The NDPERS Board moved to reduce the actuarial rate of return assumption from 7.5% to 7% for members of the Defined Benefit and the Highway Patrol Retirement Plans effective for the July 1, 2020 valuation. The change comes after the NDPERS actuarial consultant finalized an experience study of the retirement systems.
The experience study, performed every 5 years, evaluates the accuracy of the demographic and economic assumptions made about the future. The Board’s actuary uses those assumptions to perform each retirement system’s actuarial valuation every year to determine the liabilities within each system.
The next actuarial valuation is set to be reported during October 2020.
The reduction to 7% will impact the interest rate NDPERS pays on member retirement accounts, the cost to purchase service and the interest accrual on service purchase payment plans starting on January 1, 2021. The Retiree Health Insurance Credit (RHIC) actuarial rate of return assumption was also reduced to 6.5% from 7.25%. The complete experience study is available online.