54-52.6 Defined Contribution Retirement Plan

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CHAPTER 54-52.6DEFINED CONTRIBUTION RETIREMENT PLAN54-52.6-01. Definition of terms. As used in this chapter, unless the context otherwiserequires:1.&quot;Board&quot; means the public employees retirement system board.2.&quot;Deferred member&quot; means a person who elected to receive deferred vested<br>retirement benefits under chapter 54-52.3.&quot;Eligible employee&quot; means a permanent state employee, except an employee of the<br>judicial branch or an employee of the board of higher education and state institutions<br>under the jurisdiction of the board, who is eighteen years or more of age and who is<br>in a position not classified by North Dakota human resource management services.<br>If a participating member loses permanent employee status and becomes a<br>temporary employee, the member may still participate in the defined contribution<br>retirement plan.4.&quot;Employee&quot; means any person employed by the state, whose compensation is paid<br>out of state funds, or funds controlled or administered by the state or paid by the<br>federal government through any of its executive or administrative officials.5.&quot;Employer&quot; means the state of North Dakota.6.&quot;Participating member&quot; means an eligible employee who elects to participate in the<br>defined contribution retirement plan established under this chapter.7.&quot;Permanent employee&quot; means a state employee whose services are not limited in<br>duration and who is filling an approved and regularly funded position and is<br>employed twenty hours or more per week and at least five months each year.8.&quot;Wages&quot; and &quot;salaries&quot; means earnings in eligible employment under this chapter<br>reported as salary on a federal income tax withholding statement plus any salary<br>reduction or salary deferral amounts under 26 U.S.C. 125, 401(k), 403(b), 414(h), or<br>457. &quot;Salary&quot; does not include fringe benefits such as payments for unused sick<br>leave, personal leave, vacation leave paid in a lump sum, overtime, housing<br>allowances, transportation expenses, early retirement, incentive pay, severance pay,<br>medical insurance, workforce safety and insurance benefits, disability insurance<br>premiums or benefits, or salary received by a member in lieu of previously<br>employer-provided fringe benefits under an agreement between an employee and a<br>participating employer. Bonuses may be considered as salary under this section if<br>reported and annualized pursuant to rules adopted by the board.54-52.6-02. Election.1.The board shall provide an opportunity for each eligible employee who is a member<br>of the public employees retirement system on September 30, 2001, and who has not<br>made a written election under this section to transfer to the defined contribution<br>retirement plan before October 1, 2001, to elect in writing to terminate membership<br>in the public employees retirement system and elect to become a participating<br>member under this chapter. Except as provided in section 54-52.6-03, an election<br>made by an eligible employee under this section is irrevocable. The board shall<br>accept written elections under this section from eligible employees during the period<br>beginning on July 1, 1999, and ending 12:01 a.m. December 14, 2001. An eligible<br>employee who does not make a written election or who does not file the election<br>during the period specified in this section continues to be a member of the public<br>employees retirement system. An eligible employee who makes and files a writtenPage No. 1election under this section ceases to be a member of the public employees<br>retirement system effective twelve midnight December 31, 2001; becomes a<br>participating member in the defined contribution retirement plan under this chapter<br>effective 12:01 a.m. January 1, 2002; and waives all of that person's rights to a<br>pension, annuity, retirement allowance, insurance benefit, or any other benefit under<br>the public employees retirement system effective December 31, 2001. This section<br>does not affect a person's right to health benefits or retiree health benefits under<br>chapter 54-52.1. An eligible employee who is first employed and entered upon the<br>payroll of that person's employer after September 30, 2001, may make an election<br>to participate in the defined contribution retirement plan established under this<br>chapter at any time during the first six months after the date of employment. If the<br>board, in its sole discretion, determines that the employee was not adequately<br>notified of the employee's option to participate in the defined contribution retirement<br>plan, the board may provide the employee a reasonable time within which to make<br>that election, which may extend beyond the original six-month decision window.2.If an individual who is a deferred member of the public employees retirement system<br>on September 30, 2001, is reemployed and by virtue of that employment is again<br>eligible for membership in the public employees retirement system under chapter<br>54-52, the individual may elect in writing to remain a member of the public<br>employees retirement system or if eligible to participate in the defined contribution<br>retirement plan established under this chapter to terminate membership in the public<br>employees retirement system and become a participating member in the defined<br>contribution retirement plan established under this chapter. An election made by a<br>deferred member under this section is irrevocable. The board shall accept written<br>elections under this section from a deferred member during the period beginning on<br>the date of the individual's reemployment and ending upon the expiration of six<br>months after the date of that reemployment.If the board, in its sole discretion,determines that the employee was not adequately notified of the employee's option<br>to participate in the defined contribution retirement plan, the board may provide the<br>employee a reasonable time within which to make that election, which may extend<br>beyond the original six-month decision window. A deferred member who makes and<br>files a written election to remain a member of the public employees retirement<br>system retains all rights and is subject to all conditions as a member of that<br>retirement system. A deferred member who does not make a written election or<br>who does not file the election during the period specified in this section continues to<br>be a member of the public employees retirement system. A deferred member who<br>makes and files a written election to terminate membership in the public employees<br>retirement system ceases to be a member of the public employees retirement<br>system effective on the last day of the payroll period that includes the date of the<br>election; becomes a participating member in the defined contribution retirement plan<br>under this chapter effective the first day of the payroll immediately following the date<br>of the election; and waives all of that person's rights to a pension, an annuity, a<br>retirement allowance, insurance benefit, or any other benefit under the public<br>employees retirement system effective the last day of the payroll that includes the<br>date of the election. This section does not affect any right to health benefits or<br>retiree health benefits to which the deferred member may otherwise be entitled.3.An eligible employee who elects to participate in the retirement plan established<br>under this chapter must remain a participant even if that employee returns to the<br>classified service or becomes employed by a political subdivision that participates in<br>the public employees retirement system.The contribution amount must be asprovided in this chapter, regardless of the position in which the employee is<br>employed. Notwithstanding the irrevocability provisions of this chapter, if a member<br>who elects to participate in the retirement plan established under this chapter<br>becomes a supreme or district court judge, becomes a member of the highway<br>patrol, becomes employed in a position subject to teachers' fund for retirement<br>membership, or becomes an employee of the board of higher education or state<br>institution under the jurisdiction of the board who is eligible to participate in anPage No. 2alternative retirement program established under subsection 6 of section 15-10-17,<br>the member's status as a member of the defined contribution retirement plan is<br>suspended, and the member becomes a new member of the retirement plan for<br>which that member's new position is eligible.The member's account balanceremains in the defined contribution retirement plan, but no new contributions may be<br>made to that account. The member's service credit and salary history that were<br>forfeited as a result of the member's transfer to the defined contribution retirement<br>plan remain forfeited, and service credit accumulation in the new retirement plan<br>begins from the first day of employment in the new position. If the member later<br>returns to employment that is eligible for the defined contribution plan, the member's<br>suspension must be terminated, the member again becomes a member of the<br>defined contribution retirement plan, and the member's account resumes accepting<br>contributions. At the member's option, and pursuant to rules adopted by the board,<br>the member may transfer any available balance as determined by the provisions of<br>the alternate retirement plan into the member's account under this chapter.4.After consultation with its actuary, the board shall determine the method by which a<br>participating member or deferred member may make a written election under this<br>section. If the participating member or deferred member is married at the time of the<br>election, the election is not effective unless the election is signed by the individual's<br>spouse. However, the board may waive this requirement if the spouse's signature<br>cannot be obtained because of extenuating circumstances.5.If the board receives notification from the internal revenue service that this section or<br>any portion of this section will cause the public employees retirement system or the<br>retirement plan established under this chapter to be disqualified for tax purposes<br>under the Internal Revenue Code, then the portion that will cause the disqualification<br>does not apply.6.A participating member who becomes a temporary employee may still participate in<br>the defined contribution retirement plan upon filing an election with the board within<br>one hundred eighty days of transferring to temporary employee status.Theparticipating member may not become a member of the defined benefit plan as a<br>temporary employee. The temporary employee electing to participate in the defined<br>contribution retirement plan shall pay monthly to the fund an amount equal to eight<br>and twelve-hundredths percent times the temporary employee's present monthly<br>salary. The temporary employee shall also pay the required monthly contribution to<br>the retiree health benefit fund established under section 54-52.1-03.2.Thiscontribution must be recorded as a member contribution pursuant to section<br>54-52.1-03.2. An employer may not pay the temporary employee's contributions. A<br>temporary employee may continue to participate as a temporary employee until<br>termination of employment or reclassification of the temporary employee as a<br>permanent employee.7.A former participating member who has accepted a retirement distribution pursuant<br>to section 54-52.6-13 and who subsequently becomes employed by an entity<br>different from the employer with which the member was employed at the time the<br>member retired but which does participate in any state-sponsored retirement plan<br>may, before reenrolling in the defined contribution retirement plan, elect to<br>permanently waive future participation in the defined contribution retirement plan,<br>whatever plan in which the new employing entity participates, and the retiree health<br>program and maintain that member's retirement status. Neither the member nor the<br>employer are required to make any future retirement contributions on behalf of that<br>employee.54-52.6-03. Transfer of accumulated fund balances. For an individual who elects toterminate membership in the public employees retirement system under chapter 54-52, the<br>board shall transfer a lump sum amount from the retirement fund to the participating member's<br>account in the defined contribution retirement plan under this chapter. However, if the individualPage No. 3terminates employment prior to receiving the lump sum transfer under this section, the election<br>made under section 54-52.6-02 is ineffective and the individual remains a member of the public<br>employees retirement system under chapter 54-52 and retains all the rights and benefits<br>provided under that chapter. The board shall calculate the amount to be transferred for persons<br>employed before October 1, 2001, using the two following formulas, and shall transfer the greater<br>of the two amounts obtained:1.The actuarial present value of the individual's accumulated benefit obligation under<br>the public employees retirement system based on the assumption that the individual<br>will retire under the earliest applicable normal retirement age, plus interest from<br>January 1, 2001, to the date of transfer, at the rate of one-half of one percent less<br>than the actuarial interest assumption at the time of the election; or2.The actual employer contribution made, less vested employer contributions made<br>pursuant to section 54-52-11.1, plus compound interest at the rate of one-half of one<br>percent less than the actuarial interest assumption at the time of the election plus<br>the employee account balance.The board shall calculate the amount to be transferred for persons employed after<br>September 30, 2001, using only the formula contained in subsection 2.54-52.6-04.Administration.The board shall administer the defined contributionretirement plan established under this chapter and the board or vendors contracted for by the<br>board shall invest the assets of the plan. The board is the fiduciary and the trustee of the plan.<br>The board has the exclusive authority and responsibility to employ or contract with personnel and<br>for services that the board determines necessary for the proper administration of and investment<br>of assets of the plan, including managerial, professional, legal, clerical, technical, and<br>administrative personnel or services.54-52.6-05.Direction of investments.Each participating member shall direct theinvestment of the individual's accumulated employer and employee contributions and earnings to<br>one or more investment choices within available categories of investment provided by the board.54-52.6-06. Administrative expenses - Continuing appropriation. The administrativeexpenses of the plan must be paid by the participating members in a manner determined by the<br>board. The board or vendors contracted for by the board may charge reasonable administrative<br>expenses and deduct those expenses from a participating member's account in the defined<br>contribution retirement plan established under this chapter. The board shall place any money<br>deducted in an administrative expenses account with the state treasurer. The board may also<br>use funds from the payroll clearing account established pursuant to section 54-52.3-03 to pay for<br>consulting expenses. All moneys in the payroll clearing account, not otherwise appropriated, or<br>so much of the moneys as may be necessary, are appropriated to the board on a continuing<br>basis for the purpose of retaining a consultant as required for the administration of this chapter.54-52.6-07. Participation in other plans. A participating member may not participate inany other public sector retirement benefits plan for simultaneous service rendered to the same<br>public sector employer. However, this section does not prohibit a participating member from<br>participating in a retirement plan established by this state or other public sector employer under<br>the federal Internal Revenue Code.54-52.6-08. Credit of transfers. The board shall promptly credit the plan account of aparticipating member who makes an election under this chapter to terminate membership in the<br>public employees retirement system under chapter 54-52 with any amount transferred from the<br>public employees retirement system.54-52.6-09. Contributions - Penalty.1.Each participating member shall contribute monthly four percent of the monthly<br>salary or wage paid to the participant, and this assessment must be deducted fromPage No. 4the participant's salary in equal monthly installments commencing with the first<br>month of participation in the defined contribution retirement plan established under<br>this chapter.2.The employer shall contribute an amount equal to four and twelve-hundredths<br>percent of the monthly salary or wage of a participating member. If the employee's<br>contribution is paid by the employer under subsection 3, the employer shall<br>contribute, in addition, an amount equal to the required employee's contribution.<br>The employer shall pay monthly such contribution into the participating member's<br>account from its funds appropriated for payroll and salary or any other funds<br>available for such purposes. If the employer fails to pay the contributions monthly, it<br>is subject to a civil penalty of fifty dollars and, as interest, one percent of the amount<br>due for each month of delay or fraction thereof after the payment became due.3.Each employer, at its option, may pay the employee contributions required by this<br>section for all compensation earned after December 31, 1999. The amount paid<br>must be paid by the employer in lieu of contributions by the employee.If theemployer decides not to pay the contributions, the amount that would have been<br>paid will continue to be deducted from the employee's compensation.Ifcontributions are paid by the employer, they must be treated as employer<br>contributions in determining tax treatment under this code and the federal Internal<br>Revenue Code. Contributions paid by the employer may not be included as gross<br>income of the employee in determining tax treatment under this code and the federal<br>Internal Revenue Code until they are distributed or made available. The employer<br>shall pay these employee contributions from the same source of funds used in<br>paying compensation to the employee. The employer shall pay these contributions<br>by effecting an equal cash reduction in the gross salary of the employee or by an<br>offset against future salary increases or by a combination of a reduction in gross<br>salary and offset against future salary increases. Employee contributions paid by<br>the employer must be treated for the purposes of this chapter in the same manner<br>and to the same extent as employee contributions made before the date on which<br>employee contributions were assumed by the employer. An employer shall exercise<br>its option under this subsection by December 1, 1999, and shall report its choice to<br>the board in writing. The option chosen may not be revoked for the remainder of the<br>biennium. Thereafter, the option choice must be forwarded to the board, in writing,<br>by June fifteenth of each odd-numbered year.54-52.6-09.1. Acceptance of rollovers. The plan may allow a participating member totransfer or rollover funds from other qualified plans into the member's account under rules<br>adopted by the board.54-52.6-09.2. Additional employer contributions. Additional lump sum contributionsby an employer to a participating member's defined contribution retirement plan account may be<br>made if the participating member has not retired and has not received a retirement benefit under<br>this chapter. Contributions may be made in an amount actuarially equivalent to the amounts<br>determined pursuant to chapter 54-52 as follows:1.For the conversion of sick leave pursuant to section 54-52-27 if the participating<br>member has four or more years of service.2.The equivalent of up to five years of service credit unrelated to any other eligible<br>service as provided in subsection 5 of section 54-52-29 if the participating member<br>has twenty-five or more years of service.54-52.6-09.3.Contributions for military service.Repealed by S.L. 2005, ch. 531, </p> <BR></DIV><!-- /.col.one --><!-- /.col.two --></DIV><!-- /.col.main --></DIV><!-- /div id = content --> <BR class=clear></DIV> <!-- /div id = livearea --> <DIV></DIV><!-- /.col.one --> <DIV></DIV><!-- /.col.main --> <DIV></DIV><!-- /#content --><BR class=clear> <DIV></DIV><!-- /#livearea --> <!-- Footer--> <DIV id=footer> <DIV class=container> <P class=copyright>Copyright &copy; 2012-2022 Laws9.Com All rights reserved. </P><!-- /.copyright --> <P class=footerlinks><A href="/contactus.html">Contact Us</A> | <A href="/aboutus.html">About Us</A> | <A href="/terms.html">Terms</A> | <A href="/privacy.html">Privacy</A></P><!-- /.footerlinks --> </DIV><!-- /.container --> </DIV><!-- /footer --> </BODY></HTML>