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The North Dakota Public Employees Retirement System (NDPERS)

Is A Hybrid Pension Plan

The North Dakota Public Employees Retirement System (NDPERS) provides pension benefits for all state agencies except for those covered by other state-sponsored pension plans. Participation in NDPERS is mandatory if you work a minimum of 20 hours per week for 20 or more weeks of the year.

Eligible state employees hired after December 31, 1999, can opt out of the Defined Benefit Plan and elect to participate in the Defined Contribution Plan, at any time during the first six months of employment. However, once the Defined Contribution election is made it is irrevocable.

The NDPERS Defined Benefit Plan

The NPERS Defined Benefit Plan provides a guaranteed, lifetime monthly benefit upon retirement. Contributions are calculated as a percentage of your gross pay and automatically credited to your individual member account. Your account balance includes your monthly employee contributions, the vested portion of your employer contributions, and interest compounded monthly. In general, you become vested when you reach 36 months of service credit or turn 65 years of age, whichever benchmark is met earlier. Upon termination of employment, the NPERS Defined Benefit Plan provides four different payments options if you qualify under established requirements. As a member in the NDPERS Defined Benefit Plan, you’re eligible to increase your balance through the Portability Enhancement Provision (PEP) if you voluntarily contribute to a state employer-sponsored 403(b) or 457(b) supplemental retirement account as a payroll deduction. PEP enables you to become automatically vested in a percentage of your employer contribution and have it added to your member account balance. Only qualified members of the NDPERS Defined Benefit Plan are eligible for PEP.

The NPERS Defined Contribution Plan

Eligible state employees hired after December 31, 1999, can opt out of the Defined Benefit plan and elect the Defined Contribution Plan within the first 6 months of employment (your election is irrevocable).

Keep in mind, if you participate in the NPERS Defined Contribution Plan, the amount of your monthly retirement benefit is not guaranteed and you’re responsible for managing your account balance by working with investment consultants from the Trustee Company (TIAA).
Your Defined Contribution account consists of mandatory employee contributions, vested employer contributions and transferred contributions made on your behalf, plus any income, expenses, gains or losses.

You are immediately 100% vested in your mandatory employee contributions and you become vested in your employer contributions based on your years of service:

  • Less than 2 years: 0% vested in Employer Contributions
  • 2 years: 50% vested in Employer Contributions
  • 3 years: 75% vested in Employer Contributions
  • 4 years: 100% vested in Employer Contributions
Upon retirement, the Defined Contribution Plan provides two options for distribution of your vested account balance. You can choose a lump sum payment that you can roll into an eligible, approved plan. Or, you can elect to receive monthly, quarterly, semiannual, or annual payments, until your account balance is exhausted. Note: if you have elected to participate in the NDPERS Defined Contribution Plan you are not eligible for PEP.

Other North Dakota Pension Plans

The state of North Dakota provides other Defined Benefit pension plans including:
  • 1.Highway Patrol Retirement System
  • 2.Teachers Fund For Retirement
  • 3.Judges Retirement Plan
  • 4.Board of Higher Education Retirement Plan
North Dakota Pension Plans

PERS FAQ's

How long do I need to work before I am vested in NDPERS?

How long do I need to work before I am vested in NDPERS?
NDPERS Defined Benefit Plan: you become vested when you reach 36 months of service credit or turn 65 years of age, whichever benchmark is earlier.
NDPERS Defined Contribution Plan: you are immediately 100% vested in your Employee Contributions and you become vested in a percentage of your Employer Contributions based on your years of service.

What is the NDPERS retirement Age?

You can retire with a full retirement benefit:

  • If you meet the Rule of 85 which is when your combined total of years of service credit and age equals or exceeds 85 (or Rule of 90 with minimum age 60 if hired on or after 01-01-2016).
  • Or, when you attain age 65 while actively employed with a NDPERS participating agency.

You can retire early with a reduced retirement benefit after you reach age 55 (age 60 if hired on or after 01-01-2016) or older and have 3 years of eligible service credit.

Do I have to pay Federal Income Taxes on NDPERS retirement benefit?

Yes – once you retire and start receiving your NDPERS retirement benefits as income, those payments become subject to Federal taxes.

Will my NDPERS retirement benefits be reduced by Social Security Benefits I receive?

No, NDPERS does not reduce your benefit once you become eligible for Social Security.
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Pension Navigators is an educational organization dedicated to helping State Employees make informed decisions when planning their retirement. The educational resources we provide are designed to provide them with the most current information on their State Pension Benefits plus strategies for achieving their retirement income goals.

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