I hope this note finds each of you well and enjoying the fleeting days of a very hot summer. Here are a few things I’m working on this week:
- The Higher Education Committee met earlier this week on the beautiful campus of Valley City State University. Among the many interesting discussions, the issue of recruitment and retention of faculty was of great interests. Chancellor Mark Hagerott shared that the NDUS institutions have lost six cyber scientists in the last 6 months to private industry or to other universities. That is alarming because it highlights the challenges the NDUS has as other universities poach our faculty or private industry hires them away. If I heard this correctly, of the roughly 3400 faculty members in ND’s institutions of HE, about 1600 of them are adjunct.
- As I write this, I am planning on attending the interim Retirement Committee meeting at the Capitol. That committee, chaired by Representative Mike Lefor, is charged with developing a plan to end the defined benefit (DB) program administered by ND PERS to new employees beginning January 1, 2024, and putting them in a defined contribution (DC) plan, instead.
In a conversation with the chairman two weeks ago, I reminded him that had the Legislature funded the plan adequately in 2011, 2013, 2015, 2017, or 2019, we would not be looking at closing it in 2021.
Among our concerns are that by preventing new employees to contribute to the DB plan, there will not be adequate funds to pay benefits to thousands of current public employees when they retire. I shared with Chairman Lefor that public employees, regardless of their age, prefer the DB plan over the DC plan because they know that the only thing guaranteed in a defined contribution plan is the contribution. In 2008 and 2009, when markets collapsed, millions of Americans saw their DC plans crater, along with their dreams of a secure retirement.
That is not a fate we wish on anyone.
Finally, I asked that the committee carefully examine the experiences of other states that have taken this route. Instead of funding one retirement system, states found themselves funding two retirement systems. It has not been the slam dunk solution that those states had envisioned.
In fact, West Virginia was forced to re-open their DB plan when the alternative became too expensive to maintain.
This is the first meeting and there will be much more information to share down the road. Please know that we will be watching!
Finally, I will be hosting Joel Heitkamp’s News and Views program on Friday, August 13 from 8:30 to 11:00. I’ve never hosted a show before so tune in to www.kfgo.com and listen in!
Have a great week!