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Committee backs bill narrowing disability-retirement eligibility for PERS members
Summary
Senate Bill 2119 would bar PERS members who have reached normal retirement from applying for a disability retirement benefit.
Senate Bill 2119 would clarify that a member of the Public Employees Retirement System cannot apply for a disability retirement benefit under the defined‑benefit plan if the member has reached normal retirement age or date.
Rebecca Fricke, executive director of the Public Employees Retirement System, told the Government and Veterans Affairs Committee the change is intended to preserve the disability benefit as a pre‑retirement protection. “The intent of the NDEPERS long term disability benefit is to provide a pre retirement benefit to those that experience the life event of disability in which they can no longer perform the duties of their job,” Fricke said. She told the committee the system’s federal tax consultant, Ice Miller, advised the clarification would align PERS administration with industry standards and allow appropriate IRS tax reporting of disability versus retirement benefits.
Why it matters: Supporters said the bill closes a narrow but important compliance gap. Fricke explained that disability benefits are calculated at a flat 25% of final average salary, while normal retirement benefits use years of service times a multiplier. “In most cases the normal retirement benefit calculation is higher,” she said, but acknowledged there are occasional situations where the disability calculation may exceed a short‑service retiree’s normal retirement amount.
Committee discussion focused on the definition and timing of “normal retirement.” Fricke replied that normal retirement in the defined‑benefit plan is determined by the statutory rule of 85 (or the rule of 90 with minimum age requirements for employees hired after Jan. 1, 2020), and that if a member has met normal retirement they should retire under the retirement calculation rather than the disability calculation.
No public testimony opposed the bill. Representative Van Winkle moved a “do pass” recommendation with a second from Representative Steiner. The committee recorded a roll‑call vote and the motion carried (12 yes, 0 no, 1 absent). Representative McLeod was asked to carry the bill to the next stage.
The bill now proceeds with the committee’s favorable recommendation.
