BISMARCK – A bill to close a traditional pension plan for future public employees passed the North Dakota State Senate Tuesday.
House Bill 1040 would close what’s known as the defined benefit plan on December 31, 2024 for new public employees starting January 1, 2025 or later. The plan is a traditional pension plan that provides a specific payment amount in retirement. The bill would then provide a defined contribution plan for the new hires, which is a plan that allows employees and employers to invest in funds themselves over time to save for retirement. The bill also provides a plan on getting the current defined benefit plan funded which has an unfunded liability of $1.8 billion.
The bill received a tied vote from the Senate State and Local Government committee.
“Some believe that we should keep the current plan open and work to increase both cash infusions and contributions so that we can build a healthy fund going forward,” said Sen. Kristin Roers, R-Dis. 27, Fargo. “Others believe that we should close the current plan while still increasing cash infusions and contributions so that we will not have the risk of being in a position of having to worry about being upside down financially ever again.”
The bill passed by a vote of 29 to 18 and will be sent to the governor for consideration.
