e. A participating employer who employs a retired member under this section shall
12 pay the employer contributions required by section 15-39.1-09 on the salary of
13 the retired member.
14 f. A retired teacher who returns to teaching and does not exceed the annual hour
15 limit must be treated as retired for all other purposes under this chapter. A retired
16 teacher may not earn any additional service during the period of re-employment.
17 The retired teacher's benefits may not be adjusted to reflect changes in the
18 retired teacher's age or final average monthly salary at the end of the period of
19 re-employment, any optional form of payment elected under section 15-39.1-16
20 remains effective during and after the period of re-employment, and additional
21 benefits normally available to an active member, such as disability benefits, are
22 not available to a retired teacher re-employed under this section.
23 g. A retired teacher who returns to teaching and exceeds the annual hour limit must
24 immediately notify the fund office in writing. Failure to notify the fund office results
25 in the loss of one month's annuity benefit for the member. The retired member's
26 monthly benefit must be discontinued the first of the month following the date the
27 member reaches the annual hour limit.
28 2. Upon the retired teacher's subsequent retirement of a member who returns to teach
29 and whose monthly benefit is discontinued, the member's benefit must be resumed as
30 follows:
Page No. 6 23.0700.01000
 Sixty-eighth
Legislative Assembly
1 a. If the teacher subsequently retires with less than two years of additional earned
2 credited service, the teacher's contributions paid to the fund after the member's
3 benefit was suspended must be refunded in accordance with section 15-39.1-20
4 and the teacher is entitled to receive the discontinued annuity, plus any
5 postretirement benefit adjustments granted during the period of re-employment,
6 the first day of the month following the teacher's re-retirement.
7 b. If the teacher subsequently retires with two or more but less than five years of
8 additional earned credited service, the retired person's annuity is the greater of
9 the sum of the discontinued annuity, plus an additional annuity computed
10 according to this chapter based upon years of service and average salaries
11 earned during the period of re-employment plus any postretirement benefit
12 adjustments granted during the period of re-employment, or a recalculated
13 annuity computed according to this chapter based on total years of service credit
14 earned during both employment periods offset by the actuarial value of payments
15 already received. The new annuity is payable the first day of the month following
16 the member's re-retirement.
17 c. If the teacher subsequently retires with five or more years of additional earned
18 credited service, the retired person's annuity is the greater of the sum of the
19 discontinued annuity plus an additional annuity based upon years of service and
20 average salaries earned during the period of re-employment plus any
21 postretirement benefit adjustments granted during the period of re-employment,
22 or a recalculated annuity based on all years of service computed under
23 subsection 2 of section 15-39.1-10. The new annuity is payable the first day of
24 the month following the member's re-retirementThe member must have selected
25 the same benefit option as the option selected at initial retirement.
26 b. The member's total benefit upon subsequent retirement must equal the original
27 benefit plus the calculated benefit for the return to work period.
28 c. The member's benefit attributable to any return to