2015 House Bill 1011 - Introduced

State of South Dakota  
NINETIETH SESSION
LEGISLATIVE ASSEMBLY, 2015  

400W0203   HOUSE BILL   NO.  1011  

Introduced by:    The Committee on Retirement Laws at the request of the South Dakota Retirement System
 

        FOR AN ACT ENTITLED, An Act to provide for automatic increases in the accounts of automatically-enrolled participants of the deferred compensation plan of the South Dakota Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
    Section 1. That § 3-13-56 be amended to read as follows:
    3-13-56. The board may establish an automatic enrollment feature within the plan by rules promulgated pursuant to chapter 1-26 and § 3-13-54. Any automatic enrollment feature established by the board shall include:
            (1)    A provision that automatic enrollment shall apply only to newly-employed members hired after a specified future date;
            (2)    A provision that automatic enrollment shall apply only to the employees of those participating units that choose the automatic enrollment feature for the unit's employees;
            (3)    A provision that automatic enrollment may not require more than an established maximum contribution per month per automatically-enrolled participant;
            (4)    A provision that a participant who is automatically enrolled shall have as long as ninety days after the start of employment to discontinue participation in the plan;
            (5)    A provision that an automatically-enrolled participant who discontinues participation in the plan within ninety days of enrollment shall receive a refund of the participant's account within thirty days after discontinuing participation;
            (6)    A provision that the state investment officer shall select a default investment fund to receive contributions by any automatically-enrolled participant who does not choose an investment alternative to receive the participant's contributions;
            (7)    A provision authorizing participating units and the system to make contributions to the plan for the benefit of participants;
            (8)    A provision that the plan shall adhere to notice requirements to automatically-enrolled participants in accord with Internal Revenue Service Rulings 98-30 and 2000-8; and
            (9)    A provision that automatic enrollment does not require advance authorization by a participant, which is hereby deemed to be an exception to the provisions of any state law requiring employee authorization for a payroll deduction or any similar ordinance of a local participating unit; and
            (10)    A provision that the amount of compensation deferred by an automatically-enrolled participant shall automatically increase by a specified amount each year unless the participant elects not to participate in automatic escalation or elects to defer a different amount than specified.
    If a participant discontinues participation pursuant to subdivision (4), that act is a permissive withdrawal pursuant to § 414(w) of the Internal Revenue Code.

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