2012 North Dakota Century Code Title 15 Education Chapter 15-39.1 Teachers' Fund for Retirement
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CHAPTER 15-39.1
TEACHERS' FUND FOR RETIREMENT
15-39.1-01. Teachers' fund for retirement created.
There is hereby created the teachers' fund for retirement, which, upon the effective date of
this chapter shall consist of the following:
1. All moneys contained in the teachers' insurance and retirement fund accumulated
pursuant to chapter 15-39; and
2. All moneys thereafter received by the state treasurer under the provisions of this
chapter.
15-39.1-02. Prior fund terminated.
The teachers' insurance and retirement fund shall, on July 1, 1971, cease to exist and the
board administering said fund shall no longer function. All obligations of the teachers' insurance
and retirement fund must be assumed by the newly created fund.
15-39.1-03. Rights under prior chapter preserved.
No person may be caused to be deprived of rights vested under the chapter superseded
hereby. Any such person may elect to claim the person's retirement benefits according to the
provisions of the retirement program for teachers in effect prior to July 1, 1971.
15-39.1-04. Definitions.
For purposes of this chapter, unless the context or subject matter otherwise requires:
1. "Actuarial equivalent" means the annual amount determined by calculations based on
mortality tables, purchasable with a given amount at a stated age.
2. "Beneficiary" means a person, estate, trust, or organization designated in writing by a
participating member to receive benefits provided by this plan, in receipt of benefits, or
otherwise provided under section 15-39.1-17.
3. "Board" means the board of trustees of the teachers' fund for retirement.
4. "Contract" means a written agreement with a school board or other governing body of
a school district or special education unit of this state or a letter of appointment by a
state institution, state agency, or other employer participating in the fund.
5. "Fund" means the teachers' fund for retirement.
6. "Interest" as applied to member assessments is an annual rate of six percent
compounded monthly and as applied to the repurchase of credit for withdrawn years is
six percent compounded annually.
7. "Retirement" means cessation of covered employment and acceptance of a benefit
under former chapter 15-39, or chapter 15-39.1 or 15-39.2.
8. "Retirement annuity" means the payments made by the fund to a member after
retirement, these payments beginning on the first or fifteenth day of the month
following eligibility for a benefit.
9. "Salary" means a member's earnings in eligible employment under this chapter for
teaching, supervisory, administrative, and extracurricular services during a school year
reported as salary on the member's federal income tax withholding statements plus
any salary reduction or salary deferral amounts under 26 U.S.C. 125, 132(f), 401(k),
403(b), 414(h), or 457 in effect on August 1, 2011. "Salary" includes amounts paid to
members for performance of duties, unless amounts are conditioned on or made in
anticipation of an individual member's retirement or termination. The annual salary of
each member taken into account in determining benefit accruals and contributions
may not exceed the annual compensation limits established under 26 U.S.C. 401(a)
(17)(B) in effect on August 1, 2011, as adjusted for increases in the cost of living in
accordance with 26 U.S.C. 401(a)(17)(B) in effect on August 1, 2011. A salary
maximum is not applicable to members whose participation began before July 1, 1996.
"Salary" does not include:
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a.
10.
11.
12.
13.
14.
Fringe benefits or side, nonwage, benefits that accompany or are in addition to a
member's employment, including insurance programs, annuities, transportation
allowances, housing allowances, meals, lodging, or expense allowances, or other
benefits provided by a member's employer.
b. Insurance programs, including medical, dental, vision, disability, life, long-term
care, workforce safety and insurance, or other insurance premiums or benefits.
c. Payments for unused sick leave, personal leave, vacation leave, or other unused
leave.
d. Early retirement incentive pay, severance pay, or other payments conditioned on
or made in anticipation of retirement or termination.
e. Teacher's aide pay, referee pay, busdriver pay, or janitorial pay.
f. Amounts received by a member in lieu of previously employer-provided benefits
or payments that are made on an individual selection basis.
g. Signing bonuses as defined under section 15.1-09-33.1.
h. Other benefits or payments not defined in this section which the board
determines to be ineligible teachers' fund for retirement salary.
"State institution" includes North Dakota vision services - school for the blind, the
school for the deaf, and the North Dakota youth correctional center.
"Teacher" means:
a. All persons licensed by the education standards and practices board who are
contractually employed in teaching, supervisory, administrative, or extracurricular
services by a state institution, multidistrict special education unit, area career and
technology center, regional education association, school board, or other
governing body of a school district of this state, including superintendents,
assistant superintendents, business managers, principals, assistant principals,
and special teachers. For purposes of this subdivision, "teacher" includes
persons contractually employed by one of the above employers to provide
teaching, supervisory, administrative, or extracurricular services to a separate
state institution, state agency, multidistrict special education unit, area career and
technology center, regional education association, school board, or other
governing body of a school district of this state under a third-party contract.
b. The superintendent of public instruction, assistant superintendents of public
instruction, county superintendents, assistant superintendents, supervisors of
instruction, the professional staff of the department of career and technical
education, the professional staff of the center for distance education, the
executive director and professional staff of the North Dakota education
association who are members of the fund on July 1, 1995, the professional staff
of an interim school district, and the professional staff of the North Dakota high
school activities association who are members of the fund on July 1, 1995.
c. The executive director and professional staff of the North Dakota council of
school administrators who are members of the fund on July 1, 1995, and licensed
staff of teachers centers, but only if the person was previously a member of and
has credits in the fund.
d. Employees of institutions under the control and administration of the state board
of higher education who are members of the fund on July 16, 1989.
"Tier one grandfathered member" for purposes of sections 15-39.1-10 and 15-39.1-12
means a tier one member who, as of June 30, 2013, is vested as a tier one member in
accordance with section 15-39.1-11; and
a. Is at least fifty-five years of age; or
b. Has a combined total of years of service credit in the plan and years of age which
equals or exceeds sixty-five.
"Tier one member" means a teacher who has credit in the system on July 1, 2008, and
has not taken a refund pursuant to section 15-39.1-20 after June 30, 2008.
"Tier one nongrandfathered member" for purposes of sections 15-39.1-10 and
15-39.1-12 means a tier one member who does not qualify as a tier one
grandfathered member.
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15.
"Tier two member" means a teacher who is not a tier one member.
15-39.1-05. Management of fund.
Repealed by S.L. 1997, ch. 170, § 4.
15-39.1-05.1. Board composition - Terms - Voting.
1. The authority to set policy for the fund rests in a board of trustees composed as
follows:
a. The governor shall appoint, from a list of three nominees submitted to the
governor by the North Dakota education association, two board members who
are actively employed in full-time positions not classified as school administrators.
A board member appointed under this subdivision who terminates employment
may not continue to serve as a member of the board.
b. The governor shall appoint, from a list of three nominees submitted to the
governor by the North Dakota council of educational leaders, one board member
who is actively employed as a full-time school administrator. A board member
appointed under this subdivision who terminates employment may not continue to
serve as a member of the board.
c. The governor shall appoint, from a list of three nominees submitted to the
governor by the North Dakota retired teachers association, two board members
who are the retired members of the fund.
d. The state treasurer and the superintendent of public instruction.
2. All current appointees of the board shall serve the remainder of their terms as
members of the board until their terms expire and their successors are appointed. The
first newly appointed board member under subdivision a of subsection 1 must be
appointed to serve an initial term of four years. The first newly appointed board
member under subdivision c of subsection 1 must be elected to serve an initial term of
five years. Newly appointed board members shall serve a term of five years. Each
newly appointed term begins on July first.
3. Each board member is entitled to one vote, and four members constitute a quorum.
Four votes are required for resolution or action by the board.
15-39.1-05.2. Board authority - Continuing appropriation.
The board:
1. Has the powers and privileges of a corporation, including the right to sue and be sued
in its own name. The venue of all actions to which the board is a party must be
Burleigh County.
2. Shall establish investment policy for the trust fund under section 21-10-02.1. The
investment policy must include:
a. Acceptable rates of return, liquidity, and levels of risk; and
b. Long-range asset allocation targets.
3. Shall arrange for actuarial and medical consultants. The board shall cause a qualified,
competent actuary to be retained on a consulting basis. The actuary shall:
a. Make a valuation of the liabilities and reserves of the fund and a determination of
the contributions required by the fund to discharge its liabilities and pay
administrative costs;
b. Recommend to the board rates of employer and employee contributions required,
based upon the entry age normal cost or other accepted actuarial method, to
maintain the fund on an actuarial reserve basis;
c. Once every five years make a general investigation of the actuarial experience
under the fund, including mortality, retirement, employment turnover, and other
items required by the board;
d. Recommend actuarial tables for use in valuations and in calculating actuarial
equivalent values based on the investigation provided for in subdivision c; and
e. Perform other duties assigned by the board.
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4.
5.
6.
7.
May pay benefits and consultant fees as necessary which are hereby appropriated
from the fund.
Shall submit to the legislative management's employee benefits programs committee
any necessary or desirable changes in statutes relating to the administration of the
fund.
Shall determine appropriate levels of service to be provided to members, including
benefits counseling and preretirement programs.
Shall, through resolution, inform the state investment board, which is the
administrative board of the retirement and investment office, the levels of services,
goals, and objectives expected to be provided through the retirement and investment
office.
15-39.1-06. Organization of board.
The board may hold meetings as necessary for the transaction of business and a meeting
may be called by the president or any two members of the board upon reasonable notice to the
other members of the board. The president for the ensuing year must be elected at the first
meeting following July first of each year.
15-39.1-07. Vacancies - Rulemaking power.
Vacancies which may occur among the appointed members of the board must be filled by
the governor and the appointee shall complete the term for which the original member was
selected. The board may adopt such rules as may be necessary to fulfill the responsibilities of
the board.
15-39.1-08. Compensation of members.
Members of the board, excluding ex officio members, are entitled to receive one hundred
forty-eight dollars as compensation per day and necessary mileage and travel expenses as
provided in sections 44-08-04 and 54-06-09 for attending meetings of the board. No member of
the board may lose regular salary, vacation pay, vacation or any personal leave, or be denied
right of attendance by the state or political subdivision thereof while serving on official business
of the fund.
15-39.1-09. (Contingent expiration date - See note) Membership in fund and
assessments - Employer payment of employee contribution.
1. Except as otherwise provided by law, every teacher is a member of the fund and must
be assessed upon the teacher's salary seven and seventy-five hundredths percent per
annum, which must be deducted, certified, and paid monthly to the fund by the
disbursing official of the governmental body by which the teacher is employed.
Member contributions increase to nine and seventy-five hundredths percent per
annum beginning July 1, 2012, and increase thereafter to eleven and seventy-five
hundredths percent per annum beginning July 1, 2014. Except as otherwise provided
by law, every governmental body employing a teacher shall pay to the fund eight and
seventy-five hundredths percent per annum of the salary of each teacher employed by
it. Contributions to be paid by a governmental body employing a teacher increase to
ten and seventy-five hundredths percent per annum beginning July 1, 2012, and
increase thereafter to twelve and seventy-five hundredths percent per annum
beginning July 1, 2014. The required amount of member and employer contributions
must be reduced to seven and seventy-five hundredths percent per annum effective on
the July first that follows the first valuation showing a ratio of the actuarial value of
assets to the actuarial accrued liability of the teachers' fund for retirement that is equal
to or greater than ninety percent. The disbursing official of the governmental body shall
certify the governmental body payments and remit the payments monthly to the fund.
2. Each employer, at its option, may pay the teacher contributions required by
subsection 1 for all compensation earned after June 30, 1983. The amount paid must
be paid by the employer in lieu of contributions by the employee. If an employer
Page No. 4
3.
4.
decides not to pay the contributions, the amount that would have been paid will
continue to be deducted from compensation. If contributions are paid by the employer,
they must be treated as employer contributions in determining income tax treatment
under this code and the federal Internal Revenue Code. If contributions are paid by the
employer, they may not be included as gross income of the teacher in determining tax
treatment under this code and the Internal Revenue Code until they are distributed or
made available. The employer shall pay these teacher contributions from the same
source of funds used in paying compensation to the teachers. The employer shall pay
these contributions by effecting an equal cash reduction in the gross salary of the
employee or by an offset against future salary increases. If teacher contributions are
paid by the employer, they must be treated for the purposes of this chapter in the
same manner and to the same extent as teacher contributions made prior to the date
the contributions were assumed by the employer. The option given employers by this
subsection must be exercised in accordance with rules adopted by the board.
A person, except the superintendent of public instruction, who is certified to teach in
this state by the education standards and practices board and who is first employed
and entered upon the payroll of the superintendent of public instruction after
January 6, 2001, may elect to become a participating member of the public employees
retirement system. An election made by a person to participate in the public
employees retirement system under this subsection is irrevocable. Nonteaching
employees of the superintendent of public instruction, including the superintendent of
public instruction, may elect to transfer to the public employees retirement system
pursuant to section 54-52-02.13. Employees of the state board for career and
technical education may elect to transfer to the public employees retirement system
pursuant to section 54-52-02.14.
An individual who is first employed and entered upon the payroll of the state board for
career and technical education after July 1, 2007, may elect to become a participating
member of the public employees retirement system. An election made by an individual
to participate in the public employees retirement system under this subsection is
irrevocable.
15-39.1-09.1. Participation of nonpublic schoolteachers.
Repealed by S.L. 1993, ch. 191, § 3.
15-39.1-10. (Effective through June 30, 2013) Eligibility for normal retirement benefits.
1. The following members are eligible to receive monthly lifetime normal retirement
benefits under this section:
a. All tier one members who have earned three years of teaching service credit and
who have attained the age of sixty-five years.
b. All tier one members who have earned three years of teaching service credit and
who have a combined total of years of service credit and years of age which
equals or exceeds eighty-five.
c. All tier two members who have earned five years of teaching service credit and
who have attained the age of sixty-five years.
d. All tier two members who have earned five years of teaching service credit and
who have a combined total of years of service credit and years of age which
equals or exceeds ninety.
2. The amount of retirement benefits is two percent of the final average monthly salary of
the member multiplied by the number of years of credited service. For the purposes of
this subsection, final average monthly salary for a tier one member means one
thirty-sixth of the total of the member's highest annual salaries earned between July
first of a calendar year and June thirtieth of the subsequent calendar year for any three
years of service credit under the fund. For purposes of this subsection, final average
monthly salary for a tier two member means one sixtieth of the total of the member's
highest annual salaries earned between July first of a calendar year and June thirtieth
of the subsequent calendar year for any five years of service credit under the fund.
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3.
4.
Notwithstanding any other provision of this section, no member who retired on July 1,
1993, or after and is eligible to receive benefits under former chapter 15-39,
chapter 15-39.1, or section 15-39.2-02, may receive benefits which are less than:
a. Ten dollars per month per year of teaching to twenty-five years.
b. Fifteen dollars per month per year of teaching over twenty-five years.
Retirement benefits must begin no later than April first of the calendar year following
the year the member attains age seventy and one-half or April first of the calendar year
following the year the member terminates covered employment, whichever is later.
Payments must be made over a period of time which does not exceed the life
expectancy of the member or the joint life expectancy of the member and the
beneficiary. Payment of minimum distributions must be made in accordance with
section 401(a)(9) of the Internal Revenue Code in effect on August 1, 2011, and the
regulations issued under that section, as applicable to governmental plans.
(Effective after June 30, 2013) Eligibility for normal retirement benefits.
1. The following members who have acquired a vested right to a retirement annuity as
set forth in section 15-39.1-11 are eligible to receive monthly lifetime normal
unreduced retirement benefits under this section:
a. All tier one and tier two members who have attained the age of sixty-five years.
b. All tier one grandfathered members who have a combined total of years of
service credit and years of age which equals or exceeds eighty-five.
c. All tier one nongrandfathered members and tier two members who are at least
sixty years of age and who have a combined total of years of service credit and
years of age which equals or exceeds ninety.
2. The amount of retirement benefits is two percent of the final average monthly salary of
the member multiplied by the number of years of credited service. For the purposes of
this subsection, final average monthly salary for a tier one member means one
thirty-sixth of the total of the member's highest annual salaries earned between July
first of a calendar year and June thirtieth of the subsequent calendar year for any three
years of service credit under the fund. For purposes of this subsection, final average
monthly salary for a tier two member means one sixtieth of the total of the member's
highest annual salaries earned between July first of a calendar year and June thirtieth
of the subsequent calendar year for any five years of service credit under the fund.
3. Notwithstanding any other provision of this section, no member who retired on July 1,
1993, or after and is eligible to receive benefits under former chapter 15-39, chapter
15-39.1, or section 15-39.2-02, may receive benefits which are less than:
a. Ten dollars per month per year of teaching to twenty-five years.
b. Fifteen dollars per month per year of teaching over twenty-five years.
4. Retirement benefits must begin no later than April first of the calendar year following
the year the member attains age seventy and one-half or April first of the calendar year
following the year the member terminates covered employment, whichever is later.
Payments must be made over a period of time which does not exceed the life
expectancy of the member or the joint life expectancy of the member and the
beneficiary. Payment of minimum distributions must be made in accordance with
section 401(a)(9) of the Internal Revenue Code in effect on August 1, 2011, and the
regulations issued under that section, as applicable to governmental plans.
15-39.1-10.1. Postretirement adjustments.
Every person receiving monthly benefits from the fund on an account on which benefits
were being paid on June 30, 1983, shall receive an increase in benefits beginning July 1, 1983,
equal to fifteen percent of the person's present annuity. The percentage must be adjusted, if
necessary, so that the maximum increase would be no more than forty-five dollars per month.
The fifteen percent increase in benefits must be adjusted in percentage so that no person
receives less than one dollar per month per year of teaching credit.
Page No. 6
15-39.1-10.2. Postretirement adjustments.
Every person receiving monthly benefits from the fund on an account on which benefits
were being paid on June 30, 1985, shall receive an increase in benefits beginning July 1, 1985,
equal to one percent for each year the person has been retired under the fund. No member may
receive more than a ten percent or more than a forty dollar per month increase in benefits under
this section.
15-39.1-10.3. Multiple plan membership - Eligibility for benefits - Amount of benefits.
1. a. For the purpose of determining vesting of rights and eligibility for benefits under
this chapter, a teacher's years of service credit is the total of the years of service
credit earned in the fund and the years, with twelve months of compensation
equal to a year, of service employment earned in any number of the following
alternate plans:
(1) The public employees retirement system.
(2) The highway patrolmen's retirement system.
Service credit may not exceed one year of service in any fiscal year in
determining vesting and benefit eligibility.
b. If a teacher terminates eligible employment under the fund, if that teacher has not
received a refund of member contributions, and if that teacher begins eligible
employment in a plan described in paragraph 1 or 2 of subdivision a, that teacher
may elect to remain an inactive member of the fund without refund of
contributions. The board shall terminate the inactive status of a teacher under this
subdivision if the teacher gains eligible employment under this chapter or if the
teacher terminates eligible employment under a plan described in paragraph 1 or
2 of subdivision a.
c. Pursuant to rules adopted by the board, a teacher who has service credit in the
fund and in any number of the alternate plans described in paragraphs 1 and 2 of
subdivision a is entitled to benefits under this chapter.
(1) A tier one member may elect to have benefits calculated using the benefit
formula in subsection 2 of section 15-39.1-10 under either of the following
calculation methods:
(a) Using the three highest certified fiscal year salaries of this plan in the
computation of final average salary and all service credit earned in this
plan; or
(b) Using the three highest certified fiscal year salaries of this plan
combined with the alternate plan in the computation of final average
salary and service credit not to exceed one year in any fiscal year
when combined with the service credit earned in the alternate
retirement plan.
(2) A tier two member may elect to have benefits calculated using the benefit
formula in subsection 2 of section 15-39.1-10 under either of the following
calculation methods:
(a) Using the five highest certified fiscal year salaries of this plan in the
computation of final average salary and all service credit earned in this
plan; or
(b) Using the five highest certified fiscal year salaries of this plan
combined with the alternate plan in the computation of final average
salary and service credit not to exceed one year in any fiscal year
when combined with the service credit earned in the alternate
retirement plan.
2. a. If a teacher, who is eligible to participate in this fund, is also eligible to participate
in an alternate retirement system, the employee is a member of the teachers'
fund for retirement for duties covered under this fund, and the employee is also a
member of the public employees retirement system or highway patrolmen's
retirement system for duties covered by those alternate retirement systems. The
Page No. 7
3.
employers shall pay the member and employer contributions at the rates currently
existing for the applicable system.
b. If a teacher described in subdivision a was employed prior to August 1, 2003, and
has dual member rights, the teacher may elect to begin participation in the
alternate plan pursuant to the plan provisions on August 1, 2003, or may continue
participation pursuant to the plan provisions in effect on July 31, 2003. A plan
participation election is required by five p.m. on October 31, 2003. If an election is
not received by the retirement plan, the participation and benefit calculation
requirements of this chapter as of July 31, 2003, continue to be in effect for the
teacher.
Under rules adopted by the board, an individual whose service credit was canceled
when that individual received a refund of assessments at termination of employment
under this chapter may, while that individual participates in a plan described in
paragraph 1 or 2 of subdivision a of subsection 1, repurchase that service credit that
was canceled.
15-39.1-10.4. Postretirement adjustments.
An individual who, on June 30, 1987, is receiving benefits from the fund on an account paid
under former chapter 15-39 is entitled to a monthly increase in that individual's annuity. The
monthly increase is fifteen dollars plus one dollar and fifty cents for every year benefits have
been drawn from the fund, but cannot exceed an increase of seventy-five dollars per month. An
individual who, on June 30, 1987, is receiving benefits from the fund on an account paid under
this chapter is entitled to a monthly increase of one dollar and fifty cents for every year benefits
have been drawn from the fund.
15-39.1-10.5. Postretirement adjustments.
An individual who on June 30, 1989, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive an increase
in benefits equal to five cents times the individual's number of years of service credit under the
fund times the number of years the individual has drawn benefits from the fund.
15-39.1-10.6. Benefit limitations.
Benefits with respect to a member participating under former chapter 15-39 or chapter
15-39.1 or 15-39.2 may not exceed the maximum benefits specified under section 415 of the
Internal Revenue Code [26 U.S.C. 415] in effect on August 1, 2011, for governmental plans. The
maximum dollar benefit applicable under section 415(b)(1)(A) of the Internal Revenue Code
must reflect any increases in this amount provided under section 415(d) of the Internal Revenue
Code subsequent to August 1, 2011. If a member's benefit is limited by these provisions at the
time of retirement or in any subsequent year, the benefit paid in any following calendar year may
be increased to reflect all cumulative increases in the maximum dollar limit provided under
section 415(d) of the Internal Revenue Code for years after the year payments commenced, but
not to more than would have been payable in the absence of the limits under section 415 of the
Internal Revenue Code. If an annuitant's benefit is increased by a plan amendment, after the
commencement of payments, the member's benefit may not exceed the maximum dollar benefit
under section 415(b)(1)(A) of the Internal Revenue Code, adjusted for the commencement age
and form of payment, increased as provided by section 415(d) of the Internal Revenue Code. If
this plan must be aggregated with another plan to determine the effect of section 415 of the
Internal Revenue Code on a member's benefit, and if the benefit must be reduced to comply
with section 415 of the Internal Revenue Code, then the reduction must be made pro rata
between the two plans, in proportion to the member's service in each plan.
15-39.1-10.7. Postretirement adjustments.
An individual who on June 30, 1991, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive three dollars
per month multiplied by the individual's number of years of credited service for individuals who
Page No. 8
retired before 1980, two dollars per month multiplied by the individual's number of years of
credited service for individuals who retired after 1979 and before 1984, or one dollar per month
multiplied by the individual's number of years of credited service for individuals who retired after
1983 and who retire before July 1, 1991, or an increase of ten percent in the individual's
currently payable annuity, whichever is greater. The minimum monthly increase under this
section is five dollars and the maximum monthly increase under this section is seventy-five
dollars.
15-39.1-10.8. Postretirement adjustments.
An individual who on June 30, 1993, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive three dollars
per month multiplied by the individual's number of years of credited service for individuals who
retired before 1980, two dollars and fifty cents per month multiplied by the individual's number of
years of credited service for individuals who retired after 1979 and before 1984, or one dollar
per month multiplied by the individual's number of years of credited service for individuals who
retired after 1983 and who retire before July 1, 1993, or an increase of ten percent in the
individual's currently payable annuity, whichever is greater. The minimum monthly increase
under this section is five dollars and the maximum monthly increase under this section is one
hundred dollars.
15-39.1-10.9. Postretirement adjustment.
An individual who on June 30, 1997, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive an increase
of thirty dollars per month.
15-39.1-10.10. Postretirement adjustment.
An individual who on June 30, 1999, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive a monthly
increase equal to an amount determined by taking two dollars per month multiplied by the
member's number of years of service credit plus one dollar per month multiplied by the number
of years since the member's retirement.
15-39.1-10.11. Postretirement adjustments.
An individual who on June 30, 2001, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive a monthly
increase equal to an amount determined by taking two dollars per month multiplied by the
member's number of years of service credit plus one dollar per month multiplied by the number
of years since the member's retirement. In addition, an individual who is receiving monthly
benefits from the fund on an account paid under this chapter or under former chapter 15-39 is
entitled to receive a seventy-five hundredths of one percent increase of the individual's current
monthly benefit with the increased benefit payable each month thereafter beginning on July 1,
2001. An individual who on June 30, 2002, is receiving monthly benefits from the fund on an
account paid under this chapter or under former chapter 15-39 is entitled to receive a
seventy-five hundredths of one percent increase of the individual's current monthly benefit with
the increased benefit payable each month thereafter beginning on July 1, 2002. This annual
benefit adjustment is conditioned on an actuarial test performed annually by the board's
actuarial consultant to determine the actuarial adequacy of the statutory contribution rate. The
board shall report the results of the actuarial test annually to the employee benefits programs
committee. If the actuarial valuation indicates a shortfall between the actuarially determined
benchmark contribution rate and the statutory rate, the board may reduce or suspend the
conditional annual benefit adjustment. The actuarial adequacy test fails if one or more of the
following are true:
1. The shortfall is greater than six-tenths of one percent in any year; or
2. The shortfall is greater than three-tenths of one percent in any two consecutive years.
Page No. 9
15-39.1-10.12. Supplemental retiree benefit payment.
An individual who retired before January 1, 2009, and is receiving monthly benefits from the
fund on an account paid under this chapter or under former chapter 15-39 on December 1,
2009, is entitled to receive a supplemental payment from the fund. The supplemental payment
is equal to an amount determined by taking twenty dollars multiplied by the member's number of
years of service credit plus fifteen dollars multiplied by the number of years since the member's
retirement as of January 1, 2009. The supplemental payment may not exceed the greater of ten
percent of the member's annual annuity or seven hundred fifty dollars. The board shall make the
supplemental payment in December 2009.
15-39.1-11. Vesting of rights.
When a tier one member has paid assessments and earned three years of service credit in
this state, that member has a vested right to a retirement annuity but is not entitled to payments
under this chapter until the member meets the requirements set forth in section 15-39.1-10 or
15-39.1-12. When a tier two member has paid assessments and earned five years of service
credit in this state, that member has a vested right to a retirement annuity but is not entitled to
payments under this chapter until the member meets the requirements set forth in section
15-39.1-10 or 15-39.1-12.
15-39.1-12. (Effective through June 30, 2013) Early retirement.
A tier one member who has acquired a vested right to a retirement annuity as set forth in
section 15-39.1-11 and who has attained age fifty-five may retire prior to the normal retirement
age as set forth in section 15-39.1-10 but the benefits to which the member is then entitled must
be reduced to the actuarial equivalent of the benefit credits earned to the date of early
retirement from the earlier of age sixty-five or the age at which current service plus age equals
eighty-five. A tier two member who has acquired a vested right to a retirement annuity as set
forth in section 15-39.1-11 and who has attained age fifty-five may retire prior to the normal
retirement age as set forth in section 15-39.1-10 but the benefits to which the member is then
entitled must be reduced to the actuarial equivalent of the benefit credits earned to the date of
early retirement from the earlier of age sixty-five or the age at which current service plus age
equals ninety.
(Effective after June 30, 2013) Early reduced retirement benefits.
A member who has acquired a vested right to a retirement annuity as set forth in section
15-39.1-11 and who has attained age fifty-five may retire prior to the normal retirement age as
set forth in section 15-39.1-10 but the benefits to which the member is then entitled must be
reduced according to the following schedule:
1. All tier one grandfathered member benefits must be reduced by six percent per annum
from the earlier of:
a. Age sixty-five; or
b. The age at which the sum of the member's current years of service credit and
years of age equals eighty-five.
2. All tier one nongrandfathered member and tier two member benefits must be reduced
by eight percent per annum from the earlier of:
a. Age sixty-five; or
b. The later of:
(1) Age sixty; or
(2) The age at which the sum of the member's current years of service credit
and years of age equals ninety.
15-39.1-12.1. Partial service retirement.
Repealed by S.L. 1999, ch. 175, § 9.
Page No. 10
15-39.1-12.2. Benefit payments to alternate payee under domestic relations order.
1. The board shall pay retirement benefits in accordance with the applicable
requirements of any qualified domestic relations order. The board shall review a
domestic relations order submitted to it to determine if the domestic relations order is
qualified under this section and under rules established by the board for determining
the qualified status of domestic relations orders and administering distributions under
the qualified orders. Upon determination that a domestic relations order is qualified,
the board shall notify the teacher and the named alternate payee of its receipt of the
qualified domestic relations order.
2. A "qualified domestic relations order" for purposes of this section means any judgment,
decree, or order, including approval of a property settlement agreement, which relates
to the provision of child support, spousal support, or marital property rights to a
spouse, former spouse, child, or other dependent of the teacher, which is made
pursuant to a North Dakota domestic relations law, and which creates or recognizes
the existence of an alternate payee's right to, or assigns to an alternate payee the right
to, receive all or a part of the benefits payable to the teacher. A qualified domestic
relations order may not require the board to provide any type or form of benefit, or any
option, not otherwise provided under the fund, or to provide increased benefits as
determined on the basis of actuarial value. However, a qualified domestic relations
order may require the payment of benefits at the early retirement date notwithstanding
that the teacher has not terminated eligible employment. A qualified domestic relations
order must specify:
a. The name and last-known mailing address of the teacher and the name and
mailing address of each alternate payee covered by the order;
b. The amount or percentage of the teacher's benefits to be paid by the board to
each alternate payee;
c. The number of payments or period to which the order applies; and
d. Each retirement plan to which the order applies.
15-39.1-13. Exemptions from legal process.
Repealed by S.L. 1987, ch. 386, § 2.
15-39.1-14. Retirement not mandatory.
Nothing in this chapter may be construed as requiring retirement at any specific age. If the
teacher elects to teach beyond age sixty-five, the teacher continues to earn credits at the same
rate as prior to the age of sixty-five.
15-39.1-15. Withdrawal from fund - Return to teaching.
A teacher who has withdrawn from the fund as set forth in this chapter may, by returning to
teach in a public school or state institution of this state, regain service credit for prior teaching by
making the required payment. The required payment, if made within five years of returning to
teach in covered employment, is the amount that was withdrawn with interest. In all other cases,
the purchase cost must be on an actuarial equivalent basis. If the teacher returns to teach in
covered employment after June 30, 2008, the teacher becomes a tier two member regardless of
whether the teacher repurchases service credit earned while the teacher was a tier one
member.
15-39.1-16. Option of teachers eligible to receive annuities.
The board shall adopt rules providing for the receipt of retirement benefits in the following
optional forms:
Option one. Upon the death of the teacher, the reduced retirement allowance must be
continued throughout the life of, and paid to, the teacher's designated beneficiary named at the
time of retirement. If the person designated to receive the teacher's reduced retirement
allowance predeceases the teacher, the reduced retirement allowance must be converted to a
single life retirement annuity under which benefit payments, if the person designated died prior
Page No. 11
to July 1, 1989, must begin on July 1, 1989, or, if the person designated dies on or after July 1,
1989, must begin on the first day of the month following the death of the person designated.
Option two. Upon the death of the teacher, one-half of the reduced retirement allowance
must be continued throughout the life of, and paid to, the teacher's designated beneficiary
named at the time of retirement. If the person designated to receive the teacher's reduced
retirement allowance predeceases the teacher, the reduced retirement allowance must be
converted to a single life retirement annuity under which benefit payments, if the person
designated died prior to July 1, 1989, must begin on July 1, 1989, or, if the designated
beneficiary dies on or after July 1, 1989, must begin on the first day of the month following the
death of the person designated.
Option three. Upon the death of the teacher within twenty years of the commencement of
annuity payments, the payments must be continued for the remainder of the twenty-year period
to the teacher's designated beneficiary. This payment option is available to teachers who retire
after July 31, 2003.
Option four. Upon the death of the teacher within ten years of the commencement of annuity
payments, the payments must be continued for the remainder of the ten-year period to the
teacher's designated beneficiary.
Option five. Level retirement income with social security option, which is available to
teachers retiring before social security is payable.
Option six. Partial lump sum distribution option. A member who is eligible for an unreduced
service retirement annuity under section 15-39.1-10 and who retires after July 31, 2003, may
make a one-time election to receive a portion of the retirement annuity paid in a lump sum
distribution upon retirement, pursuant to rules adopted by the board.
1. The eligible member may select a standard service retirement annuity or an optional
service retirement annuity described in this section, together with a partial lump sum
distribution. The partial lump sum distribution option is not available to members who
have selected option five, the level income retirement option. This option is not
available to disabled members or beneficiaries of deceased members. The partial
lump sum distribution option may be elected only once by a member and may not be
elected by a retiree.
2. The amount of the partial lump sum distribution under this section is twelve months of
a standard service retirement annuity computed under section 15-39.1-10 and payable
at the same time that the first monthly payment of the annuity is paid.
3. The service retirement annuity selected by the member must be actuarially reduced to
reflect the partial lump sum distribution option selected by the member.
4. Before a retiring member selects a partial lump sum distribution under this section, the
fund shall provide a written notice to the member of the amount by which the
member's annuity will be reduced because of the selection.
The amount of the reduced retirement allowance payable upon the exercise of any of these
options must be computed upon an actuarial basis through the use of standard actuarial tables
and based upon the ages of the teacher and the teacher's designated beneficiary. A member's
spouse, if designated as beneficiary, must consent in writing to the member's choice of benefit
payment option for any benefit payments commencing after June 30, 1999. The board may rely
on the member's representations about that person's marital status in determining the member's
marital status. The spouse's written consent must be witnessed by a notary or a plan
representative. If the spouse does not consent, or cannot be located, the member's annuity
benefit must be paid using option two, the fifty percent joint and survivor option.
15-39.1-17. Death of member.
1. A member may designate a beneficiary to receive death benefits under the plan when
the member dies. If the member is not married, the member may designate a person,
estate, or organization as primary beneficiary to receive death benefits. If the member
is married, the spouse of the member is the member's primary beneficiary unless the
spouse consents in writing to the member's alternate primary beneficiary designation.
A member also may designate contingent beneficiaries who are entitled to any
remaining death benefits if the primary beneficiary dies before receiving all death
Page No. 12
2.
benefits provided by this plan. If a member dies without naming a contingent
beneficiary, the primary beneficiary may name a contingent beneficiary. If there is no
named primary or contingent beneficiary, any death benefits will be paid to the estate.
If a member has named more than one primary beneficiary, the board shall pay any
death benefits to the primary beneficiaries in the percentages designated by the
member or, if the member has not designated a percentage for the beneficiaries, in
equal percentages. If one or more of the primary beneficiaries has predeceased the
member, the board shall pay the predeceased beneficiary's share to the remaining
primary beneficiaries. If no primary beneficiaries remain, any death benefits must be
paid to the contingent beneficiaries in the same manner.
a. If before retiring a nonvested member dies, the plan shall pay the member's
account value to the member's beneficiary.
b. If before retiring a vested member dies, the member's beneficiary may select a
form of payment as follows:
(1) If the member dies and was eligible for unreduced retirement benefits and if
the beneficiary is one person, the beneficiary may select:
(a) A lump sum payment of the member's account value; or
(b) A lifetime monthly annuity effective on the first of the month following
the month of the member's death. The amount of the monthly annuity
is equal to an amount that would have been paid to the beneficiary
under a one hundred percent joint and survivor annuity. If the
beneficiary dies before receiving the guaranteed member account
value, any remaining balance must be paid in a lump sum to a named
contingent beneficiary, or if none, to the estate of the recipient.
(2) If the member dies and was not eligible for unreduced retirement benefits
and if the beneficiary is one person, the beneficiary may select:
(a) A lump sum payment of the member's account value; or
(b) A lifetime monthly annuity effective on the first of the month following
the month of the member's death. The amount of the monthly annuity
is equal to an amount that would have been paid to the beneficiary
under a one hundred percent joint and survivor annuity without
reduction for early retirement and using the disability option reduction
factor. If the beneficiary dies before receiving the guaranteed member
account value, any remaining balance must be paid in a lump sum to
a named contingent beneficiary, or if none, to the estate of the
recipient.
(3) If the member dies and multiple beneficiaries are eligible for death benefits,
the plan shall pay the member's account value to the member's
beneficiaries.
c. If a member or beneficiary receiving benefits under this plan dies before the total
amount of benefits paid to either or both equals the amount of the member's
account value, the difference must be paid in a lump sum to a named beneficiary,
or if none, to the estate of the recipient.
15-39.1-18. (Effective through June 30, 2013) Disability retirements.
1. Any member may also retire and receive a disability annuity if, after a period of at least
one year of service as a member in this state, the member suffers from total disability
as determined by the board.
2. The amount of the disability annuity is the greater of the amount computed by the
retirement formula in section 15-39.1-10 without consideration of age or the amount
computed by that formula without consideration of age but assuming the member had
twenty years of credited service. A member determined eligible for a disability annuity
under this section may elect to receive an annuity under any of the options allowed in
section 15-39.1-16, except the level retirement income with social security option or
the partial lump sum option.
Page No. 13
3.
4.
The disability annuity continues until the death or prior recovery of the disabled
annuitant. The board shall ascertain by periodic medical examinations the continued
disability status of a disabled annuitant.
If a disabled annuitant recovers and returns to active teaching, that annuitant is
entitled to the retirement benefit credits which the annuitant earned prior to the time of
disablement, and the credits which the annuitant earned after returning to active
teaching must be added to those earned prior to disablement.
(Effective after June 30, 2013) Disability retirements.
1. Any member may also retire and receive a disability annuity if, after a period of at least
five years of service as a member in this state, the member qualifies for total disability
as determined by the board.
2. The amount of the disability annuity is the amount computed by the retirement formula
in section 15-39.1-10 without consideration of age. A member determined eligible for a
disability annuity under this section may elect to receive an annuity under any of the
options allowed in section 15-39.1-16, except the level retirement income with social
security option or the partial lump sum option.
3. The disability annuity continues until the death or prior recovery of the disabled
annuitant. The board shall ascertain by periodic medical examinations the continued
disability status of a disabled annuitant.
4. If a disabled annuitant recovers and returns to active teaching, that annuitant is
entitled to the retirement benefit credits which the annuitant earned prior to the time of
disablement, and the credits which the annuitant earned after returning to active
teaching must be added to those earned prior to disablement.
15-39.1-19. Annuities discontinued on resumption of teaching.
Repealed by S.L. 1979, ch. 236, § 2.
15-39.1-19.1. Retired teachers return to active service - Annuities discontinued on
resumption of teaching over annual hour limit.
1. a. Except as otherwise provided in section 15-39.1-19.2, a retired teacher who is
receiving a retirement annuity under chapter 15-39, 15-39.1, or 15-39.2 may not
return to covered employment until thirty calendar days have elapsed from the
member's retirement date. A retired member may then return to covered
employment under an annual hour limit and continue receiving a monthly
retirement benefit. The annual hour limit is based on the length of the reemployed
retiree's contract as follows:
(1) Retiree reemployment of nine months or less, annual limit is seven hundred
hours;
(2) Retiree reemployment of ten months, annual limit is eight hundred hours;
(3) Retiree reemployment of eleven months, annual limit is nine hundred hours;
or
(4) Retiree reemployment of twelve months, annual limit is one thousand hours.
b. Employment as a noncontracted substitute teacher does not apply to the annual
hour limit. Professional development and extracurricular duties do not apply to the
annual hour limit.
c. The retired member and the retired member's employer must notify the fund
office in writing within thirty days of the retired member's return to covered
employment.
d. A retired member who returns to teaching shall pay the member contributions
required by section 15-39.1-09 on the salary received by the retired member. The
member contributions must be included in the retired member's account value
and may not be refunded except as provided under subdivision a of subsection 2
of section 15-39.1-19.1 and section 15-39.1-17.
Page No. 14
e.
2.
A participating employer who employs a retired member under this section shall
pay the employer contributions required by section 15-39.1-09 on the salary of
the retired member.
f. A retired teacher who returns to teaching and does not exceed the annual hour
limit must be treated as retired for all other purposes under this chapter. A retired
teacher may not earn any additional service during the period of reemployment.
The retired teacher's benefits may not be adjusted to reflect changes in the
retired teacher's age or final average monthly salary at the end of the period of
reemployment, any optional form of payment elected under section 15-39.1-16
remains effective during and after the period of reemployment, and additional
benefits normally available to an active member, such as disability benefits, are
not available to a retired teacher reemployed under this section.
g. A retired teacher who returns to teaching and exceeds the annual hour limit must
immediately notify the fund office in writing. Failure to notify the fund office results
in the loss of one month's annuity benefit for the member. The retired member's
monthly benefit must be discontinued the first of the month following the date the
member reaches the annual hour limit.
Upon the retired teacher's subsequent retirement, the member's benefit must be
resumed as follows:
a. If the teacher subsequently retires with less than two years of additional earned
credited service, the teacher's contributions paid to the fund after the member's
benefit was suspended must be refunded in accordance with section 15-39.1-20
and the teacher is entitled to receive the discontinued annuity, plus any
postretirement benefit adjustments granted during the period of reemployment,
the first day of the month following the teacher's re-retirement.
b. If the teacher subsequently retires with two or more but less than five years of
additional earned credited service, the retired person's annuity is the greater of
the sum of the discontinued annuity, plus an additional annuity computed
according to this chapter based upon years of service and average salaries
earned during the period of reemployment plus any postretirement benefit
adjustments granted during the period of reemployment, or a recalculated annuity
computed according to this chapter based on total years of service credit earned
during both employment periods offset by the actuarial value of payments already
received. The new annuity is payable the first day of the month following the
member's re-retirement.
c. If the teacher subsequently retires with five or more years of additional earned
credited service, the retired person's annuity is the greater of the sum of the
discontinued annuity plus an additional annuity based upon years of service and
average salaries earned during the period of reemployment plus any
postretirement benefit adjustments granted during the period of reemployment, or
a recalculated annuity based on all years of service computed under subsection 2
of section 15-39.1-10. The new annuity is payable the first day of the month
following the member's re-retirement.
15-39.1-19.2. Retired teachers return to active service - Critical shortage areas and
disciplines - Rules.
1. A retired teacher who is receiving a retirement annuity under chapter 15-39, 15-39.1,
or 15-39.2 may elect to return to teaching without losing any benefits under the
provisions of this section or elect to return to teaching under the provisions of section
15-39.1-19.1. To return to teaching under this section, a retired teacher must:
a. Return to teach in a critical shortage geographical area or subject discipline as
determined by the education standards and practices board by rule;
b. If retired after January 1, 2001, have been receiving a retirement annuity for at
least one year. A retired teacher may perform noncontracted substitute teaching
duties but may not engage in full-time or part-time teaching duties during the
one-year separation from service; and
Page No. 15
c.
2.
3.
Notify the fund office in writing within thirty days of the retired member's return to
covered employment. The retired member's employer must also notify the fund
office in writing within thirty days of the retired member's return to covered
employment.
A retired teacher who returns to teaching under this section shall pay the member
contributions required by section 15-39.1-09 on the salary of the retired member. The
member contributions must be included in the retired member's account value and
may not be refunded except as provided under section 15-39.1-17. A retired teacher
who returns to teaching under the provisions of this section must be treated as retired
for all other purposes under this chapter. A retired teacher may not earn any additional
service during the period of reemployment. The retired teacher's benefits may not be
adjusted to reflect changes in the retired teacher's age or final average monthly salary
at the end of the period of reemployment, any optional form of payment elected under
section 15-39.1-16 remains effective during and after the period of reemployment, and
additional benefits normally available to an active member, such as disability benefits,
are not available to a retired teacher reemployed under this section.
A participating employer who employs a retired member under this section shall pay
the employer contributions required by section 15-39.1-09 on the salary of the retired
member.
15-39.1-20. Withdrawal from fund.
When a member of the fund ceases to be eligible under the terms of this chapter to
participate in the fund, the member may, after a period of one hundred twenty days, withdraw
from the fund and is then entitled to receive a refund of assessments accumulated with interest.
The one-hundred-twenty-day requirement may be waived by the board when it has evidence the
teacher will not be returning to teach in North Dakota. The refund is in lieu of any other benefits
to which the member may be entitled under the terms of this chapter, and by accepting the
refund, the member is waiving any right to participate in the fund under the same provisions that
existed at the time the refund was accepted regardless of whether the member later
repurchases refunded service credit. A member or a beneficiary of a member may elect, at the
time and under rules adopted by the board, to have any portion of an eligible rollover distribution
paid directly in a direct rollover to an eligible retirement plan specified by the member or the
beneficiary to the extent permitted by section 401(a)(31) of the Internal Revenue Code in effect
on August 1, 2011.
15-39.1-21. Effect on existing obligations.
Nothing herein contained may be construed to affect existing retirement benefits and all
obligations of the teachers' insurance and retirement fund existing on July 1, 1971, must be
assumed and paid from the teachers' fund for retirement. Amounts which persons retired on
July 1, 1971, are receiving must be frozen as of that date and may not be deemed increased by
this chapter.
15-39.1-22. Annual audit.
The board shall conduct an annual audit of the fund for the fiscal year ending the preceding
June thirtieth.
15-39.1-23. Penalties for failure to make required reports and payments.
Except for unintentional reporting errors, an employing body failing to file reports required
by the board or failing to pay over for credit to the fund the amounts required to be paid by this
chapter is subject to a civil penalty of two hundred fifty dollars and, as interest, one percent of
the amount due for each month of delay or fraction thereof after the report was required to be
filed or the payment became due. The board, if satisfied the delay or underpayment was
unintentional and excusable, may waive, or if paid, refund all or part of the two hundred fifty
dollar penalty and may reduce the interest rate charge to the investment return rate used in the
most recent actuarial valuation, compounded annually, but may not waive the entire amount of
Page No. 16
the interest. The penalty must be paid to the fund and deposited in the same manner as other
receipts under this chapter.
In addition, a school district, multidistrict special education unit, area career and technology
center, and regional education association may not share in the apportionment of any money
from the state for any year unless the school district, multidistrict special education unit, area
career and technology center, or regional education association has made the reports required
by the board as permitted by this chapter, and has paid over for credit to the fund the amounts
required to be paid under this chapter.
15-39.1-24. Purchase of additional credit.
Prior to retirement a teacher who provides proof of eligibility under rules adopted by the
board may purchase additional credit for use toward retirement in the following instances and
manner:
1. A teacher may purchase service credit for years of elementary or secondary teaching
service at an accredited out-of-state public, private, or parochial school.
2. A teacher not qualified to receive military credit under the Uniformed Services
Employment and Reemployment Rights Act of 1994 [Pub. L. 103-353; 108 Stat. 3150;
38 U.S.C. 4301-4307] or Veterans' Reemployment Rights Act of 1991 [Pub. L. 93-508;
88 Stat. 3150] who has received an honorable discharge from military service of the
United States of America may purchase military credit for no more than four years of
active service, upon filing application and proof with the board.
3. A teacher may purchase service credit for credit lost while on an approved leave of
absence from teaching duties.
4. A teacher may purchase service credit for the time during each legislative session
spent serving as a member of the legislative assembly while holding eligible
employment under this chapter. As an alternative to a teacher purchasing service
credit under this subsection, a teacher and the governmental body employing the
teacher may enter into an agreement by which payment for service credit for time
spent during each legislative session by the teacher serving as a member of the
legislative assembly is made pursuant to section 15-39.1-09. The agreement must
provide that contributions made pursuant to section 15-39.1-09 are calculated based
on the teacher's annual salary without reduction for a leave of absence taken by the
teacher during the legislative session.
5. A teacher may purchase credit for years of elementary or secondary teaching service if
employed by an agency of the United States government.
6. A teacher who is elected president of a professional educational organization
recognized by the board and who serves in a full-time capacity in lieu of teaching may
purchase service credit for the time spent serving as president. As an alternative to
purchasing service credit under this subsection, a teacher and the governmental body
employing the teacher may enter into an agreement under which payment for service
credit for the time spent as president of the professional educational organization is
made pursuant to section 15-39.1-09. The agreement must provide that contributions
made pursuant to section 15-39.1-09 are calculated based on the teacher's annual
salary as president.
7. A teacher may purchase service credit for years of elementary or secondary teaching
service in an accredited North Dakota private or parochial school.
8. A teacher who has at least five years of teaching service credit in the fund may
purchase credit not based on service for use toward retirement eligibility and benefits.
The purchase of service credit for such nonqualified service as defined under section
415(n) of the Internal Revenue Code is limited to an aggregate of five years.
9. A teacher who had that person's North Dakota teaching service interrupted by military
service in any branch of the United States armed forces and received an honorable
discharge may receive credit for military service pursuant to applicable federal
veterans' rights acts including the Uniformed Services Employment and
Reemployment Rights Act of 1994 [Pub. L. 103-353; 108 Stat. 3150; 38 U.S.C.
Page No. 17
10.
11.
12.
4301-4307] or the Veterans' Reemployment Rights Act of 1991 [Pub. L. 93-508;
88 Stat. 3150].
With the exception of military service, purchased service credit is not eligible for credit
if the years claimed also qualify for retirement benefits from another retirement system.
The fund may accept eligible rollovers, direct rollovers, and trustee-to-trustee transfers
from eligible retirement plans specified under Internal Revenue Code section 402(c)(8)
(B) to purchase refunded service credit under section 15-39.1-15 and to purchase
additional service credit under section 15-39.1-24. The board shall adopt rules to
ensure that the rollovers and transfers comply with the requirements of the Internal
Revenue Code and internal revenue service regulations. The total amount rolled over
or transferred into the fund may not exceed the amount due to purchase service credit.
The amount of additional service eligible to be purchased under this section must be
credited to the teacher when the teacher has made the required payment. Except as
provided in subsections 4, 6, and 9, the purchase cost must be on an actuarial
equivalent basis.
15-39.1-25. Certain rights and obligations fixed.
Except as otherwise provided in chapter 15-39.2, the laws pertaining to the teachers' fund
for retirement, as contained in chapter 15-39.1, apply to teachers, superintendents, assistant
superintendents, principals, assistant principals, special teachers, supervisors of instruction and
other supervisors, presidents, deans, school librarians, and registrars employed by any state
institution under the supervision and control of the state board of higher education and the
commissioner of higher education, only in the form and substance as chapter 15-39 existed as
of July 1, 1967, and all such persons have only such rights, benefits, and privileges as provided
in chapter 15-39 as it existed on July 1, 1967. Such persons are responsible or liable for only
those costs or assessments provided for in chapter 15-39 as such laws and chapter existed on
July 1, 1967. The state board of higher education or any institution under the supervision or
control of the state board of higher education is not liable for any costs, assessments, or
payments under the provisions of chapter 15-39 in excess of that provided or required under the
provisions of chapter 15-39 as such laws and chapter existed on July 1, 1967. It is hereby
declared to be the intent of the legislative assembly to freeze the rights, benefits, privileges,
assessments, payments, and obligations of the persons, offices, and institutions specified in this
section to those rights, benefits, privileges, assessments, payments, and obligations as they
existed under the provisions of chapter 15-39 as such laws and chapter existed in form and
substance as of July 1, 1967, and that all legislative enactments subsequent to such date do not
affect or apply to those persons, offices, and institutions specified in this section or their rights,
benefits, privileges, assessments, payments, and obligations as fixed by this section.
15-39.1-26. Investment of moneys in fund - Interest and earnings attributable to fund.
Investment of the fund is under the supervision of the state investment board in accordance
with chapter 21-10. The moneys must be placed for investment only with a firm or firms whose
endeavor is money management, and only after a trust agreement or contract has been
executed. Investment costs may be paid directly from the fund, and are hereby appropriated for
that purpose, in accordance with section 21-10-06.2. All interest and earnings on funds
administered by the board must be credited to the fund.
15-39.1-27. Computation of years of service.
In computing the terms of service of a member under this chapter, for a member employed
full time, a year is deemed to be one hundred seventy-five days of compensation. Employment
less than one hundred seventy-five days of compensation is not deemed to be a full year but
only as the proportion of a year as the number of hours employed in each year of service bears
to seven hundred hours.
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15-39.1-28. Tax levy for teachers' retirement.
Any school district by a resolution of its school board may levy a tax pursuant to
subdivision b of subsection 1 of section 57-15-14.2, the proceeds to be used for the purposes of
meeting the district's contribution to the fund arising under this chapter and to provide the
district's share, if any, of contribution to the fund for contracted employees of either a
multidistrict special education board or another school district where the contracted employees
are also providing services to the taxing school district.
15-39.1-29. Fraud against fund - Penalty.
Any person who knowingly makes a false statement, or falsifies or permits to be falsified
any record or records of this retirement fund in any attempt to defraud such fund as a result of
such act, is guilty of theft, and is punishable therefor under the laws of the state of North
Dakota. Should any change or error in records result in any person receiving from the fund more
or less than that person would have been entitled to receive had the records been correct, then,
on the discovery of any such error, the board shall correct such error, and, as far as practicable,
shall adjust the payments in such a manner that the actuarial equivalent of the benefit to which
such person was correctly entitled is paid.
15-39.1-30. Confidentiality of records.
All records relating to the retirement benefits of a member or a beneficiary under this
chapter are confidential and are not public records. The information and records may be
disclosed, under rules adopted by the board, only to:
1. A person to whom the teacher has given written consent to have the information
disclosed.
2. A person legally representing the teacher, upon proper proof of representation, and
unless the teacher specifically withholds consent.
3. A person authorized by a court order.
4. A member's participating employer, limited to information concerning the member's
years of service credit, years of age, employer and employee contribution amounts,
and salary. The board may share other types of information as needed by the
employer to validate the employer's compliance with existing state or federal law. Any
information provided to the member's participating employer under this subsection
must remain confidential except as provided in subsection 6.
5. The administrative staff of the public employees retirement system for purposes
relating to membership and benefits determination.
6. State or federal agencies for the purpose of validating member eligibility or employer
compliance with existing state or federal law.
7. Member interest groups approved by the board, limited to information concerning the
member's death.
8. A government child support enforcement agency for purposes of establishing paternity
or establishing, modifying, or enforcing a child support obligation of the member.
9. The member's spouse or former spouse, that individual's legal representative, and the
judge presiding over the member's dissolution proceeding for purposes of aiding the
parties in drafting a qualified domestic relations order under section 15-39.1-12.2. The
information disclosed under this subsection must be limited to information necessary
for drafting the order.
10. Beneficiaries designated by a participating member or a former participating member
to receive benefits after the member's death, but only after the member's death.
Information relating to beneficiaries may be disclosed to other beneficiaries of the
same member.
11. The general public, but only after the board has been unable to locate the member for
a period in excess of two years, and limited to the member's name and the fact that
the board has been unable to locate the member.
12. Any person if the board determines disclosure is necessary for treatment, operational,
or payment purposes, including the completion of necessary documents.
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13.
A person if the information relates to an employer service purchase, but the
information must be limited to the member's name and employer, the retirement
program in which the member participates, the amount of service credit purchased by
the employer, and the total amount expended by the employer for that service credit
purchase. Information identified under this subsection may only be obtained from the
member's employer.
15-39.1-31. Correction of errors - Adjustment to actuarial equivalent.
If any change or error in the records of the fund or any participating employer or error in any
calculation results in any person receiving from the fund more than that person would have
been entitled to receive had the records been correct, the board shall correct the error and, as
far as practicable, adjust the payment in such a manner that the actuarial equivalent of the
benefit to which the person was entitled is paid or the board may offset the amount of the
overpayment from the amount of future retirement benefit payments. However, if the person
agrees to repay the fund for the cost of the error upon terms acceptable to the board, no
actuarial adjustment to the person's retirement benefit need be made.
15-39.1-32. Correction of errors - Lump sum payment.
If any change or error in the records of the fund or any participating employer or any error in
calculation results in any person receiving less from the fund than that person would have been
entitled to receive had the records been correct, the board shall correct the error and adjust the
payment in such a manner that the benefit to which the person was correctly entitled is paid. In
addition, the board shall remit payment to the person in a lump sum to compensate that person
for the difference between what was paid and what should have been paid. No interest may be
assessed against the fund for providing payment for the correction of any loss of benefits.
15-39.1-33. Employer service purchases.
A participating employer may purchase additional service credit on behalf of a member
under the following conditions:
1. The member may not be given the option to choose between an employer service
purchase and an equivalent amount paid in cash.
2. The member must meet one of the following conditions at the time the purchase is
made:
a. The tier one member's age plus service credit must be equal to or greater than
seventy-seven;
b. The tier one member's age must be at least fifty-five and the member must have
at least three years of service credit;
c. The tier two member's age plus service credit must be equal to or greater than
eighty-two; or
d. The tier two member's age must be at least fifty-five and the member must have
at least five years of service credit.
3. The board must determine the purchase price on an actuarially equivalent basis.
4. The purchase must be completed before the member's retirement.
5. The employer may purchase a maximum of three years of service credit on behalf of
the member.
6. The employer must pay the purchase price for the service credit purchased under this
section in a lump sum.
15-39.1-34. Internal Revenue Code compliance.
The board shall administer the plan in compliance with section 415, section 401(a)(9),
section 401(a)(17), and section 401(a)(31) of the Internal Revenue Code and regulations
adopted pursuant to those provisions as they apply to governmental plans.
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