NORTH DAKOTA PUBLIC EMPLOYEES RETIREMENT SYSTEM

401(a) Defined Contribution Plan

These are important details regarding this plan. Please call the NDPERS Benefits Office at  800 803-7377 for more information or visit www.nd.gov/ndpers for the full plan details.

ELIGIBILITY

Pursuant to HB 1452, effective October 1, 2013 through July 31, 2017, every Permanent Employee hired by the State of North Dakota who is at least 18 years old and who is hired within the window period of October 1, 2013 through July 31, 2017 is eligible to participate in the Defined Contribution Plan (the Plan). This does not include an employee of the Highway Patrol who is eligible to participate in the Highway Patrol Retirement System under NDCC 39-03.1, an employee who is eligible for the Teachers Fund For Retirement under NDCC 15-39.1 or an employee who is eligible for the alternate retirement program available under NDCC 15-10-17.4

Every Eligible Employee may participate in the Plan upon making an affirmative election within the first six months of employment.

CONTRIBUTIONS

Mandatory Employee Contributions
Each participant shall contribute seven percent (7%) of his or her compensation to the Plan. These are called "Mandatory Employee Contributions." Presently four percent (4%) of your employee contribution is contributed by your employer under 414(h) of the Internal Revenue Code and is paid in equal monthly installments commencing with the first month of participation in this Plan. Of 7%, 3% will be deducted from your paycheck on a pre-tax basis. Contribution rates for this plan are set in statute and pursuant to HB1452, when the Defined Benefit Hybrid Plan becomes 100% funded, all contribution rates will return to the rates that were in effect on 7/31/2013.

Mandatory Employer Contributions
Your employer shall contribute seven and twelve hundredths percent (7.12%) of compensation to the Plan each month. 

Effective January 1, 2014, the mandatory employer contribution will increase by 1% to 7.12% of your salary. The additional 1% will be contributed on a pre-tax basis. Contribution rates for this plan are set in statute or by the NDPERS Board and pursuant to HB1452, when the Defined Benefit Hybrid Plan becomes 100% funded, all contribution rates will return to the rates that were in effect on 7/31/2013.

VESTING

"Vesting" refers to an employee's right, usually earned over time, to receive some retirement benefits regardless of whether or not they remain with the employer. You will be vested in the employer contributions according to the following schedule:

Schedule 1

  • After 0 years you are 0% vested
  • After 1 years you are 0% vested
  • After 2 years you are 50% vested
  • After 3 years you are 75% vested
  • After 4 years you are 100% vested

INVESTMENTS

Your employer offers you a variety of investment choices from an array of asset classes. You can see a list of the investment choices under this plan on the Investment Choices page.

EXPENSES

Expenses vary from investment to investment. To learn about expenses associated with an investment, see a list of the investment choices under this plan on the Investment Choices page, and read the Fact Sheet or the prospectus for that investment.

DISTRIBUTIONS

You have a variety of options1 when it’s time to take income from your North Dakota Public Employees Retirement System Defined Contribution Plan:

  • Single-Sum Death Benefit

    • Please contact the NDPERS Benefits Office at 800 803-7377 for more information.
       
  • Systematic Withdrawals

    • Please contact the NDPERS Benefits Office at 800 803-7377 for more information.
       
  • Lump Sum

    • Please contact the NDPERS Benefits Office at 800 803-7377 for more information.
*Please note you will forfeit the Retiree Health Insurance Credit (RHIC) if you take a lump sum withdrawal or rollover from your account after termination.

*Please note: You must have terminated/resigned employment and be off of payroll for 31 days before you are eligible to take a distribution in any form.

  • Rollover

    • Upon separation from employment, you have the option to roll over your accumulations to another retirement plan that will accept them or to an Individual Retirement Account (IRA). Direct rollovers -- from one account to another -- are nontaxable and not reported as income to the federal government. Your plan's rules specify when you are eligible for a distribution.
*Please note: You must have terminated/resigned employment and be off of payroll for 31 days before you are eligible to take a distribution in any form.

*Please note you will forfeit the Retiree Health Insurance Credit (RHIC) if you take a lump sum withdrawal or a rollover from your account after termination.

TAXATION

Retirement plan contributions are usually made with before-tax dollars so Federal income taxes are deferred until you begin taking withdrawals later on.

No taxes are due on pre-tax contributions and earnings made until the money is withdrawn, but because these plans are intended primarily for retirement, you can generally withdraw funds only after termination of employment or age 59 ½ (subject to plan rules). If you withdraw funds before age 59 ½ , they may be subject to an additional 10% early-withdrawal penalty. In limited instances when you are making contributions to your retirement plan with after-tax dollars, you will not have to pay income tax on your principal. However, when monies are withdrawn, taxes may be applicable to any earnings and interest accrued.

For additional information and guidance, contact your tax advisor.

LOANS

This plan does not offer a loan feature.


1 The availability of certain distributions may depend on the type of contract underlying your plan. Also, if you're married, your right to choose an option may be subject to your spouse's right to survivor benefits. Talk to your benefits office for details.

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