Official: ND pension fund problems can be fixed

By DALE WETZEL

BISMARCK, N.D.

North Dakota's pension funds for teachers and government workers rose 13.2 percent in value in their last budget year, but the rebound does not offset recent losses, an investment administrator told state legislators on Wednesday.

"Pension funds across the country are in trouble ... but I would say North Dakota's not insurmountable," said LeRoy Gilbertson, the interim director of North Dakota's Retirement and Investment Office. "Some of them, it's questionable whether they're going to be able to come out of it."

Gilbertson spoke to a legislative committee that is considering proposals for the 2011 Legislature to raise contributions to the Public Employees Retirement System and the Teachers' Fund for Retirement. The PERS fund covers North Dakota government workers and public employee pension plans in Fargo, Grand Forks and Bismarck.

The PERS fund had about $1.5 billion and the teachers' fund had about $1.4 billion in assets on June 30, the end of the budget year, Gilbertson said. Both increased in value by 13.2 percent during the last budget year, after plummeting more than 24 percent the year before.

Lawmakers are considering several proposals to bolster the pension funds, including requiring increased contributions from workers and their taxpayer-financed employers, or making a lump-sum infusion of taxpayer money into the funds.

Complicating the work is an audit of the Retirement and Investment Office that should be finished by the end of August. It was ordered after the April suicide of the office's former director, Steve Cochrane. A permanent new office director should be hired by late fall.

North Dakota was among 15 states whose pension funds were recently rated by the nonprofit Pew Center as needing improvement.

North Dakota's pension funds do not offer automatic cost-of-living increases to beneficiaries, although the Legislature has provided occasional benefit improvements. Gilbertson said the lack of automatic increases will make it less difficult for the funds to recover.

"Those are really expensive, and some pension funds were extremely high, a 5 or 6 percent a year increase," he said. "North Dakota doesn't have that."