ND Pension Officials Send State Employees Reassuring Memo After Ugly Audit


Last week the North Dakota Auditor’s office published some ugly pension numbers for the state’s Public Employees Retirement System. According to the audit, NDPERS is only 65% funded while the retirement fund for highway patrol officers is only 70% funded. In a separate audit, the Teachers Fund For Retirement was found to be only 60% funded. All of those numbers represent a decline from previous funding levels.

In what was no doubt intended as a response to the news, NDPERS sent out a memo to state employees in an attempt to reassure them. A SAB reader who happens to be a public employee forwarded me the memo, which you can read below.

The reader who sent me the memo said he fell off his chair when he read the last paragraph in the memo asking for increased legislative appropriations into the funds, and the suggestion that previous increases in pension contributions by the legislature had reversed the fund’s downward trends:

The actions of the Legislature and the Governor in approving SB 2108, as amended, accomplished two of the goals for the systems: 1) the downward trend has been stopped, and 2) the plans have been stabilized. Looking forward to the next session we will still need to address the third goal, putting the plans on a positivetrend to improve their funded status over time. In order to achieve this goal NDPERS is proposing a new bill in
the upcoming legislative session which includes a 2% increase in employee and a 2% increase in employer contributions phased in over 2 years effective for January 2014 and January 2015. NDPERS will have a web video posted on our website by January 1, 2013 that discusses the challenges facing the retirement plan and proposed legislation to face these challenges.

The idea that the legislature’s 2011 actions have stopped the slide in NDPERS is demonstrably not true, as this table from the audit report indicates:


The shortfall between the pension’s projected revenues and projected obligations increased by more than 5%. The highway patrol’s shortfall increased by more than 3%.

The fiscal situation of these funds is getting worse, not better, despite increased appropriations form the legislature.

NDPERS Pension Memo

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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  • Tim Heise

    so much for being the best run state

    • kevindf

      Isn’t ND one of the most corrupt states?
      “7. North Dakota
      > Overall grade: F (58%)
      > Public access to information: C
      > Legislative accountability: F
      > Political financing: F
      > Ethics enforcement agencies: F

      North Dakota got an F in eight of the 14 categories, including redistricting, ethics enforcement agencies, lobbying disclosure and political financing. According to the report, these problems with accountability can lead to conflicts of interest. For example, there are no laws in place preventing civil servants from entering any part of the private sector after leaving office. The state has had a Republican governor in place since Ed Shafer took office in December, 1992. Republicans hold 75% of legislature seats and are philosophically opposed to more regulation, according to State Integrity Investigation reporter Teri Finneman. Speaking to 24/7 Wall St. about entrenched political parties and risk of corruption, the center’s spokesperson, Randy Barrett, explained, “machines tend to want to protect themselves.” Last year, they overwhelmingly voted against a bill to create an ethics commission.”

      Read more: America’s Most Corrupt States – 24/7 Wall St. http://247wallst.com/2012/03/22/americas-most-corrupt-states/#ixzz2EzlNCqqN

      • http://sayanythingblog.com Rob

        That report isn’t worth the paper is written on.

        Soros group making noise.

  • Concerned State Employee

    This letter was a topic of discussion at work. Our conclusion is that Sparb Collins must think we blindly believe everything NDPERS tells us about the status of the retirement account.Nothing of course is further from the truth.

    Despite what the teachers and public employees “unions” may say, there are a fair number of state employees and teachers who are more than open to a change in their respective retirement systems. They are open to it because they realize that funds actually have to be there to retire on, and with the current defined benefit system that simply is not going to be the case. The only way to correct this is to transition towards a defined contribution system like most other employers have. We also see what is happening in other states, and how their public employees retirement systems are bankrupting them. Going to a defined contribution plan is simply the responsible thing for North Dakota to do in order to do the right thing for us employees and the taxpayers that we serve.

    • Concerned State Employee

      By the way, the membership of these “unions” is pretty light, so don’t let them fool you into thinking they speak for the majority of state employees and teachers. They most certainly do not

      • yy4u2

        Threw my letter in the trash after reading it. I would gladly transition out of the defined benefit plan as well as SS if given the choice for either. From one of Rob’s posts the other day, it surprised me to learn that new employees are given the choice of the defined benefit and contribution plans. Oh, but they need new suckers much like SS does. A good faith front for PERS to the legislature as they continue to milk the taxpayers and try to hide the lies from the employees.

        • http://sayanythingblog.com Rob

          I had a legislator call and correct me slightly on that issue. The defined-contribution plans are only for unclassified state employees. That happened some time in the 1990’s.

          So they’re not open to everyone.

          • yy4u2

            I guess it would be interesting to know how many unclassified state employees there are as I believe they are mostly, if not all, elected or appointed positions. I can’t recall the link but stumbled across it this morning while on my phone searching the NDPERS website where it showed, data from several years ago, where those saving more through the deferred comp program was a fraction of those ‘participating’ in the main retirement program where they don’t have to physically set money aside. It is unfortunate not just for this state, but for the nation, that so few think it is their responsibility or even take any innitiative, to save for retirement. Where does it say that the govt is the end all be all? Well, besides anything that comes out of this administration’s mouth, books by Karl Marx and other great fellows like Mussolini and Adolf, and probably any writing recommended by Ms. Clinton or Warren.

            And please, don’t tell dirtball Harry, I’d hate to go to jail for speaking my mind and the truth. http://www.foxnews.com/entertainment/2012/12/14/harry-belafonte-msnbc-criticized-over-jailing-republicans-remarks/?intcmp=features

      • http://sayanythingblog.com Rob

        You’re right, membership is light, but the unions throw around a lot of weight at the legislature speaking on behalf of teachers and public workers whether the teachers/workers like it or not, apparently.

        • Concerned State Employee

          I agree. The legislators have had no choice but to take the unions at their word. I am hoping they start to realize that just because these unions are vocal doesn’t mean they have all the backing from the “rank and file” that they claim.

    • http://sayanythingblog.com Rob

      The only way to correct this is to transition towards a defined contribution system like most other employers have. We also see what is happening in other states, and how their public employees retirement systems are bankrupting them. Going to a defined contribution plan is simply the responsible thing for North Dakota to do in order to do the right thing for us employees and the taxpayers that we serve.

      You’re exactly right. What’s particularly frustrating is that ND is in great financial shape to do that right now. But instead we’re kicking the can down the road, increasing taxpayer contributions to these pensions and hoping the investments eventually make up the gap. Which just ain’t gonna happen.

      • http://ndgoon.blogspot.com Goon

        Why do I smell a bailout coming from the RINO’s in the ND legislature?

        • RCND

          The way that account is being managed, any bailout would only get them through one biennium at best. They lost huge amounts a while ago and the previous head killed himself. Something not kosher has been going on behind the scenes

  • Big Bully

    But some how some way we will be told it ultimately for the children.

  • Lynn Bergman

    North Dakota citizens; you should have screamed bloody murder during the last sesion when NOTHING was done to make the switch from defined benefits to defined contributions… and you will have NO EXCUSE for not letting your legislators know how you feel this January.

    The entire Legacy Fund (remember, the money set aside for our grandchildren… for when the oil and gas are gone) will be spent on pensions if the legislature doesn’t take action. Or is that what “Republicrats” have been planning all along????????
    Get a brain people!

    • kevindf

      The legislature doubled down on the greed of the state pay rollers by making the private sector guarantee the day-to-day value of all the state pensions. They take zero risk in anything they invest in!