N.D. Admin. Code Title 71 — Retirement Board

Article 71-01 General Administration

Chapter 71-01-01 Organization of Board

N.D. Admin. Code 71-01-01-01 Organization of public employees retirement board

1.History. The 1965 legislative assembly created the public employees retirement system by legislation codified as North Dakota Century Code chapter 54-52. The starting date of the program was July 1, 1966. The board acts as the administrating body to manage the public employees retirement system, the judges retirement system, the highway patrol retirement system, the national guard security officers and firefighters system, the uniform group insurance program, the deferred compensation plan, the prefunded retiree health program, and a pretax benefit program for public employees.

2.Board membership. The board consists of eleven members. Four are members of the legislative assembly. The majority leader of the house of representatives shall appoint two members of the house of representatives and the majority leader of the senate shall appoint two members of the senate. The members of the legislature shall serve a term of two years, at the pleasure of the appointing majority leader. Four members of the board must be appointed by the governor to serve a term of five years, at the pleasure of the governor. Three members are elected by the active membership of the system to serve a term of five years.

3.Executive director. The executive director is appointed by the board and is responsible for the administration of the day-to-day activities of the retirement systems, the prefunded retiree health program, the uniform group insurance program, the deferred compensation program, and the pretax benefit program for public employees.

4.Inquiries. Inquiries regarding the board may be addressed to:

Executive Director Box 1657 Bismarck, North Dakota 58502

History

• History: Effective November 1, 1981; amended effective November 1, 1985; April 1, 1988; September 1, 1989; January 1, 1992; May 1, 2004; April 1, 2016; January 1, 2025.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-03

Chapter 71-01-02 Election Rules

N.D. Admin. Code 71-01-02-01 Election committee

1.The retirement board must appoint a committee of three, one of whom will be designated as chair, from its membership to oversee elections to the board.

2.Committee members, or their authorized representatives, are responsible for reviewing the election rules for the retirement board membership of the North Dakota public employees retirement system, for counting ballots, and for reporting the election results to the board.

3.Committee members will be appointed at the February meeting of the North Dakota public employees retirement system board to serve until the retirement board meeting for the following February.

History

• History: Effective April 1, 1992.

N.D. Admin. Code 71-01-02-02 Eligible voters

1.An active employee, eligible to serve as an elected member of the board in accordance with subsection 4 of North Dakota Century Code section 54-52-03, is eligible to cast one vote for each active member vacancy on the retirement board.

2.An individual participating in the uniform group insurance program, the deferred compensation plan for public employees, or the pretax benefits program but not in the retirement system is ineligible to cast votes in retirement board elections.

History

• History: Effective April 1, 1992; amended effective July 1, 1994; April 1, 2008; April 1, 2012; January 1, 2025.

N.D. Admin. Code 71-01-02-03 Candidate eligibility

Any active participating member, members of the defined contribution retirement plan, the highway patrol retirement system, and the job service retirement plan are eligible to serve as an elected member of the board in accordance with subsection 4 of North Dakota Century Code section 54-52-03, may become a candidate for election to the board. An agency or political subdivision may not be represented by more than one elected member. Employees who have terminated their employment for whatever reason are not eligible to serve as an active elected member of the board.

History

• History: Effective April 1, 1992; amended effective July 1, 1994; July 1, 2000; April 1, 2008; July 1, 2010; April 1, 2012; January 1, 2025.

N.D. Admin. Code 71-01-02-04 Election notification

1.The director of the North Dakota public employees retirement system shall ensure that notification of an active member vacancy and the election is given to all active participating members through publication of a notice in the North Dakota public employees retirement system newsletter or any other method of communication as deemed appropriate by the director at least twenty-one calendar days in advance of the filing date for nomination petitions.

2.The notice must include a statement of voter and candidate eligibility, the candidate nomination requirements, the date of election, the filing date for the nomination petition, and where to obtain the nomination petitions for filing.

History

• History: Effective April 1, 1992; amended effective July 1, 2000; April 1, 2008; April 1, 2014; April 1, 2020; January 1, 2025.

N.D. Admin. Code 71-01-02-05 Petition format

1.The nomination petition for an active member on the board must include the signatures of at least one hundred active eligible voters.

2.The nomination petition must include the following statement: "We, the petitioners, who are members of the North Dakota Public Employees Retirement System, nominate _______________ for election to the North Dakota Public Employees Retirement System board."

3.The nomination petition must include a certification by the candidate, as follows: "I accept the nomination and if elected will fulfill the responsibilities as a member of the North Dakota Public Employees Retirement System board."

4.If there is not room for the required signatures on a single nomination petition, additional petitions may be used. Candidates may reproduce, at their own expense, blank nomination petitions that meet the format requirements without requesting additional petitions from the North Dakota public employees retirement system. All nomination petitions used must be certified and signed by the nominee when submitted to the North Dakota public employees retirement system office.

History

• History: Effective April 1, 1992; amended effective May 1, 2004; April 1, 2008; April 1, 2012; January 1, 2025.

N.D. Admin. Code 71-01-02-06 Procedure for completing and filing petitions

1.No period of time, on which an employee is entitled to receive wages or salary from the state of North Dakota or a political subdivision, may be used by the candidates to promote their election except as permitted by the employing agency. In addition, no public funds may be used for the purpose of promoting an election unless permitted by the employing agency.

2.Nomination petitions must be filed with the North Dakota public employees retirement system no later than four p.m. on the date provided in the election notice and must be validated by the election committee or their representatives following the filing deadline and prior to ballots being distributed.

3.Nomination petitions not furnished by the North Dakota public employees retirement system will be accepted provided they are submitted in the prescribed form.

4.A candidate may withdraw that candidate's nomination petition up until one week after the date the nomination petition is filed with the North Dakota public employees retirement system. The notice must be in writing and duly witnessed.

5.Nomination petitions may be accompanied by a three-inch [76.20-millimeter] by five-inch [127.00-millimeter] photograph of the candidate and a narrative not to exceed two hundred words. The absence of a photo or narrative will not invalidate the candidate's eligibility, but only the candidate's name will then appear with the other candidates' information that accompanies the ballots.

6.The retirement board or its representative reserves the right to edit lengthy narratives to the two hundred word limit.

7.The board or its representative shall inform all candidates of the validation of their candidacy.

History

• History: Effective April 1, 1992; amended effective July 1, 2000; April 1, 2008; April 1, 2020.

N.D. Admin. Code 71-01-02-07 Election ballots

1.Ballots must be prepared by the North Dakota public employees retirement system staff in accordance with the election rules.

2.Ballots must be printed on postcards with return postage supplied and will be mailed to all eligible voters with a narrative on candidates who have provided that information.

3.Ballots must first be arranged with the names of each candidate on the ballot. In printing the ballots, the position of the names must be changed as many times as there are candidates' names on the ballot. The change must be accomplished by taking the name at the head of the ballot and placing it at the bottom and moving the name that was second before the change to the head of the names on the ballot. The same number of ballots must be printed after each change of position so as to result in an equal number of ballots with each candidate's name at the head of the ballot. The ballot must provide a space for write-in candidates.

4.If there is only one candidate for an election, the election will nonetheless be conducted in compliance with the provisions of this chapter.

5.If there is no candidate, the board shall solicit at least two persons from the eligible pool of candidates to run for election to the board. The election will then be conducted in compliance with the provisions of this chapter.

History

• History: Effective April 1, 1992; amended effective July 1, 2000; April 1, 2008.

N.D. Admin. Code 71-01-02-08 Election

1.Ballots must be mailed by first-class United States mail to the address of all eligible active voters for an election of an active board member as determined by the North Dakota public employees retirement system's membership as of April fifteenth in the year of the election.

Each eligible voter gets one ballot. Lost ballots may not be replaced.

2.North Dakota public employees retirement system members who become eligible to vote after April fifteenth, but before the deadline for the receipt of ballots, may be issued a special election ballot by making their request for such ballot in writing to the North Dakota public employees retirement system office no later than the two weeks before the deadline for receipt of ballots.

3.Ballots must be returned to the North Dakota public employees retirement system office no later than four p.m. on the date provided on the election ballots.

4.The candidate receiving the highest number of votes must be considered elected. When there is more than one active member board vacancy to be filled, the candidate with the second highest number of votes must be considered elected. If there are three active member board vacancies to be filled, the person with the third highest number of votes must be considered elected.

History

• History: Effective April 1, 1992; amended effective April 1, 2008; April 1, 2020; January 1, 2025.

N.D. Admin. Code 71-01-02-09 Canvassing rules

1.Ballot counting by election committee members or their authorized representatives will commence on the date set for the election committee to do so and will continue until complete.

2.Each candidate may have one overseer present at the canvassing who may examine each ballot as to its sufficiency after the canvassers have completed the canvassing of all ballots.

No overseer may possess a pen, pencil, or other device which could be considered capable of altering a ballot in any manner.

3.A candidate may act as his or her overseer. If a candidate wishes to designate a representative to act as his or her overseer, that candidate must provide a written authorization, duly witnessed, to the election committee at the canvassing. An overseer may act on behalf of more than one candidate; however, each person must show the required authorization from each candidate represented.

4.The overseer may question the decision of the canvassers regarding a ballot after completion of the canvassing. If questioned, the comments of an overseer will be heard. The canvassers will then vote regarding the acceptability of the ballot with the majority vote ruling.

5.A ballot is not valid where the number of votes on the ballot exceeds the number of vacancies in the election. A ballot that does not, in the opinion of a majority of the canvassers, show a clear indication of the voter's intention, may not be counted.

6.If the percentage of votes received by the candidate receiving the highest number of votes is less than one percent more than the votes received by the candidate receiving the next highest number of votes, the board shall order a recount.

7.Tie votes will be determined by a coin toss. If this procedure is necessary, the election committee will establish and notify the tied candidates of the procedure and location for resolving the tie.

8.If the committee should determine that the outcome of the election has been compromised for any reason, the committee may determine the election to be invalid. If the election is determined to be invalid, the committee shall call for a new election with a new election schedule.

History

• History: Effective April 1, 1992; amended effective April 1, 2008; July 1, 2010; April 1, 2020.

N.D. Admin. Code 71-01-02-10 Notification of election results

1.Election results must be presented to the retirement board following the canvassing of votes.

Such report must include an itemization of the number of ballots returned, votes cast for each candidate, votes invalidated, and votes not counted due to late receipt.

2.All candidates will be notified of the election results no later than the business day following the June meeting of the retirement board.

3.Employers and the membership participating in the North Dakota public employees retirement system will be notified of the election results.

History

• History: Effective April 1, 1992; amended effective April 1, 2008; April 1, 2020.

N.D. Admin. Code 71-01-02-11 Special elections

1.A special election will be called for by the retirement board in the event of a vacancy resulting from the death, resignation, or termination of North Dakota public employees retirement system membership by any elected board members.

2.Special elections must be conducted in accordance with the regular elections rules, except that the board will determine a new election schedule.

3.In the case of a special election, the term to be filled is the unexpired portion of the vacant board position.

History

• History: Effective April 1, 1992.

N.D. Admin. Code 71-01-02-12 Penalties

A violation of any provision under this chapter may result in one or more of the following penalties, as determined by the board:

1.A candidate's petitions may be declared void.

2.A candidate's nomination may be declared void.

3.A candidate's election may be declared void.

4.Within thirty days of beginning an elected member's term in office, the elected member may be removed.

History

• History: Effective July 1, 2000.

N.D. Admin. Code 71-01-02-13 Election voting

In lieu of sections 71-01-02-07, 71-01-02-08, and 71-01-02-09 the retirement board may allow for a process by which electronic ballots are submitted to elect an active candidate to the board.

History

• History: Effective April 1, 2014; amended effective January 1, 2025.

Chapter 71-01-03 Confidential Information Requests

N.D. Admin. Code 71-01-03-01 Confidential information request

A request for confidential information is not a request pursuant to the open records laws, but instead is a request for information that has been determined to be confidential under state law but which may be disclosed pursuant to the invocation of an exception to the confidentiality requirements.

All requests for confidential information must be made in writing to the executive director of the public employees retirement system. The request shall state the specific information requested, the reason for the request, the intended use of the information, and the applicable exception to the confidentiality requirements.

N.D. Admin. Code 71-01-03-02 Review of the request

The executive director shall review each request and determine if the information can be provided.

If the request is not clear, the executive director shall write back within forty-five days indicating what additional information is needed. If no additional information is needed, the executive director shall provide the information or deny the request within forty-five days.

N.D. Admin. Code 71-01-03-03 Board review

If the executive director is unable to determine whether the information can be provided within forty-five days, the director shall refer the request to the public employees retirement system board for its review. The board may approve the request, deny the request, or request additional information.

N.D. Admin. Code 71-01-03-04 Treatment, payment, or operations

The board of the public employees retirement system has determined that:

1.Information related to enrollment, participation, benefits, or contributions may be shared with participating employers or public employees retirement system contractors for purposes of maintaining a member's participation and benefits in the public employees retirement system programs. Such sharing of information is limited to that information that is necessary to assure that a member's participation and benefits are properly handled. All such information remains confidential whether in the possession of the public employees retirement system, its participating employers, or its contractors.

2.Information relating to eligibility for retirement benefits may be shared with the social security administration and such other organizations to ensure that the member is still alive and continues to be eligible.

3.Information necessary for the administration and operation of the program may be shared with the public employees retirement system attorney and consultants. To the extent such information is shared it remains confidential.

4.Information relating to the death benefits and beneficiary designations of a deceased member may be shared with an ex spouse if listed as a beneficiary on a designation of beneficiary form, or any other person listed as a beneficiary on a designation of beneficiary form, subsequent to the death of the member, but in advance of a final determination regarding the applicable designated beneficiaries, only to the extent necessary to accurately identify the appropriate designated beneficiaries.

All other requests for information under this section must first be submitted to the executive director and then reviewed by the public employees retirement system board.

History

• History: Effective May 1, 2004; amended effective April 1, 2016.
• Law Implemented: NDCC 54-52-26

Article 71-02 Public Employees Retirement System

Chapter 71-02-01 Definitions

N.D. Admin. Code 71-02-01-01 Definitions

As used in North Dakota Century Code chapter 54-52 and this article:

1."Accumulated contributions" means the total of all of the following:

a.The employee account fund balance accumulated under the prior plan as of June 30, 1977.

b.The vested portion of the employee's "vesting fund" accumulated under the prior plan as of June 30, 1977.

c.The member's mandatory contributions made after July 1, 1977.

d.The member's vested employer contributions made after January 1, 2000, pursuant to North Dakota Century Code section 54-52-11.1.

e.The interest on the sums determined under subdivisions a, b, c, and d, compounded annually at the rate of five percent from July 1, 1977, to June 30, 1981, six percent from July 1, 1981, through June 30, 1986, and one-half of one percent less than the actuarial interest assumption from July 1, 1986, to the member's withdrawal from the plan or retirement.

f.The sum of any employee purchase or repurchase payments.

2."Actuarial equivalent" means a benefit calculated to be of equal value to the benefit otherwise payable when computed on the basis of assumptions and methods adopted for this purpose by the board in a way that precludes employer discretion pursuant to Internal Revenue Code

section 401(a)(25). The assumptions and methods adopted by the board, and any table of adjustment factors established in accordance with the assumptions and methods, are incorporated by reference.

3."Alternative retirement system" means the teachers' fund for retirement, the highway patrolmen's retirement system, and the teachers' insurance and annuity association of America.

4."Beneficiary" means any person in receipt of a benefit provided by this plan or any person designated by a participating member to receive benefits.

5."Board" means the board of trustees for the public employees retirement system.

6."Bonus" means cash compensation for services performed in addition to base salary excluding commission and shift differentials. Bonus does not include lump sum payments of sick leave provided under North Dakota Century Code section 54-06-14 or lump sum payments of annual leave or vacation pay.

7."Claim" means the right to receive a monthly retirement allowance, the receiving of a retirement allowance, or the receiving of a disability benefit.

8."Continuously employed" means any period of employment uninterrupted by voluntary or involuntary termination or discharge. A member who has taken a leave of absence approved by the member's employer, not to exceed a year unless approved by the executive director, and returns to employment shall be regarded as continuously employed for the period.

9."Contribution" means the payment into the fund as a percentage of the salary of a member.

10."County judge" means a judge who was elected pursuant to North Dakota Century Code

section 27-07.1-01 or an individual holding the position of county judge, county justice, or judge of county court prior to the general election in 1982, who meets all the eligibility requirements established under North Dakota Century Code chapter 54-52.

11."Interruption of employment" is when an individual is inducted (enlists or is ordered or called to active duty into the armed forces of the United States) and leaves an employment position with a state agency or political subdivision, other than a temporary position. The individual must have left employment to enter active duty and shall make application in accordance with the Uniformed Services Employment and Reemployment Rights Act.

12."Leave of absence" means the period of time up to one year for which an individual may be absent from covered employment without being terminated. At the executive director's discretion, the leave of absence may be extended not to exceed two years, or indefinitely if the leave of absence is due to interruption of employment.

13."Medical consultant" means a person or committee appointed by the board of the North Dakota public employees retirement system to evaluate medical information submitted in relation to disability applications, recertifications, and rehabilitation programs or other such duties as assigned by the board.

14."Normal retirement age", except for members of the national guard plan, the bureau of criminal investigation plan, and the public safety plan, means age sixty-five unless otherwise provided. For members of the national guard plan, the bureau of criminal investigation plan, and the public safety plan, normal retirement age means age fifty-five, unless otherwise provided.

15."Office" means the administrative office of the public employees retirement system.

16."Overtime" as used in North Dakota Century Code section 54-52-01 means, for employees other than firefighters and peace officers, any hours worked over the regularly scheduled work week and not to exceed forty hours in a week which are paid either at the regular hourly rate or time and one-half. For firefighters and peace officers, overtime means hours worked over the regularly scheduled work period which are paid either at the regular hourly rate or time and one-half.

17."Participating employer" means an employer who contributes to the North Dakota public employees retirement system. For confidentiality purposes, "participating employer" means the person or group of persons with the ultimate authority over personnel decisions within the agency or political subdivision with which the member is employed or the person's or group's official designee.

18."Pay status" means a member is receiving a retirement allowance from the fund.

19."Permanent and total disability" for members of the main retirement system, the national guard plan, the bureau of criminal investigation plan, and the public safety plan means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than twelve months. For members of the judges' plan, "permanent and total disability" is determined pursuant to subsection 3 of North Dakota Century Code section 54-52-17.

20."Plan administrator" means the executive director of the North Dakota public employees retirement system or other person or committee as may be appointed by the board of the North Dakota public employees retirement system from time to time.

21."Plan year" means the twelve consecutive months commencing July first of the calendar year and ending June thirtieth of the subsequent calendar year.

22."Prior plan" means the state employees' retirement system which existed from July 1, 1966, to June 30, 1977.

23."Regularly funded" means a legislatively authorized full-time equivalent (FTE) position for state agencies. For all governmental units other than state agencies, regularly funded means a similar designation by the unit's governing board which is created through the regular budgeting process and receives traditional employee benefits such as sick leave and annual leave.

24."Retiree" means an individual receiving a monthly retirement allowance pursuant to chapter 54-52.

25."Retirement allowance" means a reoccurring, periodic benefit from an eligible employer-sponsored retirement plan as approved by the board.

26."Service credit" means increments of time to be used in the calculation of retirement benefits.

Service credit may be earned as stated in section 71-02-03-01 or may be purchased or repurchased according to section 71-02-03-02.1.

27."Substantial gainful activity" must be based upon the totality of the circumstances including consideration of an individual's training, education, and experience; an individual's potential for earning at least seventy percent of the individual's predisability earnings; and other items deemed significant on a case-by-case basis. Eligibility is based on an individual's employability and not actual employment status.

28."Termination of employment" for the purposes of determination for eligibility for benefit payments means a severance of employment by not being on the payroll of a covered employer for a minimum of one month. Approved leave of absence or if reemployed by any covered employer prior to receiving a lump sum distribution of the member's account balance does not constitute termination of employment.

29."Termination of participation" means termination of eligibility to participate in the retirement plan.

History

• History: Amended effective September 1, 1982; November 1, 1990; September 1, 1991; January 1, 1992; September 1, 1992; June 1, 1993; July 1, 1994; June 1, 1996; July 1, 2000; April 1, 2002; May 1, 2004; July 1, 2006; July 1, 2010; April 1, 2014; April 1, 2016; July 1, 2018; April 1, 2020; July 1, 2026.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52

Chapter 71-02-02 Membership

N.D. Admin. Code 71-02-02-01 Membership - General rule

If an eligible employee becomes a member of the public employees retirement system, the following requirements apply:

1.A temporary employee shall submit a completed participation agreement within six months of the date of hire as a temporary employee or within six months of a change in status from a permanent to temporary position. If no application is made and filed with the office, an irrevocable waiver of participation must occur for as long as the employee is in temporary status.

2.Delinquent payments of over thirty days, for reasons other than leave of absence or seasonal employment, must result in termination of eligibility to participate as a temporary member.

3.Upon taking a refund, future participation as a temporary member is waived.

4.A member may not contribute concurrently to the plan within any given month as both a permanent and a temporary member. Permanent employment has precedence.

July 1, 1998; May 1, 2004; July 1, 2006; April 1, 2016; July 1, 2018; April 1, 2022; July 31, 2025;

January 1, 2026.

History

• History: Amended effective September 1, 1982; November 1, 1990; September 1, 1992; June 1, 1996;
• General Authority: NDCC 54-52-04, 54-52-23
• Law Implemented: NDCC 54-52-01, 54-52-02.9, 54-52-05, 54-52-23

N.D. Admin. Code 71-02-02-02 Nonstate elected officials - Membership and return to service

1.Purpose. North Dakota Century Code sections 54-52-02.11 and 54-52.6-02.1 conflict with Internal Revenue Code sections 401(a)(36) and 401(k)(4)(B)(ii) and related regulations and relevant guidance.

Pursuant to the authority granted to the board under North Dakota Century Code section 54-52-23, the purpose of this section is to ensure compliance with federal statutes and rules until the conflict between North Dakota Century Code section 54-52-02.11 and federal law is addressed by the legislative assembly.

2.Membership.

a.As used in this subsection, "eligible elected official" means a county elected official who is a permanent employee, peace officer, firefighter, dispatcher, emergency medical services personnel, or correctional officer and who is eighteen years or more of age.

b.Effective May 13, 2025, an eligible elected official of a participating county, from and after the date that individual takes office, shall participate in the defined contribution retirement plan established under North Dakota Century Code chapter 54-52.6, unless at the time of taking office the individual is:

(1)Eligible to participate in the public safety plan, in which case the eligible elected official shall participate in the public safety plan under North Dakota Century Code

chapter 54-52; or (2)A participating or deferred member under North Dakota Century Code chapter 54-52, in which case the eligible elected official shall participate in the defined benefit plan under North Dakota Century Code chapter 54-52.

c.Effective May 13, 2025, a county elected official who is not an eligible elected official shall have the same participation options as a temporary employee.

3.Return to service.

a.As used in this subsection, "impacted member" means a participating member who has reached the member's normal retirement date, returned to service or continued employment as an elected official of the same participating county with which the member was employed at the time the member retired, and is not contributing to the public safety plan, the defined benefit plan, or the defined contribution retirement plan.

b.Before August 1, 2027, a request by an impacted member to receive in-service benefit distributions while the impacted member is an elected official of the county of prior employment must be approved.

c.Retroactive effective date. This subsection is retroactive to July 1, 2007.

4.Sunset provision. This section must terminate on the effective date of any measure enacted by the legislative assembly providing the necessary amendments to the North Dakota Century Code to ensure compliance with the federal statutes or rules.

History

• History: Effective July 31, 2025; amended effective January 1, 2026.
• General Authority: NDCC 54-52-04, 54-52-23
• Law Implemented: NDCC 54-52-02.15, 54-52-05

Chapter 71-02-03 Service Credit

N.D. Admin. Code 71-02-03-01 Service credit - General rule

A member receives credit for each month a contribution is made. Service credit shall be granted upon proper verification without member contribution after an employee has participated in eligible employment not less than two years for prior service employment as defined in North Dakota Century Code section 54-52-01. For employees employed prior to July 1, 2004, service credit shall be granted upon proper verification without member contribution after an employee has participated in eligible employment not less than two years for:

1.Probationary employment prior to July 1, 1979, that was previously excluded from eligible employment.

2.Eligible employment between the ages of eighteen and twenty-one that was previously excluded by the age limitation of twenty-one for participation in the retirement program.

3.Summer months for eligible school employees for the period July 1, 1979, to July 1, 1982.

4.Former members of the teachers' fund for retirement, job service North Dakota, or highway patrolmen's retirement systems will be granted credit for previous service in these funds if they received a lump sum refund prior to September 1, 1976.

Service credit will not be granted for:

1.Prior service if the member received a refund of contributions after July 1, 1966, unless service has been repurchased in its entirety.

2.Service if the member received a refund of contributions after July 1, 1966, unless it is repurchased or purchased in its entirety or in part as specified by the member.

3.Prior service for any member whose employer joined the retirement system on or after July 1, 1977, unless purchased for the member at the time the employer joined or unless purchased by the member.

4.Service the member waived when transferring into the defined contribution retirement plan, including service not yet granted pursuant to section 71-02-03-01.

A member may take leave pursuant to policies, rules, and statutes applicable to the member's employing unit. However, service credit may only be given for leave that is part of a participating member's continuous service. Service credit may not be given for isolated leave that is not part of continuous service.

History

• History: Amended effective September 1, 1982; November 1, 1990; June 1, 1996; May 1, 2004. 71-02-03-01.1. Noneligible service credit.
• History: Effective November 1, 1990; amended effective April 1, 1992; July 1, 2000.
• Law Implemented: NDCC 54-52-05, 54-52-17, 54-52-19.2 71-02-03-01.2. Service credit given for leave taken.
• History: Effective June 1, 1996.

N.D. Admin. Code 71-02-03-02 Military credit

Repealed effective November 1, 1990. 71-02-03-02.1. Purchase of additional service credit and repurchase of past service.

In order to purchase additional credit or repurchase past service, a member must notify the office, in writing, of the service for which they wish to receive credit. In addition to the written request, the following information must be submitted if applicable:

1.Verification by the former employer of previous North Dakota or out-of-state public service, or service with the federal government.

2.Documentation of military service by submitting a DD214 or NGB22.

3.Certification of approval by the member's employer of any leave of absence and length of that leave.

4.Statement from employee or former employer that service credit being applied for does not qualify for retirement benefits under another retirement system.

The total dollar amount for the purchase or repurchase may be paid in a lump sum or on a monthly, quarterly, semiannual, or annual basis. Payments may be subject to contribution limitations established under 26 U.S.C. 415. Payments must begin within ninety days of the date the written cost confirmation is prepared. If the installment method is used, the following conditions apply:

1.Simple interest at the actuarial rate of return must accrue monthly on the unpaid balance.

Interest is calculated from the fifteenth of each month.

2.The installment schedule may extend while the employee is employed by a participating employer but for no longer than a fifteen-year time period.

3.Installment payments may be made by a payroll deduction where available. However, it is the responsibility of the member to initiate and terminate the payroll deduction.

4.Payments only may be received until the fifteenth of the month following the month of the member's termination of employment or the month of member's termination of participation in an eligible plan with a participating employer.

5.Payments are due by the fifteenth of the month to be credited for the month.

6.Payments must be greater or equal to fifty dollars per month, large enough to pay the current interest plus a portion of principal, and an amount necessary to complete the payment contract within the fifteen-year time period.

July 1, 2006; July 1, 2010; July 1, 2026. 71-02-03-02.3. Delinquent payment.

If no payment is received within thirty days of the due date, the public employees retirement system shall send a letter to the member advising them of the delinquency. If no payment is received within sixty days after the due date, the account must be closed. Payments received on closed accounts must be returned to the member. The member may submit written documentation as to the cause for the delinquency to the executive director for review and to request that the purchase contract be reestablished without a new calculation.

Service purchased or repurchased will be credited in the following manner:

1.For each month the system receives a payment toward a purchase contract, the member will earn a proportion of service credit.

2.Member acceptance of a service purchase contract extinguishes all pending service purchase cost estimates, excluding purchase of unused sick leave.

3.Service purchase contracts set up on a payment plan and only partially paid will have the remaining unpaid portion of service credit included when preparing the new service purchase cost calculation.

4.For members converting service under the public employees retirement system to service under the judge's retirement system, each month of county judge service under the public employees retirement system will be converted to one month of judicial service credit. The account balance from the public employees retirement system will be transferred to the judges' retirement system account once the contract is paid in full or closed.

July 1, 2010; April 1, 2020. 71-02-03-02.5. Costs.

If purchasing under North Dakota Century Code section 54-52-02.6 or subdivision d of subsection 1 of North Dakota Century Code section 54-52-17.4, the cost will be the higher of the amount refunded to the member plus interest at the actuarial rate of return or the actuarial cost to provide the credit. All other types of service purchases must be actuarially determined. An actuarial cost must be calculated by applying actuarial factors to the amount of retirement and retiree health insurance credit being purchased by the member. The member's current age, average salary, current credited service, and actuarial factors on record and in effect with the North Dakota public employees retirement system in the month in which the member's written request is processed by the office must be used in the cost calculation. A member's written request must be processed by the office within sixty days of receipt.

The amount of retirement and retiree health insurance credit being purchased must be calculated using the benefit formulas in place at the time the written request from the member is processed by the office.

When calculating the cost, enhancements to the benefit formula must be considered to be in place at the time the law is signed by the governor.

The member's average salary shall be calculated as follows:

1.For members working full time with more than twelve months of service credit, by using the calculation found in subsection 2 of North Dakota Century Code section 54-52-17.

2.For members working full time with less than twelve months of service credit, by using the calculation found in subsection 2 of North Dakota Century Code section 54-52-17, but disregarding any month in which the member was paid less than a full-month salary. A full-month salary is the compensation the member and the member's employer agreed the member would be paid for working a full month.

3.For members who have not yet received a full-month salary, the member's average salary shall equal the member's full-month salary, as defined in subsection 2.

4.For members working part time, by using the applicable calculations found in subsections 1 and 2, but using a monthly salary equal to the equivalent of the salary the member would have received if the member was working full time.

The retirement board must adopt actuarial assumptions necessary to determine the actuarial factors for the cost calculation. The assumptions must be reviewed concurrently with the assumptions for the retirement program.

Upon receipt of the written request from the member, and all required documentation, a written cost confirmation must be prepared and mailed to the member. The cost stated in the confirmation letter is valid for a period of ninety days from the date of the letter unless the contributor terminates employment with a participating employer. If the contributor terminates employment, then the cost stated in the confirmation letter is valid only until the earlier of the end of the ninety-day period or the fifteenth day of the month following the month of termination.

History

• History: Effective November 1, 1990; amended effective July 1, 1994; June 1, 1996; May 1, 2004. 71-02-03-02.2. Payment.
• History: Effective November 1, 1990; amended effective July 1, 1994; June 1, 1996; May 1, 2004;
• History: Effective November 1, 1990; amended effective July 1, 1994; June 1, 1996; May 1, 2004. 71-02-03-02.4. Crediting purchased or repurchased service.
• History: Effective November 1, 1990; amended effective July 1, 1994; June 1, 1996; May 1, 2004;
• History: Effective July 1, 1994; amended effective June 1, 1996; July 1, 2000; April 1, 2002; May 1, 2004; July 1, 2006; July 1, 2018.

N.D. Admin. Code 71-02-03-03 Service after age sixty-five

Repealed as the result of S.L. 1981, ch. 547, § 1.

N.D. Admin. Code 71-02-03-04 Cancellation of credits

If a member terminates service and receives a return of the member's accumulated contributions, service credit for the years of such contributions shall be canceled.

History

• Law Implemented: NDCC 54-52-17

N.D. Admin. Code 71-02-03-05 Coordination of multiple plan membership

Upon providing proper documentation of retirement plan participation, a member who meets the following criteria may use service credit in the teachers' insurance retirement fund for the purpose of meeting the normal retirement date for vesting purposes under North Dakota Century Code chapter 54-52. The member:

1.Must have participated in both the teachers' fund for retirement and the teachers' insurance and annuity association of America-college retirement equities fund.

2.Must have elected to transfer the member's teachers' insurance retirement fund account balance to teachers' insurance and annuity association of America-college retirement equities fund in connection with the administrative coordination of the various state retirement plans as provided under chapter 133 of the 1973 North Dakota Session Laws.

3.Did not have a cash out since the time of the transfer of funds.

4.Did not relinquish such service credit in writing.

History

• History: Effective June 1, 1996; amended effective July 1, 1998; April 1, 2020.

N.D. Admin. Code 71-02-03-06 Conversion of sick leave

To convert unused sick leave to service credit, the member shall submit an application to the office, no later than the end of the month in which the member is no longer eligible to accrue the sick leave hours, unless otherwise approved by the executive director. The member's employer shall confirm the member's unused balance of accumulated sick leave as of the date the member is no longer eligible to accrue sick leave hours. For a member transferring from one participating employer to another participating employer without terminating eligible employment, the public employees retirement system shall record unused sick leave of a participating member if the new employer certifies it will not transfer that leave. The certification must include documentation from the previous employer detailing the number of hours of sick leave. The public employees retirement system shall receive the certification within sixty days after the member leaves employment with the former employer. One month of service credit must be awarded for each one hundred seventy-three and three-tenths hours of unused accumulated sick leave. The employer and employee contributions rates used to calculate the cost must be the rate of the retirement program of the member at termination.

1.Aftertax payments may be accepted from the member as early as six months prior to when the member is no longer eligible to accrue sick leave hours, if the following requirements are met:

a.A notice of employment change has been provided to the public employees retirement system.

b.A written certification by the member's employer, as to the member's unused balance of accumulated sick leave as of the date the member wishes to begin payment, is on file with the public employees retirement system.

c.The sick leave conversion payment must be calculated using the member's unused balance of accumulated sick leave confirmed by the member's employer, and the member's final average salary as of the date of calculation. If there is a difference between the sick leave conversion payment amount and the amount the member has paid, any overpayment must be refunded to the member and any underpayment must be collected from the member by the fifteenth of the month following the month the member is no longer eligible to accrue sick leave hours.

2.Pretax rollover or transfer payments may be accepted from the member as early as sixty days prior to when the member is no longer eligible to accrue sick leave hours, if the following requirements are met:

a.A notice of employment change has been provided to the public employees retirement system.

b.A written certification by the member's employer, as to the member's projected unused balance of accumulated sick leave no sooner than sixty days prior to the date the member is no longer eligible to accrue sick leave hours, is on file with the public employees retirement system. This certification also must include a certification by the employer of the projected salaries to be reported to the public employees retirement system during the final months of employment.

c.The sick leave conversion payment must be recalculated using the member's unused balance of accumulated sick leave confirmed by the member's employer and the member's final average salary as of the date of calculation. If there is a difference between the sick leave balance or conversion payment amount and the amount the member has paid, then only the amount of sick leave available as of the date the member is no longer eligible to accrue sick leave hours must be added to the member's record. The member account balance must be credited with the full amount of funds from the rollover or transfer.

d.If an underpayment has occurred, then the remaining amount must be collected from the member by the fifteenth of the month following the month the member is no longer eligible to accrue sick leave hours.

e.The retiree health credit portion must be paid as a personal aftertax payment.

3.The member's record must be updated with the additional service credit once payment is made in full.

History

• History: Effective June 1, 1996; amended effective April 1, 2002; May 1, 2004; July 1, 2006; April 1, 2008; July 1, 2018; January 1, 2025; July 1, 2026.
• Law Implemented: NDCC 54-52-27

N.D. Admin. Code 71-02-03-07 Employer purchase of service credit or sick leave program

An employer may elect to purchase up to five years of service credit for an employee and purchase an employee's unused sick leave that meets the requirements of section 71-02-03-08. Before offering a purchase program to its employees, the employer must create a program and an employer must document the program in writing and submit a copy to the public employees retirement system. The governing authority of the employer shall also submit to the executive director of the public employees retirement system a letter indicating:

1.The program meets all the requirements of the North Dakota Century Code.

2.The program meets all applicable federal requirements.

3.The employer agrees to remit to the public employees retirement system a lump sum payment of the cost of the purchase upon being billed.

4.The employer has not given the employee the option of a cash payment in lieu of the employer purchase.

5.The employer shall clearly specify who is eligible for the program and indicate if the program is intended to be permanent or will be for a specific time period only.

6.The employer agrees that all purchases for service credit will be based upon actuarial cost as determined by the public employees retirement system and all unused sick leave purchases will be based upon the computation specified in the North Dakota Century Code. The employer also agrees that all purchases will be completed no later than the fifteenth day of the month following the month of the employee's termination or sixty days from the date the employer and employee agree to the purchase, whichever comes first.

7.The employer agrees that in offering such a program the employer will direct each employee interested in the program to first apply to the employer's authorized agent who will then certify the eligibility of the member, the amount of service credit to be purchased or sick leave to be converted, and send such certification to the public employees retirement system. The employer also agrees that the employer's authorized agent will coordinate the program, authorize all purchases in writing to the public employees retirement system, and be the focal point for communications between the public employees retirement system, the employer, and the employee.

8.The employer agrees that for each employee certified to be eligible to have service credit purchased or sick leave converted, the employer will first obtain from the employee authorization for the public employees retirement system to share confidential information with the employer.

9.The employer certifies that in offering the program, the employer is making it available to all employees or a specified class of employees on a nondiscriminatory basis.

10.The employer agrees to provide information and policies relating to an employer purchase program pursuant to North Dakota Century Code section 54-52-26.

When an employer files the above letter with the public employees retirement system, it may offer the program to its employees. An employer may terminate this program at any time upon the governing

authority of the employer sending to the executive director of the public employees retirement system a letter indicating when the program is to be canceled

History

• History: Effective May 1, 2004; amended effective July 1, 2006; April 1, 2008; July 1, 2010.
• Law Implemented: NDCC 54-52-17.4, 54-52-29

N.D. Admin. Code 71-02-03-08 Eligible sick leave

An employer or a member may only purchase unused sick leave that has not been previously purchased by a former employer or the member.

History

• History: Effective May 1, 2004; amended effective July 1, 2006.
• Law Implemented: NDCC 54-52-27

Chapter 71-02-04 Retirement Benefits

N.D. Admin. Code 71-02-04-01 Retirement benefits - Application

Except as provided in section 71-02-04-02 for retirement options, applications for retirement, surviving spouse, and disability benefits must be filed at the public employees retirement system office at least thirty days before the retirement date or before the commencement of benefits. A member shall file a photocopy of the member's birth certificate, and if a benefit election is an optional benefit under subsection 1 or 2 of section 71-02-04-04, the member must provide a photocopy of the spouse's birth certificate and marriage certificate with the office. A surviving spouse shall file a photocopy of the surviving spouse's birth certificate, deceased spouse's birth certificate and certified copy of the death certificate, and marriage certificate if a benefit election is under subdivision b of subsection 6 of North Dakota Century Code section 54-52-17. If a birth certificate is not available, a member or surviving spouse may submit other documentation based on policy and procedure adopted by the board.

History

• History: Amended effective November 1, 1990; July 1, 1994; May 1, 2004; April 1, 2014.

N.D. Admin. Code 71-02-04-02 Special retirement options - Application

1.A member may elect a retirement option by filing an application with the office no less than thirty days prior to the beginning date of benefit payments. An application may be filed later than thirty days if approved by the executive director upon receiving sufficient evidence that the application was delayed by the member's employer.

2.A member may revoke the election of an optional benefit as provided in subsection 1 and make a new election, if such revocation is received in writing before the first retirement check is cashed but no later than fifteen days after the first retirement check has been issued. If the member changes the member's election less than fifteen days prior to the named beginning date of benefits, the first retirement payment may be delayed up to two months. Any delayed payment must be adjusted to include any deferred retirement payments. If the member's first retirement payment is paid by direct deposit and the member wishes to revoke the election of the benefit, then the member must immediately notify the public employees retirement system of the member's election. The benefit will only be revoked if the public employees retirement system is able to reverse the direct deposit paid to the bank within the bank reversal window.

3.A member may not revoke the elected benefit after receiving and cashing the first benefit check or if paid by direct deposit, after the bank reversal window has expired, unless, the member can provide sufficient evidence to the executive director that the factual basis by which the election was made later proved to be incorrect and such was due in part to representation or misrepresentations made by the employer or the office.

The termination date for purposes of processing an application for retirement benefits must be the last date for which a member receives salary except for a member who is on an approved leave of absence. For members who are paid salary in any month following actual separation from employment when the salary is received after the normal processing date, the termination date for purposes of processing the application must be the same date as the date that the last paycheck was issued as salary.

History

• History: Amended effective November 1, 1990; May 1, 2004; July 1, 2010. 71-02-04-02.1. Application processing.
• History: Effective June 1, 1996.
• General Authority: NDCC 54-52-04

N.D. Admin. Code 71-02-04-03 Payment date - Retirement benefits

Except for retirement options provided in section 71-02-04-02, a member's retirement benefit shall commence on the first day of the month which follows the member's eligibility for the benefit and which is at least thirty days after the date on which the member filed an application with the office.

Notwithstanding any other provision in this article, benefits must begin no later than April first of the calendar year after the calendar year in which the member retires or meets minimum distribution rules provided in subsection 2 of North Dakota Century Code section 54-52-28, whichever is later. If the member is employed but ineligible for active participation in the retirement plan, the member's benefits must begin no later than April first of the calendar year after the calendar year in which the member meets minimum distribution rules provided in subsection 2 of North Dakota Century Code section

N.D. Admin. Code 54-52-28 In the absence of a retirement application, benefits shall be paid based on a single life, or normal retirement for judges, payment option. Benefits must be directly deposited into a financial account identified by the member or sent to the member's last-known address. If the benefit checks are returned with no forwarding information, the benefits will remain in the fund, and will be distributed in a lump sum retroactive to the required beginning date upon location of the member. If two consecutive checks issued remain uncashed, future payments will be suspended until the member makes payment arrangements with the office

April 1, 2022. 71-02-04-03.1. Payment date - Retirement benefits for late retirees.

Except for retirement options provided in sections 71-02-04-02 and 71-02-04-03, for members who are terminated and older than the age at which they reach their normal retirement date, but who have delayed or inadvertently failed to apply for retirement benefits, the regular accrued annuity benefits will commence with a lump sum equal to the amount of missed payments, without interest, retroactive to their normal retirement date unless the deferred normal retirement option is elected or otherwise approved by the North Dakota public employees retirement system board. There will be no retroactive payment for the retiree health insurance credit program.

History

• History: Amended effective November 1, 1990; July 1, 1994; July 1, 2000; July 1, 2010; July 1, 2018;
• History: Effective April 1, 2002; amended effective July 1, 2006; April 1, 2008.

N.D. Admin. Code 71-02-04-04 Optional benefits

A member may elect, as provided in section 71-02-04-02, to receive one of the following optional benefits in lieu of the regular single life, or normal for judges, retirement benefit.

1.One hundred percent joint and survivor benefit. A member shall receive an actuarially reduced retirement benefit during the member's lifetime and after the member's death the same amount will be continued to the member's surviving spouse during the spouse's lifetime.

The designated beneficiary is limited to the member's spouse. Payments of benefits to a member's surviving spouse shall be made on the first day of each month commencing on the first day of the month following the member's death, providing the beneficiary has supplied a marriage certificate and death certificate and is still living. Benefits shall terminate in the month in which the death of the beneficiary occurs. In the event the designated beneficiary predeceases the member or, in the event of divorce, the option shall be canceled and the member's benefit shall be returned to the single life or normal amount. Payment of the single life or normal amount shall commence on the first day of the month following receipt, in the public employees retirement system office, of written notification of the spouse's death or member's divorce. Written notification must be either a death certificate or a photocopy of the divorce decree.

2.Fifty percent joint and survivor benefit. A member shall receive an actuarially reduced retirement benefit during the member's lifetime and after the member's death one-half the rate of the reduced benefit will be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse. Payments of benefits to a member's surviving spouse shall be made on the first day of each month commencing on the first day of the month following the member's death, providing the beneficiary has supplied a marriage certificate and death certificate and is still living. Benefits shall terminate in the month in which the death of the beneficiary occurs. In the event the designated beneficiary predeceases the member or, in the event of divorce, the option shall be canceled and the member's benefit shall be returned to the single life or normal amount. Payment of the single life or normal amount shall commence on the first day of the month following receipt, in the public employees retirement system office, of written notification of the spouse's death or member's divorce. Written notification must be either a death certificate or a photocopy of the divorce decree.

3.Twenty-year or ten-year certain option. A member may elect an option which is the actuarial equivalent of the member's normal, early, or deferred vested retirement pension payable for life with a twenty-year or ten-year certain feature, as designated by the member.

A member may elect as provided in section 71-02-04-02 to receive one of the following benefit modifications:

1.Partial lump sum option. The partial lump sum option will only be available to members who retire on or after reaching normal retirement date. This option is an irrevocable election made at initial application for retirement, and is not an option for a subsequent retirement. The payment is equal to twelve monthly payments determined under the single life annuity option.

The member is permitted to choose one of the optional forms of payment as defined in section 71-02-04-04 for ongoing benefits. The ongoing benefits will be actuarially reduced to reflect the partial lump sum payment.

2.Deferred normal retirement option. The deferred normal retirement option will only be available to members who retire after reaching normal retirement date. This option is an irrevocable election made at initial application for retirement, and is not an option for a subsequent retirement. The payment is in lieu of a lump sum equal to the amount of missed payments, without interest, retroactive to the member's normal retirement date. The member is permitted to choose one of the optional forms of payment as defined in section 71-02-04-04.

The ongoing benefits will be actuarially increased to reflect the lump sum.

3.Graduated benefit option. The graduated benefit option will only be available to members who retire after reaching normal retirement date. This option is an irrevocable election made at initial application for retirement, and is not an option for a subsequent retirement. The member is permitted to choose one of the optional forms of payment for ongoing benefits as defined in

section 71-02-04-04. The ongoing benefits will be actuarially reduced to reflect the election of the graduated benefit option.

History

• History: Amended effective September 1, 1982; November 1, 1990; July 1, 1994; May 1, 2004; July 1, 2006; April 1, 2008; July 1, 2010; April 1, 2012; April 1, 2022. 71-02-04-04.1. Benefit modifications.
• History: Effective July 1, 2010; amended effective April 1, 2014; July 1, 2018.

N.D. Admin. Code 71-02-04-05 Designation of beneficiary

A member may designate a beneficiary or beneficiaries by filing such designation with the office.

Except in the case of the joint and survivor option, a member shall have the right to change the member's designation of beneficiary without the consent of the beneficiary, but no such change shall be effective or binding unless it is received by the office prior to the death of the member. If a vested, married member designates a beneficiary other than or in addition to a spouse, the member's spouse's consent must be obtained before benefits can be paid other than to the member's spouse.

History

• History: Amended effective November 1, 1990; April 1, 2002.

N.D. Admin. Code 71-02-04-06 Lack of a designated beneficiary

Repealed effective July 1, 1994.

N.D. Admin. Code 71-02-04-07 Amount of early retirement benefit

The early retirement benefit for members of the main plan first enrolled prior to January 1, 2016, and members of the national guard plan, the bureau of criminal investigation plan, the public safety plan, and the judges' plan must be an amount actuarially reduced from the single life retirement benefit by one-half of one percent for each month (six percent per year) the member is younger than the age at which the member would be at the member's normal retirement date to account for benefit payments beginning before the normal retirement date.

July 1, 2010; April 1, 2016; July 1, 2026.

History

• History: Amended effective September 1, 1982; June 1, 1996; April 1, 2002; May 1, 2004; July 1, 2006;

N.D. Admin. Code 71-02-04-08 Assignment or alienation of plan benefits

Repealed effective July 1, 2006.

N.D. Admin. Code 71-02-04-09 Dual membership - Receipt of retirement benefits while contributing to the teachers' fund for retirement, the highway patrolmen's retirement system, or the teachers' insurance and annuity association of America - college retirement equities fund

Dual members must select one of the following options:

1.Begin receiving retirement benefits from one plan prior to ceasing employment covered by the alternate plan, subject to termination of employment or termination of participation.

2.Begin receiving retirement benefits from one plan and begin work in a job covered by the alternate plan. If this option is chosen, benefits will be calculated based on the method provided in subsection 2 of North Dakota Century Code section 54-52-17.2.

3.Continue as a dual member and begin receiving retirement benefits from both plans after ceasing employment.

The following limitations apply when a member elects an option under subsection 1 of section 71-02-04-09.

1.Eligible service credit may be used for vesting purposes and determining when the dual member may begin drawing normal retirement benefits. A member may begin drawing retirement benefits from one fund and use the same years, and any additional years, for reaching retirement from the alternate fund if the service credit is earned at different times.

2.If a dual member elects to receive retirement benefits as provided in subsection 1 of section 71-02-04-09, the final average salary, service credit, and member's age used to calculate the benefit that is applicable at the time retirement benefits begin may not be adjusted after the benefit effective date.

3.The salary used in calculating the retirement benefit must be provided in writing by the alternate retirement system. Months not employed are excluded for the purpose of computing the final average salary. If a dual member works less than thirty-six months at retirement, the final average salary is the average salary for total months of employment.

4.Any defined contribution plan membership under North Dakota Century Code chapter 54-52.6 is not eligible for dual membership service and vesting rights in the defined benefit plan under North Dakota Century Code chapter 54-52.

History

• History: Effective June 1, 1996; amended effective May 1, 2004; April 1, 2014.
• General Authority: NDCC 54-52-04, 54-52-17, 54-52-17.2
• Law Implemented: NDCC 54-52-17, 54-52-17.2 71-02-04-09.1. Dual membership limitations.
• History: Effective June 1, 1996; amended effective May 1, 2004; April 1, 2012; April 1, 2016; July 1, 2026.
• General Authority: NDCC 54-52-04, 54-52-17, 54-52-17.2
• Law Implemented: NDCC 54-52-17, 54-52-17.2

N.D. Admin. Code 71-02-04-10 Erroneous payment of benefits - Overpayments

1.An "overpayment" means a payment of money by the public employees retirement system that results in a person receiving a higher payment than the person is entitled to under the provision of the retirement plan of membership.

2.A person who receives an overpayment is liable to refund those payments upon receiving a written explanation and request for the amount to be refunded. All overpayments must be collected using the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like gains. If the cost of recovering the amount of the overpayment is estimated to exceed the overpayment, the repayment is considered to be unrecoverable.

3.If the overpayment of benefits was not the result of any wrongdoing, negligence, misrepresentation, or omission by the recipient, the recipient may make repayment arrangements subject to the executive director's approval within sixty days of the written notice of overpayment with the minimum repayment amount no less than fifty dollars per month. If repayment arrangements are not in place within sixty days of the date of the written notice of overpayment, the executive director shall offset the amount of the overpayment from the amount of future retirement benefit payments so that the actuarial equivalent of the overpayment is spread over the benefit payment period.

4.If the overpayment of benefits was the result, in whole or in part, of the wrongdoing, negligence, misrepresentation, or omission of the recipient, the recipient is liable to pay simple interest charges at the rate of six percent on the outstanding balance to compensate the fund for lost earnings, from the time the erroneous benefit was paid through the time it has been refunded in full. Recovered funds are first applied to interest and, if any amount is left over, that amount is applied to principal. The recipient may make repayment arrangements, subject to the executive director's approval, within sixty days of the written request for refund with the minimum repayment amount no less than fifty dollars per month. If repayment arrangements are not in place within sixty days of the date of the written notice of overpayment, the executive director shall offset the amount of the overpayment from the amount of future retirement benefit payments so that the actuarial equivalent of the overpayment is spread over the benefit payment period.

5.If an individual dies prior to fully refunding an erroneous overpayment of benefits, the public employees retirement system must make application to the estate of the deceased to recover the remaining balance.

History

• History: Effective June 1, 1996; amended effective April 1, 2002; July 1, 2006; April 1, 2008; July 1, 2010; April 1, 2022.

N.D. Admin. Code 71-02-04-11 Erroneous payment of benefits - Underpayments

1.An "underpayment" means a payment of money by the public employees retirement system that results in a person receiving a lower payment than the person is entitled to under the provisions of the retirement plan of membership.

2.If an underpayment occurs, the amount of the lump sum payment must be paid within sixty days of the discovery of the error.

3.If the underpayment of benefits was not the result of any wrongdoing, negligence, misrepresentation, or omission by the employer or recipient, the underpayment of benefits is to include simple interest at the rate of six percent from the time the underpayment occurred.

4.If the underpayment of benefits was the result, in whole or in part, of the wrongdoing, negligence, misrepresentation, or omission of the employer or recipient, the underpayment of benefits will not include simple interest.

5.If an individual dies prior to receiving the underpayment of benefits, the public employees retirement system must pay the designated beneficiary on record or, in the absence of a designation of beneficiary, to the estate.

History

• History: Effective June 1, 1996; amended effective May 1, 2004; April 1, 2008; April 1, 2022.

N.D. Admin. Code 71-02-04-12 Erroneous payment of benefits - Appeals

1.A person not satisfied with repayment arrangements made under section 71-02-04-10 may appeal the executive director's decision in writing to the board. The written request must explain the basis of the appeal and must be received in the office within sixty days of the executive director's written decision.

2.The board may release a person from liability to refund an overpayment, in whole or in part, if it determines:

a.The receipt of overpayment is not the fault of the recipient.

b.It would be contrary to equity and good conscience to collect the refund.

History

• History: Effective June 1, 1996.

N.D. Admin. Code 71-02-04-13 Reduced benefit option

A participating member may enter into an agreement with the retirement board to receive an actuarially adjusted monthly retirement benefit to accommodate the less than full payment for years of service credit necessary to meet the normal retirement date, if the following criteria are met:

1.The participating member is within seventy-two months of obtaining the normal retirement date.

2.The service cannot be purchased prior to the participating member drawing a retirement benefit because it would be in violation of 26 U.S.C. 415 or limits of purchasing additional service credit found under subsection 10 of North Dakota Century Code section 54-52-17.4.

3.The participating member must have completed all other types of purchases the participating member is eligible for prior to entering into the reduced benefit agreement.

4.The participating member's reduced benefit agreement must indicate a benefit option election.

If a benefit election is an optional benefit under subsection 1 or 2 of section 71-02-04-04, the reduced benefit is payable over the lifetime of both the member and surviving spouse.

History

• History: Effective June 1, 1996; amended effective July 1, 1998; April 1, 2002; May 1, 2004; April 1, 2020.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 39-03.1-11, 54-52-17

Chapter 71-02-05 Disability

N.D. Admin. Code 71-02-05-01 Eligibility

Repealed effective January 1, 1992.

N.D. Admin. Code 71-02-05-02 Commencement of benefit

Repealed effective January 1, 1992.

N.D. Admin. Code 71-02-05-03 Cancellation of disability benefit

When a member receiving a disability benefit attains the member's normal retirement date, that member may elect to terminate that member's disability benefits and draw retirement benefits as specified in North Dakota Century Code section 54-52-17.

History

• History: Amended effective January 1, 1992; May 1, 2004; July 1, 2006; January 1, 2025.

N.D. Admin. Code 71-02-05-04 Calculation of disability benefit

Repealed effective November 1, 1990.

N.D. Admin. Code 71-02-05-05 Conditions for changing to a disability retirement benefit from an early reduced retirement benefit

A member may elect to start receiving an early reduced retirement benefit, should the member be eligible to do so, pending a disability determination or appeal. Upon receiving a disability determination, interest accrual shall resume beginning the first of the month following notice of the determination, continuing to accrue on the annuitant's accumulated contribution until the annuitant reaches the annuitant's normal retirement date. The disability benefit will be calculated and a differential payment made retroactive to the first day of the month following the member's termination from covered employment.

History

• History: Effective September 1, 1982; amended effective November 1, 1990; January 1, 1992; July 1, 1998; July 1, 2006.

N.D. Admin. Code 71-02-05-06 Determination of disability - Procedures. 1.a.If the member is unable or unwilling to file a public employees retirement system application for disability retirement, the member's legal representative may file the member's disability application

b.For all members except members of the judges' plan, the application must explain the cause of the disability, the limitations caused by the disability, the treatment being followed, and the effect of the disability on the member's ability to be engaged in any gainful occupation for which the member is, or could become, reasonably fitted by education, training, or experience. For the judges' plan, the application must explain the cause of the disability, the limitations caused by the disability, the treatment being followed, and the effect of the disability on the member's ability to mentally or physically fulfill the duties and responsibilities of being a judge. A judge who is determined to be disabled pursuant to subdivision a of subsection 3 of North Dakota Century Code section 27-23-03 shall file an application documenting this determination and the effective date of the disability.

c.The application must be filed with the public employees retirement system and may not be filed earlier than one hundred twenty days before the expected termination date. 2.a.The board may retain a medical consultant to evaluate and make recommendations on disability retirement applications.

b.The medical consultant shall review all medical information provided by the applicant.

c.The medical consultant is responsible to determine eligibility for disability benefits for applicants not approved for social security disability benefits or for judges not approved pursuant to subsection 3 of North Dakota Century Code section 27-23-03 and shall advise the executive director of the decision in writing. Applicants who become eligible for disability benefits under the Social Security Act and who meet the requirements of subdivision h of subsection 3 of North Dakota Century Code section 54-52-17 are eligible for benefits under subsection 4 of North Dakota Century Code section 54-52-17 without submitting further medical information to the medical consultant, but are subject to recertification requirements specified in this chapter. The social security disability award must provide proof that the member's disability was determined during the member's period of eligible employment. In determining eligibility for judges not approved pursuant to the above, the medical consultant shall work with a review committee composed of one supreme court judge and a district court judge to review the application. In order for the application to be approved, it must have the concurrence of the medical consultant and at least one judge. The executive director shall appoint two judges to serve on the review committee. 3.a.The applicant for disability retirement shall provide the medical examination reports as requested by the medical consultant.

b.The member is liable for any costs incurred by the member in undergoing medical examinations and completing and submitting the necessary medical examination reports, medical reports, and hospital reports necessary for initial determination of eligibility for benefits.

c.If determined to be eligible for disability benefits, the member must be reimbursed for the cost of medical examinations specifically requested by the medical consultant and the executive director. 4.a.If the applicant has terminated employment, the public employees retirement system shall notify the applicant in writing of the decision. If the applicant is determined not to be eligible for disability benefits, the public employees retirement system shall advise the applicant of the appeal procedure. If the applicant is determined eligible for disability benefits, benefits must be paid pursuant to subsection 5.

b.If the applicant has not terminated employment, the applicant must be provided with a preliminary notification of the decision in writing. The preliminary notification remains in effect for a period not to exceed two hundred seventy days. If an applicant does not terminate employment within two hundred seventy days of the date of termination provided on the disability application, the application must be considered to be vacated but the applicant may reapply as provided in subsection 1.

c.The applicant may appeal an adverse determination to the board by providing a written notice of appeal within thirty days of the date that the public employees retirement system mailed the decision.

d.The board shall consider all appeals at regularly scheduled board meetings. The applicant must be notified of the time and date of the meeting and may attend and be represented by legal counsel. The executive director shall provide to the board for its consideration a case history brief that includes membership history, medical examination summary, and the plan administrator's conclusions and recommendations. The board shall make the determination for eligibility at the meeting unless additional evidence or information is needed. The discussion concerning disability applications must be confidential and closed to the general public.

e.If the initial board decision is adverse to the applicant after exhausting the administrative procedure under subdivisions c and d, the applicant may file a request for a formal hearing to be conducted under North Dakota Century Code chapter 28-32. The request for a formal hearing must be filed within thirty days after notice of the initial decision has been mailed. If an appeal is not filed within the thirty-day period, the initial decision of the board is final. If a request for a formal hearing is timely filed, notice of the hearing must be served at least thirty days prior to the date set for the hearing. The board shall request appointment of an administrative law judge from the office of administrative hearings to conduct the hearing and make recommended findings of fact, conclusions of law, and order. The board shall either accept the administrative law judge's recommended findings of fact, conclusions of law, and order or adopt its own findings of fact, conclusions of law, and order. The applicant may under North Dakota Century Code section 28-32-42 appeal the final decision resulting from this procedure to the district court.

5.If awarded, the disability annuity is payable on, or retroactive to, the first day of the month following the member's termination from covered employment minus any early retirement benefits that have been paid. 6.a.A disabled annuitant's eligibility must be recertified eighteen months after the date the first check is issued and thereafter as specified by the medical consultant unless proof of receipt of ongoing social security disability benefits is received. The executive director may waive the necessity for a recertification, based on the recommendation of the medical consultant or upon proof of receipt of ongoing social security disability benefits.

b.The public employees retirement system shall send a recertification application and request for a statement of annual earnings by certified mail with return receipt to the disabled annuitant to be completed and sent back to the office. If a completed recertification application has not been received by the recertification date set in the recertification request, benefits must be suspended effective the first of the month following that date. If a completed recertification application is not received within six months of the recertification date set in the recertification request unless an alternative date has been approved by the executive director, the member is no longer eligible to receive disability benefits. Benefits suspended within six months of the recertification date set in the recertification request will be reinstated the first of the month following recertification by the medical consultant, or upon proof of receipt of ongoing social security disability benefits, unless an alternative date has been approved by the executive director. The regular accrued disability benefits must commence with a lump sum equal to the amount of missed payments, without interest, retroactive to the first day of the month benefits were suspended, unless otherwise approved by the board.

c.The medical consultant may require the disabled annuitant to be reexamined by a doctor.

The submission of medical reports by the disabled annuitant, and the review of those reports by the medical consultant, may satisfy the reexamination requirement. Upon recertification, the disabled annuitant must be reimbursed for the cost of the required reexamination if deemed necessary by the medical consultant and the executive director.

d.If the disabled annuitant has not provided proof of receipt of ongoing social security disability benefits, the medical consultant shall make the recertification decision. The executive director may require additional recertifications, if the facts warrant this action.

The decision may be appealed to the board within ninety days of receiving the written recertification decision.

e.Benefit payments must be suspended immediately upon notice received from the medical consultant that the disabled annuitant does not meet recertification requirements. The executive director shall notify the disabled annuitant of the suspension of benefits by certified mail and shall reinstate benefits back to date of suspension if the annuitant is subsequently found to meet recertification requirements.

f.If it is determined the disabled annuitant was not eligible for benefits during any time period when benefits were provided, the executive director may do all things necessary to recover the erroneously paid benefits.

History

• History: Effective January 1, 1992; amended effective July 1, 1994; June 1, 1996; April 1, 2002; May 1, 2004; July 1, 2006; April 1, 2016; July 1, 2018; July 1, 2026.
• General Authority: NDCC 54-52-04, 54-52-17
• Law Implemented: NDCC 54-52-17, 54-52-26

N.D. Admin. Code 71-02-05-07 Optional benefits

For the main system, the national guard plan, the bureau of criminal investigation plan, and the public safety plan, a member deemed eligible for a disability benefit may elect to receive one of the following optional benefits in lieu of the regular disability benefit, as provided in this section.

1.A member shall receive an actuarially reduced disability retirement benefit as long as the member remains eligible for benefits under North Dakota Century Code section 54-52-17 and after the member's death the same amount must be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse. Payments of benefits to a member's surviving spouse must be made on the first day of each month commencing on the first day of the month following the member's death, provided the beneficiary is still living and has supplied a marriage certificate and the member's death certificate. Benefits terminate in the month in which the death of the beneficiary occurs.

In the event the designated beneficiary predeceases the member or, in the event of divorce, the option must be canceled and the member's benefit must be returned to the single life amount. Payment of the single life amount must commence on the first day of the month following the spouse's death providing written notification of death and a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

2.A member shall receive an actuarially reduced disability retirement benefit as long as the member remains eligible for benefits under North Dakota Century Code section 54-52-17 and after the member's death one-half the rate of the reduced benefit must be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse. Payments of benefits to a member's surviving spouse must be made on the first day of each month commencing on the first day of the month following the member's death, providing the beneficiary has supplied a marriage certificate and death certificate and is still living. Benefits terminate in the month in which the death of the beneficiary occurs. In the event the designated beneficiary predeceases the member or, in the event of divorce, the option must be canceled and the member's benefit must be returned to the single life amount. Payment of the single life amount must commence on the first day of the month following the spouse's death providing written notification of death and a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

3.A member may elect an option which is the actuarial equivalent of the member's normal, early, or deferred vested retirement pension payable for life with a twenty-year or ten-year certain feature, as designated by the member.

For the judges' plan, a member deemed eligible for a disability benefit may elect to receive one of the following optional benefits in lieu of the regular disability benefit, as provided in this section.

1.A member shall receive an actuarially reduced disability retirement benefit as long as the member remains eligible for benefits under North Dakota Century Code section 54-52-17 and after the member's death the same amount must be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse. Payments of benefits to a member's surviving spouse must be made on the first day of each month commencing on the first day of the month following the member's death, provided the beneficiary is still living and has supplied a marriage certificate and the member's death certificate. Benefits terminate in the month in which the death of the beneficiary occurs.

In the event the designated beneficiary predeceases the member or, in the event of divorce, the option must be canceled and the member's benefit must be returned to the normal retirement amount. Payment of the normal retirement amount must commence on the first day of the month following the spouse's death providing written notification of death and a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

2.A member may elect an option which is the actuarial equivalent of the member's normal, early, or deferred vested retirement pension payable for life with a twenty-year or ten-year certain feature, as designated by the member.

History

• History: Effective January 1, 1992; amended effective July 1, 1994; May 1, 2004; July 1, 2006; April 1, 2008; April 1, 2012; April 1, 2016; July 1, 2026.
• Law Implemented: NDCC 54-52-06.4, 54-52-17 71-02-05-07.1. Judges' plan optional benefits.
• History: Effective May 1, 2004; amended effective July 1, 2006; April 1, 2008; July 1, 2010; April 1, 2012; July 1, 2026.

N.D. Admin. Code 71-02-05-08 Transitional period

For purposes of providing a transition period during the twelve-month application period provided under previous law, amendments to chapter 71-02-05 dated January 1, 1992, apply to disabled employees who terminated on or after July 1, 1991. However, the previous rules will continue in effect for disabled employees who terminated before July 1, 1991.

History

• History: Effective January 1, 1992.

N.D. Admin. Code 71-02-05-09 Interest accrual on accumulated contributions for disabled annuitants

Effective January 1, 1998, interest must accrue on accumulated contributions as defined in article 71-02 until the disabled annuitant reaches that person's normal retirement age, cancels the benefit in accordance with section 71-02-05-03, the account is closed, or until benefit payments commence to the member's beneficiary.

History

• History: Effective July 1, 1998; amended effective May 1, 2004; July 1, 2006; July 1, 2010.

Chapter 71-02-06 Contributions

N.D. Admin. Code 71-02-06-01 Conditions for return

1.For members eligible for an automatic refund, the accumulated contributions of a member who has a termination of employment prior to retirement must be refunded automatically as follows unless the member elects to remain in an inactive status within thirty days after the termination date:

a.For all members except members of the bureau of criminal investigation plan addressed under subdivision b and members of the judges' plan addressed under subdivision c, if the member has less than three years of service credit and an account balance less than one thousand dollars;

b.For members of the bureau of criminal investigation plan hired after July 31, 2023, if the member has less than ten years of service credit and an account balance less than one thousand dollars; and

c.For members of the judges' plan, if the member has less than five years of service credit and an account balance less than one thousand dollars.

2.For members not eligible for an automatic refund, the accumulated contributions of a member who has a termination of employment prior to retirement must be refunded upon application filed with the executive director.

3.The termination date for purposes of processing an application for refund or rollover must be the last date for which a member receives salary except for a member who is on an approved leave of absence. For members who are paid salary in any month following actual separation from employment if the salary is received after the normal processing date, the termination date for purposes of processing the application must be the same date as the date that the last paycheck was issued as salary.

July 1, 2010; July 1, 2018; July 1, 2026.

History

• History: Amended effective November 1, 1990; June 1, 1996; July 1, 1998; July 1, 2000; May 1, 2004;
• Law Implemented: NDCC 54-52-06, 54-52-17

N.D. Admin. Code 71-02-06-02 Effect of return

Refund of accumulated contributions shall cancel all service credit accumulated prior to the refund and shall extinguish the right to any benefits provided by North Dakota Century Code chapter 54-52.

Any former member returning their refund, with interest at the actuarial rate of return, within sixty days from withdrawal must be reinstated.

History

• History: Amended effective November 1, 1990; July 1, 1994.
• General Authority: NDCC 54-52-04, 54-52-17
• Law Implemented: NDCC 54-52-17

N.D. Admin. Code 71-02-06-03 Inapplicability of return of contribution guarantee

Repealed effective September 1, 1982.

N.D. Admin. Code 71-02-06-04 Adjustment for bonuses, profit sharing, and contributions paid in a month other than month earned

Adjustments for the following must be made for all members:

1.Participating employers shall report bonuses or profit-sharing amounts paid when remitting the contribution associated with the bonus. Recruitment and retention bonuses under North Dakota Century Code section 54-06-31 are not eligible for consideration as salary and no contributions associated with those types of bonuses shall be submitted.

2.Bonuses or profit-sharing amounts paid by a participating employer other than pursuant to North Dakota Century Code section 54-06-31 will be retroactively prorated over the applicable prior twelve month period. Bonuses or profit-sharing amounts may not be submitted to the public employees retirement system for future months.

3.Upon receiving notice of contributions received in a month other than the month earned, the office will assign contributions to the appropriate month.

History

• History: Effective June 1, 1993; amended effective June 1, 1996; July 1, 1998; July 1, 2000; April 1, 2002; April 1, 2008; July 1, 2018.

N.D. Admin. Code 71-02-06-05 Basis for calculating contributions - Salary reduction - Salary deferral arrangements

1.Amounts deducted from a member's salary at the member's option to a qualified section 125 cafeteria plan, 401(k) plan, 403(b) plan, or 457 plan are part of wages or salary when calculating retirement contributions.

2.Employee contributions paid by the employer under IRC 414(h) pursuant to a salary reduction agreement do not reduce wages or salary when calculating retirement contributions.

3.Amounts contributed to a qualified section 125 cafeteria plan, 401(k) plan, 403(b) plan, or 457 plan by the employer are not part of wages or salary when calculating retirement contributions.

History

• History: Effective June 1, 1993.

N.D. Admin. Code 71-02-06-06 Employer payment of employee contributions

1.A written election submitted under subsection 3 of North Dakota Century Code section 54-52-05 must be reported to the board a minimum of thirty-one days prior to the effective date.

2.An employer electing to pay employee monthly salary contributions under North Dakota Century Code section 54-52-05 or 54-52.6-09 may not discriminate in its contributions to eligible participating employees within the same class of employees for plan enrollment.

History

• History: Effective July 1, 1994; amended effective May 1, 2004; April 1, 2022; July 1, 2026.
• Law Implemented: NDCC 54-52-05

N.D. Admin. Code 71-02-06-07 Employer contribution - National guard/law enforcement

As part of its annual actuarial evaluation, the board shall determine the amount required to support the level of benefits for national guard/law enforcement specified in North Dakota Century Code section

N.D. Admin. Code 54-52-17 The board shall set the employer's contribution rate on a biennial basis, but may adjust that rate if it is actuarially necessary to maintain appropriate funding levels

History

• History: Effective July 1, 1994; amended effective May 1, 2004; April 1, 2016.
• Law Implemented: NDCC 54-52-06.4

N.D. Admin. Code 71-02-06-08 Retirement contributions for individuals working less than a forty-hour workweek

Retirement contributions must be made on wages paid to eligible permanent employees who are regularly scheduled for less than forty hours per week but who work at least twenty hours per week during a twelve-month period.

History

• History: Effective June 1, 1996; amended effective July 1, 1998.

N.D. Admin. Code 71-02-06-09 Individual employee incentive payments

Individual employee incentive payments received under North Dakota Century Code section 54-06-24 or similar programs are not considered to be salary and are not subject to retirement contributions.

History

• History: Effective June 1, 1996.
• Law Implemented: NDCC 54-52-01(19), 54-52-05, 54-52-06

N.D. Admin. Code 71-02-06-10 Transfer of funds

Pursuant to subdivision a of subsection 4 of North Dakota Century Code section 15-10-17, funds may be transferred on behalf of those persons who are eligible through their employment with the state board of higher education. The following requirements apply:

1.Applicant must file a completed application for the teachers' insurance and annuity association of America - college retirement equities fund.

2.Notice of termination and verification of teachers' insurance and annuity association of America - college retirement equities fund eligibility must be filed by either the applicant or appropriate payroll officer.

3.Interest at the rate of seven percent must be used in calculating interest on the nonvested employer contribution, beginning from the date of first contribution through the date of transfer to the teachers' insurance and annuity association of America - college retirement equities fund.

History

• History: Effective April 1, 2012.
• Law Implemented: NDCC 15-10-17

N.D. Admin. Code 71-02-06-11 Transfer date

Transfer of funds will be sent to the teachers' insurance and annuity association of America college retirement equities fund program within six months of receiving the application package. Any application received prior to the applicant's eligibility to participate in the alternate retirement program will be considered ineffective and the applicant shall reapply upon achieving eligible status.

History

• History: Effective April 1, 2012.
• Law Implemented: NDCC 15-10-17

N.D. Admin. Code 71-02-06-12 Employee-paid contributions - Repayment options

If the office determines that any required employee-paid contributions have not been made, the cost of any required employee-paid contributions may be paid in a lump sum or in installments in a manner consistent with installment payments permitted under section 71-02-03-02.2.

History

• History: Effective April 1, 2016.
• Law Implemented: NDCC 39-03.1-09, 54-52-02.9, 54-52-05, 54-52-06.1, 54-52-06.3, 54-52-06.4

N.D. Admin. Code 71-02-06-13 Refusal of interest on contributions

A member or beneficiary may decline to receive interest on the member's contributions and vested employer contributions, if any, by notifying the public employees retirement system, in writing, of that decision when the member or beneficiary applies for a distribution of the accumulated contributions. A member or beneficiary who does so waives any right to that interest.

History

• History: Effective April 1, 2022.
• Law Implemented: NDCC 39-03.1-09, 54-52-02.9, 54-52-05, 54-52-06.1, 54-52-06.3, 54-52-06.4

Chapter 71-02-07 Return to Service

N.D. Admin. Code 71-02-07-01 Return to service - Unretired member

Repealed effective November 1, 1990.

N.D. Admin. Code 71-02-07-02 Return to service - Retired member

The benefits of a retired member who returns to permanent employment must be suspended without interest accruing on the suspended account, except as provided in section 71-02-02-02 and subsection 1 of North Dakota Century Code section 54-52-05. Upon subsequent termination and retirement, the member is required to select the same benefit option as the option selected at initial retirement. The member's total benefit upon subsequent retirement must equal the original benefit plus the calculated benefit for the return to work period. The member's benefit attributable to any return to work period must be based upon service and earnings attributable to the return to work period only and be calculated as follows:

1.The member's calculated benefit must be based on the benefit provisions in effect at subsequent retirement and must include the member's and spouse's ages, salary earned during the period of reemployment, total service credits earned after reemployment, and actuarial factors in effect at subsequent retirement.

2.If a member dies during subsequent employment, the member's initial retirement benefit option election must apply and the date of death must be considered the subsequent retirement date.

3.If a member's spouse dies during the subsequent employment of the member, section 71-02-04-04 applies to the member's initial and subsequent retirement benefit calculation.

July 1, 2018; July 31, 2025; January 1, 2026.

History

• History: Amended effective November 1, 1990; July 1, 1998; May 1, 2004; July 1, 2006; July 1, 2010;
• General Authority: NDCC 54-52-04, 54-52-17, 54-52-23
• Law Implemented: NDCC 54-52-02.15, 54-52-05, 54-52-17

N.D. Admin. Code 71-02-07-03 Return to service - Disabled member

If the recipient of a disability benefit under North Dakota Century Code chapter 54-52 returns to work, that member is responsible for reporting employment to the public employees retirement system.

1.If a member is working in a permanent full-time position and is eligible to participate in the public employees retirement system, monthly benefits from the public employees retirement system must be suspended. If the individual is not able to continue employment for a consecutive period of time resulting in nine months of service credit as a result of the disability and continues to meet eligibility requirements under the plan, that member may resume disability status with the public employees retirement system.

2.If a member returns to substantial gainful activity in employment not covered under the public employees retirement system, the disability benefit may continue for up to nine consecutive months. If the individual is not able to continue employment for at least nine months as a result of the disability and continues to meet eligibility requirements under the plan, the member may continue disability status with the public employees retirement system.

3.Upon subsequent termination and retirement, the member is required to select the same benefit option as the option selected at initial retirement.

4.If a member dies during subsequent employment, the member's initial retirement benefit option election applies and the date of death is considered the subsequent retirement date.

5.If a member's spouse dies during the subsequent employment of the member, section 71-02-04-04 applies to the member's initial and subsequent retirement benefit calculation.

History

• History: Effective November 1, 1990; amended effective September 1, 1992; July 1, 1994; July 1, 2000; April 1, 2002; April 1, 2020.
• General Authority: NDCC 54-52-04, 54-52-17
• Law Implemented: NDCC 54-52-17

Chapter 71-02-08 Participation by Governmental Units

N.D. Admin. Code 71-02-08-01 Participation

Repealed effective January 1, 2025.

N.D. Admin. Code 71-02-08-02 Withdrawal

Any political subdivision may discontinue participation in the fund if the following requirements are met:

1.The political subdivision shall provide the board with a copy of a resolution adopted by the governing authority authorizing the termination of participation in the fund.

2.Upon receiving a copy of the written resolution, an actuarial study must be done by the plan's actuary to determine the accrued benefit of all employees minus allocated assets from the date of participation. The interest assumption used must be two hundred basis points less than the plan's interest assumption used for funding purposes. The withdrawal liability must include an administrative expense assessment of five percent.

3.Any costs incurred by the fund, resulting from a political subdivision ceasing participation, including the actuarial fee study and the withdrawal liability, must be assessed against the political subdivision and paid in full before a political subdivision terminates its participation.

4.All employees of a political subdivision that has terminated participation in the fund must not be eligible for future benefit accruals or improvements granted to employees or former employees of participating governmental units after the date the employer's participation ceases.

5.As of the date the employer's participation ceases, all participating members, including participating members who are not otherwise vested in accordance with subsection 5 of North Dakota Century Code section 54-52-17, must be fully vested in benefits accrued up to the date the employer's participation ceases to the extent funded.

6.Notwithstanding the vesting requirements of North Dakota Century Code sections 54 52-11.1 and 54-52-17, all participating members have the option of taking a refund or rollover of the participating member's accumulated contributions, including vested employer contributions, plus interest or deferred retirement.

History

• History: Effective September 1, 1982; amended effective June 1, 1996; April 1, 2019; July 1, 2026.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-02.1

N.D. Admin. Code 71-02-08-03 Transfer of funds

Repealed effective April 1, 2012.

N.D. Admin. Code 71-02-08-04 Transfer date

Repealed effective April 1, 2012.

N.D. Admin. Code 71-02-08-05 Merger of eligible employer groups

If a merger between two or more eligible employer groups occurs, the following requirements apply:

1.Written notification must be provided to the office no later than sixty days before the merger is final.

2.Whenever two or more employer groups merge into one, and all do not presently participate in the public employees retirement system, the units merging shall decide upon one of the following:

a.The participating employer or employers may elect to cease participation as of the date of the merger, subject to payment of any actuarial liabilities accrued. An actuarial study must be conducted at the cost of the exiting employer upon providing the public employees retirement system with written notice of the employer's election to cease participation.

b.Subject to executing a revised participation agreement, eligible employees who have not previously been eligible for participation in any retirement plan of the employer must be given the option to participate based upon provisions of North Dakota Century Code

section 54-52-02.15 or waive participation effective the date of the merger. Any person hired in an eligible position after the consolidation date shall participate or any other employee mandated by the employer shall participate.

History

• History: Effective June 1, 1996; amended effective July 1, 2026.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 15-10-17, 54-52-02.1

Chapter 71-02-09 Review Procedure

N.D. Admin. Code 71-02-09-01 Review procedure

A member who has received notice that the member's benefits have been denied in whole or in

part may within thirty days of receipt of such notice secure review by written request addressed to the board in care of the executive director of the public employees retirement system. The applicant has the right to all relevant information available to the board and may submit arguments or comments in writing. The board must render a decision within one hundred twenty days after the request for a review is timely filed. The decision by the board must be submitted to the applicant in writing and include the specific reason or reasons for the decision and the specific references to the provisions of the plan on which the decision is based.

History

• History: Amended effective June 1, 1996; April 1, 2012.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-04

N.D. Admin. Code 71-02-09-02 Formal review procedure

If the initial decision is adverse to the applicant after exhausting the administrative procedure under

section 71-02-09-01, the applicant may file a request for a formal hearing to be conducted under North Dakota Century Code chapter 28-32. The request for a formal hearing must be filed within thirty days after notice of the initial decision has been mailed or delivered. If an appeal for a formal hearing is not filed within the thirty-day period, the initial decision of the board is final. If a request for a formal hearing is timely filed, notice of the hearing must be served at least thirty days prior to the date set for the hearing. The board shall request appointment of an administrative law judge from the office of administrative hearings to conduct the hearing and make recommended findings of fact, conclusions of law, and order. The board shall either accept the administrative law judge's recommended findings of fact, conclusions of law, and order or adopt its own findings of fact, conclusions of law, and order. The applicant may under North Dakota Century Code section 28-32-42 appeal the final decision resulting from this procedure to the district court.

History

• History: Effective June 1, 1996; amended effective July 1, 2006.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-04

Chapter 71-02-10 Qualified Domestic Relations Orders

N.D. Admin. Code 71-02-10-01 Payment in accordance with qualified domestic relations orders

Retirement benefits must be paid in accordance with any qualified domestic relations order (QDRO) issued in compliance with North Dakota Century Code section 54-52-17.6.

History

• History: Effective November 1, 1990.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-17.6

N.D. Admin. Code 71-02-10-02 Qualified domestic relations orders procedures

1.Upon receipt of a proposed domestic relations order, the public employees retirement system shall send an initial notice to each person named therein, including the member and the alternate payee named in the order, together with an explanation of the procedures followed by the fund.

2.If a member who is not in pay status at the time the proposed domestic relations order, or notice of intent to submit a proposed domestic relations order, was received from the member, the member's legal representative, or an individual authorized to receive confidential information under subsection 8 of North Dakota Century Code section 54-52-26, makes application for a lump sum distribution due to termination of employment, the application for lump sum distribution will be held until such time as the proposed domestic relations order is determined to be qualified and a certified copy of such order is received at the North Dakota public employees retirement system office or until the end of the eighteen-month review period, or until the North Dakota public employees retirement system office receives notice that a proposed domestic relations order will not be submitted, whichever occurs first.

3.Upon receipt of a domestic relations order, the public employees retirement system shall review the domestic relations order to determine if it is a qualified order as established by the model language format specified by the board.

4.The domestic relations order shall be considered a qualified order when the executive director notifies the parties the order is approved and a certified copy of the court order has been submitted to the office.

5.If the order becomes qualified, the executive director shall:

a.Send notice to all persons named in the order and any representatives designated in writing by such person that a determination has been made that the order is a qualified domestic relations order.

b.Comply with the terms of the order.

6.If the order is determined not to be a qualified domestic relations order or a determination cannot be made as to whether the order is qualified or not qualified within eighteen months of receipt of such order, the public employees retirement system shall send written notification of termination of review to all parties at least forty-five days prior to the end of the eighteen-month review period. At the end of the eighteen-month review period, the proposed order is deemed to be withdrawn and of no legal effect.

a.If a member who was not in pay status at the time the proposed domestic relations order was received made application for a lump sum distribution due to termination of employment, the application for lump sum distribution will be processed at the end of the eighteen-month review period.

b.If determined after the expiration of the eighteen-month period the order is a qualified domestic relations order, the qualified domestic relations order must be applied prospectively only.

April 1, 2014.

History

• History: Effective November 1, 1990; amended effective July 1, 1994; July 1, 2006; April 1, 2012;
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-17.6

Chapter 71-02-11 Uniformed Services Employment and Reemployment Rights Act

N.D. Admin. Code 71-02-11-01 Eligibility requirements

To be eligible to receive service credit with North Dakota public employees retirement system for military time under this chapter, a veteran must have had an interruption of employment and been discharged under honorable conditions.

History

• History: Effective September 1, 1991; amended effective May 1, 2004.

N.D. Admin. Code 71-02-11-02 Award of service credit

1.A veteran with eligible time may receive up to sixty months' credit upon proper application. A veteran eligible to receive service credit for military time must apply for and, if required to pay any portion of the employee contribution, purchase that time within the lesser of three times the length of active duty or five years from the date of the veteran's return to covered employment. Service credit will not be awarded until all required documentation is received by the North Dakota public employees retirement system. If payment of required employer and employee contributions is made, the service will be recognized for both benefit eligibility and benefit calculation purposes. If payment of required employer and employee contributions is not made, then the veteran's application for service will be recognized and credit will be used for benefit eligibility purposes only.

2.For persons employed by a political subdivision who will or have returned from an interruption of employment, the following applies:

a.If the employing political subdivision is not a participating employer in the North Dakota public employees retirement system and does not become one, no credit will be granted.

b.If the employing political subdivision joins the North Dakota public employees retirement system at a date later than the interruption of employment, and purchases prior service credit for its employees while the applicant is still employed, service will be granted as provided in subsection 1 of section 71-02-11-02.

c.If the employing political subdivision joins the North Dakota public employees retirement system while the applicant is still employed, and prior service is not purchased on behalf of the employees, no credit will be given.

d.If a political subdivision joins the North Dakota public employees retirement system after an employee has terminated, no credit may be granted to said employee for interruption of employment.

History

• History: Effective September 1, 1991; amended effective May 1, 2004; July 1, 2006; April 1, 2012.
• Law Implemented: NDCC 54-52-17.4(5), 54-52-17.14; 38 USC 4318(a)(2)(A), 38 USC 4318(a)(2)(B), 38 USC 4318(b)(2); 20 CFR 1002.259-262

N.D. Admin. Code 71-02-11-03 Documentation requirements

The burden of proof will be on the member for providing documentation necessary to determine what military time is eligible for service credit. At a minimum, the following documentation is required before service credit will be awarded:

1.The member must provide a legible copy of military discharge papers (DD214, DD215, or NGB22).

2.The member must provide proof of the last day of employment prior to reporting for active duty and the first day of employment following the return from active duty. This information must be certified by the authorized agent of the employing agency using a "Purchase Agreement for USERRA Covered Military Active Duty" or notice of change if returning from leave of absence.

3.The members requesting service credit for extended military terms must provide a legible copy of the appropriate military papers (DD214).

4.Members who elect to purchase military time must submit a completed purchase agreement.

History

• History: Effective September 1, 1991; amended effective May 1, 2004; July 1, 2006.

N.D. Admin. Code 71-02-11-04 Payment

The cost for purchase of eligible military service in the North Dakota public employees retirement system and the North Dakota highway patrolmen's retirement system is as follows:

1.The cost for any required employee contributions to be paid by the member may be paid in a lump sum or in installments pursuant to the rules established for purchase or repurchase payment under subsection 1, 2, or 3 of section 71-02-03-02.2. If no payments have been made, no credit will be awarded for benefit calculation purposes. To prevent any delay in issuing the employee's first retirement check, purchase must be completed at least thirty days prior to retirement date.

2.The employer cost will be assessed to the member's most recent participating employer. Upon being billed by the North Dakota public employees retirement system, the participating employer will have thirty days in which to make payment in full. If, after sixty days, the employer has not made payment in full, a civil penalty on fifty dollars will be assessed, and, as interest, one percent of the amount due for each month of delay or fraction thereof after the payment became due. In lieu of assessing a civil penalty or one percent per month, or both, interest at the actuarial rate of return may be assessed for each month the contributions are delinquent. If contributions are paid within ninety days of the date they became due, penalty and interest to be paid on delinquent contributions may be waived.

April 1, 2012; July 1, 2018.

History

• History: Effective September 1, 1991; amended effective May 1, 2004; July 1, 2006; July 1, 2010;
• Law Implemented: NDCC 54-52-17.4(5), 54-52-17.14; 38 USC 4318(a)(2)(A), 38 USC 4318(a)(2)(B), 38 USC 4318(b)(2); 20 CFR 1002.259-262

N.D. Admin. Code 71-02-11-05 Retired members

Repealed effective May 1, 2004.

N.D. Admin. Code 71-02-11-06 Deceased retirees or members

Repealed effective May 1, 2004.

N.D. Admin. Code 71-02-11-07 Refund of overpayments

In the event an employee or retiree purchased military service at a cost higher than determined above, overpayments may be refunded. Upon verification that the previously purchased military service meets the general eligibility requirements under section 71-02-11-01, a refund may be issued according to the following guidelines:

1.For a purchase paid in a lump sum:

a.The overpayment will be refunded to the member.

b.Interest on the refund amount will be paid at an annual rate of seven and five-tenths percent compounded monthly. Interest will be calculated from the month the public employees retirement system received the lump sum payment to the month in which the refund is made.

c.The refund will be calculated and issued within one hundred eighty days of receiving all necessary documentation.

2.For a purchase paid in installments:

a.If an employee is currently making installment payments, the purchase amount will be recalculated using the percentage of salary that the member was required to pay times eligible months of military time being purchased. Any excess funds resulting from the recalculation will be applied towards the outstanding amount due. Should the payments made to date exceed the new contract amount, a refund of the difference will be issued within one hundred eighty days.

b.If an eligible employee or retiree has paid the installment contract in full, the purchase amount will be recalculated using the percentage of salary that the member was required to pay times eligible months of military time being purchased. A refund of the difference between the payments actually made and what the payments should have been on the new contract amount will be made within one hundred eighty days of receiving the necessary documentation. Interest on the refund amount will be calculated at an annual rate of seven and five-tenths percent, compounded monthly, from the month in which the purchase was paid in full to the month in which the refund is issued.

History

• History: Effective September 1, 1991; amended effective July 1, 2006.

Article 71-03 Uniform Group Insurance Program

Chapter 71-03-01 Bid Process

N.D. Admin. Code 71-03-01-01 Bid contracts

Contracts for the uniform group insurance programs must be awarded through a competitive bidding process. In order to ensure uniformity, the board will utilize services of the actuarial consultant to formulate bid specifications.

History

• History: Effective October 1, 1986.
• General Authority: NDCC 54-52.1-08
• Law Implemented: NDCC 54-52.1-04

N.D. Admin. Code 71-03-01-02 Bid specifications

Bid solicitations may be for:

1.Life insurance.

2.Hospital and medical coverages for active or retired members or both - fully insured contract.

3.Self-insured coverage for active or retired members or both.

4.Dental insurance.

5.Vision insurance.

6.Long-term care insurance.

7.Prescription drug coverage for active or retired members or both.

History

• History: Effective October 1, 1986; amended effective May 1, 2004; April 1, 2008; April 1, 2012.
• General Authority: NDCC 54-52.1-08
• Law Implemented: NDCC 54-52.1-02, 54-52.1-04

N.D. Admin. Code 71-03-01-03 Bid deadlines

Repealed effective April 1, 2012.

N.D. Admin. Code 71-03-01-04 Bid letting

Repealed effective April 1, 2012.

Chapter 71-03-02 Health Maintenance Organization [Repealed]

N.D. Admin. Code 71-03-02 Health Maintenance Organization [Repealed]

CHAPTER 71-03-02

HEALTH MAINTENANCE ORGANIZATION [Repealed effective July 1, 1998]

Chapter 71-03-03 Employee Responsibilities

N.D. Admin. Code 71-03-03-01 Enrollment

An eligible employee is entitled to coverage the first of the month following the month of employment, or the month following meeting eligibility criteria, unless otherwise noted below, if the employee submits an application for coverage within the first thirty-one days of employment or within the thirty-one days of meeting eligibility for one of the following special enrollment periods:

1.Loss of coverage under any other health, dental, vision, or prescription drug insurance plan.

2.Marriage. The enrollment of an employee's spouse. An employee who previously waived coverage shall enroll for coverage at the time the employee's spouse is enrolled.

3.Addition of a dependent as a result of receiving legal guardianship or receiving a court order to provide health coverage. An employee who previously waived coverage shall enroll for coverage at the same time that the employee's eligible dependent is enrolled.

4.Addition of a dependent as a result of birth, adoption, or placement for adoption. Effective date of coverage is the first of the month in which the event occurred. An employee who previously waived coverage shall enroll for coverage at the same time that the employee's eligible dependent is enrolled.

History

• History: Effective October 1, 1986; amended effective July 1, 1994; June 1, 1996; July 1, 1998; July 1, 2010; April 1, 2012; April 1, 2016; April 1, 2022; January 1, 2025.
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03

N.D. Admin. Code 71-03-03-02 Late enrollment

An eligible employee failing to submit an application for coverage within the first thirty-one days of employment or eligibility for a special enrollment period may enroll during the annual open enrollment.

Upon a showing of good cause, the executive director may waive the thirty-one day application requirement.

History

• History: Effective October 1, 1986; amended effective June 1, 1996; July 1, 1998; May 1, 2004; April 1, 2016.
• Law Implemented: NDCC 54-52.1-03, 42 U.S.C. 300gg-3

N.D. Admin. Code 71-03-03-03 Early enrollment

Repealed effective June 1, 1996.

N.D. Admin. Code 71-03-03-04 Open enrollment

Repealed effective June 1, 1996.

N.D. Admin. Code 71-03-03-05 Special enrollment for certain qualifying events

An eligible employee, retiree, or surviving spouse who has accepted a periodic distribution from the defined contribution retirement plan or a monthly retirement benefit from the North Dakota public employees retirement system, North Dakota highway patrol's retirement system, the retirement system established by job service North Dakota, the judges' retirement system, the teachers' fund for retirement, or teachers' insurance and annuity association of America - college retirement equities fund, or retirees who have accepted a retirement allowance from a participating political subdivision's retirement plan and provide verification of distribution are eligible for coverage with the health, dental, vision, or prescription drug insurance program.

1.The eligible employee, retiree, or surviving spouse shall submit application for coverage within thirty-one days from one of the following qualifying events:

a.If the eligible retiree turns age sixty-five or becomes eligible for Medicare.

b.If the eligible retiree's spouse turns age sixty-five or becomes eligible for Medicare.

c.If the eligible employee terminates employment.

d.If the eligible retiree or surviving spouse receives the first monthly retirement benefit from one of the eligible retirement systems outlined above.

e.If an eligible employee or retiree who is covered through another employer-sponsored plan becomes ineligible for the other employer-sponsored plan due to divorce, death, loss of employment, reduction in hours or other events which may cause loss of coverage as determined by the board.

f.If the eligible employee or retiree is no longer eligible for employer-sponsored group insurance, including continuation coverage provided under the Consolidated Omnibus Budget Reconciliation Act of 1985.

g.If the eligible employee, retiree, or surviving spouse gets married (in which case, an employee, retiree, or surviving spouse who previously waived coverage shall enroll for coverage at the time the employee's, retiree's, or surviving spouse's spouse is enrolled).

h.If the eligible employee, retiree, or surviving spouse obtains a new dependent as a result of receiving legal guardianship or receiving a court order to provide health coverage (in which case, an employee, retiree, or surviving spouse who previously waived coverage shall enroll for coverage at the same time that the employee, retiree, or surviving spouse's eligible dependent is enrolled).

i.If the eligible employee, retiree, or surviving spouse obtains a new dependent as a result of birth, adoption, or placement for adoption (in which case, an employee, retiree, or surviving spouse who previously waived coverage shall enroll for coverage at the same time that the employee, retiree, or surviving spouse's eligible dependent is enrolled).

2.Coverage becomes effective on the first day of the month following the month in which the qualifying event occurred except under subdivision a or b of subsection 1 coverage may become effective the month in which eligibility for Medicare occurs and under subdivision i of subsection 1 coverage becomes effective on the first of the month in which the event occurred. If an application is not submitted within thirty-one days of a qualifying event, the eligible employee, retiree, or surviving spouse must be considered to have waived coverage and may not be enrolled unless the eligible employee, retiree, or surviving spouse meets the criteria of another qualifying event. Upon a showing of good cause, the executive director may waive the thirty-one day application requirement.

3.Other individuals eligible for the health, dental, vision, or prescription drug insurance plan include a surviving spouse who is not receiving a qualified monthly retirement benefit from one of the eligible retirement systems outlined above, but who was a covered dependent on the eligible retiree's health, dental, vision, or prescription drug insurance plan at the time of the eligible retiree's death, if there is no lapse in coverage.

4.Individuals not eligible for the health, dental, vision, or prescription drug insurance plan include:

a.A former employee who received a refund of the employee's retirement account, including individuals in the defined contribution plan who take a cash withdrawal of the employee's account, roll their account into another qualified plan, or use the moneys in their account to purchase an annuity.

b.A nonspouse beneficiary (eligible for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985).

c.A deferred retiree or surviving spouse between the time in which the retiree or surviving spouse's eligibility for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, if eligible, ends and the month in which the eligible retiree or surviving spouse receives the first monthly retirement benefit from one of the eligible retirement systems.

d.A formerly deferred retiree who received a refund of the retiree's retirement account.

e.A surviving spouse of a nonvested employee eligible continuation coverage under for the Consolidated Omnibus Budget Reconciliation Act of 1985.

f.A surviving spouse of a former employee who received a refund of the employee's retirement account.

g.A former participating member of the defined contribution retirement program who would not qualify for one of the retirement dates set forth in subsection 3 of North Dakota Century Code section 54-52-17 if that employee was a member of the defined benefit retirement plan, unless eligible for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, and then only for the required duration of eligibility under the Act.

h.For the purposes of the medical and prescription drug plan, employees who first retire after July 1, 2015, and are not eligible for Medicare upon their retirement and completion of any period of eligibility for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, until such time as they or their spouse become eligible for Medicare.

July 1, 1998; July 1, 2000; May 1, 2004; April 1, 2012; April 1, 2016; July 1, 2018; July 1, 2026.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; July 1, 1994; June 1, 1996;
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03, 54-52.1-03.1; Pub. L. 99-272; 100 Stat. 222; 26 USC 162 et seq.

N.D. Admin. Code 71-03-03-06 Continuation of health, dental, vision, or prescription drug coverage after termination

An employee who terminates employment and is not receiving a monthly retirement benefit from one of the eligible retirement systems, and applies for continued coverage with the health, dental, vision, or prescription drug plan may continue such coverage for a maximum of eighteen months by remitting timely payments to the board. The employee desiring coverage shall notify the board within sixty days of the termination. Coverage will become effective on the first day of the month following the last day of coverage by the employing agency, if an application is submitted within sixty days. An individual who fails to timely notify the board is not eligible for coverage.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; June 1, 1996; April 1, 2012.
• Law Implemented: NDCC 54-52.1-02; Pub. L. 99-272; 100 Stat. 222; 26 USC 162 et seq.

N.D. Admin. Code 71-03-03-07 Continuation of health, dental, vision, or prescription drug coverage for dependents

Dependents of employees with family coverage may continue coverage with the group after their eligibility would ordinarily cease. This provision includes divorced or widowed spouses and children when they are no longer dependent on the employee. Coverage is contingent on the prompt payment of the premium, and in no case will coverage continue for more than thirty-six months. Dependents desiring coverage shall notify the board within sixty days of the qualifying event and must submit an application in a timely manner. An individual who fails to notify the board within the sixty days, and who desires subsequent coverage, will not be eligible for coverage.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; April 1, 2012.
• Law Implemented: NDCC 54-52.1-02; Pub. L. 99-272; 100 Stat. 232; 42 USC 300 et seq.

N.D. Admin. Code 71-03-03-08 Continuation of life insurance after retirement

An employee who is enrolled in the group life insurance program may continue the basic and supplemental life insurance coverage upon retirement or disability if the employee receives a retirement allowance from an eligible retirement system by applying for life insurance coverage and remitting timely payments to the board. Life insurance coverage must be continuous from when active group life insurance ends and retired employee life insurance coverage begins. Supplemental life insurance coverage can only be continued until age sixty-five.

January 1, 2025.

History

• History: Effective October 1, 1986; amended effective June 1, 1996; May 1, 2004; April 1, 2014;
• Law Implemented: NDCC 54-52.1-02

N.D. Admin. Code 71-03-03-09 Leave without pay

An employee on an approved leave without pay may elect to continue coverage for the periods specified in the plans for life insurance, health, dental, vision, or prescription drug coverages by paying the full premium to the agency. An eligible employee electing not to continue coverage during a leave of absence is entitled to renew coverage for the first of the month following the month that the employee has returned to work if the employee submits an application for coverage within the first thirty-one days of returning to work. An eligible employee failing to submit an application for coverage within the first thirty-one days of returning to work or eligibility for a special enrollment period, may enroll during the annual open enrollment. Upon a showing of good cause, the executive director may waive the thirty-one day application requirement.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; June 1, 1996; September 1, 1997; July 1, 1998; May 1, 2004; April 1, 2012; April 1, 2022.
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03

N.D. Admin. Code 71-03-03-10 Employee contribution

An employee who selects a level of coverage which requires an additional amount of premium shall pay the amount due to the employing agency. The employee contribution may be paid via payroll deduction or any other means acceptable to the agency.

History

• History: Effective October 1, 1986; amended effective January 1, 2025.
• Law Implemented: NDCC 54-52.1-03

Chapter 71-03-04 Employer Responsibilities

N.D. Admin. Code 71-03-04-01 Employer contribution

1.An agency shall pay to the board the full amount of the employer contribution by the fifteenth of each month. The agency shall verify the number of eligible employees and the level of coverage for each. An employee is eligible for an employer contribution for the month following the month of employment. If an eligible employee terminates employment prior to the effective date of coverage, employer contribution is not required. The employer contribution ends the month following the month of termination of employment. If an employee transfers from a permanent employee position to a temporary employee position without a termination of employment, the employer contribution ends the month in which the permanent employment ends. If an employee transfers from one state agency to another, the new agency is responsible for the payment of the premium for the first of the month following employment.

2.As used in this section, "termination of employment" means a severance of employment by not being on the payroll of a participating employer for a minimum of one month. Approved leave of absence does not constitute termination of employment.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; July 1, 2010; July 1, 2026.

N.D. Admin. Code 71-03-04-02 Information to employee

Each agency shall inform its employees of their right to group insurance and the process necessary to enroll.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; April 1, 2014.
• Law Implemented: NDCC 54-52.1-03

N.D. Admin. Code 71-03-04-03 Collecting employee contribution

Each agency shall collect any employee contribution due and submit it along with the employer contribution to the board each month. When an employee on an approved leave of absence requests to continue in the group, the agency shall collect the full amount of the premium from the employee each month and remit it to the board.

History

• History: Effective October 1, 1986.

N.D. Admin. Code 71-03-04-04 Termination of employment

Each agency shall notify the board when an eligible employee terminates employment. The board shall inform the terminating employee of options available to the employee for continuation of coverage.

History

• History: Effective October 1, 1986.

N.D. Admin. Code 71-03-04-05 Premium for basic term life insurance

All state departments that participate in the group life insurance program must pay the board the full premium for the basic term life insurance for each of its eligible employees.

History

• History: Effective October 1, 1986; amended effective July 1, 1994; July 1, 1998; July 1, 2010.
• Law Implemented: NDCC 54-52.1-01(7)

N.D. Admin. Code 71-03-04-06 Minimum requirements for political subdivisions

Repealed effective June 1, 1996.

Chapter 71-03-05 Board Responsibilities

N.D. Admin. Code 71-03-05-01 Premium billing

The board will maintain a monthly billing and reconcile the moneys for all employers and other eligible individuals provided in North Dakota Century Code chapter 54-52.1.

History

• History: Effective October 1, 1986; amended effective January 1, 2025.

N.D. Admin. Code 71-03-05-02 Retiree billing

Retirees receiving a monthly retirement benefit from the board in a sufficient amount to pay premium will have the total monthly premium deducted from their benefit check.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; April 1, 2008; July 1, 2018.
• Law Implemented: NDCC 54-52.1-03

N.D. Admin. Code 71-03-05-03 Late premium for retirees

Repealed effective April 1, 2008.

N.D. Admin. Code 71-03-05-04 Late premium for terminated employees

Repealed effective April 1, 2012.

N.D. Admin. Code 71-03-05-05 Appeal process

If a member's benefits have been denied in whole or in part by the board or its agent, the member will be notified in writing of the denial and the reasons. Within sixty days of the date shown on the denial notice, the member may file a petition for review. The petition must be in writing, the reasons stated for disputing the denial and be accompanied by any documentation. Should the member filing a petition for review, or should the board or its agent desire information which cannot be presented satisfactorily by correspondence, the board or its designated appeals committee may schedule a hearing. The member filing the appeal will be notified in writing at least fifteen days prior to hearing of the time, date, and place.

The board or its agent will render a decision as soon as possible, but not later than one hundred twenty days after the receipt of the petition for review. The decision will be in writing.

History

• History: Effective October 1, 1986; amended effective November 1, 1990; July 1, 2010; April 1, 2012.

N.D. Admin. Code 71-03-05-06 Recovery of benefit payments

Whenever benefits are paid in noncompliance with the contract, the board retains the right to recover the payments from the party responsible. In case the claims payor is at fault, the amount of overpayment will be withheld from the administrative fees paid by the board. In case overpayments are made because of false or misleading information provided by a member, the claims payor shall attempt to recover the amount. Any moneys recovered shall be credited to the board. In case an overpayment is made because of a mistake or deliberate act by a health care provider, the claims payor shall collect the money from the provider and credit that amount to the board. In cases of suspected fraud, the board may turn the evidence over to the state's attorney or attorney general's office for possible prosecution.

History

• History: Effective October 1, 1986.

N.D. Admin. Code 71-03-05-07 Erroneous payment of premiums - Overpayments

1.An "overpayment" means a payment of money to the public employees retirement system for group insurance premiums that exceeds the premiums due for the level of coverage that should have been in effect.

2.If an overpayment occurs, the amount of the overpayment must be paid to the insured in a lump sum within thirty days of the discovery of the error. The payment may be made to any person insured under the policy.

History

• History: Effective April 1, 2002; amended effective April 1, 2016.

N.D. Admin. Code 71-03-05-08 Erroneous payment of premiums - Underpayments

1.An "underpayment" means a payment of money to the public employees retirement system for group insurance premiums that is less than the premiums due for the level of coverage that should have been in effect. Underpayment of premium is solely an error in the amount of premium billed to the individual.

2.An individual who underpays premiums is liable to pay those premiums upon receiving a request for repayment and an explanation of the amount due from the executive director. All underpayments must be collected using the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like gains. If the cost of recovering the underpayment is estimated to exceed the amount of the underpayment, the underpayment is considered to be unrecoverable.

3.If an underpayment is discovered in the first month it occurs, the individual must pay the amount due in a lump sum within thirty days of the discovery of the error.

4.If an underpayment is not discovered within the first month it occurs, the following will apply:

a.If not the result of any wrongdoing, negligence, misrepresentation, or omission by the individual, then the individual must make arrangements within sixty days of receiving written notification to either pay by lump sum or installments. The installment payment schedule is subject to approval by the executive director with the minimum repayment amount no less than fifty dollars a month. If repayment arrangements are not in place within sixty days of the date of the written request for repayment, the executive director shall authorize payment to be made in three equal installments, using the same payment method the individual has authorized for paying current monthly premiums.

b.If underpayment is the result, in whole or in part, of the wrongdoing, negligence, misrepresentation, or omission of the individual, underpayments must be made in full within sixty days of written notification.

5.If an underpayment occurs and the individual no longer participates in the group insurance, any premium amounts due are immediately payable.

6.If the individual dies prior to paying in full, then the public employees retirement system must make application to the estate of the deceased to recover the remaining balance.

7.If the individual refuses to repay the underpayment, or the underpayment is not paid in full, coverage may be canceled retroactive to the first day of the month following the month for which full premium payment was received.

History

• History: Effective April 1, 2002; amended effective April 1, 2008; July 1, 2010; April 1, 2016.

N.D. Admin. Code 71-03-05-09 Erroneous payment of premiums - Appeals

1.A person not satisfied with the repayment arrangements made under this policy may appeal the executive director's decision in writing to the board. The written request must explain the

basis of the appeal and must be received in the office within sixty days of the executive director's written decision.

2.The board may release a person from liability to repay an underpayment, in whole or in part, if it determines:

a.The underpayment is not the fault of the recipient; or

b.It would be contrary to equity and good conscience to collect the underpayment.

History

• History: Effective April 1, 2002.

N.D. Admin. Code 71-03-05-10 Determining amount of premium overpayments and underpayments

1.The amount of the health premium overpayment or underpayment must be determined by calculating the difference between the premium that was paid and the premium that should have been paid, retroactively to the month the change in premium should have occurred, or July of the earliest contract period still open, whichever is more recent.

2.The amount of the life premium overpayment or underpayment must be determined by calculating the difference between the premium that was paid and the premium that should have been paid, retroactively to the month the change in premium should have occurred, or the first day of the first month of the earliest contract period still open, whichever is more

3.The amount of the dental premium overpayment or underpayment must be determined by calculating the difference between the premium that was paid and the premium that should have been paid, retroactively to the month the change in premium should have occurred, or the first day of the first month of the earliest contract period still open, whichever is more

4.The amount of the vision premium overpayment or underpayment must be determined by calculating the difference between the premium that was paid and the premium that should have been paid, retroactively to the month the change in premium should have occurred, or the first day of the first month of the earliest contract period still open, whichever is more

5.The amount of the employee assistance premium overpayment or underpayment must be determined by calculating the difference between the premium that was paid and the premium that should have been paid, retroactively to the month the change in premium should have occurred, or the first day of the first month of the earliest contract period still open, whichever is more recent.

History

• History: Effective April 1, 2002; amended effective April 1, 2008; April 1, 2014; July 1, 2026.

N.D. Admin. Code 71-03-05-11 Failure to provide notification and errors

1.If the individual fails to notify the public employees retirement system of a change that affects the level of coverage in force, upon learning of the change, the guidelines for premium overpayment or underpayment will apply.

2.If an individual fails to notify the public employees retirement system to establish coverage, the guidelines for premium overpayment or underpayment will not apply. Coverage will only be established prospectively.

3.If the public employees retirement system makes an error that affects the level of coverage in force for the individual, upon learning of the error, the guidelines for premium overpayment or underpayment will apply.

4.If the public employees retirement system makes an error and does not establish coverage for an individual, upon learning of the error, the guidelines for premium underpayment will apply.

5.If an individual does not receive timely notification of COBRA continuation rights, premiums must be paid in full before continuation coverage is established retroactively.

History

• History: Effective April 1, 2002.

Chapter 71-03-06 Participating Political Subdivisions Employee Responsibilities

N.D. Admin. Code 71-03-06-01 Enrollment

An eligible employee is entitled to coverage the first of the month following the month of employment, or the month following meeting eligibility criteria, unless otherwise noted below, if the employee submits an application for coverage within the first thirty-one days of employment, or within the thirty-one days of meeting eligibility for one of the following special enrollment periods:

1.Loss of coverage under any other health insurance plan.

2.Marriage. The enrollment of an employee's spouse. An employee who previously waived coverage shall enroll for coverage at the time the employee's spouse is enrolled.

3.Addition of a dependent as a result of receiving legal guardianship, or receiving a court order to provide health coverage. An employee who previously waived coverage shall enroll for coverage at the same time that the employee's eligible dependent is enrolled.

4.Addition of a dependent as a result of birth, adoption, or placement for adoption. The effective date of coverage is the first of the month in which the event occurred. An employee who previously waived coverage shall enroll for coverage at the same time that the employee's eligible dependent is enrolled.

History

• History: Effective June 1, 1996; amended effective July 1, 1998; July 1, 2010; January 1, 2025.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52.1-03.1, 54-52.1-03.4

N.D. Admin. Code 71-03-06-02 Late enrollment

Political subdivisions must follow the same late enrollment procedures as outlined in section 71-03-03-02.

History

• History: Effective June 1, 1996; amended effective July 1, 1998; May 1, 2004; July 1, 2010.

N.D. Admin. Code 71-03-06-03 Special enrollment for certain qualifying events

Political subdivisions must follow the same enrollment procedures as outlined in section 71-03-03-05.

History

• History: Effective June 1, 1996; amended effective July 1, 2010.

N.D. Admin. Code 71-03-06-04 Continuation of hospital and medical coverages after termination

Political subdivisions must follow the same continuation procedure as outlined in section 71-03-03-06.

N.D. Admin. Code 71-03-06-05 Continuation of health benefits for dependents

Political subdivisions must follow the same continuation procedure as outlined in section 71-03-03-07.

History

• History: Effective June 1, 1996; amended effective July 1, 2010.

N.D. Admin. Code 71-03-06-06 Continuation of life insurance after retirement

Political subdivisions must follow the same continuation procedure as outlined in section 71-03-03-08.

N.D. Admin. Code 71-03-06-07 Leave without pay

Political subdivisions must follow the same leave without pay procedures as outlined in section 71-03-03-09.

N.D. Admin. Code 71-03-06-08 Employee contribution

An employee who is enrolled in the group insurance plan and required by the employer to pay a

part of the premium must pay the amount due to the employer. The employee contribution may be paid via payroll deduction or any other means acceptable to the employer.

History

• History: Effective June 1, 1996; amended effective July 1, 2010; January 1, 2025.
• General Authority: NDCC 54-52-04, 54-52.1-03.1, 54-52.1-08
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03.1

Chapter 71-03-07 Participation of Political Subdivisions Employer Responsibilities

N.D. Admin. Code 71-03-07-01 Employer contribution

1.An employer shall pay to the board the full monthly premium amount for each eligible employee enrolled in the group insurance plan by the fifteenth of each month. The employer shall verify the number of eligible employees and the level of coverage for each. An employee is eligible for an employer contribution for the month following the month of employment. If an eligible employee terminates employment prior to the effective date of coverage, no employer contribution is required. The employer contribution ends the month following the month of termination of employment. If an employee transfers from a permanent employee position to a temporary employee position without a termination of employment, the employer contribution ends the month in which the permanent employment ends. If an employee transfers from one participating employer to another, the new employer is responsible for the payment of the premium for the first of the month following employment.

2.As used in this section, "termination of employment" means a severance of employment by not being on the payroll of a participating employer for a minimum of one month. Approved leave of absence does not constitute termination of employment.

History

• History: Effective June 1, 1996; amended effective July 1, 2010; April 1, 2022; July 1, 2026.
• General Authority: NDCC 54-52.1-08
• Law Implemented: NDCC 54-52.1-03.1

N.D. Admin. Code 71-03-07-02 Information to employee

Each employer shall inform employees of their right to group insurance and the process necessary to enroll. The employer shall provide each eligible employee such forms as necessary to enroll in the group insurance program.

History

• History: Effective June 1, 1996; amended effective July 1, 2010.

N.D. Admin. Code 71-03-07-03 Collecting employee contributions

Each employer shall collect any employee contribution due and submit it with the employer contribution to the retirement board each month. When an employee on an approved leave of absence requests to continue in the group, the employer shall collect the full amount of the premium from the employee each month and remit it to the retirement board. The minimum employer contribution will be determined by the retirement board and must be consistently applied to all eligible employees.

History

• History: Effective June 1, 1996; amended effective May 1, 2004; July 1, 2010.

N.D. Admin. Code 71-03-07-04 Termination of employment

Each employer shall notify the retirement board when an eligible employee terminates employment.

The retirement board shall inform the terminating employee of options available to the employee for continuation of coverage.

History

• History: Effective June 1, 1996.

N.D. Admin. Code 71-03-07-05 Premium for basic term life insurance

All political subdivisions that elect to participate in the group life insurance program must pay the retirement board the full premium for the basic term life insurance for each of its eligible employees.

History

• History: Effective June 1, 1996; amended effective July 1, 2010.
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03.1

N.D. Admin. Code 71-03-07-06 Requirements for enrolling temporary employees and paid members of political subdivision boards, commissions, or associations

Each employer shall inform temporary employees and the paid members of its board, commission, or association of their right to the group insurance plan and the process necessary to enroll. Each employer shall provide each eligible member such forms as necessary to enroll in the group insurance plan. Each employer shall collect any member contribution due and submit it along with any employer contribution to the retirement board each month. The minimum employer contribution will be determined by the retirement board. Each employer shall notify the retirement board when an eligible member is no longer eligible for the group insurance plan. The retirement board shall inform such member of options available for continuation of coverage.

History

• History: Effective June 1, 1996; amended effective May 1, 2004; April 1, 2008.
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03, 54-52.1-03.1

N.D. Admin. Code 71-03-07-07 Minimum requirements for political subdivisions

An enrolled political subdivision must extend the benefits of the group insurance program to its eligible employees and paid members of its board, commission, or association subject to minimum requirements established by the retirement board and a minimum period of participation of sixty months. If the political subdivision withdraws from participation before completing sixty months of participation, unless federal or state laws or rules are modified or interpreted in a way that makes participation by the political subdivision in the uniform group insurance program no longer allowable or appropriate, the political subdivision must make payment to the retirement board equal to the expenses incurred on behalf of that political subdivision's employees which exceed the income received by the retirement board on behalf of that political subdivision's employees during the time of participation. For purposes of this section:

1."Expenses incurred" means:

a.Claims incurred by the political subdivision during the enrolled period and paid during or within three months after the enrolled period and includes capitated payments to providers;

b.Reasonable administrative expenses as incurred by the public employees retirement system and the claims administrator as set forth in the master contract; and

c.The cost of any premium buydown provided.

2."Income received" means all premiums paid by the political subdivision to the retirement board.

Full payment is due within three months after receipt of notice from the executive director, unless an alternative payment schedule has been approved by the retirement board. A late payment charge must be assessed on all money due on an account at a rate of one and three-fourths percent per month.

History

• History: Effective June 1, 1996; amended effective April 1, 2014.
• Law Implemented: NDCC 54-52.1-02, 54-52.1-03, 54-52.1-03.1

Article 71-04 Deferred Compensation Plan for Public Employees

Chapter 71-04-01 Definitions

N.D. Admin. Code 71-04-01-01 Definitions

The terms used throughout this title have the same meaning as in North Dakota Century Code

section 54-52.2-04, except:

1."Beneficiary" means an individual designated by the participant to receive benefits under the plan in the event the participant dies.

2."Compensation" means the total annual remuneration for employment or contracted services received by the participant from the employer.

3."Deferred compensation" means the amount of compensation not yet earned which the participant and the employer shall mutually agree shall be deferred from current monthly salary in accordance with the provisions of the plan.

4."Eligible state deferred compensation plan" means a plan established and maintained by this state that complies with the Internal Revenue Code (IRC) 457(b).

5."Employer" means the state of North Dakota or any of its political subdivisions, institutions, departments, or agencies.

6."Participant" is any employee of a participating employer who executes a participant agreement.

7."Participant agreement" means an agreement between the employer and a participant setting forth certain provisions and elections relative to the plan, incorporating the terms of the plan and establishing the deferral and participation in the plan.

8."Provider" means any insurance company, federally insured financial institutions, Bank of North Dakota, or registered dealer under North Dakota Century Code chapter 10-04 authorized by the retirement board to provide investment vehicles to employees.

9."Retirement" means separation from service with the employer on a date coincidental with the normal, postponed, early, or disability retirement dates as described in North Dakota Century Code chapter 54-52-17.3.

10."Retirement board" or "board" means the eleven persons described in North Dakota Century Code chapter 54-52-03.

11."Separation from service" means that term as defined under Internal Revenue Code section 402(d)(4)(A)(3i) and includes termination of employment with the employer by reason of death, disability, retirement, resignation, or discharge.

12."State" means the state of North Dakota, or any department, institution, or separate agency thereof acting as an employer of the participant.

13."Unforeseeable emergency" means a severe financial hardship to the participant resulting from a sudden and unexpected illness or accident of the participant, the participant's spouse or dependent of the participant, loss of the participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant.

14."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 pursuant to section 71-08-11-01.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; April 1, 2002; May 1, 2004; July 1, 2010; April 1, 2016; April 1, 2020; January 1, 2025.
• General Authority: NDCC 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03, 54-52.2-03.2, 54-52.2-04

Chapter 71-04-02 Plan Design

N.D. Admin. Code 71-04-02-01 Plan design

The retirement board shall establish a deferred compensation plan as allowed under section 457 of the Internal Revenue Code. The plan shall contain sections dealing with definitions, administration, plan participation, benefits, withdrawals, and other areas as determined by the retirement board.

History

• History: Effective April 1, 1989.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 54-52.2-03

Chapter 71-04-03 Employee Responsibilities

N.D. Admin. Code 71-04-03-01 Enrollment

Public employees may enroll with up to three providers in the deferred compensation plan by completing and submitting a participant agreement to the office or the board's designated vendor.

History

• History: Effective April 1, 1989; amended effective April 1, 2014; April 1, 2016; January 1, 2025.
• General Authority: NDCC 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03

N.D. Admin. Code 71-04-03-02 Effective date of deferrals

All deferrals are effective the payroll period ending in the month following the month in which the deferral is authorized. Deferrals cannot be requested or authorized for the month in which income is being earned.

History

• History: Effective April 1, 1989; amended effective July 1, 2010.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 54-52.2-03; IRC 457(b)(4)

N.D. Admin. Code 71-04-03-03 Change in monthly deferral

A participant may change the amount of deferral at any time, as long as a participant agreement is completed and submitted to the office or the board's designated vendor as set forth in section 71-04-03-01.

History

• History: Effective April 1, 1989; amended effective April 1, 2016; January 1, 2025.
• General Authority: NDCC 54-52-04, 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03; IRC 457(b)(4)

N.D. Admin. Code 71-04-03-04 Change in beneficiary

The participant may change the primary or contingent beneficiary at any time by contacting the participant's designated provider representative.

History

• History: Effective April 1, 1989; amended effective May 1, 2004.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 54-52.2-03

N.D. Admin. Code 71-04-03-05 Unforeseeable emergency

A participant who, prior to separation from service, experiences an unforeseeable emergency as defined in section 71-04-01-01 may apply for a distribution of the participant's deferred compensation account to the extent reasonably needed to satisfy the financial need. The participant may make application by completing a financial hardship form and delivering it to the retirement board offices.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; April 1, 2002; July 1, 2010.
• General Authority: NDCC 28-32-02, 54-52.2-03.2

N.D. Admin. Code 71-04-03-06 Termination of participation

Participation in the plan may be terminated at any time by completion of a participant agreement indicating a suspension of monthly deferrals.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; April 1, 2002; May 1, 2004; July 1, 2010.
• General Authority: NDCC 28-32-02, 54-52.2-03.2

N.D. Admin. Code 71-04-03-07 Distribution of assets

Distribution of assets may be made only upon separation from service as defined in section 71-04-01-01, or in accordance with section 71-04-03-05 or 71-04-08-01, or as a direct trustee-to-trustee plan transfer to a tax-qualified governmental defined benefit plan (as defined in Internal Revenue Code

section 414(d)) for the purchase of permissive service credit (as defined in Internal Revenue Code

section 415(n)(3)(A) or a repayment to which Internal Revenue Code section 415 does not apply by reason of section 415(k)(3), regardless of whether or not the participant has had a severance from employment, at a time and in a manner prescribed by the board, as set forth in the 457 deferred compensation plan document, and in a manner consistent with section 457(e)(17) of the Internal Revenue Code.

History

• History: Effective May 1, 2004; amended effective April 1, 2016.
• General Authority: NDCC 28-32-02, 54-52-03.2

Chapter 71-04-04 Retirement Board Responsibilities

N.D. Admin. Code 71-04-04-01 Enrollment

The board shall design and provide employees with a participant agreement to facilitate the enrollment in the plan. The participant agreement must provide for the collection of all information regarding identification of the employee, starting date of the deduction, the payroll period affected, name of the provider company, and the provider representative.

History

• History: Effective April 1, 1989; amended effective September 1, 1997; May 1, 2004; July 1, 2010.
• Law Implemented: NDCC 54-52.2-01, 54-52.2-02, 54-52.2-05

N.D. Admin. Code 71-04-04-02 Booklets

The board shall, upon request of the employee, make available a descriptive booklet setting forth the enrollment requirements of the plan, explanation of the deferred compensation plan under

section 457 of the Internal Revenue Code, and investment options under the plan.

History

• History: Effective April 1, 1989; amended effective September 1, 1997; May 1, 2004; July 1, 2010.

N.D. Admin. Code 71-04-04-03 Provider agreement

The board shall establish a written provider agreement for the authorization of companies or organizations who offer investment options to public employees. This agreement may include registration and reporting requirements, educational requirements of sales representatives, and limitations of investment options.

History

• History: Effective April 1, 1989; amended effective July 1, 2010.

N.D. Admin. Code 71-04-04-04 Employer agreement

The board shall establish a written agreement for all employers, other than state departments, agencies, boards, or commissions, which appoint the state to administer their deferred compensation plan. This agreement includes requirement for the employer to adopt the board's rules, employers to make the requested payroll deductions upon proper application by the employee, remit the deductions directly to the board along with a listing of deferred compensation deductions for all employees participating in the plan, submit all provider participant contracts to the board, hold all participant account information as confidential, and notify the board within thirty days of participant's termination of employment.

History

• History: Effective April 1, 1989; amended effective April 1, 2002; July 1, 2006; July 1, 2010.

N.D. Admin. Code 71-04-04-05 Payroll deduction authorization

The office shall make available to the payroll division of each employer direction to begin, modify, or discontinue deductions pursuant to the completed participant agreement as the payroll division's authorization to begin deductions.

History

• History: Effective April 1, 1989; amended effective July 1, 2010; April 1, 2016.
• Law Implemented: NDCC 54-52.2-02, 54-52.2-03

N.D. Admin. Code 71-04-04-06 Participant accounts

The board shall have each provider of investment services establish individual accounts to record the participant's contributions, earnings, and other account activity.

History

• History: Effective April 1, 1989; amended effective July 1, 2010.

N.D. Admin. Code 71-04-04-07 Separation from service

The board may notify the participant, provider company, and provider representative of the employee's separation from service and eligibility for payment of benefits.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; May 1, 2004; July 1, 2010; April 1, 2016.
• General Authority: NDCC 28-32-02, 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03, 54-52.2-03.2

N.D. Admin. Code 71-04-04-08 Authorization

The executive director or the executive director's designee is authorized to sign all provider agreements, employer agreements, or benefit applications that meet the requirements under article 71-04 and under North Dakota Century Code chapter 54-52.2.

History

• History: Effective July 1, 1994; amended effective May 1, 2004; April 1, 2016.
• General Authority: NDCC 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-01, 54-52.2-02, 54-52.2-03, 54-52.2-03.2

N.D. Admin. Code 71-04-04-09 Provider suspension

The board shall suspend a provider that does not meet the requirements under article 71-04 or North Dakota Century Code chapter 54-52.2. The board may apply either of the following two types of suspension:

1.Loss of active provider status. Under this type of suspension, the provider may not enroll any new participants. The provider may continue to receive contributions from existing members.

2.Loss of provider status. Under this type of suspension, the provider may not enroll any new participants nor receive any further contributions from existing members.

At least thirty days prior to suspension, the board shall send a certified letter to the provider indicating the board's intent to suspend and the reasons for the suspension. Any response from the provider must be reviewed by the board at the board's next scheduled meeting. A letter of intent does not need to be sent if the provider fails to meet the requirements of section 71-04-06-11. If the board decides to suspend a provider, the board shall send a certified letter of suspension to the provider stating the reasons for the suspension and the type of suspension.

History

• History: Effective July 1, 1994.
• General Authority: NDCC 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03.2

N.D. Admin. Code 71-04-04-10 Processing deductions

The board will process and remit employee deferred compensation deductions to the designated provider company within three business days following receipt in good order of all funds and documentation from the employer.

History

• History: Effective July 1, 2006; amended effective July 1, 2010.

Chapter 71-04-05 Employer Responsibilities

N.D. Admin. Code 71-04-05-01 Employer enrollment

Any employer may extend the benefits of the deferred compensation plan to its employees by agreeing to abide by the deferred compensation plan and rules developed by the retirement board, executing an administrative agreement, and submitting a signed copy of meeting minutes to the employers' governing board, wherein the governing board has appointed the retirement board to administer its deferred compensation plan.

History

• History: Effective April 1, 1989; amended effective June 1, 1996.

N.D. Admin. Code 71-04-05-02 Payroll deductions

The employer shall authorize employee payroll deductions only after receiving notification from the office. The participant agreement must indicate the date the payroll deduction is to start, the provider, and the contribution amount. Unless otherwise agreed to by the retirement office, payroll deductions must be remitted to the office within ten days after each payroll period. Along with each payment, the employer shall provide the office with a listing of deferred compensation deductions for all employees participating in the deferred compensation plan using the deferred compensation transmittal of deduction form or the approved electronic format.

History

• History: Effective April 1, 1989; amended effective July 1, 2006; April 1, 2014; April 1, 2016; July 1, 2026.
• General Authority: NDCC 28-32-02, 54-52-03.2
• Law Implemented: NDCC 54-52.2-02

N.D. Admin. Code 71-04-05-03 Monthly report

Repealed effective July 1, 2006.

N.D. Admin. Code 71-04-05-04 Providers

The employer shall authorize payroll deductions in the deferred compensation plan only for providers authorized by the retirement board. The retirement board will supply a listing of all authorized providers to the employer.

History

• History: Effective April 1, 1989.

N.D. Admin. Code 71-04-05-05 Contracts

All contracts between the provider and the employee must be delivered to the retirement board for safekeeping.

History

• History: Effective April 1, 1989.

N.D. Admin. Code 71-04-05-06 Separation from service notice

The employer shall notify the office within thirty days of an employee's separation from service. The office may then notify the former employee's provider of the employee separation from service and eligibility for payment options under the plan.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; May 1, 2004; April 1, 2016.
• General Authority: NDCC 28-32-02, 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03, 54-52.2-03.2

N.D. Admin. Code 71-04-05-07 Employer assets

Repealed effective April 1, 2002.

N.D. Admin. Code 71-04-05-08 Employer participation termination

The employer may terminate participation in the deferred compensation plan by first giving sixty days' written notice to the retirement board of the employer's intent to terminate. The participants in the plan must be considered to have terminated from the plan as of the date the employer terminates participation in the deferred compensation plan. Deferral of benefits must stop and benefits must be made payable as provided in sections 71-04-03-06 and 71-04-07-01.

History

• History: Effective April 1, 1989; amended effective September 1, 1997.

Chapter 71-04-06 Provider Responsibilities

N.D. Admin. Code 71-04-06-01 Application

Those firms desiring to offer investment services for the deferred compensation plan shall first notify the board, in writing, of the firms' willingness to become a provider.

N.D. Admin. Code 71-04-06-02 Administrative agreement

Firms expressing a desire to become a provider of investment services under the deferred compensation plan must agree to all provisions and sign the board's administrative agreement. The administrative agreement sets forth the responsibilities of the provider to the plan, the board, and the employee and stipulates that the provider abide by the plan and rules and regulations adopted by the board for the administration of the plan.

N.D. Admin. Code 71-04-06-03 Sales representatives

All sales representatives of the provider approved by the board to solicit employees must be fully trained to explain the various investment options available through the provider, be able to explain what the deferred compensation program is as found under section 457 of the Internal Revenue Code, and be licensed with the North Dakota state securities commissioner for the sale of registered or unregistered securities or the North Dakota state insurance commissioner for the sale of insurance contracts or policies, or both.

N.D. Admin. Code 71-04-06-04 Listing of investment options

Each provider shall provide a listing of the investment options offered to employees. The listing must be attached to the administrative agreement.

History

• History: Effective April 1, 1989.

N.D. Admin. Code 71-04-06-05 Employee statements

Participants in the provider's investment options shall receive, at least quarterly, account statements, sent to their home address, detailing each participant's activity and account balance.

History

• History: Effective April 1, 1989; amended effective July 1, 1994.

N.D. Admin. Code 71-04-06-06 Retirement board report

The provider shall deliver quarterly reports, in an approved electronic format, to the board detailing the activity of each participant's account. The quarterly report must be delivered within thirty days of the end of each calendar quarter and must include an alphabetical listing of the participants, social security numbers of the participants, the provider's contract number for the participants (if any), type of account for each participant, beginning account balance forwarded from the previous reporting period, contributions made by the participants for the current reporting period, transfers and rollovers from other eligible plans during the reporting period, investment earnings or losses added to the account (if any for the reporting period), any withdrawals made during the reporting period, administrative charges assessed against the account during the reporting period, transfers and direct rollovers to other eligible plans during the reporting period, and the account balance at the end of the reporting period. The report columns must be totaled. The quarterly report must include active, inactive, and accounts in payout status, with the exception of accounts which have been annuitized, and be for all payroll divisions for the plan.

July 1, 2006; July 1, 2010.

History

• History: Effective April 1, 1989; amended effective November 1, 1990; July 1, 1994; May 1, 2004;

N.D. Admin. Code 71-04-06-07 Account transfer

The provider shall allow any participant who so requests, the ability to transfer the participant's account to another provider on a tax-free basis. The request to the provider must be made in writing by the board or its designated representative. The transfer must be made within thirty days of the provider's receipt of the transfer request.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; July 1, 2010.

N.D. Admin. Code 71-04-06-08 Benefit requests

The provider shall honor all requests for benefit or refund payments made upon notification of the employee's separation from service by the board.

History

• History: Effective April 1, 1989; amended effective May 1, 2004; July 1, 2010.

N.D. Admin. Code 71-04-06-09 Benefit payments

The provider shall make benefit payments to the participant in the manner designated by the participant.

N.D. Admin. Code 71-04-06-10 Income tax withholding

The provider shall allow for the withholding of federal and state income taxes from the benefit payments and file the required reports of the withholdings with the appropriate federal and state agencies.

History

• History: Effective April 1, 1989; amended effective July 1, 1998; April 1, 2002.

N.D. Admin. Code 71-04-06-11 Provider reporting failure - Penalty

Should the provider fail to deliver the required report within a thirty-day period beyond the end of the reporting period, notice must be given by certified mail of the provider's failure to comply. The provider shall then have thirty days from the date of the certified letter to comply with the reporting requirement. If the provider fails to deliver the required report within the thirty-day period, the provider is in violation of the administrative agreement and shall lose active provider status as described under subsection 1 of section 71-04-04-09. If the provider has not filed the report within ninety days after the end of the reporting period, the provider shall lose provider status as described under subsection 2 of

section 71-04-04-09. Loss of provider status results in all current contributions of active participants being suspended effective in the next payroll cycle. The board will notify all participants of the company's failure to deliver the required reports. Current participants will be required to either select a new provider for future contributions, or have their account go into a dormant status with the company losing provider status. The board will then terminate the agreement with the provider.

July 1, 2010.

History

• History: Effective April 1, 1989; amended effective November 1, 1990; July 1, 1994; May 1, 2004;

N.D. Admin. Code 71-04-06-12 Provider suspension - Employee account transfers

Should the provider be in violation of the administrative agreement, employees shall have the option of transferring their individual accounts to another qualified provider. The employee shall also have the option of leaving the account with the provider until the employee is eligible for a distributable event.

History

• History: Effective April 1, 1989; amended effective July 1, 1994; July 1, 2010.

N.D. Admin. Code 71-04-06-13 Dormant accounts

The employee may elect to leave the employee's account with the provider after separation from service.

History

• History: Effective April 1, 1989; amended effective July 1, 1994.

N.D. Admin. Code 71-04-06-14 Product disclosure

The provider shall report annually in a form and manner specified by the board such information the board may require related to the provider's investment products. Should the provider fail to deliver the required report within a sixty-day period following the date of request, the provider is in violation of the administrative agreement and subject to the action set forth in section 71-04-04-09.

History

• History: Effective July 1, 1994.
• General Authority: NDCC 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03.2

Chapter 71-04-07 Benefits [Repealed]

N.D. Admin. Code 71-04-07 Benefits [Repealed]

CHAPTER 71-04-07

BENEFITS [Repealed effective April 1, 2002]

Chapter 71-04-08 Qualified Domestic Relations Orders

N.D. Admin. Code 71-04-08-01 Payment in accordance with qualified domestic relations orders

Retirement moneys must be paid in accordance with any qualified domestic relations order issued in compliance with North Dakota Century Code section 54-52.2-03.3.

History

• History: Effective May 1, 2004.
• General Authority: NDCC 28-32-02, 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03.3

N.D. Admin. Code 71-04-08-02 Qualified domestic relations orders procedures

1.Upon receipt of a proposed domestic relations order, the executive director shall:

a.Send an initial notice to each person named therein, including the member and the alternate payee named in the order, with an explanation of the procedures followed by the fund.

b.Order the funds to which the alternate payee would be entitled by direction of the order segregated, if those funds are ascertainable from the proposed order.

c.Review the domestic relations order to determine if it is a qualified order as established by the model language format specified by the board.

2.The domestic relations order shall be considered a qualified order when the executive director notifies the parties the order is approved and a certified copy of the court order has been submitted to the public employees retirement system office.

3.If the order becomes qualified, the executive director shall:

a.Send a notice to all persons named in the order and any representative designated in writing by such person that a determination has been made that the order is a qualified domestic relations order.

b.Comply with the terms of the order.

c.Direct the amount established for an alternate payee, in each plan to which the order applies, be paid in a lump sum within one hundred twenty days of the acceptance of the qualified domestic relations order or the entry of the order by the court.

4.If the order is determined not to be a qualified domestic relations order or a determination cannot be made as to whether the order is qualified or not qualified within eighteen months of receipt of such an order, the executive director shall send written notification of termination of the review to all parties at least forty-five days prior to the end of the eighteen-month review period. At the end of the eighteen-month review period, the proposed order is deemed to be withdrawn and of no legal effect.

a.If a segregated account has been established for an alternate payee, the executive director shall distribute the amounts in the segregated account in the manner required in the absence of an order.

b.If determined after the expiration of the eighteen-month period, the order is a qualified domestic relations order, the qualified domestic relations order must be applied prospectively only.

History

• History: Effective May 1, 2004.
• General Authority: NDCC 28-32-02, 54-52.2-03.2
• Law Implemented: NDCC 54-52.2-03.3

Chapter 71-04-09 Uniformed Services Employment and Reemployment Rights Act

N.D. Admin. Code 71-04-09-01 Eligibility requirements

To be eligible to make up contributions to the 457 deferred compensation plan for missed contributions during military time under this chapter, a veteran must have had an interruption of the veteran's employment and been discharged under honorable conditions.

History

• General Authority: NDCC 54-52-04, 54-52.6-04

N.D. Admin. Code 71-04-09-02 Documentation requirements

The burden of proof will be on the member for providing documentation necessary to determine what military time is eligible for makeup contributions. At a minimum, the following documentation is required:

1.The member must provide a legible copy of military discharge papers (DD214, DD215, or NGB22).

2.The member must provide proof of the last day of employment prior to reporting for active duty and the first day of employment following the return from active duty. This information must be certified by the authorized agent of the employing agency using a record of previous service or notice of change form if returning from leave of absence.

3.Members who elect to contribute missed contributions for military time must submit a completed missed contributions agreement.

History

• General Authority: NDCC 54-52-04

N.D. Admin. Code 71-04-09-03 Payment

The payment for missed contributions for eligible military service under the deferred compensation plan may be paid in a lump sum or in installments pursuant to the rules established under section 71-04-05-02.

History

• General Authority: NDCC 54-52.2-04, 54-52.6-04

N.D. Admin. Code 71-04-09-04 Recording of missed contributions

To determine eligibility for vesting of employer contributions pursuant to North Dakota Century Code section 54-52-11.1, payments for missed contributions during military time under this chapter will be allocated to each month, beginning with the first month of missed contributions. Vested employer contributions will then be calculated pursuant to North Dakota Century Code section 54-52-11.1.

History

• General Authority: NDCC 54-52-04, 54-52.6-04

Article 71-05 Highway Patrol Retirement System

Chapter 71-05-01 Definitions

N.D. Admin. Code 71-05-01-01 Definitions

As used in North Dakota Century Code chapter 39-03.1 and this article:

1."Actuarial equivalent" means a benefit calculated to be of equal value to the benefit otherwise payable when computed on the basis of assumptions and methods adopted for this purpose by the board in a way that precludes employer discretion pursuant to Internal Revenue Code

section 401(a)(25). The assumptions and methods adopted by the board, and any table of adjustment factors established in accordance with the assumptions and methods, shall be incorporated by reference.

2."Covered employment" means employment with the North Dakota highway patrol.

3."Medical examination" means an examination conducted by a doctor licensed to practice in North Dakota that includes a diagnosis of the disability, the treatment being provided for the disability, the prognosis and classification of the disability, and a statement indicating how the disability prevents the individual from performing the duties of a highway patrolman.

4."Normal retirement age" means age fifty-five except as otherwise provided.

5."Office" means the administrative office of the public employees retirement system.

6."Overtime" as used in North Dakota Century Code section 39-03.1-01 means any hours worked over an employee's regularly scheduled work period. Whether paid at the regular hourly rate or one and one-half times the regular rate, overtime must be excluded as reportable retirement contributions.

7."Permanent and total disability" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than twelve months.

8."Plan administrator" means the executive director of the North Dakota public employees retirement system or other person or committee as may be appointed by the board of the North Dakota public employees retirement system from time to time.

9."Substantial gainful activity" must be based upon the totality of the circumstances, including consideration of an individual's training, education, and experience; an individual's potential for earning at least seventy percent of the individual's predisability earnings; and other items deemed significant on a case-by-case basis. Eligibility is based on an individual's employability and not actual employment status.

April 1, 2016; April 1, 2020; July 1, 2026.

History

• History: Effective November 1, 1990; amended effective October 1, 1991; June 1, 1992; July 1, 2006;
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1

Chapter 71-05-02 Disability

N.D. Admin. Code 71-05-02-01 Disability retirement eligibility

A member of the highway patrol retirement system, who has completed at least one hundred eighty days of employment, is eligible for disability retirement benefits if the member became permanently and totally disabled during the period of covered employment and otherwise complies with section

N.D. Admin. Code 71-05-02-02 A member eligible for normal retirement date shall receive the normal retirement benefit if it exceeds the disability retirement benefit

A member may elect to start receiving an early reduced retirement benefit, should the member be eligible to do so, pending a disability determination or appeal. During this period, the member's account will be handled in the same manner as all early reduced retirement benefits. Upon receiving a disability determination, interest accrual on the member's account shall resume beginning the first of the month following notice of the determination, continuing to accrue on the annuitant's accumulated contribution until the annuitant reaches the annuitant's normal retirement date. The disability benefit will be calculated and a differential payment made retroactive to the first day of the month following the member's termination from covered employment.

History

• History: Effective November 1, 1990; amended effective July 1, 2006. 71-05-02-01.1. Conditions for changing to a disability retirement benefit from an early reduced retirement benefit.
• History: Effective May 1, 2004; amended effective July 1, 2006.

N.D. Admin. Code 71-05-02-02 Determination of disability - Procedures. 1.a.Application for disability benefits must be made within one year from the last date of covered employment on the form provided by the plan administrator

b.If the member is unable or unwilling to file an application, the member's employer or legal representative may file the member's disability application.

c.The application must explain the cause of the disability, the limitations caused by the disability, the treatment being followed, and the effect of the disability on the individual's ability to be engaged in any gainful occupation for which the person is, or could become, reasonably fitted by education, training, or experience. 2.a.The applicant for disability retirement must provide the plan administrator with medical examination reports.

b.An initial medical examination must be completed by the member's attending or family physician on the medical examination form provided by the plan administrator. If deemed necessary by the board's medical consultant, an additional examination must be completed by a specialist in the disability involved. Available medical or hospital reports may be accepted in lieu of a medical examination report if deemed acceptable by the medical consultant.

c.The member is liable for any costs incurred by the member in undergoing medical examinations and completing and submitting the necessary medical examination reports, medical reports, and hospital reports. 3.a.The board shall retain a medical doctor to act as its consultant on disability retirement applications.

b.The medical consultant shall review all medical information provided by the applicant.

c.The medical consultant is responsible to advise the plan administrator of the medical diagnosis and whether the condition is a permanent and total disability. 4.a.The plan administrator shall consider applications for disability benefits and shall make a written decision whether an applicant is entitled to benefits. The decision must be mailed to the applicant's address of record.

b.The applicant may appeal an adverse determination to the board by providing a written notice of appeal within thirty days of the date that the plan administrator mailed the decision.

c.The board shall consider all appeals at regularly scheduled board meetings. The applicant must be notified of the time and date of the meeting and may attend and be represented by legal counsel. The executive director shall provide to the board for its consideration a case history brief that includes membership history, medical examination summary, and the plan administrator's conclusions and recommendations. The board shall make the determination for eligibility at the meeting unless additional evidence or information is needed. The discussion concerning disability applications must be confidential and closed to the general public.

d.If the applicant has terminated employment, the plan administrator shall notify the applicant in writing of the decision. If the applicant is determined not to be eligible for disability benefits, the plan administrator shall advise the applicant of the appeal procedure. If the applicant is determined eligible for disability benefits, benefits must be paid pursuant to subsection 5.

e.If the applicant has not terminated employment, the applicant must be provided with a preliminary notification of the decision in writing. The preliminary notification remains in effect for a period not to exceed two hundred seventy days. If an applicant does not terminate employment within two hundred seventy days of the date of termination provided on the disability application, the application must be considered to be vacated but the applicant may reapply as provided in subsection 1.

f.If the initial board decision is adverse to the applicant, after exhausting the administrative procedure under subdivisions b and c, the applicant may file a request for a formal hearing to be conducted under North Dakota Century Code chapter 28-32. The request for a formal hearing must be filed within thirty days after notice of the initial decision has been mailed. If an appeal is not filed within the thirty-day period the initial decision of the board is final. If a request for a formal hearing is timely filed, notice of the hearing must be served at least thirty days prior to the date set for the hearing. The board shall request appointment of an administrative law judge from the office of administrative hearings to conduct the hearing and make recommended findings of fact, conclusions of law, and order or adopt its own findings of fact, conclusions of law and order. The applicant, under North Dakota Century Code section 28-32-42, may appeal the final decision resulting from this procedure to the district court.

5.If awarded, the disability annuity is payable on, or retroactive to, the first day of the month following the member's termination from covered employment, minus any early retirement benefits that have been paid. 6.a.A disabled annuitant's eligibility must be recertified eighteen months after the date the first check is issued and thereafter as specified by the medical consultant. The plan administrator may waive the necessity for a recertification based on the recommendation of the medical consultant.

b.The plan administrator shall send a recertification form and request for a statement of annual earnings by certified mail with return receipt to the disabled annuitant to be completed and sent back to the office. If completed recertification has not been received by the recertification date set in the recertification request, benefits must be suspended effective the first of the month following that date. Benefits must be reinstated the first of the month following recertification by the medical consultant. The regular accrued disability benefits must commence with a lump sum equal to the amount of missed payments, without interest, retroactive to the first of the month that benefits were suspended, unless otherwise approved by the North Dakota public employees retirement system board.

c.The medical consultant may require the disabled annuitant to be reexamined by a doctor.

The submission of medical reports by the annuitant, and the review of those reports by the board's medical consultant, may satisfy the reexamination requirement. Upon recertification, the disabled annuitant must be reimbursed up to four hundred dollars for the cost of the required reexamination if deemed necessary by the medical consultant and the plan administrator.

d.The medical consultant shall make the recertification decision. The executive director may require additional recertifications. The decision may be appealed to the board within ninety days of receiving the written recertification decision.

e.Benefit payments must be suspended immediately upon notice received from the medical consultant that the annuitant does not meet recertification requirements. The plan administrator shall notify the annuitant of the suspension of benefits by certified mail and shall reinstate benefits back to the date of suspension if the annuitant is subsequently found to meet recertification requirements.

f.If it is determined that the disability annuitant was not eligible for benefits during any time period when benefits were provided, the executive director may do all things necessary to recover the erroneously paid benefits.

July 1, 2026.

History

• History: Effective November 1, 1990; amended effective June 1, 1992; June 1, 1996; May 1, 2004;

N.D. Admin. Code 71-05-02-03 Aggrieved parties' rights

Repealed effective June 1, 1996.

N.D. Admin. Code 71-05-02-04 Optional benefits

An individual deemed eligible for a disability benefit may elect, as provided in this section, to receive one of the following optional benefits in lieu of the regular disability benefit.

1.One hundred percent joint and survivor benefit. A member shall receive an actuarially reduced disability retirement benefit as long as the member remains eligible for benefits under subdivision d of subsection 3 of North Dakota Century Code section 39-03.1-11 and after the member's death the same amount will be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse. Payments of benefits to a member's surviving spouse must be made on the first day of each month commencing on the first day of the month following the member's death, provided the beneficiary supplies a marriage certificate and death certificate and is still living. Benefits must terminate in the month in which the death of the beneficiary occurs. If the designated beneficiary predeceases the member or, in the event of divorce, the member's benefit must be returned to the normal retirement amount. Payment of the normal retirement amount must commence on the first day of the month following the spouse's death if written notification of death, provided a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

2.Twenty-year or ten-year certain option. A member may receive the actuarial equivalent of the member's normal, early, or deferred vested retirement pension payable for life with a twenty-year or ten-year certain feature, as designated by the member.

History

• History: Effective July 1, 1998; amended effective May 1, 2004; July 1, 2006; April 1, 2008; April 1, 2012.
• Law Implemented: NDCC 39-03.1-11.4(d)

N.D. Admin. Code 71-05-02-05 Interest accrued on accumulated contributions for disabled annuitants

Effective January 1, 1998, interest shall accrue on accumulated contributions as defined in article 71-01 until the disabled annuitant reaches normal retirement age, cancels the benefit in accordance with section 71-05-02-06, the account is closed, or until benefit payments commence to the member's beneficiary.

History

• History: Effective July 1, 1998; amended effective July 1, 2010.
• Law Implemented: NDCC 39-03.1-11.4(d)

N.D. Admin. Code 71-05-02-06 Cancellation of disability benefit

When a member receiving a disability benefit attains the member's normal retirement date, that member may elect to terminate that member's disability benefit and draw retirement benefits as specified in North Dakota Century Code section 39-03.1-11. Upon receipt of normal retirement benefits, interest accrual on the member account must end and benefit option factors must be based upon the actuarial retirement factors on the date of disability to normal conversion.

History

• History: Effective May 1, 2004; amended effective July 1, 2006; January 1, 2025.

Chapter 71-05-03 Membership

N.D. Admin. Code 71-05-03-01 Membership - General rule

Each eligible member of the highway patrol shall become a member of the North Dakota highway patrolmen's retirement system upon filing a membership form with the office, and the beginning of contributions to the fund.

History

• History: Effective October 1, 1991.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-07

Chapter 71-05-04 Service Credit

N.D. Admin. Code 71-05-04-01 Service credit - General rule

A member receives credit for each month a contribution is made.

History

• History: Effective October 1, 1991; amended effective July 1, 1998.
• Law Implemented: NDCC 39-03.1-11

N.D. Admin. Code 71-05-04-02 Military credit

Eligible service credit may be granted as it pertains to the North Dakota highway patrol retirement system as established in chapter 71-02-11.

History

• History: Effective October 1, 1991.
• Law Implemented: 38 USC 2021-2026

N.D. Admin. Code 71-05-04-03 Repurchase of service credit and purchase of additional service credit

To purchase additional credit or repurchase past service, a contributor shall notify the public employees retirement system, in writing, of the service for which the person wishes to receive credit. In addition to the written request, the following information must be submitted, if applicable:

1.Documentation of military service by submitting a DD214 or NGB22.

2.Certification of approval by the member's employer of any leave of absence and length of that leave.

3.Verification by the former employer of previous North Dakota or out-of-state public service, or service with the federal government.

4.Statement from employee or former employer that service credit being applied for does not qualify for retirement benefits under another retirement system.

Repealed effective May 1, 2004.

History

• History: Effective October 1, 1991; amended effective June 1, 1996; April 1, 2002; May 1, 2004; July 1, 2026. 71-05-04-03.1. Purchase of additional years of service.

N.D. Admin. Code 71-05-04-04 Payment

The total dollar amount for repurchase or purchase may be paid in a lump sum or on a monthly, quarterly, semiannual, or annual basis. Payments may be subject to contribution limitations established under 26 U.S.C. 415. Payments must begin within ninety days of the date the written cost confirmation is prepared. If the installment method is used, the following conditions apply:

1.Simple interest at the actuarial rate of return must accrue monthly on the unpaid balance.

Interest is calculated from the fifteenth of each month.

2.The installment schedule may extend while the member is employed by the participating employer but for no longer than a fifteen-year time period.

3.Installment payments may be made by a payroll deduction where available. However, it is the responsibility of the contributor to initiate and terminate the payroll deduction.

4.Payments are due by the fifteenth of the month to be credited for the month.

5.Payments may only be received from a contributor until the fifteenth of the month following the month of the member's termination date with a participating employer.

6.Payments must be greater or equal to fifty dollars per month, large enough to pay the current interest plus a portion of the principal and an amount necessary to complete the payment contract within the fifteen-year time period.

1.The cost to purchase service credit must be calculated by applying actuarial factors to the amount of the retirement and retiree health insurance credit being purchased by the contributor or member of an alternative retirement system. The contributor's current age, average salary, and current credited service on record with the North Dakota public employees retirement system in the month in which the contributor's written request is processed by the office must be used in the cost calculation. A member's written request must be processed by the office within sixty days of receipt. The amount of retirement and retiree health insurance credit benefits being purchased must be calculated using the benefit formulas in place at the time the written request from the contributor is processed by the office. Whenever calculating the cost, enhancements to the benefit formula must be considered to be in place at the time the law is signed by the governor.

2.The member's average salary shall be calculated as follows:

a.For members working full time with more than twelve months of service credit, by using the calculation found in subsection 2 of North Dakota Century Code section 39-03.1-11.

b.For members working full time with less than twelve months of service credit, by using the calculation found in subsection 2 of North Dakota Century Code section 39-03.1-11, but disregarding any month in which the member was paid less than a full-month salary.

A full-month salary is the compensation the member and the member's employer agreed the member would be paid for working a full month.

c.For members who have not yet received a full-month salary, the member's average salary shall equal the member's full-month salary, as defined in subsection 2.

d.For members working part time, by using the applicable calculations found in subsections 1 and 2, but using a monthly salary equal to the equivalent of the salary the member would have received if the member was working full time.

3.The board must adopt actuarial assumptions necessary to determine the actuarial factors for the cost calculation. The assumptions must be reviewed concurrently with the assumptions for the retirement program.

4.Upon receipt of the written request from the contributor, a written cost confirmation must be prepared and mailed to the individual. The cost stated in the confirmation letter is valid for a period of ninety days from the date of the letter unless the contributor terminates employment with the employer. If the contributor terminates employment, then the cost stated in the confirmation letter is valid only until the earlier of the end of the ninety-day period or the fifteenth day of the month following the month of termination.

History

• History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004; July 1, 2006; July 1, 2010.
• General Authority: NDCC 39-03.1-06, 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1
• Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1 71-05-04-04.1. Costs.
• History: Effective June 1, 1996; amended effective May 1, 2004; July 1, 2006; July 1, 2026.

N.D. Admin. Code 71-05-04-05 Delinquent payment

If a payment to be made pursuant to section 71-05-04-04 is not received within thirty days of the due date, the public employees retirement system shall send a letter to the contributor or member of an alternative retirement system advising the person of the delinquency. If no payment is received within sixty days after the due date, the account must be closed. Payments received on a closed account must be returned to the member. The member may submit written documentation as to the cause for the delinquency to the executive director for review and to request that the purchase contract be reestablished without a new calculation.

History

• History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004.
• Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1

N.D. Admin. Code 71-05-04-06 Crediting purchased or repurchased service

1.For each month the system receives a payment toward a purchase contract, the member will earn a proportion of service credit.

2.Member acceptance of a service purchase contract extinguishes all pending service purchase cost estimates, excluding purchase of unused sick leave.

3.Service purchase contracts set up on a payment plan and only partially paid must have the remaining unpaid portion of service credit included whenever preparing a new service purchase cost calculation.

History

• History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004; July 1, 2010; July 1, 2026.

N.D. Admin. Code 71-05-04-07 Cancellation of credits

If a member terminates service and receives a return of the member's accumulated contributions, service credit for the years of such contributions must be canceled.

History

• History: Effective October 1, 1991.
• Law Implemented: NDCC 39-03.1-10.1, 39-03.1-14.1

N.D. Admin. Code 71-05-04-08 Conversion of sick leave

1.To convert unused sick leave to service credit, the member shall submit an application to the office of the amount of unused sick leave to be converted no later than the end of the month in which the member terminates employment, unless otherwise approved by the executive director. The member's employer shall confirm the member's unused balance of accumulated sick leave as of the date the member terminates employment. For a member transferring from one participating employer to another participating employer without terminating eligible employment, the public employees retirement system shall record unused sick leave of a participating member if the new employer certifies it may not transfer that leave. The certification must include documentation from the previous employer detailing the number of hours of sick leave. The public employees retirement system shall receive the certification within sixty days after the member leaves employment with the former employer.

2.One month of service credit must be awarded for each one hundred seventy-three and three-tenths hours of unused accumulated sick leave. The employer and employee contribution rates used to calculate the cost must be the rate of the retirement program of the member at termination.

3.Aftertax payments may be accepted from the member as early as six months prior to termination if the following requirements are met:

a.A notice of termination or application for monthly benefits form is on file with the public employees retirement system.

b.A written certification by the member's employer, as to the member's unused balance of accumulated sick leave as of the date the member wishes to begin payment, is on file with the public employees retirement system.

c.At termination, the sick leave conversion payment must be recalculated using the member's unused balance of accumulated sick leave, confirmed by the member's employer, and the member's final average salary as of the date of calculation.

d.If there is a difference between the sick leave conversion payment amount and the amount the member has paid, any overpayment must be refunded to the member and any underpayment must be collected from the member by the fifteenth of the month following the month of the member's date of termination.

e.The member's record must be updated with the additional service credit once payment is made in full and the member has terminated employment.

4.Pretax rollover or transfer payments may be accepted from the member as early as sixty days prior to termination if the following requirements are met:

a.A notice of termination or application for monthly benefits form is on file with the public employees retirement system.

b.A written certification by the member's employer, as to the member's projected unused balance of accumulated sick leave no sooner than sixty days prior to the date of termination, is on file with the public employees retirement system. This certification must also include a certification by the employer of the projected salaries to be reported to the public employees retirement system during the final months of employment.

c.At termination, the sick leave conversion payment must be recalculated using the member's unused balance of accumulated sick leave confirmed by the member's employer, and the member's final average salary as of the date of calculation. If there is a difference between the sick leave balance or conversion payment amount and the amount the member has paid, then only the amount of sick leave available as of the termination date will be added to the member's record. The member account balance will be credited with the full amount of funds from the rollover or transfer.

d.If an underpayment has occurred, then the remaining amount must be collected from the member by the fifteenth of the month following the month of the member's date of termination.

e.The retiree health credit portion must be paid as a personal aftertax payment.

f.The member's record must be updated with the additional service credit once payment is made and the member in full has terminated employment.

History

• History: Effective June 1, 1996; amended effective April 1, 2002; May 1, 2004; July 1, 2006; April 1, 2008; January 1, 2025; July 1, 2026.
• Law Implemented: NDCC 39-03.1-30

N.D. Admin. Code 71-05-04-09 Employer purchase of service credit or sick leave program

An employer may elect to purchase up to five years of service credit for an employee and purchase an employee's unused sick leave that meets the requirements of section 71-02-03-08. Before offering a purchase program to its employees the employer must create a program and document the program in writing and submit a copy to the public employees retirement system. The governing authority of the employer shall also submit to the executive director of the public employees retirement system a letter indicating:

1.The program meets all the requirements of the North Dakota Century Code.

2.The program meets all applicable federal requirements.

3.The employer agrees to remit to the public employees retirement system a lump sum payment of the cost of the purchase upon being billed.

4.The employer has not given the employee the option of a cash payment in lieu of the employer purchase.

5.The employer shall clearly specify who is eligible for the program and indicate if the program is intended to be permanent or will be for a specific time period only.

6.The employer agrees that all purchases for service credit will be based upon actuarial cost as determined by the public employees retirement system. The employer also agrees that all purchases will be completed no later than the fifteenth day of the month following the month of the employee's termination or sixty days from the date the employer and employee agree to the purchase, whichever comes first.

7.The employer agrees that in offering such a program the employer will direct each employee interested in the program to first apply to the employer's authorized agent who will then certify the eligibility of the member, the amount of service credit to be purchased, and send such certification to the public employees retirement system. The employer also agrees that the employer's authorized agent will coordinate the program, authorize all purchases in writing to the public employees retirement system, and be the focal point for communications between the public employees retirement system, the employer, and the employee.

8.The employer agrees that for each employee certified to be eligible to have service credit purchased, the employer will first obtain from the employee authorization for the public employees retirement system to share confidential information with the employer.

9.The employer certifies that in offering the program, the employer is making it available to all employees or a specified class of employees on a nondiscriminatory basis.

10.The employer agrees to provide information and policies pertaining to the employer purchase program pursuant to North Dakota Century Code section 39-03.1-28.

When an employer files the above letter with the public employees retirement system, it may offer the program to its employees. An employer may terminate this program at any time upon the governing

authority of the employer sending to the executive director of the public employees retirement system a letter indicating when the program is to be canceled.

History

• History: Effective May 1, 2004; amended effective July 1, 2006; April 1, 2008; July 1, 2010.
• Law Implemented: NDCC 39-03.1-10.2

Chapter 71-05-05 Normal and Early Retirement Benefits

N.D. Admin. Code 71-05-05-01 Normal and early retirement benefits - Application

Except as provided in section 71-05-05-02 for retirement options, applications for retirement, surviving spouse, and disability benefits must be filed at the public employees retirement system at least thirty days before normal or early retirement date or before the commencement of benefits. A member shall file a photocopy of the member's birth certificate and, if the member is married, a photocopy of the member's spouse's birth certificate and marriage certificate. A surviving spouse shall file a photocopy of the surviving spouse's birth certificate, deceased member's birth certificate, and marriage certificate for a benefit election under subsection 6 of North Dakota Century Code section 39-03.1-11. If a birth certificate is not available, a member or surviving spouse may submit other documentation based on policy and procedure adopted by the board.

History

• History: Effective October 1, 1991; amended effective May 1, 2004; April 1, 2014.

N.D. Admin. Code 71-05-05-02 Special retirement options - Application

1.A member may elect a retirement option by filing an application with the office no less than thirty days prior to the beginning date of benefit payments. An application may be filed later than thirty days prior to the beginning date of benefit payments if approved by the plan administrator upon receiving sufficient evidence that the application was delayed by the member's employer.

2.A member may revoke the election of an optional benefit as provided in subsection 1 and make a new election if such revocation is received in writing before the first retirement check is cashed but no later than fifteen days after the first retirement check has been issued. If the member changes the member's election less than fifteen days prior to the named beginning date of benefits, the first retirement payment may be delayed up to two months. Any delayed payment must be adjusted to include any deferred retirement payments. If the member's first retirement payment is paid by direct deposit and the member wishes to revoke the election of the benefit, then the member must immediately notify the public employees retirement system of the member's election. The benefit will only be revoked if the public employees retirement system is able to reverse the direct deposit paid to the bank within the bank reversal window.

3.A member may not revoke the elected benefit after receiving and cashing the first benefit check or if paid by direct deposit, after the bank reversal window has expired, unless the member can provide sufficient evidence to the executive director that the factual basis by which the election was made later proved to be incorrect and such was due in part to representation or misrepresentations made by the employer or the retirement office.

History

• History: Effective October 1, 1991; amended effective May 1, 2004; July 1, 2010.

N.D. Admin. Code 71-05-05-03 Payment date - Regular early and normal retirement benefits

Except for the retirement options provided in section 71-05-05-02, a member's normal or early retirement benefit must commence on the first day of the month which follows the member's eligibility for the benefit and which is at least thirty days after the date on which the member filed an application with the office.

Except for retirement options provided in sections 71-05-05-02 and 71-05-05-03, for members who are terminated and older than the age at which they reach their normal retirement date, but who have delayed or inadvertently failed to apply for retirement benefits, the regular accrued annuity benefits will commence with a lump sum equal to the amount of missed payments, without interest, retroactive to their normal retirement date unless the deferred normal retirement option is elected or otherwise approved by the North Dakota public employees retirement system board. There will be no retroactive payment for the retiree health insurance credit program.

History

• History: Effective October 1, 1991. 71-05-05-03.1. Payment date - Retirement benefits for late retirees.
• History: Effective April 1, 2008.

N.D. Admin. Code 71-05-05-04 Optional benefits

A member may elect, as provided in section 71-05-05-02, to receive one of the following optional benefits in lieu of the regular early or normal retirement benefit.

1.One hundred percent joint and survivor benefit. A member may receive an actuarially reduced retirement benefit during the member's lifetime and after the member's death the same amount will be continued to the member's surviving spouse during the spouse's lifetime.

The designated beneficiary is limited to the member's spouse. In the event the member's spouse predeceases the member or, in the event of divorce, the option shall be canceled and the member's benefit shall be returned to the normal retirement amount. Payment of the normal retirement amount shall commence on the first day of the month following the spouse's death providing written notification of death and a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

Payments of benefits to a member's surviving spouse must be made on the first day of each month, commencing on the first day of the month following the member's death, providing the beneficiary has supplied a marriage certificate, death certificate, birth certificate verifying age, and is still living. Benefits must terminate in the month in which the death of the beneficiary occurs.

2.Twenty-year or ten-year term certain. A member may elect an option which is the actuarial equivalent of the member's normal, early, or deferred vested retirement pension payable for life with a twenty-year or ten-year certain feature, as designated by the member.

A member may elect as provided in section 71-05-05-02 to receive one of the following benefit modifications:

1.Partial lump sum option. The partial lump sum option will only be available to members who retire on or after reaching their normal retirement date. This option is an irrevocable election and made at initial application for retirement. The payment is equal to twelve monthly payments determined under the normal annuity option. The member is permitted to choose one of the optional forms of payment for ongoing benefits. The ongoing benefits will be actuarially reduced to reflect the partial lump sum payment.

2.Deferred normal retirement option. The deferred normal retirement option will only be available to members who retire after reaching their normal retirement date. This option is an irrevocable election and made at initial application for retirement. The payment is in lieu of a lump sum equal to the amount of missed payments, without interest, retroactive to the member's normal retirement date. The ongoing benefits will be actuarially increased to reflect the lump sum.

3.Graduated benefit option. The graduated benefit option will only be available to members who retire after reaching normal retirement date. This option is an irrevocable election and made at initial application for retirement. The member is permitted to choose one of the optional forms of payment for ongoing benefits excluding the deferred normal retirement option or partial lump sum option. The ongoing benefits will be actuarially reduced to reflect the election of the graduated benefit.

History

• History: Effective October 1, 1991; amended effective July 1, 2006; April 1, 2008; July 1, 2010; April 1, 2012. 71-05-05-04.1. Benefit modifications.
• History: Effective July 1, 2010.

N.D. Admin. Code 71-05-05-05 Designation of beneficiary

A member may designate a beneficiary or beneficiaries by filing such designation with the office. A member shall have the right to change the member's designation of beneficiary without the consent of the beneficiary, but no such change is effective or binding unless it is received by the office prior to the death of the member. If a vested, married member designates a beneficiary other than or in addition to a spouse, the consent of the member's spouse is required before benefits can be paid other than to the member's spouse.

History

• History: Effective October 1, 1991; amended effective April 1, 2002.
• Law Implemented: NDCC 39-03.1-11(6)(7)(8)

N.D. Admin. Code 71-05-05-06 Lack of a designated beneficiary

If no beneficiary is designated by a member, any benefits due and payable must be paid to the estate. If the member has elected the one hundred percent joint and survivor option, and the designated beneficiary predeceases the member, the option must be canceled and the member's benefits must be returned to its unreduced amount.

History

• History: Effective October 1, 1991.

N.D. Admin. Code 71-05-05-07 Amount of early retirement benefit

The early retirement benefit must be an amount actuarially reduced from the normal retirement benefit by one-half of one percent for each month (six percent per year), that the member is younger than age fifty-five on the date of the member's early retirement benefit effective date.

History

• History: Effective October 1, 1991; amended effective July 1, 2010.

N.D. Admin. Code 71-05-05-08 Retirement - Dual membership

1.If a member elects to begin drawing monthly benefits while continuing to participate in the public employees retirement system, teachers' fund for retirement, or the teachers' insurance and annuity association college retirement equities fund, the provisions of section 71-02-04-09 must apply.

2.A defined contribution plan membership under North Dakota Century Code chapter 54-52.6 is not eligible for dual membership service and vesting rights in the highway patrol retirement plan under North Dakota Century Code chapter 39-03.1.

History

• History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004; July 1, 2026.
• General Authority: NDCC 39-03.1-14.1(1)(c)
• Law Implemented: NDCC 39-03.1-14.1

N.D. Admin. Code 71-05-05-09 Assignment or alienation of plan benefits

Benefits provided under the plan may not be assigned or alienated except as provided in North Dakota Century Code section 54-52-17.6.

History

• History: Effective April 1, 2002.
• Law Implemented: NDCC 39-03.1-14.2

N.D. Admin. Code 71-05-05-10 Erroneous payment of benefits - Overpayments

1.An "overpayment" means a payment of money by the public employees retirement system that results in a person receiving a higher payment than the person is entitled to under the provision of the retirement plan of membership.

2.A person who receives an overpayment is liable to refund those payments upon receiving an explanation and a written request for the amount to be refunded from the executive director.

All overpayments must be collected using the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like gains. If the cost of recovering the amount of the overpayment is estimated to exceed the overpayment, the repayment is considered to be unrecoverable.

3.If an overpayment of benefits was not the result of any wrongdoing, negligence, misrepresentation, or omission by the recipient, the recipient may make repayment arrangements subject to the executive director's approval within sixty days of the written notice of overpayment with the minimum repayment amount no less than fifty dollars per month. If repayment arrangements are not in place within sixty days of the date of the written notice of overpayment, the executive director shall offset the amount of the overpayment from the amount of future retirement benefit payments so that the actuarial equivalent of the overpayment is spread over the individual's benefit payment period.

4.If the overpayment was the result, in whole or in part, of the wrongdoing, negligence, misrepresentation, or omission of the recipient, the recipient is liable to pay interest charges at the rate of six percent on the outstanding balance to compensate the fund for lost earnings from the time the erroneous benefit was paid through the time it has been refunded in full.

Recovered funds are first applied to interest, and if any amount is left over, that amount is applied to principal. The recipient may make repayment arrangements, subject to the executive director's approval, within sixty days of the written request for refund with the minimum repayment amount no less than fifty dollars per month. If repayment arrangements are not in place within sixty days of the date of the written notice of overpayment, the executive director shall offset the amount of the overpayment from the amount of future retirement benefit payments so that the actuarial equivalent of the overpayment is spread over the benefit payment period.

5.If an individual dies prior to fully refunding an erroneous overpayment of benefits, the public employees retirement system must make application to the estate of the deceased to recover the remaining balance.

History

• History: Effective April 1, 2002; amended effective July 1, 2006; July 1, 2010.
• General Authority: NDCC 32-03-04, 39-03.1-06, 54-52-04(12), 54-52-14.2

N.D. Admin. Code 71-05-05-11 Erroneous payment of benefits - Underpayments

1.An "underpayment" means a payment of money by the public employees retirement system that results in a person receiving a lower payment than the person is entitled to under the provisions of the retirement plan of membership.

2.If an underpayment occurs, the amount of the lump sum payment must be paid within sixty days of the discovery of the error.

3.If the underpayment of benefits was not the result of any wrongdoing, negligence, misrepresentation, or omission by the employer or recipient, the underpayment of benefits is to include interest at the rate of six percent from the time the underpayment occurred.

4.If the underpayment of benefits was the result, in whole or in part, of the wrongdoing, negligence, misrepresentation, or omission of the employer or recipient, the underpayment of benefits will not include interest.

5.If an individual dies prior to receiving the underpayment of benefits, the public employees retirement system must pay the designated beneficiary on record, or in the absence of a designation of beneficiary, to the estate.

History

• History: Effective April 1, 2002; amended effective May 1, 2004; April 1, 2008.

N.D. Admin. Code 71-05-05-12 Erroneous payment of benefits - Appeals

1.A person not satisfied with repayment arrangements made under section 71-02-04-10 may appeal the executive director's decision in writing to the board. The written request must explain the basis of the appeal and must be received in the office within sixty days of the executive director's written decision.

2.The board may release a person from liability to refund an overpayment, in whole or in part, if it determines:

a.The receipt of overpayment is not the fault of the recipient.

b.It would be contrary to equity and good conscience to collect the refund.

History

• History: Effective April 1, 2002.

Chapter 71-05-06 Return of Contributions

N.D. Admin. Code 71-05-06-01 Return of contributions - Conditions for return

The accumulated contributions of a member who terminates permanent employment:

1.Before accumulating ten years of service credit and whose account balance is less than one thousand dollars must be automatically refunded unless the member elects to remain in an inactive status.

2.After accumulating ten years of service credit, accumulated contributions must be refunded upon application filed with the retirement office.

History

• History: Effective October 1, 1991; amended effective July 1, 2010.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-10.1

N.D. Admin. Code 71-05-06-02 Effect of return

Refund of accumulated contributions cancels all service credit accumulated prior to the refund and extinguishes the right to any benefits provided by North Dakota Century Code chapter 39-03. Any former member returning the member's refund, with interest at the actuarial rate of return, within sixty days from withdrawal must be reinstated.

History

• History: Effective October 1, 1991.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-10.1

Chapter 71-05-07 Return to Service

N.D. Admin. Code 71-05-07-01 Return to service - Retired member

The benefits of a retired member who returns to permanent employment must be suspended without interest accruing on the suspended account. Upon subsequent termination and retirement, the member is required to select the same benefit option as the option selected at initial retirement. The member's total benefit upon subsequent retirement must equal the original benefit plus the calculated benefit for the return-to-work period. The member's benefit attributable to any return-to-work period shall be based upon service and earnings attributable to the return-to-work period only and be calculated as follows:

1.The member's benefit must be based on the benefit provisions in effect at subsequent retirement and shall include the member's and spouse's ages, salary earned during the period of reemployment, total service earned after reemployment, and actuarial factors in effect at subsequent retirement.

2.If a member dies during subsequent employment, the member's initial retirement benefit option election will apply and the date of death will be considered the subsequent retirement date.

3.If a member's spouse dies during the subsequent employment of the member, section 71-05-05-04 applies to the member's initial and subsequent retirement benefit calculation.

History

• History: Effective October 1, 1991; amended effective May 1, 2004; July 1, 2010; April 1, 2020.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-11

N.D. Admin. Code 71-05-07-02 Return to service - Disabled member

If the recipient of a disability benefit returns to work, said member is responsible for reporting employment to the public employees retirement system.

1.If a member is working in a permanent full-time position and is eligible to participate in the North Dakota highway patrolmen's retirement system, monthly benefits from the North Dakota highway patrolmen's retirement system must be suspended. If an individual is not able to continue employment for a consecutive period of time resulting in nine months of service credit as a result of the disability and continues to meet eligibility requirements under the plan, that member may resume disability status with the North Dakota highway patrolmen's retirement system.

2.If a member is receiving disability benefits from the North Dakota highway patrolmen's retirement system, and returns to substantial gainful activity in employment not covered under the highway patrolmen's retirement system, the disability benefit may continue for up to nine consecutive months. If the individual is not able to continue employment for a consecutive period of time resulting in nine months of service credit as a result of the disability and continues to meet eligibility requirements under the plan, that member may continue disability status with the North Dakota highway patrolmen's retirement system.

3.If a member becomes ineligible for a disability benefit from the North Dakota highway patrolmen's retirement system, the disability benefit will be discontinued on the date the member becomes ineligible for disability status.

History

• History: Effective October 1, 1991; amended effective April 1, 2020.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-11

Chapter 71-05-08 Qualified Domestic Relations Orders

N.D. Admin. Code 71-05-08-01 Payment in accordance with qualified domestic relations orders

Retirement benefits must be paid in accordance with any qualified domestic relations order (QDRO) issued in compliance with subsection 4 of North Dakota Century Code section 39-03.1-11.

History

• History: Effective October 1, 1991.
• General Authority: NDCC 39-03.1-14.2
• Law Implemented: NDCC 39-03.1-14.2

N.D. Admin. Code 71-05-08-02 Qualified domestic relations orders procedures

1.Upon receipt of a proposed domestic relations order, the public employees retirement system shall send an initial notice to each person named therein, including the member and the alternate payee named in the order, together with an explanation of the procedures followed by the fund.

2.If a member who is not in pay status at the time the proposed domestic relations order, or notice of intent to submit a proposed domestic relations order, was received from the member, the member's legal representative, or an individual authorized to receive confidential information under subsection 8 of North Dakota Century Code section 39-03.1-28, makes application for a lump sum distribution due to termination of employment, the application for lump sum distribution will be held until such time as the proposed domestic relations order is determined to be qualified and a certified copy of such order is received at the North Dakota public employees retirement system office or until the end of the eighteen-month review period, or until the North Dakota public employees retirement system office receives notice that a proposed domestic relations order will not be submitted, whichever occurs first.

3.Upon receipt of a domestic relations order, the public employees retirement system shall review the domestic relations order to determine if it is a qualified order as established by the model language format specified by the board.

4.The domestic relations order shall be considered a qualified order when the executive director notifies the parties the order is approved and a certified copy of the court order has been submitted to the office.

5.If the order becomes qualified, the executive director shall:

a.Send notice to all persons named in the order and any representatives designated in writing by such person that a determination has been made that the order is a qualified domestic relations order.

b.Comply with the terms of the order. 6.a.If the order is determined not to be a qualified domestic relations order or a determination cannot be made as to whether the order is qualified or not qualified within eighteen months of receipt of such order, the public employees retirement system shall send written notification of termination of review to all parties at least forty-five days prior to the end of the eighteen-month review period. At the end of the eighteen-month review period, the proposed order is deemed to be withdrawn and of no legal effect.

b.If a member who was not in pay status at the time the proposed domestic relations order was received made application for a lump sum distribution due to termination of eligible employment, the application for lump sum distribution will be processed at the end of the eighteen-month review period.

c.If determined after the expiration of the eighteen-month period the order is a qualified domestic relations order, the qualified domestic relations order must be applied prospectively only.

History

• History: Effective October 1, 1991; amended effective July 1, 1994; July 1, 2006; April 1, 2012; April 1, 2014.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-14.2

Chapter 71-05-09 Indexing Final Average Salary for Vested Terminated Contributors

N.D. Admin. Code 71-05-09-01 Calculation of final average salary increase for deferred vested contributors

Final average salary used for calculating deferred vested retirement benefits for contributors who terminate with ten or more years of service in the highway patrol retirement system must be increased on an annual basis following the contributor's termination date until the date the contributor begins to receive retirement benefits.

The increase must be approximately equal to or less than the annual salary increase provided by law to state employees at a rate set by the board upon the recommendation of the plan's actuary.

If the increase is for a period of less than twelve months, the increase must be in proportion to the number of months in the period.

History

• History: Effective July 1, 1994.
• General Authority: NDCC 39-03.1-06
• Law Implemented: NDCC 39-03.1-11(5)

N.D. Admin. Code 71-05-09-02 Multiple plan members

If a contributor has a combination of ten years of cumulative service with the public employees retirement system, the teachers' fund for retirement, and the highway patrol retirement system, a contributor's final average salary for the highway patrol retirement system must be increased in the manner provided for in section 71-05-09-01.

History

• History: Effective July 1, 1994.
• General Authority: NDCC 39-01.1-11, 39-03.1-06
• Law Implemented: NDCC 39-03.1-11(5), 39-03.1-14.1(1)

Article 71-06 Retiree Health Insurance Credit

Chapter 71-06-01 Retiree Health Insurance Credit

N.D. Admin. Code 71-06-01-01 Eligibility for retiree health insurance credit applied to premiums for annuitants and surviving spouses under the North Dakota public employees retirement system, the North Dakota highway patrolmen's retirement system, the retired judges under North Dakota Century Code chapter 27-17, annuitants of the job service retirement program, and former participating members of the defined contribution retirement plan receiving periodic distributions

N.D. Admin. Code 71-06-01-02 Calculation of retiree health insurance credit

Retiree health insurance credit will be calculated on actual years and months of service, identical to retirement benefits under North Dakota Century Code chapter 54-52.

1.Retiree health insurance credit will be subject to reduction factors in the event of early retirement.

For annuitants of the public employees retirement system defined benefit plan and North Dakota public employees retirement system judges, and for members of the defined contribution retirement plan, excluding national guard/law enforcement and highway patrol retirees, who take a periodic distribution:

Age at RetirementReduction FactorAge at RetirementReduction Factor 64 to 653%59 to 6033% 63 to 649%58 to 5939% 62 to 6315%57 to 5845% 61 to 6221%56 to 5751% 60 to 6127%55 to 5657% For annuitants of the job service retirement program: This includes those who retired under a discontinued service annuity but does not include those who retired at a normal or optional date. 64 to 653%59 to 6033%54 to 5563% 63 to 649%58 to 5939%53 to 5469% 62 to 6315%57 to 5845%52 to 5375% 61 to 6221%56 to 5751%51 to 5281% 60 to 6127%55 to 5657%50 to 5187% For annuitants of the highway patrol fund and national guard/law enforcement retirees and national guard/law enforcement retirees who transferred to the defined contribution retirement plan:

Age at RetirementReduction Factor 54 to 553% 53 to 549% 52 to 5315% 51 to 5221% 50 to 5127%

2.Disabled annuitants receiving benefits under subdivision g of subsection 3 of North Dakota Century Code section 54-52-17, subdivision d of subsection 3 of North Dakota Century Code

section 39-03.1-11, North Dakota Century Code section 52-11-01, or section 71-02-05-05 will be eligible for full retiree health insurance credit benefits. No age reduction factor will be applied.

3.A surviving spouse eligible to receive benefits under paragraph 2 of subdivision a and paragraphs 2 and 3 of subdivision b of subsection 6 of North Dakota Century Code section 54-52-17, subdivision b of subsection 6 of North Dakota Century Code section 39-03.1-11, or North Dakota Century Code section 52-11-01 will receive retiree health insurance credit based on the deceased member's years of service without any age reduction applied.

4.A surviving spouse receiving benefits under the provisions of subdivision b, c, d, or e of subsection 9 of North Dakota Century Code section 54-52-17; subdivisions a, b, and c of subsection 5 of North Dakota Century Code section 27-17-01; subsection 9 of North Dakota Century Code section 39-03.1-11; or North Dakota Century Code section 52-11-01 will receive retiree health insurance credit for the duration benefits are paid, based upon the original annuitant's retirement age.

History

• History: Effective April 1, 1992; amended effective June 1, 1996; July 1, 2000; July 1, 2010; April 1, 2016; April 1, 2020.

N.D. Admin. Code 71-06-01-03 For retirees receiving more than one benefit entitled to retiree health insurance credit

1.If a retiree is receiving more than one benefit from the public employees retirement system, or other participating system; one as a surviving spouse, and the other based upon the retiree's own service credit, the retiree health insurance credit for each benefit will be combined with an effective date based on eligibility in accordance with North Dakota Century Code section 54-52.1-03.3.

2.If the retiree was employed by a political subdivision which does not participate in the public employees retirement system health plan, and is drawing a retirement benefit or a surviving spouse benefit, the individual may receive the retiree health insurance credit as any other retiree based upon a retiree premium.

3.If a husband and wife are both receiving a benefit from a retirement system that provides the retiree health insurance credit, the retiree health insurance credit will be applied as follows:

a.Each will have their respective retiree health insurance credit reimbursed for their respective premiums.

b.If only one retiree takes a family health plan under the uniform group health insurance program, they may make application with the public employees retirement system to combine retiree health insurance credits.

Retirees are responsible for making application with the public employees retirement system to combine and discontinue combining retiree health insurance credits.

4.Retirees with service credit in more than one of the participating retirement systems will have their respective retiree health insurance credit for each benefit combined with an effective date based on eligibility in accordance with North Dakota Century Code section 54-52.1-03.1.

Surviving spouses receiving multiple benefits from retirement systems that provide the retiree health insurance credit will have their respective retiree health insurance credit for each benefit combined with an effective date based on eligibility in accordance with North Dakota Century Code section 54-52.1-03.3.

History

• History: Effective April 1, 1992; amended effective June 1, 1996; July 1, 1998; April 1, 2008; April 1, 2012; April 1, 2016.

N.D. Admin. Code 71-06-01-04 Employer paid health premiums

Repealed effective July 1, 1998.

N.D. Admin. Code 71-06-01-05 Member contributions

Any member contribution received for purposes of retiree health insurance credit must be refunded without interest to any member who terminates employment and who receives a refund of retirement contributions.

History

• History: Effective April 1, 1992; amended effective June 1, 1996.
• Law Implemented: NDCC 54-52.1-01(1)(c)

N.D. Admin. Code 71-06-01-06 Erroneous crediting of the retiree health insurance credit. 71-06-01-06.1. Retroactive payment of the retiree health insurance credit

N.D. Admin. Code 71-06-01-07 Optional benefits

A married member may elect to receive one of the following optional retiree health credit benefits in lieu of the retiree health insurance credit option provided in this chapter:

1.Fifty percent joint and survivor benefit. A member shall receive an actuarially reduced retiree health insurance credit during the member's lifetime and after the member's death one-half the rate of the reduced benefit will be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse.

Benefits shall terminate in the month in which the death of the beneficiary occurs. If the member's spouse predeceases the member or, in the event of divorce, the member's benefit must be returned to the standard option amount. The standard option amount must commence on the first day of the month following the spouse's death if a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

2.One hundred percent joint and survivor benefit. A member shall receive an actuarially reduced retiree health insurance credit during the member's lifetime and after the member's death the same amount will be continued to the member's surviving spouse during the spouse's lifetime. The designated beneficiary is limited to the member's spouse. Benefits shall terminate in the month in which the death of the beneficiary occurs. If the member's spouse predeceases the member or, in the event of divorce, the member's benefit must be returned to the standard option amount. The standard option amount shall commence on the first day of the month following the spouse's death providing written notification of the death and a death certificate has been submitted or, in the event of divorce, a photocopy of the divorce decree.

History

• History: Effective July 1, 1998; amended effective April 1, 2008; April 1, 2016.

N.D. Admin. Code 71-06-01-08 Vesting in retiree health credit for members of the defined contribution retirement plan

Notwithstanding section 71-02-03-01.1, members of the defined contribution retirement plan vest in their retiree health credit in the same manner as members of the retirement program to which they would belong if they had not elected to participate in the defined contribution retirement plan, including the earning of service credit, the reduction for early retirement, and credit granted pursuant to section 71-02-03-01.

History

• History: Effective July 1, 2000.
• General Authority: NDCC 54-52.1-03.2(1)(b)
• Law Implemented: NDCC 54-52.1-03.3, 54-52.6-02

N.D. Admin. Code 71-06-01-09 Payment - Retiree health insurance credit benefits

Eligible retiree health insurance credit benefits that have been substantiated by the office must be directly deposited into a financial account identified by the member or sent to the member's last-known address. If the benefit checks are returned with no forwarding information, the benefits will remain in the fund, and will be distributed in a lump sum upon location of the member. If two consecutive checks issued remain uncashed, future payments will be suspended until the member makes payment arrangements with the office.

History

• History: Effective July 1, 2018.

N.D. Admin. Code 71-06-01-10 Withdrawal

Withdrawal under this chapter is governed by section 71-02-08-02.

History

• History: Effective April 1, 2019.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52-02

N.D. Admin. Code 71-06-01-11 Erroneous payment of benefits - Overpayments, underpayments, and appeals

1.Section 71-02-04-10 applies to overpayments of the retiree health insurance credit.

2.Section 71-02-04-11 applies to underpayments of the retiree health insurance credit.

3.A person who has received written notice pursuant to section 71-02-04-10 that the person received an overpayment of the retiree health insurance credit and is not satisfied with repayment arrangements related to the retiree health insurance credit may appeal as provided in section 71-02-04-12.

History

• History: Effective July 1, 2026.
• General Authority: NDCC 54-52-04

Article 71-07 Pretax Benefits Program

Chapter 71-07-01 General Organization

N.D. Admin. Code 71-07-01-01 Plan document

The board must prepare a plan document for the pretax benefits program. The plan document must meet applicable requirements of the Internal Revenue Code. The board must annually review any plan document updates prior to the beginning of each new plan year if necessary due to changes in federal law. Modifications must be made to reflect changes in the program and to maintain a qualifiable program pursuant to the Internal Revenue Code.

History

• History: Effective April 1, 1992; amended effective April 1, 2014.
• General Authority: NDCC 54-52-04, 54-52.3-02
• Law Implemented: NDCC 54-52.3-02

N.D. Admin. Code 71-07-01-02 Summary plan document

Upon request of the employee, the retirement board shall make available a descriptive booklet setting forth the enrollment requirements of the plan and explanation of the pretax benefits program under section 125 of the Internal Revenue Code.

History

• History: Effective April 1, 1992; amended effective May 1, 2004.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52.3-02

N.D. Admin. Code 71-07-01-03 Program moneys

Within six months of the end of the plan year, the executive director must return to the payroll clearing account any surplus in the pretax benefits account. Surplus includes employer Federal Insurance Contributions Act tax savings and forfeited employee account balances not used to offset the administrative expenses of the program, negative account balances, and the projected funds necessary to provide for short-term cashflow requirements when paying claims in the new plan year for the medical spending account.

History

• History: Effective April 1, 1992.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52.3-06

Article 71-08 Defined Contribution Retirement Plan

Chapter 71-08-01 Election and Transfer

N.D. Admin. Code 71-08-01-01 Ability to elect to transfer into the defined contribution retirement plan

Repealed effective January 1, 2025.

N.D. Admin. Code 71-08-01-02 Vesting in transferred accumulated fund balance

Vesting in that portion of the accumulated fund balance attributable to the employer's contribution which is transferred from the defined benefit public employees retirement system pursuant to North Dakota Century Code section 54-52.6-03 will follow the same schedule provided in North Dakota Century Code section 54-52.6-10.

History

• Law Implemented: NDCC 54-52.6-03, 54-52.6-10

N.D. Admin. Code 71-08-01-03 Spousal signature requirements

For purposes of the spousal signature requirements of subsection 4 of North Dakota Century Code

section 54-52.6-02 and North Dakota Century Code section 54-52.6-11, extenuating circumstances alleviating the requirement of a spouse's signature are only present if the board determines the spouse is unavailable for the entire election period or the member has a power of attorney over the spouse which would legally allow the member to sign for the spouse.

History

• Law Implemented: NDCC 54-52.6-02(4), 54-52.6-11

N.D. Admin. Code 71-08-01-04 Transfer of members with qualified domestic relations orders on their accounts

Members of the public employees retirement system under North Dakota Century Code chapter 54-52 who have a valid qualified domestic relations order on their account may only transfer to the defined contribution retirement plan if they obtain a new qualified domestic relations order from the applicable court. The account shall not be transferred unless both the participating member and the member's ex-spouse agree to transfer to the defined contribution retirement plan.

History

• Law Implemented: NDCC 54-52.6-12

N.D. Admin. Code 71-08-01-05 Transfer amount of persons transferring into eligible employment after December 31, 1999

The amount the board shall transfer for persons beginning or transferring to eligible employment after December 31, 1999, and before January 1, 2025, must equal the actual employer and employee contributions plus interest, as provided in subsection 2 of North Dakota Century Code section 54-52.6-03.

History

• History: Effective July 1, 2000; amended effective January 1, 2025.
• General Authority: NDCC 54-52-04
• Law Implemented: NDCC 54-52.6-03

N.D. Admin. Code 71-08-01-06 Public employees retirement system retirees not eligible to transfer upon return to work

A member of the public employees retirement system defined benefit plan who has retired and received a retirement annuity and later returns to work in a position that is eligible for the defined contribution retirement plan is nonetheless ineligible to transfer into the defined contribution retirement plan and must remain a member of the public employees retirement system.

History

• Law Implemented: NDCC 54-52.6-02

N.D. Admin. Code 71-08-01-07 Late election opportunity

Repealed effective January 1, 2025.

N.D. Admin. Code 71-08-01-08 Transfer of funds

Pursuant to subdivision a of subsection 4 of North Dakota Century Code section 15-10-17, funds may be transferred on behalf of those persons who are eligible through their employment with the state board of higher education. The following requirements apply:

1.Applicant must file a completed application for the teachers' insurance and annuity association of America - college retirement equities fund.

2.Notice of termination and verification of teachers' insurance and annuity association of America - college retirement equities fund eligibility must be filed by either the applicant or appropriate payroll officer.

3.A participating member is eligible to transfer that person's accumulated balance in the plan upon becoming a former participating member.

History

• History: Effective April 1, 2012.
• General Authority: NDCC 15-10-17
• Law Implemented: NDCC 15-10-17

Chapter 71-08-02 Membership in Defined Contribution Retirement Plan

N.D. Admin. Code 71-08-02-01 Membership of individuals who become employees covered under the judges' plan, the national guard plan, the bureau of criminal investigation plan, the public safety plan, the highway patrol retirement plan, the teachers' fund for retirement plan, or the alternate retirement plan of the state board of higher education

1.If a member of the defined contribution retirement plan begins employment in a position covered under the judges' plan, the national guard plan, the bureau of criminal investigation plan, the public safety plan, the highway patrol retirement plan, the teachers' fund for retirement plan, or the alternate retirement plan of the state board of higher education, the member's status as a member of the defined contribution retirement plan is suspended and the member becomes a new member of the retirement plan for which that member's new position is eligible. The member's account balance remains in the defined contribution retirement plan, but new contributions may not be made to that account. The member's service credit and salary history that were forfeited as a result of the member's transfer to the defined contribution retirement plan remain forfeited, and service credit accumulation in the new retirement plan begins from the first day of employment in the new position. If the member later returns to employment that is eligible for the defined contribution plan, the member's suspension is terminated, the member again becomes a member of the defined contribution plan, and the member's account shall resume accepting contributions. The contributions to the alternate retirement plan must remain with that plan unless at the member's option, the member elects to transfer any available balance as determined by the provisions of the alternate retirement plan into the member's account in the defined contribution retirement plan.

2.Any membership service and vesting obtained the judges' plan, the main plan, the national guard plan, the bureau of criminal investigation plan, the public safety plan, the highway patrol retirement plan, the teachers' fund for retirement plan, or the alternate retirement plan of the state board of higher education, may not be used toward credited service and vesting in the defined contribution plan under North Dakota Century Code chapter 54-52.6.

History

• History: Effective July 1, 2000; amended effective April 1, 2002; July 1, 2006; April 1, 2020; July 1, 2026.
• General Authority: NDCC 28-32-02(1)
• Law Implemented: NDCC 54-52.6-01(3)

N.D. Admin. Code 71-08-02-02 Continuation of membership

Other than as provided in section 71-08-02-01, a former participating member of the defined contribution retirement plan who returns to state employment following a previous termination or retirement continues to be a member of the defined contribution retirement plan even if the member took one of the distributions allowed by North Dakota Century Code section 54-52.6-13.

History

• History: Effective July 1, 2000.
• General Authority: NDCC 28-32-02(1)
• Law Implemented: NDCC 54-52.6-02

N.D. Admin. Code 71-08-02-03 Nonstate elected officials - Membership and return to service

1.Purpose. North Dakota Century Code section 54-52-02.11 and subsection 3 of section 54-52.6-02.1 conflict with Internal Revenue Code sections 401(a)(36) and 401(k)(4)(B)(ii) and related regulations and relevant guidance.

Pursuant to the authority granted to the board under North Dakota Century Code sections 54-52-23 and 54-52.6-23, the purpose of this section is to ensure compliance with federal statutes and rules until the conflict between North Dakota Century Code section 54-52-02.11 and subsection 3 of section 54-52.6-02.1 and federal law is addressed by the legislative assembly.

2.Membership. A county elected official shall participate in the defined contribution retirement plan as provided under section 71-02-02-02.

3.Return to service.

a.Before August 1, 2027, a request by a county elected official to receive in-service benefit distributions must be approved as provided under section 71-02-02-02.

b.Retroactive effective date. This subsection is retroactive to July 1, 2007.

4.Sunset provision. This section must terminate on the effective date of any measure enacted by the legislative assembly providing the necessary amendments to the North Dakota Century Code to ensure compliance with the federal statutes or rules.

History

• History: Effective July 31, 2025; amended effective January 1, 2026.
• General Authority: NDCC 54-52-04, 54-52.6-23
• Law Implemented: NDCC 54-52-02.15, 54-52.6-02

Chapter 71-08-03 Disability

N.D. Admin. Code 71-08-03-01 Disability distribution

The board shall allow distribution of the participating member's vested account balance if the board determines the participating member has become totally and permanently disabled using the procedure provided in section 71-02-05-06. If approved, the disabled member has the same distribution options as provided in paragraphs 1 and 3 of subdivision a of subsection 3 of North Dakota Century Code section 54-52.6-13. However, if the member chooses the periodic distribution option, the member only must be allowed to receive distributions for as long as the 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. The board shall use the redetermination and recertification procedures provided in section 71-02-05-06 to determine whether the member remains disabled. If the board determines that a member no longer meets the eligibility definition, the board shall discontinue the disability retirement benefit.

History

• History: Effective July 1, 2000; amended effective July 1, 2026.
• General Authority: NDCC 28-32-02(1)
• Law Implemented: NDCC 54-52.6-14

Chapter 71-08-04 Qualified Domestic Relations Orders

N.D. Admin. Code 71-08-04-01 Payment in accordance with qualified domestic relations orders

Retirement moneys must be paid in accordance with any qualified domestic relations order issued in compliance with North Dakota Century Code section 54-52.6-12.

History

• History: Effective July 1, 2000.
• General Authority: NDCC 28-32-02(1)
• Law Implemented: NDCC 54-52.6-12

N.D. Admin. Code 71-08-04-02 Qualified domestic relations orders procedures

1.Upon receipt of a proposed domestic relations order, the public employees retirement system shall:

a.Send an initial notice to each person named therein, including the member and the alternate payee named in the order, with an explanation of the procedures followed by the fund.

b.If a member who is not in pay status at the time the proposed domestic relations order, or notice of intent to submit a proposed domestic relations order, was received from the member, the member's legal representative, or an individual authorized to receive confidential information under subsection 8 of North Dakota Century Code section 54-52-26, makes application for a lump sum distribution due to termination of employment, the application for lump sum distribution will be held until such time as the proposed domestic relations order is determined to be qualified and a certified copy of such order is received at the North Dakota public employees retirement system office or until the end of the eighteen-month review period, or until the North Dakota public employees retirement system office receives notice that a proposed domestic relations order will not be submitted, whichever occurs first.

c.Review the domestic relations order to determine if it is a qualified order as established by the model language format specified by the board.

2.The domestic relations order shall be considered a qualified order when the executive director notifies the parties the order is approved and a certified copy of the court order has been submitted to the office.

3.If the order becomes qualified, the executive director shall:

a.Send notice to all persons named in the order and any representative designated in writing by such person that a determination has been made that the order is a qualified domestic relations order.

b.Comply with the terms of the order.

c.Allow the alternate payee to choose the appropriate investment options for the alternate payee's account.

d.Allow the alternate payee to choose the same payout options allowed for the member.

4.If the order is determined not to be a qualified domestic relations order or a determination cannot be made as to whether the order is qualified or not qualified within eighteen months of receipt of such order, the public employees retirement system shall send written notification of termination of review to all parties at least forty-five days prior to the end of the eighteen-month review period. At the end of the eighteen-month review period, the proposed order is deemed to be withdrawn and of no legal effect.

a.If a member who was not in pay status at the time the proposed domestic relations order was received made application for a lump sum distribution due to termination of employment, the application for lump sum distribution will be processed at the end of the eighteen-month review period.

b.If determined after the expiration of the eighteen-month period the order is a qualified domestic relations order, the qualified domestic relations order must be applied prospectively only.

History

• History: Effective July 1, 2000; amended effective July 1, 2006; April 1, 2012; April 1, 2014.
• General Authority: NDCC 28-32-02(1)
• Law Implemented: NDCC 54-52.6-12

Chapter 71-08-05 Review Procedure

N.D. Admin. Code 71-08-05-01 Review procedure

The board shall use the same review and formal review procedures as provided in chapter 71-02-09.

History

• History: Effective July 1, 2000.
• General Authority: NDCC 28-32-02(1)
• Law Implemented: NDCC 54-52.6-13

Chapter 71-08-06 Uniformed Services Employment and Reemployment Rights Act

N.D. Admin. Code 71-08-06-01 Eligibility requirements

To be eligible to receive service credit with the defined contribution plan for military time under this

chapter, a veteran must have had an interruption of the veteran's employment and been discharged under honorable conditions.

History

• History: Effective May 1, 2004.
• General Authority: NDCC 54-52.6-04, 54-52-02

N.D. Admin. Code 71-08-06-02 Award of service credit

A veteran with eligible time may receive up to sixty months' credit upon proper application. A veteran eligible to receive service credit for military time must apply for and, if required to pay any portion of the employee contribution, purchase that time within the lesser of three times the length of active duty or five years from the date of that person's return to covered employment after an honorable discharge. Service credit will not be awarded until all required documentation is received by the North Dakota public employees retirement system. If payment of required employer and employee contributions is made, the service will be recognized for both benefit eligibility and benefit calculation purposes. If payment of required employer and employee contribution is not made, then the veteran's application for service will be recognized and credit will be used for benefit eligibility purposes only.

History

• History: Effective May 1, 2004; amended effective July 1, 2006; April 1, 2012.
• General Authority: NDCC 54-52.6-04, 54-52-04
• Law Implemented: NDCC 54-52.6-09.4; 38 USC 4318(a)(2)(A), 38 USC 4318(a)(2)(B), 38 USC 4318(b)(2); 20 CFR1002.259-262

N.D. Admin. Code 71-08-06-03 Documentation requirements

The burden of proof will be on the member for providing documentation necessary to determine what military time is eligible for service credit. At a minimum, the following documentation is required before service credit will be awarded:

1.The member must provide a legible copy of military discharge papers indicating an honorable discharge (DD214, DD215, or NGB22).

2.The member must provide proof of the last day of employment prior to reporting for active duty and the first day of employment following the return from active duty. This information must be certified by the authorized agent of the employing agency using a "Purchase Agreement for USERRA Covered Military Active Duty" or notice of change if returning from leave of absence.

3.The members requesting service credit for extended military terms must provide a legible copy of the appropriate military papers (DD214).

4.A member who elects to purchase military time must submit a completed purchase agreement.

History

• History: Effective May 1, 2004; amended effective July 1, 2006.

N.D. Admin. Code 71-08-06-04 Cost

The cost for purchase of eligible military service in the defined contribution plan may be paid as follows:

1.The cost for any required employee contributions to be paid by the member may be paid in a lump sum or in installments pursuant to the rules established for purchase or repurchase payment under subsection 3, 4, or 5 of section 71-02-03-02.2. If no payments have been made, no credit will be awarded for benefit calculation purposes.

2.The employer cost will be assessed to the member's most recent participating employer. Upon being billed by the public employees retirement system, the participating employer will have thirty days in which to make payment in full. If, after sixty days, the employer has not made payment in full, a civil penalty of fifty dollars will be assessed, and, as interest, one percent of the amount due for each month of delay or fraction thereof after the payment became due.

History

• History: Effective May 1, 2004; amended effective July 1, 2006; July 1, 2010; April 1, 2012.
• Law Implemented: NDCC 54-52.6-09.4; 38 USC 4318(a)(2)(A), 38 USC 4318(a)(2)(B), 38 USC 4318(b)(2); 20 CFR 1002.259-262

N.D. Admin. Code 71-08-06-05 Refund of overpayments

If an employee purchased military service at a cost higher than determined in this chapter, overpayments may be refunded. Upon verification that the previously purchased military service meets the general eligibility requirements under section 71-08-06-01, a refund may be issued according to the following guidelines:

1.For a purchase paid in a lump sum:

a.The overpayment will be refunded to the member.

b.The refund will be calculated and issued within one hundred eighty days of receiving all necessary documentation.

2.For a purchase paid in installments:

a.If the employee is currently making installment payments, the purchase amount will be recalculated using the percentage of salary that the member was required to pay times eligible months of military time being purchased. Any excess funds resulting from the recalculation will be applied toward the outstanding amount due. Should the payments made to date exceed the new contract amount, a refund of the difference will be issued within one hundred eighty days.

b.If an eligible employee or retiree has paid the installment contract in full, the purchase amount will be recalculated using the percentage of salary that the member was required to pay times eligible months of military time being purchased. A refund of the difference between the payments actually made and what the payments should have been on the new contract amount will be made within one hundred eighty days of receiving the necessary documentation.

History

• History: Effective May 1, 2004; amended effective July 1, 2006.

Chapter 71-08-07 Additional Contributions

N.D. Admin. Code 71-08-07-01 Additional employer contributions

An employer may elect to provide additional employer contributions to an employee's account in an amount not exceeding the equivalent of a purchase of up to five years of service credit for that employee and the purchase of an employee's unused sick leave that meets the requirements of section

N.D. Admin. Code 71-08-07-02 Before offering such a program to its employees, an employer must create a program and document it in writing and submit a copy to the public employees retirement system. The governing

authority of the employer shall also submit to the executive director of the public employees retirement system a letter indicating:

1.The program meets all the requirements of the North Dakota Century Code.

2.The program meets all applicable federal requirements.

3.The employer agrees to remit to the public employees retirement system a lump sum payment of the cost of the purchase upon being billed.

4.The employer has not given the employee the option of a cash payment in lieu of the employer purchase.

5.The employer shall clearly specify who is eligible for the program and indicate if the program is intended to be permanent or will be for a specific time period only.

6.The employer agrees that all additional employer contributions will not exceed the equivalent of a purchase of service credit as determined by the public employees retirement system and all unused sick leave purchases will be based upon the computation specified in the North Dakota Century Code. The employer also agrees that all purchases will be completed no later than the fifteenth day of the month following the month of the employee's termination or sixty days from the date the employer and employee agree to the purchase, whichever comes first.

7.The employer agrees that in offering such a program the employer will direct each employee interested in the program to first apply to the employer's authorized agent who will then certify the eligibility of the member and the amount of service credit to be purchased or sick leave to be converted and send such certification to the public employees retirement system. The employer also agrees that the employer's authorized agent will coordinate the program, authorize all purchases in writing to the public employees retirement system and be the focal point for communications between the public employees retirement system, the employer, and the employee.

8.The employer agrees that for each employee certified to be eligible to have service credit purchased or sick leave converted, the employer will first obtain from the employee authorization for the public employees retirement system to share confidential information with the employer.

9.The employer certifies that in offering the program, the employer is making it available to all employees or a specified class of employees on a nondiscriminatory basis.

10.The employer agrees to provide information and policies pertaining to the employer purchase program pursuant to North Dakota Century Code section 54-52-26.

When an employer files the above letter with the public employees retirement system, the employer may offer the program to its employees. An employer may terminate this program at any time upon the governing authority of the employer sending to the executive director of the public employees retirement system a letter indicating when the program is to be canceled.

History

• History: Effective May 1, 2004; amended effective July 1, 2006; April 1, 2008; July 1, 2010.
• Law Implemented: NDCC 54-52.6-09.2

N.D. Admin. Code 71-08-07-02 Eligible sick leave

An employer may provide additional contributions equal to the purchase of an employee's unused sick leave only to the extent that it has not been previously purchased by a former employer or the member.

History

• History: Effective May 1, 2004; amended effective July 1, 2006.
• Law Implemented: NDCC 54-52.6-09.2

N.D. Admin. Code 71-08-07-03 Employee-paid contributions - Repayment options

If the office determines that any required employee-paid contributions have not been made, the cost of any required employee-paid contributions may be paid in a lump sum or in installments in a manner consistent with installment payments permitted under section 71-02-03-02.2.

History

• History: Effective April 1, 2016.
• Law Implemented: NDCC 54-52.6-09

Chapter 71-08-08 Temporary Employee Participation

N.D. Admin. Code 71-08-08-01 Temporary employee participation

For each eligible temporary employee who elects to participate as such in the defined contribution plan, the following applies:

1.A temporary employee hired before January 1, 2025, must submit a completed participation agreement within six months of the date of hire as a temporary employee or within six months of a change in status from a permanent to temporary position. If no application is made and filed with the office, an irrevocable waiver of participation will occur for as long as the employee is in temporary status.

2.Contributions for temporary employees must be submitted no later than the sixth working day of the month for the previous month's salary.

3.Delinquent payments of over thirty days, for reasons other than leave of absence or seasonal employment, will result in termination of eligibility to participate as a temporary member.

4.Upon taking a refund, future participation as a temporary member is waived.

5.A member may not participate as both a permanent and a temporary member. Permanent employment has precedence.

6.All temporary employee contributions must be made on an after-tax basis. An employer may not enter into a pickup arrangement under IRC 414(h) with any temporary employee.

7.A temporary employee first employed after December 31, 2024, may elect, within one hundred eighty days of beginning employment, to participate in the defined contribution retirement plan under this chapter. If an application is not made and filed with the office, a waiver of participation must occur for as long as the employee is in temporary employee status.

Monthly, the temporary employee shall contribute an amount equal to nine and twenty-six hundredths percent times the temporary employee's present monthly salary, and may elect to contribute up to an additional one, two, three, four, five, or six percent. The election to contribute an additional percent is a lifetime election and will continue for as long as the temporary employee is employed by any participating employer.

8.A temporary employee may continue to participate as a temporary employee until termination of employment or reclassification of the temporary employee as a permanent employee. For a temporary employee who becomes a permanent employee, all provisions applicable to permanent employees apply upon eligibility as a permanent employee.

History

• History: Effective July 1, 2006; amended effective January 1, 2025.
• General Authority: NDCC 54-52-04, 54-52.6
• Law Implemented: NDCC 54-52-02.9, 54-52.6-09.6

Chapter 71-08-09 Return to Service - Retired Member

N.D. Admin. Code 71-08-09-01 Return to service - Retired member

The benefits of a retired member of the defined contribution plan who returns to permanent employment must be suspended except as provided in section 71-08-02-03 and North Dakota Century Code section 54-52.6-02.

History

• History: Effective July 1, 2006; amended effective July 31, 2025; January 1, 2026.
• General Authority: NDCC 54-52-04, 54-52.6, 54-52.6-23
• Law Implemented: NDCC 54-52-02.15, 54-52.6-01(7), 54-52.6-02, 54-52.6-02(7)

Chapter 71-08-10 Permanent Employee Participation

N.D. Admin. Code 71-08-10-01 Permanent employee participation

1.Under this chapter "eligible employee" means a permanent employee who:

a.Meets all the eligibility requirements set by North Dakota Century Code chapter 54-52;

b.Is at least eighteen years of age;

c.Becomes a participating member after December 31, 2024; and

d.Is not eligible to participate in the national guard plan, bureau of criminal investigation plan, public safety plan, judges' plan, highway patrol plan, teachers' fund for retirement plan, or alternative retirement program established under subsection 6 of North Dakota Century Code chapter 15-10-17 for employees of the board of higher education or state institutions under the jurisdiction of the board of higher education.

2.Effective January 1, 2025, the public employees retirement system defined benefit main plan maintained for employees is closed to new eligible employees. However, an employee who first becomes a participating or deferred member under North Dakota Century Code chapter 54-52 before January 1, 2025, remains in the defined benefit retirement plan under North Dakota Century Code chapter 54-52, regardless of being rehired after December 31, 2024.

3.Except as otherwise provided under this section and section 71-08-02-03, effective January 1, 2025, an eligible employee who begins employment with an employer as defined under subsection 6 of North Dakota Century Code chapter 54-52-01 shall participate in the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6 as provided under North Dakota Century Code chapter 54-52.6-02.1.

4.This section does not impact an employee to the extent the employee is a participating member in one or more of the following enumerated plans: national guard plan, bureau of criminal investigation plan, public safety plan, judges' plan, highway patrol plan, teachers' fund for retirement plan, or alternative retirement program established under subsection 6 of North Dakota Century Code chapter 15-10-17 for employees of the board of higher education or state institutions under the jurisdiction of the board of higher education.

a.A participating or deferred member in the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6 who becomes eligible to participate in a plan enumerated under subsection 4 shall cease participation in the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6 and commence participation in the retirement plan enumerated under subsection 4.

b.Unless subsection 2 applies, a participating member of a retirement plan enumerated under subsection 4 who ceases participation in that plan and becomes an eligible employee under the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6 shall participate in the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6.

5.An eligible employee must be enrolled in the plan within the first thirty days of employment.

History

• History: Effective January 1, 2025; amended effective July 31, 2025; January 1, 2026; July 1, 2026.
• General Authority: NDCC 54-52-02.15, 54-52-04
• Law Implemented: NDCC 54-52-02.15, 54-52.6-02, 54-52.6-09

N.D. Admin. Code 71-08-10-02 Contribution

1.A participating member who first joined the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6 after December 31, 2024, except for an employee who elects to participate in the defined contribution retirement plan under North Dakota Century Code section 54-52.6-02.2, shall contribute monthly four percent of the monthly salary or wage paid to the participating member. In addition, the participating member may elect, within thirty days of beginning employment, to contribute monthly to the defined contribution retirement plan under North Dakota Century Code chapter 54-52.6 up to an additional three percent of the monthly salary or wage paid to the participating member. All additional contributions must be in whole percentages.

2.A participating member's election for additional contributions under subsection 1 is a one-time, irrevocable election as long as the individual is a participating member with any participating employer.

History

• History: Effective January 1, 2025.
• General Authority: NDCC 54-52-04; IRC 414(h)(2), Rev. Rul. 2006-43
• Law Implemented: NDCC 54-52-02.15, 54-52.6-09

N.D. Admin. Code 71-08-10-03 Designation of beneficiary

A member may designate a beneficiary or beneficiaries by filing such designation with the office. A member has the right to change the member's designation of beneficiary without the consent of the beneficiary, but no such change shall be effective or binding unless it is received by the office prior to the death of the member. If a vested, married member designates a beneficiary other than or in addition to spouse, the member's spouse's consent must be obtained before benefits can be paid other than to the member's spouse. For the purpose of this section, "member" means a participating member, a deferred member, or a retiree.

History

• History: Effective January 1, 2025.
• General Authority: NDCC 54-52-04, 54-52.6-11
• Law Implemented: NDCC 30.1-05-02, 54-52-02.15, 54-52.6-09

Chapter 71-08-11 Contributions

N.D. Admin. Code 71-08-11-01 Adjustment for bonuses, profit sharing, and contributions paid in a month other than month earned

Adjustments for the following must be made for all participating members:

1.Participating employers shall report bonuses or profit-sharing amounts paid when remitting the contribution associated with the bonus. Recruitment and retention bonuses paid pursuant to North Dakota Century Code section 54-06-31 are not eligible for consideration as salary and contributions associated with those bonuses may not be submitted.

2.Bonuses or profit-sharing amounts may not be submitted to the public employees retirement system for any month other than the month the amount is paid to the participating employer.

History

• General Authority: NDCC 54-52-04, 54-52.6-01(8)

N.D. Admin. Code 71-08-11-02 Basis for calculation contributions - Salary reduction - Salary deferral arrangements

1.Amounts deducted from a participating member's salary at the participating member's option to a qualified section 125 cafeteria plan, 401(k) plan, 403(b) plan, or 457 plan are part of wages or salary when calculating retirement contributions.

2.Employee contributions paid by the employer under IRC 414(h) pursuant to a salary reduction agreement do not reduce wages or salary when calculating retirement contributions.

3.Amounts contributed to a qualified section 125 cafeteria plan, 401(k) plan, 403(b) plan, or 457 plan by the employer are not part of wages or salary when calculating retirement contributions.

N.D. Admin. Code 71-08-11-03 Employer payment of employee contributions

1.A written election submitted under subsection 3 of North Dakota Century Code section 54-52.6-09 must be reported to the board a minimum of thirty-one days prior to the effective date.

2.An employer electing to pay employee monthly salary contributions under North Dakota Century Code section 54-52-05 or 54-52.6-09 may not discriminate in its contributions to eligible employees within the same class of employees for plan enrollment.

History

• History: Effective January 1, 2025; amended effective July 1, 2026.
• Law Implemented: NDCC 54-52.6-09

N.D. Admin. Code 71-08-11-04 Retirement contributions for individuals working less than a forty-hour workweek

Retirement contributions must be made on wages paid to a permanent employee who is regularly scheduled for less than forty hours per week but who works at least twenty hours per week during a twelve-month period.

History

• Law Implemented: NDCC 54-52.6-09.6

N.D. Admin. Code 71-08-11-05 Individual employee incentive payments

Individual employee incentive payments received under North Dakota Century Code section 54-06-24 or similar programs are not considered to be salary and are not subject to retirement contributions.

History

• General Authority: NDCC 54-52-04, 54-52.6-01(8), 54-52.6-02

N.D. Admin. Code 71-08-11-06 Contributions transferred from defined benefit retirement plan

1.The lump sum amount to be transferred from the defined benefit retirement plan under North Dakota Century Code section 54-52.6-02.2 and North Dakota Century Code section 54-52.6-03 based on the actuarial present value of the eligible employee's accumulated benefit obligation as of January 1, 2025, includes the employee contribution portion and the employer contribution portion.

2.The employee contribution portion of the actuarial present value of the eligible employee accumulated benefit obligation means the employee's direct contribution to the defined benefit retirement plan under North Dakota Century Code chapter 54-52 plus the interest on the employee's contributions in the defined benefit retirement plan.

3.The employer contribution portion of the actuarial present value of the eligible employee's accumulated benefit obligation means the lump sum amount transferred minus the employee share. The employee shall vest in the employer contribution under the provisions found in North Dakota Century Code section 54-52.6-10.

History

• Law Implemented: NDCC 54-52.6-02.2, 54-52.6-03

N.D. Admin. Code 71-08-11-07 Employer-paid additional contribution for a transferee

For an eligible employee who is employed by a state employer who transfers from the defined benefit plan to the defined contribution plan under North Dakota Century Code chapter 54-52.6, the eligible employee's state employer, on January 1 of each year an additional contribution is due, will make the additional contribution under subsection 3 of North Dakota Century Code section 54-52.6-02.2 no later than January 15 of the year in which the additional contribution is required. An eligible employee who is employed by a state employer at the time each additional contribution is required must receive the additional contribution.

History

• General Authority: NDCC 54-52.6-02
• Law Implemented: NDCC 54-52.6-02.2, 54-52.6-03

N.D. Admin. Code 71-08-11-08 Forfeiture of rights upon distribution

Distribution of accumulated account balance must cancel all vesting service credit accumulated prior to the distribution and must extinguish the right to any retiree benefits provided by North Dakota Century Code chapter 54-52.6.

History

• History: Effective July 1, 2026.
• Law Implemented: NDCC 54-52.6-13

Chapter 71-08-12 Participation by Political Subdivisions

N.D. Admin. Code 71-08-12-01 Participation

A political subdivision may choose to extend the benefits of the defined contribution plan to its employees by agreeing to abide by the terms of the defined contribution plan and rules developed by the board, executing a participation agreement, and submitting a copy of a signed resolution adopted by the governing authority electing to appoint the retirement board to administer its defined contribution retirement plan.

History

• Law Implemented: NDCC 54-52-02.1

N.D. Admin. Code 71-08-12-02 Withdrawal

1.A political subdivision may discontinue participation in the defined contribution retirement plan by providing the board a written resolution adopted by the governing authority authorizing the termination of participation in the defined contribution retirement plan. The resolution must be provided to the board at least sixty days prior to the effective date of discontinuation and discontinuation must always take effect on the first working day of a month.

2.The employees in the defined contribution retirement plan must be considered to have terminated from the plan as of the date the employer terminates participation in the plan.

Employee deferrals and employer contributions must stop, and benefits must be made payable. All employees shall be one hundred percent vested in the employee and employer contributions as of the effective date of discontinuation.

History

• Law Implemented: NDCC 54-52-02.1, 54-52-02.15

N.D. Admin. Code 71-08-12-03 Merger of eligible employer groups

If a merger between two or more eligible employer groups occurs, the following requirements apply:

1.Written notification must be provided to the office no later than sixty days before the merger is final.

2.If two or more employer groups merge into one, and all do not presently participate in the public employees retirement system, the units merging shall decide upon one of the following:

a.The participating employer or employers may elect to cease participation in the defined contribution plan as of the date of the merger.

b.Subject to executing a revised participation agreement, eligible employees who have not previously been eligible for participation in any retirement plan of the employer must be given the choice to participate or waive participation effective the date of the merger. Any person hired in an eligible position after the consolidation date shall participate or any other employee mandated by the employer shall participate.

History

• Law Implemented: NDCC 54-52-02.1