Tuesday, April 27, 2010
by Brett Narloch
Today Rep. Frank Wald of Dickinson submitted legislation to an interim committee that would put new state employees and teachers into a defined-contribution retirement plan rather than a defined-benefits plan.
North Dakota teachers and government workers now have pension plans with guaranteed benefits. The pension funds are in financial trouble, and Wald says new employees should be enrolled instead in 401(k)-style savings plans that don't have a taxpayer guarantee.
The NDPC proposed this idea back in February in response to the state's pension fund sinking. This idea definitely has merit. While it may not cure the problems facing the pension system (read about those HERE), it would prevent new problems from arising by letting new members to the pension system know that if the market goes down, the value of their earned benefits goes down too.