54-52-17. Formulation of plan. (Retroactive application - See note)
Participating members shall receive benefits according to this section and according to rules
adopted by the board, not inconsistent with this chapter. An individual is not entitled to receive a
prior service benefit if the individual was not continuously employed by a governmental unit in
North Dakota for a period of not less than two years immediately before eligibility for retirement.
1. Participating members shall receive credit for full-time employment or its equivalent
from the date they attain eligibility until their normal retirement date, postponed
retirement date, or early retirement date, as defined in this section. Part-time
employment will be recognized as full-time employment on a prorated basis as the
board may prescribe.
2. Retirement benefits are calculated from the participating member's final average
salary, which is the average of the highest salary received by the member for any
thirty-six months employed during the last one hundred twenty months of employment.
For members who terminate employment on or after August 1, 2010, final average
salary is the average of the highest salary received by the member for any thirty-six
months employed during the last one hundred eighty months of employment. For
members who terminate employment between July 31, 2005, and August 1, 2010, final
average salary is the average of the highest salary received by the member for any
thirty-six months employed during the period for which the board has appropriate and
accurate salary records on the board's electronic database, but that period may not be
more than the last one hundred eighty months of employment. For members who
terminate employment after December 31, 2019, final average salary is the higher of
the final average salary calculated on December 31, 2019, or the average salary
earned in the three highest periods of twelve consecutive months employed during the
last one hundred eighty months of employment. Months without earnings are excluded
for the purpose of computing an average. If the participating member has worked for
less than thirty-six months at the normal retirement date, the final average salary is the
average salary for the total months of employment.
3. Retirement dates are defined as follows:
a. Normal retirement date, except for a national guard security officer or firefighter, a
firefighter, dispatcher, correctional officer, or peace officer employed by the state,
or a firefighter, dispatcher, emergency medical services personnel, peace officer,
or correctional officer employed by a political subdivision, is:
(1) The first day of the month next following the month in which the member
attains the age of sixty-five years; or
(2) When the member has a combined total of years of service credit and years
of age equal to eighty-five and has not received a retirement benefit under
this chapter.
b. Normal retirement date for members first enrolled after December 31, 2015,
except for a national guard security officer or firefighter, a firefighter, dispatcher,
correctional officer, or peace officer employed by the state, a firefighter,
dispatcher, emergency medical services personnel, peace officer, or correctional
officer employed by a political subdivision, or a supreme court or district court
judge, is:
(1) The first day of the month next following the month in which the member
attains the age of sixty-five years; or
(2) When the member has a combined total of years of service credit and years
of age equal to ninety and the member attains a minimum age of sixty and
has not received a retirement benefit under this chapter.
c. Normal retirement date for a national guard security officer or firefighter is:
(1) The first day of the month next following the month in which the national
guard security officer or firefighter attains the age of fifty-five years and has
completed at least three eligible years of employment; or
(2) When the national guard security officer or firefighter has a combined total of
years of service credit and years of age equal to eighty-five and has not
received a retirement benefit under this chapter.
d. Normal retirement date for a dispatcher, emergency medical services personnel,
peace officer, firefighter, or correctional officer employed by a political subdivision
is:
(1) The first day of the month next following the month in which the dispatcher,
emergency medical services personnel, peace officer, firefighter, or
correctional officer attains the age of fifty-five years and has completed at
least three eligible years of employment; or
(2) When the dispatcher, emergency medical services personnel, peace officer,
firefighter, or correctional officer has a combined total of years of service
credit and years of age equal to eighty-five and has not received a
retirement benefit under this chapter.
e. (1) Normal retirement date for a peace officer employed by the bureau of
criminal investigation is:
(a) [1] For a member employed before August 1, 2023, the first day of
the month next following the month in which the peace officer
attains the age of fifty-five years and has completed at least three
eligible years of employment; and
[2] For a member employed after July 31, 2023, the first day of the
month next following the month in which the peace officer attains
the age of fifty-five years and has completed at least ten eligible
years of employment; or
(b) When the peace officer has a combined total of years of service credit
and years of age equal to eighty-five and has not received a
retirement benefit under this chapter.
(2) Normal retirement date for a firefighter, dispatcher, correctional officer, or
peace officer employed by the state, other than a peace officer employed by
the bureau of criminal investigation, is:
(a) The first day of the month next following the month in which the
firefighter, dispatcher, correctional officer, or peace officer attains the
age of fifty-five years and has completed at least three eligible years
of employment; or
(b) When the firefighter, dispatcher, correctional officer, or peace officer
has a combined total of years of service credit and years of age equal
to eighty-five and has not received a retirement benefit under this
chapter.
f. Postponed retirement date is the first day of the month next following the month
in which the member, on or after July 1, 1977, actually severs or has severed the
member's employment after reaching the normal retirement date.
g. (1) Early retirement date, except for a national guard security officer or
firefighter, a firefighter, dispatcher, emergency medical services personnel,
peace officer, or correctional officer employed by a political subdivision, or a
firefighter, dispatcher, correctional officer, or peace officer employed by the
state, is the first day of the month next following the month in which the
member attains the age of fifty-five years and has completed three years of
eligible employment.
(2) For a national guard security officer or firefighter, early retirement date is the
first day of the month next following the month in which the national guard
security officer or firefighter attains the age of fifty years and has completed
at least three years of eligible employment.
(3) For a firefighter, dispatcher, correctional officer, or peace officer employed
by the state, other than a peace officer employed by the bureau of criminal
investigation, or a dispatcher, emergency medical services personnel,
firefighter, peace officer, or correctional officer employed by a political
subdivision, early retirement date is the first day of the month next following
the month in which the dispatcher, emergency medical services personnel,
peace officer, firefighter, or correctional officer attains the age of fifty years
and has completed at least three years of eligible employment.
(4) For a peace officer employed by the bureau of criminal investigation, early
retirement date is the first day of the month next following the month in
which the peace officer attains the age of fifty years and has completed:
(a) If hired before August 1, 2023, at least three years of eligible
employment; or
(b) If hired after July 31, 2023, at least ten years of eligible employment.
h. Disability retirement date is the first day of the month after a member becomes
permanently and totally disabled, according to medical evidence called for under
the rules of the board, and has completed at least one hundred eighty days of
eligible employment. For supreme and district court judges, permanent and total
disability is based solely on a judge's inability to perform judicial duties arising out
of physical or mental impairment, as determined pursuant to rules adopted by the
board or as provided by subdivision a of subsection 3 of section 27-23-03.
(1) A member is eligible to receive disability retirement benefits only if the
member became disabled during the period of eligible employment and
applies for disability retirement benefits within twelve months of the date the
member terminates employment.
(2) A member is eligible to continue to receive disability benefits as long as the
permanent and total disability continues and the member submits the
necessary documentation and undergoes medical testing required by the
board, or for as long as the member participates in a rehabilitation program
required by the board, or both. If the board determines a member no longer
meets the eligibility definition, the board may discontinue the disability
retirement benefit. The board may pay the cost of any medical testing or
rehabilitation services the board deems necessary and these payments are
appropriated from the retirement fund for those purposes. A member's
receipt of disability benefits under this section is limited to receipt from the
fund to which the member was actively contributing at the time the member
became disabled.
(3) A member who has reached normal retirement age or normal retirement
date and is eligible for unreduced retirement benefits may not apply for a
disability retirement benefit.
4. The board shall calculate retirement benefits as follows:
a. Normal retirement benefits for a retiree, except a supreme or district court judge
and peace officer employed by the bureau of criminal investigation reaching
normal retirement date equals an annual amount, payable monthly, comprised of
a service benefit and a prior service benefit, as defined in this chapter, which is
determined as follows:
(1) For a member first enrolled:
(a) Before January 1, 2020, service benefit equals two percent of final
average salary multiplied by the number of years of service
employment.
(b) After December 31, 2019, service benefit equals one and seventy-five
hundredths percent of final average salary multiplied by the number of
years of service employment.
(2) Prior service benefit equals two percent of final average salary multiplied by
the number of years of prior service employment.
b. Normal retirement benefits for a supreme or district court judge under the public
employees retirement system reaching normal retirement date equals an annual
amount, payable monthly, comprised of a benefit as defined in this chapter,
determined as follows:
(1) Benefits must be calculated from the time of appointment or election to the
bench and must equal three and one-half percent of final average salary
multiplied by the first ten years of judicial service, two and eighty hundredths
percent of final average salary multiplied by the second ten years of judicial
service, and one and one-fourth percent of final average salary multiplied by
the number of years of judicial service exceeding twenty years.
(2) Service benefits must include, in addition, an amount equal to the percent
specified in subdivision a of final average salary multiplied by the number of
years of nonjudicial employee service and employment.
c. Normal retirement benefits for a peace officer employed by the bureau of criminal
investigation reaching the normal retirement date equals an annual amount,
payable monthly, comprised of a service benefit and a prior service benefit
determined as follows:
(1) The first twenty years of credited service multiplied by three percent of final
average salary.
(2) For years in excess of twenty years of credited service multiplied by one and
seventy-five hundredths percent of final average salary.
d. Postponed retirement benefits are calculated as for single life benefits for those
members who retired on or after July 1, 1977.
e. Early retirement benefits are calculated as for single life benefits accrued to the
date of termination of employment, but must be actuarially reduced to account for
benefit payments beginning before the normal retirement date, as determined
under subsection 3. Except for a national guard security officer or firefighter, a
firefighter, dispatcher, or emergency medical services personnel employed by a
political subdivision, a dispatcher, correctional officer, or peace officer employed
by a governmental unit, or a supreme court or district court judge, early retirement
benefits for members first enrolled after December 31, 2015, are calculated for
single life benefits accrued to the date of termination of employment, but must be
reduced by fixed rate of eight percent per year to account for benefit payments
beginning before the normal retirement date. A retiree, other than a supreme or
district court judge, or a peace officer employed by the bureau of criminal
investigation and hired after July 31, 2023, is eligible for early retirement benefits
only after having completed three years of eligible employment. A supreme or
district court judge retiree is eligible for early retirement benefits only after having
completed five years of eligible employment. A peace officer employed by the
bureau of criminal investigation and hired after July 31, 2023, is eligible for early
retirement benefits only after having completed ten years of eligible employment.
f. Except for a supreme or district court judge, disability retirement benefits are
twenty-five percent of the member's final average salary. Disability retirement
benefits for a supreme or district court judge are seventy percent of final average
salary reduced by any social security benefits and by any workforce safety and
insurance benefits paid to the member. The minimum monthly disability
retirement benefit under this section is one hundred dollars.
5. Upon termination of employment after completing three years of eligible employment,
except for a supreme or district court judge, who must complete five years of eligible
employment, or a peace officer employed by the bureau of criminal investigation and
hired after July 31, 2023, who must complete ten years of eligible employment, but
before normal retirement date, a member who does not elect to receive early
retirement benefits is eligible to receive deferred vested retirement benefits payable
commencing on the member's normal retirement date in one of the optional forms
provided in subsection 9. Members who have delayed or inadvertently failed to apply
for retirement benefits to commence on their normal retirement date may choose to
receive either a lump sum payment equal to the amount of missed payments, or an
actuarial increase to the form of benefit the member has selected, which increase
must reflect the missed payments.
6. If before retiring a member dies after completing three years of eligible employment,
except for a supreme or district court judge, who must have completed five years of
eligible employment, or a peace officer employed by the bureau of criminal
investigation and hired after July 31, 2023, who must complete ten years of eligible
employment, the board shall pay the member's account balance to the member's
designated beneficiary as provided in this subsection. If the member has designated
an alternate beneficiary with the surviving spouse's written consent, the board shall
pay the member's account balance to the named beneficiary. If the member has
named more than one primary beneficiary, the board shall pay the member's account
balance to the named primary beneficiaries in the percentages designated by the
member or, if the member has not designated a percentage for the beneficiaries, in
equal percentages. If one or more of the primary beneficiaries has predeceased the
member, the board shall pay the predeceased beneficiary's share to the remaining
primary beneficiaries. If any beneficiary survives the member, yet dies before
distribution of the beneficiary's share, the beneficiary must be treated as if the
beneficiary predeceased the member. If there are no remaining primary beneficiaries,
the board shall pay the member's account balance to the contingent beneficiaries in
the same manner. If there are no remaining designated beneficiaries, the board shall
pay the member's account balance to the member's estate. If the member has not
designated an alternate beneficiary or the surviving spouse is the beneficiary, the
surviving spouse of the member may select a form of payment as follows:
a. If the member was a supreme or district court judge, the surviving spouse may
select one of the following optional forms of payment:
(1) A lump sum payment of the member's retirement account as of the date of
death.
(2) Payments as calculated for the deceased member as if the member was of
normal retirement age at the date of death, payable until the spouse dies.
b. The surviving spouse of all other members may select one of the following
options:
(1) A lump sum payment of the member's retirement account as of the date of
death.
(2) Payment of a monthly retirement benefit equal to fifty percent of the
deceased member's accrued single life retirement benefits until the spouse
dies.
(3) If the member dies on or after the member's normal retirement date, the
payment of a monthly retirement benefit equal to an amount that would have
been paid to the surviving spouse if the member had retired on the day of
the member's death and had selected a one hundred percent joint and
survivor annuity, payable until the spouse dies. A surviving spouse who
received a benefit under this subsection as of July 31, 1995, is entitled to
the higher of that person's existing benefit or the equivalent of the accrued
benefit available under the one hundred percent joint and survivor provision
as if the deceased member were of normal retirement age, with the increase
payable beginning August 1, 1995.
7. If a member not coming under the provisions of subsection 6 terminates employment
because of death, permanent and total disability, or any voluntary or involuntary
reason prior to retirement, the member or the member's designated beneficiary is
entitled to the member's account balance at termination. The board automatically shall
refund a member's account balance if the member has completed less than three
years of eligible employment, has an account balance of less than one thousand
dollars, and was not a supreme or district court judge or a peace officer employed by
the bureau of criminal investigation and hired after July 31, 2023. If the member was a
supreme or district court judge, the board automatically shall refund a member's
account balance if the member completed less than five years of eligible employment
and has an account balance of less than one thousand dollars. If the member was a
peace officer employed by the bureau of criminal investigation and hired after July 31,
2023, the board automatically shall refund a member's account balance if the member
completed less than ten years of eligible employment and has an account balance of
less than one thousand dollars. A member may waive the refund if the member
submits a written statement to the board, within thirty days after termination,
requesting that the member's account balance remain in the fund.
8. The surviving spouse of a member receiving retirement benefits must be the member's
primary beneficiary unless there is no surviving spouse or the surviving spouse
designates an alternate beneficiary in writing. If a member receiving retirement
benefits or the member's surviving spouse receiving retirement benefits dies before
the total amount of benefits paid to either or both equals the amount of the member's
account balance at retirement, the difference must be paid to the named beneficiary of
the recipient or, if there is no named beneficiary, to the recipient's estate. A benefit
payment owed to the member, surviving spouse, or alternate beneficiary which was
not paid before the death of the member, surviving spouse, or alternate beneficiary
must be paid to the named beneficiary of the recipient or, if there is no named
beneficiary, to the recipient's estate.
9. a. The board shall adopt rules providing for the receipt of retirement benefits in the
following optional forms:
(1) Single life.
(2) An actuarially equivalent joint and survivor option, with fifty percent or one
hundred percent options.
(3) Actuarially equivalent life with ten-year or twenty-year certain options.
(4) An actuarially equivalent partial lump sum distribution option with a
twelve-month maximum lump sum distribution.
(5) An actuarially equivalent graduated benefit option with either a one percent
or two percent increase to be applied the first day of January of each year.
b. Except for a supreme or district court judge, unless a member specifically
requests that the member receive benefits according to one of these options at
the time of applying for retirement, all retirement benefits must be in the form of a
single life benefit. For a supreme or district court judge, unless a member
specifically requests that the member receive benefits according to one of these
options at the time of applying for retirement, all retirement benefits must be in
the form of a lifetime monthly pension with fifty percent of the benefit continuing
for the life of the surviving spouse, if any.
10. The fund may accept rollovers from other eligible plans under rules adopted by the
board for the purchase of additional service credit, but only to the extent the transfer is
a rollover contribution that meets the requirement of section 408 of the Internal
Revenue Code.
11. The board may accept trustee-to-trustee transfers as permitted by Internal Revenue
Code section 403(b)(13) and section 457(e)(17) from an Internal Revenue Code
section 403(b) annuity or Internal Revenue Code section 457 deferred compensation
plan for the purchase of permissive service credit, as defined in Internal Revenue
Code section 415(n)(3)(A) or as repayment of a cashout from a governmental plan
under Internal Revenue Code section 415(k)(3).
12. The board may establish individual retirement accounts and individual retirement
annuities as permitted under section 408(q) of the Internal Revenue Code to allow
employees to make voluntary employee contributions. The board may adopt rules to
implement and administer the accounts and annuities under this section.
