4 minute read
Protecting Defined Benefit
By Gary Feist, NDU Vice President of Public Employees
The North Dakota Public Employees Retirement System (PERS) board of directors had legislation introduced, Senate Bill 2046, that would have provided the fourth and final shared 1% and 1% contribution increase, putting the main retirement plan, covering state and political subdivision employees, on the path to becoming fully funded. PERS previously introduced this legislation during the 2011, 2013, 2015, 2017 and 2019 sessions, and each time it was defeated. With days remaining in the 2021 legislative session, SB 2046 was hog-housed (amended) to close the defined benefit (DB) plan to new hires without completing an actuarial study to know the implications of the plan. The closure of the DB plan would have placed all employees hired after December 31, 2023, in a defined contribution (DC) retirement plan, which is like a 401K. Legislators were clear the change would not affect current employees. The state has a contract with employees and is obligated to pay retirement benefits under the DB plan to current and future retirees that are part of the Plan. The amended bill included an infusion of $100 million and future cash infusions if the plan’s actuarial funded status dropped below 70%. The future additional contributions were legislative intent, but as public employees have experienced in the past, legislative intent rarely becomes reality. North Dakota United’s (NDU) activists and the legislative team defeated this terrible legislation on the last day of the session. This will not be the last attack on the DB pension by political ideologues who want to move public employees to a DC plan placing all the investment risk on the employee. Over the interim, NDU along with our members and allies will continue the fight to maintain our DB plan, which provides for a secure retirement for the life of the employee. Other states have closed their DB retirement plans only to see costs skyrocket requiring the state to reopen their DB plan. An argument has been made that young employees want a DC plan because of the portability it provides if an employee leaves their job, but the research shows most employees including millennials prefer a DB plan. The PERS DB plan is a hybrid plan providing flexibility through the PEP program. An employee that contributes to a 457 plan (401K) can transfer up to 4% of the state’s contribution to their account bucket should they leave public employment and want to take their retirement with them providing portability as well as enhancing the employee’s retirement savings through an employee managed and directed 457 plan. Join the fight for a secure retirement through a DB plan and contribute to a 457 plan to enhance your retirement security.
Did you know we’re more than an insurance company? We are dedicated to helping educators make informed financial decisions so they can stay in the job they love. Our representatives offer no-cost Did you know we’re more than an insurance company? We are dedicated to helping educators make informed financial decisions Did you know we’re more than an insurance company? financial wellness education on a variety of topics important to educators. so they can stay in the job they love. Our representatives offer no-cost financial wellness education on a variety of topics important to educators. We are dedicated to helping educators make informed financial decisions so they can stay in the job they love. Our representatives offer no-cost financial wellness education on a variety of topics important to educators.
Contact your local Horace Mann representative Ctoonlearntact y moreour loorcalvisit usHoraceat horacemann.com.Mann representative to learn moreContact yoorur visitlocalus at horacemann.com.Horace Mann representative to learn more or visit us at horacemann.com.
Shawn Rehm Jason Rohrer Bob Tiller Fargo Minot 701-232-7353 701-839-4669 Shawn Rehm Jason Rohrer Fargo Minot 701-232-7353 701-839-4669 Shawn Rehm Jason Rohrer Fargo Minot Grand Forks 701-787-8754 Bob Tiller Grand Forks 701-787-8754 Bob Tiller Grand Forks 701-232-7353 701-839-4669 701-787-8754
Horace Mann and its affiliates enter into agreements with educational associations pursuant to which Horace Mann or its affiliate pays the educational association to provide various services that are aimed at familiarizing the association’s members with the Horace Mann brand, products or services. For more information or to ask questions about your educational association’s services agreement, Horace Mann and its affiliates enter into agreements with educational associations pursuant to which Horace Mann or its affiliate pay please email your inquiry to association.relations@horacemann.com.s the educational association to provide various services that are aimed at familiarizing the association’s members with the Horace Mann brand, products or services. For more information or to ask questions about your educational association’s services agreement, please email your inquiry to association.relations@horacemann.com. Horace Mann and its affiliates enter into agreements with educational associations pursuant to which Horace Mann or its affiliate pays the educational association to provide various services that are aimed at familiarizing the association’s members with the Horace Mann brand, products or services. For more information or to ask questions about your educational association’s services agreement, please email your inquiry to association.relations@horacemann.com.
AM-C04554NDU (4-21) AM-C04554NDU (4-21)
AM-C04554NDU (4-21)
