CHAPTER 3-12C
SOUTH DAKOTA RETIREMENT SYSTEM
PART 1. DEFINITIONS.
3-12C-101 Definitions.
3-12C-102 Actuarial equivalent defined.
3-12C-103 Child defined.
3-12C-104 COLA or cost of living adjustment defined.
3-12C-105 Compensation defined.
3-12C-106 Contributing member defined.
3-12C-107 Disability defined.
3-12C-108 Effective rate of interest defined.
3-12C-109 Minimum actuarial requirement to support benefits defined.
3-12C-110 Spouse defined.
3-12C-111 Terminated defined.
3-12C-112 Vested defined.
3-12C-113 Internal Revenue Code references.
PART 2. ADMINISTRATION
3-12C-201 Citation of chapter.
3-12C-202 System managed by board--Standard of conduct--Legal advice.
3-12C-203 Board of Trustees created--Composition.
3-12C-204 Election of trustees--Terms of office.
3-12C-205 Resignation of trustee due to loss of qualifying status--Filling of vacancy.
3-12C-206 Trustees--Oath of office.
3-12C-207 Compensation and expenses of trustees.
3-12C-208 Meetings of board--Chair and vice chair--Votes required for decision.
3-12C-209 Appointment of executive director--Compensation--Employment of personnel--Bond.
3-12C-210 Expense fund continued--Transfer from retirement system fund--Report of budget--Appropriation and disbursement for expenses.
3-12C-211 Rules for administration.
3-12C-212 Applications for membership or benefits--Picture identification required.
3-12C-213 Grievance procedure--Administrative and judicial review.
3-12C-214 Correction of records--Adjustment for underpayment or overpayment--Limitation.
3-12C-215 Confidentiality of records--Exceptions.
3-12C-216 Exemption of contributions and benefits from taxation and process.
3-12C-217 Domestic relations orders--Determination as to whether qualified--Restrictions on provisions.
3-12C-218 Business name of system--Treasurer.
3-12C-219 Use of fund restricted.
3-12C-220 Diversion of funds prohibited--Legislative policy.
3-12C-221 Rights of members on termination of system or discontinuance of contributions.
3-12C-222 Application of forfeitures.
3-12C-223 Investment of assets by investment council--Pooling of funds--Standards for investment--Compliance with federal divestiture enactments.
3-12C-224 Quadrennial independent report on investment performance.
3-12C-225 Review of investment policy when return lower than average--Report to Governor and Legislature.
3-12C-226 Annual actuarial valuation of system--Scope of valuation.
3-12C-227 Actuarial assumptions on which valuation based--Report of change.
3-12C-228 Funding of system--Review--Report--Corrective action.
3-12C-229 Annual report of funded status of system.
3-12C-230 Record of board proceedings--Annual report.
PART 3. MEMBERSHIP
3-12C-301 Members of system.
3-12C-302 Membership in system--Exclusions.
3-12C-303 Newly elected officials permitted to join system--Requirements--Credited service.
3-12C-304 Continuation of previously established retirement plan--Vote of employees required to participate in consolidated system.
3-12C-305 Newly established retirement plans of political subdivisions and public corporations to participate in consolidated system.
3-12C-306 Election by political subdivision or public corporation to participate in consolidated system.
3-12C-307 Coverage of joint employees of participating and nonparticipating political subdivisions.
3-12C-308 Accrued benefit deposit required when political subdivision or public corporation joins consolidated system--Participation by employees--Deferred payment of deposit.
3-12C-309 Effective date of participation of employees of participating unit.
3-12C-310 Privatization of governmental function.
PART 4. CONTRIBUTIONS
3-12C-401 Rate of contributions--Deduction from pay--Employer to make members' contributions.
3-12C-402 Additional contribution for foundation members by participating unit.
3-12C-403 Monthly transmission of contributions--Deposit in fund.
3-12C-404 Deduction of delinquent contributions from payments due from state--Penalty and interest.
3-12C-405 Service records and employee information furnished by employers.
3-12C-406 Knowing transmission of report with excluded compensation as misdemeanor.
3-12C-407 Accumulated contributions defined for foundation members.
3-12C-408 Accumulated contributions defined for generational members.
3-12C-409 Refund of unpaid accumulated contributions upon termination--Reversion of unclaimed payments to system.
3-12C-410 Lump-sum payments where designated beneficiary does not survive member--Reversion to system of unclaimed payments.
PART 5. SERVICE CREDIT
3-12C-501 Uniform application of service credit rules.
3-12C-502 Credited service defined for foundation members.
3-12C-503 Credited service defined for generational members.
3-12C-504 Purchase of prior service credit--Calculation of amount due.
3-12C-505 Prospective increase for credited service related to years of noncontributory service.
3-12C-506 Refund for purchase cost of noncontributing service.
3-12C-507 Repealed.
3-12C-508 Repealed.
3-12C-509 Purchase of prior service credit for public service not covered by retirement plan.
3-12C-510 Acquisition of credited service through transfer of funds--Requirements.
3-12C-511 Purchase of nonqualified permissive service credit allowed.
3-12C-512 Acquisition of credited service for members mobilized into certain federal military service.
3-12C-513 Service credit for leave of absence--Contributions to cover period of absence.
3-12C-514 Credited service for leave of absence due to qualified military service--Return to employment after discharge.
3-12C-515 Death or disability of member on leave of absence due to qualified military service--Return to service date and benefits.
3-12C-516 Members receiving differential wage payments.
3-12C-517 Valuation of purchased prior service credit--Installment payments--Death of member--Adjustment when installments not paid.
3-12C-518 Conversion of credited service.
3-12C-519 Purchase of certain public service as Class B service.
3-12C-520 Prior service credit on return of nonvested member to employment.
PART 6. TERMINATION AND REEMPLOYMENT BEFORE RETIREMENT
3-12C-601 Retirement benefit to terminated member with vested right--Calculation.
3-12C-602 Withdrawal of accumulated contributions on leaving covered employment--Picture identification required--Limitation.
3-12C-603 Distribution by direct rollover.
3-12C-604 Contributions left in system on termination of employment without vested right--Maximum period--Forfeiture.
3-12C-605 Uncollected payments from system--Reversion.
3-12C-606 Reinstatement of terminated rights.
3-12C-607 Early withdrawal precludes additional refund.
3-12C-608 Eligibility for benefits upon becoming full-time employee within twelve months after withdrawal.
PART 7. BENEFITS GENERALLY
3-12C-701 Benefits only payable monthly--Lump-sum payments prohibited unless specified.
3-12C-702 Person's birthday for purposes of eligibility.
3-12C-703 COLA applied to benefits--COLA elimination.
3-12C-704 Determination of COLA payable.
3-12C-705 Date of application of prorated payment of COLA.
3-12C-706 Modified monthly benefit permitted.
3-12C-707 Highest annual compensation.
3-12C-708 Time of termination of benefits.
3-12C-709 Duplicate benefits prohibited unless from another member's contributions.
3-12C-710 Member who leaves employment--Spouse and minor children.
3-12C-711 Rules regulating maximum annual benefit--Tax qualification--Limitation year defined.
3-12C-712 Compensation limits in Internal Revenue Code § 401(a)(17).
3-12C-713 Contribution credit defined--Payment of contribution credit and credited investment return.
PART 8. DISABILITY BENEFITS
3-12C-801 Criteria for determining disability--Uniform application.
3-12C-802 Disability documentation inadmissible for proceedings relative to workers' compensation.
3-12C-803 Disability benefits eligibility--Applications before July 1, 2015--Required information--Filing deadline.
3-12C-804 Employer certification of inability to provide effective accommodations or comparable employment--Applications before July 1, 2015.
3-12C-805 Amount of monthly disability benefit--Applications before July 1, 2015.
3-12C-806 Elimination or addition of disability benefit pertaining to children--Applications before July 1, 2015.
3-12C-807 Deduction of other public benefits from disability benefit--Reduction when children become ineligible--Applications before July 1, 2015.
3-12C-808 Conversion of disability benefit to retirement benefit at retirement age--Applications before July 1, 2015.
3-12C-809 Termination of disability benefit based on application before July 1, 2015.
3-12C-810 Maximum amount of disability benefit--Reporting earned income--Applications before July 1, 2015.
3-12C-811 Disability benefits for applications received after June 30, 2015.
3-12C-812 Disability benefits eligibility.
3-12C-813 Application for disability benefits--Required information--Filing deadline.
3-12C-814 Employer information--Employment history and accommodations.
3-12C-815 Health care provider information--Disability--Other medical documentation.
3-12C-816 Advice of disability advisory committee--Independent examination or assessment--Notice of disapproval of application.
3-12C-817 Notice of approval of disability benefits--Commencement of benefits.
3-12C-818 Calculation of disability benefits--Foundation members.
3-12C-819 Disability benefits for generational members.
3-12C-820 No credited service for disability benefit period.
3-12C-821 Contributions for period of employment while receiving disability benefits.
3-12C-822 Termination of disability benefits.
3-12C-823 Contributions upon return to covered employment.
3-12C-824 Retirement benefit of member who received disability benefits and returned to covered employment.
3-12C-825 Retirement benefit of member whose disability benefits were terminated but who did not return to covered employment.
3-12C-826 Family benefit--Member dies before normal retirement age while receiving disability benefits.
3-12C-827 Surviving spouse benefit where member received disability benefits.
3-12C-828 Surviving spouse benefit where member dies after normal retirement age while receiving disability benefits.
PART 9. BENEFITS PAYABLE AFTER THE DEATH OF A CONTRIBUTING MEMBER
3-12C-901 Family and surviving spouse benefits--Death of contributing member before retirement or death of member receiving disability based on application before July 1, 2015--Amount of benefit--Effective date.
3-12C-902 Payment or delivery to minors.
3-12C-903 Benefits payable directly to child at age eighteen--Elimination upon ineligibility.
3-12C-904 Elimination of family benefit as children become ineligible.
3-12C-905 Deductions of member's primary social security from benefits.
3-12C-906 Family benefits in lieu of other death benefits--Election by designated beneficiary to withdraw accumulated contributions.
3-12C-907 Family benefit--Deceased member who was working--Total benefit--Effective date.
PART 10. ADDITIONAL SURVIVOR PROTECTION
3-12C-1001 Election of additional survivor protection--Commencement and termination of additional contribution.
3-12C-1002 Extension of survivor protection option to current contributing members--Limitation on future extensions.
3-12C-1003 New enrollments in additional survivor protection prohibited.
3-12C-1004 Amount of additional survivor protection benefits--Termination.
PART 11. FOUNDATION MEMBER BENEFITS
3-12C-1101 Final average compensation for foundation members whose contributory service concluded before July 1, 2021.
3-12C-1102 Limitations on final average compensation for foundation members whose contributory service concluded before July 1, 2020.
3-12C-1103 Final average compensation for foundation members whose contributory service concludes after June 30, 2021.
3-12C-1104 Limitations on final average compensation for foundation members whose contributory service concludes after June 30, 2020.
3-12C-1105 Normal retirement age for foundation members.
3-12C-1106 Normal retirement benefit for foundation members for Class A credited service.
3-12C-1107 Normal retirement benefit for foundation members for Class B credited service other than justice, judge, or magistrate judge.
3-12C-1108 Normal retirement benefit for foundation members for Class B credited service as justice, judge, or magistrate judge.
3-12C-1109 Adjustments in benefit for certain retirees based on time and circumstances of retirement.
3-12C-1110 Reduction age defined for foundation members.
3-12C-1111 Early retirement benefits for foundation members.
3-12C-1112 Adjustment of early retirement benefits for foundation members who retire before eligible for social security.
3-12C-1113 Effective date of retirement benefit of foundation member--Last payment--Retroactive retirement benefits.
3-12C-1114 Surviving spouse benefit--Retired foundation member--Effective dates.
3-12C-1115 Surviving spouse benefit--Foundation member--Calculation of benefit.
3-12C-1116 Early surviving spouse benefit for foundation member's spouse.
PART 12. GENERATIONAL MEMBER BENEFITS
3-12C-1201 Final average compensation defined for generational members.
3-12C-1202 Limitations on final average compensation for generational members.
3-12C-1203 Normal retirement age for generational members.
3-12C-1204 Normal retirement benefit for generational members for Class A credited service.
3-12C-1205 Normal retirement benefit for generational members for Class B credited service other than justice, judge, or magistrate judge.
3-12C-1206 Normal retirement benefit for generational members for Class B credited service as justice, judge, or magistrate judge.
3-12C-1207 Early retirement benefits for generational members.
3-12C-1208 Application for retirement benefit required--Picture identification required--Spouse signature not required.
3-12C-1209 Monthly benefit options for generational members.
3-12C-1210 Irrevocable benefit election by generational members.
3-12C-1211 Effective date of retirement benefit of generational member--Last payment.
3-12C-1212 Retroactive retirement benefits for generational members.
3-12C-1213 Surviving spouse benefit--Retired generational member--Amount of benefit.
3-12C-1214 Surviving spouse benefit--Generational member dying after normal retirement age but before start of benefit--Amount of benefit.
3-12C-1215 Amount of surviving spouse benefit for generational member.
3-12C-1216 Early surviving spouse benefit for generational member's spouse.
PART 13. VARIABLE RETIREMENT ACCOUNTS
3-12C-1301 Variable retirement accounts of generational members--Contributions and credited investment return.
3-12C-1302 Variable retirement contributions of generational members.
3-12C-1303 Distributions from generational member's variable retirement account.
PART 14. REEMPLOYMENT AFTER RETIREMENT
3-12C-1400 Three consecutive calendar months of separation described.
3-12C-1401 Reemployment of retired member--Separation of service required--Hiring procedures.
3-12C-1401.1 Reemployment of retired member--Limited exception to separation of service requirement.
3-12C-1402 Reduction of retirement benefit during reemployment before July 1, 2004--Recalculation of additional benefit.
3-12C-1403 Retirement benefits for members who reentered covered employment after June 30, 2004 and before April 1, 2010.
3-12C-1404 Reduction of retirement benefit during reemployment for members who reentered employment between July 1, 2004 and April 1, 2010--Benefit upon subsequent retirement.
3-12C-1405 Retired members--Reentrance to covered employment--Benefits and membership.
3-12C-1405.1 Reemployment of retired member--Limited exception to benefit and membership provisions for part-time employment.
3-12C-1405.2 Reemployment of retired member--Employer tracking.
3-12C-1406 Invalid retirement--Repayment of retirement benefit payments.
PART 15. SUPPLEMENTAL PENSION BENEFIT
3-12C-1501 Supplemental pension benefit created.
3-12C-1502 Interest rate assumption--Suspension of new supplemental pension contracts--No right to particular price.
3-12C-1503 Rollover of funds--Single premium--Contract effective upon signing--Payment of benefits.
3-12C-1504 Types of supplemental pension benefits.
3-12C-1505 COLA applicable to supplemental pension benefits.
3-12C-1506 Death of participant or spouse--Lump sum distribution to beneficiaries--Time for making claim.
3-12C-1507 Contract purchases and benefit payments deemed qualified plan distributed annuity contracts.
3-12C-1508 Minimum distribution rules--Annual benefit limitations.
3-12C-1509 Applicability of certain retirement system provisions.
3-12C-1510 Exemption from Title 58 and from securities and agent registration.
PART 16. MEMBERSHIP BY CONSOLIDATION AND ELECTION
3-12C-1601 Previous retirement systems consolidated--Purpose.
3-12C-1602 Intent to provide increased benefits to previously retired members of systems.
3-12C-1603 Increase in benefits for previously retired members of systems.
3-12C-1604 Adjustment of increase for retired members electing optional payment or early retirement.
3-12C-1605 Previously retired members paid from consolidated fund.
3-12C-1606 Members of consolidated systems entitled to benefits of prior law--Retention of Codified Laws.
3-12C-1607 Amount of benefits for justice or judge mandatorily retired.
3-12C-1608 Board of Regents employees--Definition of balances.
3-12C-1609 Existing regents' contracts preserved--Expansion of retirement plan--Transition.
3-12C-1610 Contract for purchase of service for Board of Regents.
3-12C-1611 Contributory service credited to Board of Regents employees--Eligibility of nonparticipating employees--Qualification for prior credited service.
3-12C-1612 Normal retirement allowance reduced by actuarial equivalent--Deposit of individual balance--Member contributions.
3-12C-1613 Allowance to surviving spouse of law enforcement officer retired for disability.
3-12C-1614 Repealed.
3-12C-1615 Rapid City firefighter membership in system--Benefits and credited service.
3-12C-1616 Rapid City firefighter retirement benefits--Normal retirement age.
3-12C-1617 Payments from public employees retirement fund to Rapid City firefighters.
3-12C-1618 Payments by Rapid City.
3-12C-1619 Crediting of transfers from Rapid City pension fund.
3-12C-1620 Retirement benefits for certain city of Aberdeen employees.
3-12C-1621 Aberdeen firefighters to participate in system.
3-12C-1622 Eligible benefits for Aberdeen firefighters.
3-12C-1623 Amount to be paid by municipality of Aberdeen.
3-12C-1624 Funds from Aberdeen municipality considered member contributions.
3-12C-1625 Watertown firefighters pension fund members--Credited service.
3-12C-1626 Watertown firefighters benefits paid from the system--Minimum benefit.
3-12C-1627 Payments by Watertown.
3-12C-1628 Crediting transfers from city of Watertown firemen pension fund.
3-12C-1629 Mitchell firefighters as members of system.
3-12C-1630 Benefits for Mitchell firefighters.
3-12C-1631 Calculation of Mitchell firefighter benefits.
3-12C-1632 Amount of payment to system by city of Mitchell.
3-12C-1633 Transfer of city of Mitchell firemen's pension plan funds as member contributions.
3-12C-1634 Information required of city of Mitchell.
3-12C-1635 Huron firefighters as members of system.
3-12C-1636 Benefits for Huron firefighters.
3-12C-1637 Calculation of Huron firefighter benefits.
3-12C-1638 Amount of payment to system by City of Huron.
3-12C-1639 Transfer of city of Huron firemen's pension plan funds as member contributions.
3-12C-1640 Information required of city of Huron.
3-12C-1641 Election by municipality of Sioux Falls to be participating unit.
3-12C-1642 Transfer of funds in cement plan retirement fund.
3-12C-1643 Members of cement plant retirement plan to be Class C members of system.
3-12C-1644 Class C members to receive benefits as provided under cement plant retirement plan.
3-12C-1645 Funds transferred from cement plant retirement fund considered member contributions.
3-12C-1646 Payment of benefits and operational expenses related to Class C members.
3-12C-1647 Promulgation of rules to administer retirement benefits for Class C members.
3-12C-1648 Member election to receive lump sum trustee-to-trustee payment in lieu of monthly payments.
3-12C-1649 Surviving spouse election to receive lump sum trustee-to-trustee payment in lieu of monthly payments.
3-12C-1650 Department of Labor and Regulation employees' retirement plan--Membership with system--Class D.
3-12C-1651 Class D membership--Benefits received.
PART 17. RECLASSIFICATION
3-12C-1701 Correctional security staff benefits.
3-12C-1702 Calculation of benefits for sheriffs and deputies--Prior elective rights preserved.
3-12C-1703 Calculation of benefits of parole agent.
3-12C-1704 Calculating benefits of air rescue firefighter.
3-12C-1705 Foundation member conservation officers.
3-12C-1706 Benefits of conservation officers employed by Department of Game, Fish and Parks, Division of Custer State Park, and park rangers--Credited service.
PART 18. QUALIFIED BENEFIT PRESERVATION ARRANGEMENT
3-12C-1801 Participant--Definition.
3-12C-1802 Qualified benefit preservation arrangement--Definition.
3-12C-1803 Qualified benefit preservations arrangement--Establishment--Purpose.
3-12C-1804 Eligibility to participate.
3-12C-1805 Benefit payable.
3-12C-1806 Cost of living adjustment after benefit begins--Change in benefit payable.
3-12C-1807 Qualified benefit preservation arrangement--Funding.
3-12C-1808 Contributions.
3-12C-1809 Qualified benefit preservation arrangement trust fund--Establishment--Purpose.
3-12C-1810 Qualified benefit preservation arrangement assets--Income.
3-12C-1811 Qualified benefit preservation arrangement--Administration.
3-12C-1812 Qualified benefit preservation arrangement--No assignment.
3-12C-1813 Conflicts.
3-12C-1814 Limitation of rights.
3-12C-1815 Erroneous payments--Corrections.
3-12C-1816 Administration of benefit--Release and receipt.
3-12C-1817 Reservation of power to change.
PART 19. REQUIRED MINIMUM DISTRIBUTIONS
3-12C-1901 General rule.
3-12C-1902 Member's death after distributions begun.
3-12C-1903 Member's death before required distributions begun.
3-12C-1904 Incidental benefit rule.
3-12C-1905 Reasonable and made in good faith.
3-12C-101. Definitions.
Terms as used in this chapter mean:
(1) "Actuarial accrued liability," the present value of all benefits less the present value of future normal cost contributions;
(2) "Actuarial experience analysis," a periodic report that reviews basic experience data and furnishes actuarial analysis that substantiates the assumptions adopted for the purpose of making an actuarial valuation of the system;
(3) "Actuarial valuation," a projection of the present value of all benefits and the current funded status of the system, based upon stated assumptions as to rates of interest, mortality, disability, salary progressions, withdrawal, and retirement as established by a periodic actuarial experience analysis that takes into account census data of all active members, vested terminated members, and retired members and their beneficiaries under the system;
(4) "Actuarial value funded ratio," the actuarial value of assets divided by the actuarial accrued liability;
(5) "Actuarial value of assets," equal to the fair value of assets;
(6) "Actuarially determined contribution rate," the fixed, statutory contribution rate, no less than the normal cost rate with expenses assuming the minimum COLA, and no greater than the normal cost rate with expenses assuming the maximum COLA;
(7) "Air rescue firefighters," employees of the Department of the Military who are stationed at Joe Foss Field, Sioux Falls, and who are directly involved in firefighting activities on a daily basis;
(8) "Approved actuary," any actuary who is a member of the American Academy of Actuaries or an Associate or a Fellow of the Society of Actuaries who meets the qualification standards of the American Academy of Actuaries to issue actuarial opinions regarding the system or any firm retaining such an actuary on its staff and who is appointed by the board to perform actuarial services;
(9) "Assumed rate of return," the actuarial assumption adopted by the board pursuant to § 3-12C-227 as the annual assumed percentage return on trust fund assets, compounded;
(10) "Beneficiary," the person designated by a member of the system to receive any payments after the death of such member;
(11) "Benefits," the amounts paid to a member, spouse, child, or beneficiary as a result of the provisions of this chapter;
(12) "Board," the Board of Trustees of the South Dakota Retirement System;
(13) "Calendar quarter," a period of three calendar months ending March thirty-first, June thirtieth, September thirtieth, or December thirty-first of any year;
(14) "Campus security officers," employees of the Board of Regents whose positions are subject to the minimal educational training standards established by the law enforcement standards commission pursuant to chapter 23-3, who satisfactorily complete the training required by chapter 23-3 within one year of employment, and whose primary duty as sworn law enforcement officers is to preserve the safety of the students, faculty, staff, visitors, and the property of the university. The employer shall file with the system evidence of the appointment as a sworn law enforcement officer at the time of employment and shall file evidence of satisfactory completion of the training program pursuant to chapter 23-3 within one year of employment;
(15) "Certified school employee," any employee of a participating unit who is required to have a certificate as defined in subdivision 13-42-1(3);
(16) "Class A credited service," service credited as a Class A member of the system;
(17) "Class A member," any member other than a Class B member or a Class C member and is either a foundation member or a generational member;
(18) "Class B credited service," service credited as a Class B member of the system;
(19) "Class B member," a member who is a justice, judge, state law enforcement officer, magistrate judge, police officer, firefighter, county sheriff, deputy county sheriff, correctional security staff, parole agent, air rescue firefighter, emergency medical services personnel, campus security officer, court services officer, juvenile corrections agent, gaming enforcement agent, conservation officer, or park ranger and is either a foundation member or a generational member;
(20) "Class C credited service," service credited as a Class C member of the system;
(21) "Class C member," any member of the cement plant retirement plan including any retiree or any vested member;
(22) "Class D credited service," service credited as a Class D member of the system;
(23) "Class D member," any member that was a member of the Department of Labor and Regulation employees' retirement plan as of June 30, 2020;
(24) "Classified employee," an employee of a public school district who is not required by law to be a certified school employee, an employee of any college or university under the control of the Board of Regents who is not a faculty member or an administrator and comes within the provisions of chapter 3-6D, an employee of a public corporation, an employee of a chartered governmental unit, and any other participating employee not elsewhere provided for in this chapter;
(25) "Comparable level position," a member's position of employment that is generally equivalent to the member's prior position of employment in terms of required education, required experience, required training, required work history, geographic location, and compensation and benefits;
(26) "Conservation officers," employees of the Department of Game, Fish and Parks and the Division of Wildlife or Division of Custer State Park who are employed pursuant to § 41-2-11 and whose positions are subject to the requirements as to education and training provided in chapter 23-3;
(27) "Consumer price index," the consumer price index for urban wage earners and clerical workers calculated by the United States Bureau of Labor Statistics;
(28) "Contributory service," service to a participating unit during which contributions were made to a South Dakota retirement system, which may not include years of credited service as granted in § 3-12C-509 or 3-12C-511;
(29) "Correctional security staff," the warden, deputy warden, and any other correctional staff holding a security position as verified by the Department of Corrections and approved by the Bureau of Human Resources and Administration and the Bureau of Finance and Management, and determined by the board as Class B members;
(30) "Court services officers," persons appointed pursuant to § 26-7A-8;
(31) "Covered employment," a member's employment as a full-time employee of a participating unit;
(32) "Deputy county sheriff," an employee of a county that is a participating unit, appointed by the board of county commissioners pursuant to §§ 7-12-9 and 7-12-10, whose position is subject to the minimum educational and training standards established by the law enforcement standards commission pursuant to chapter 23-3. The term does not include jailers or clerks appointed pursuant to §§ 7-12-9 and 7-12-10 unless the participating unit has requested that the jailer be considered as a deputy county sheriff and the board has approved the request;
(33) "Effective date of retirement," the first day of the month in which retirement benefits are payable;
(34) "Eligible retirement plan," the term eligible retirement plan includes those plans described in section 402(c)(8)(B) of the Internal Revenue Code;
(35) "Eligible rollover distribution," any distribution to a member of accumulated contributions pursuant to § 3-12C-602. The term does not include any portion of a distribution that represents contributions made to the system on an after tax basis nor distributions paid as a result of the member reaching the required beginning date;
(36) “Emergency medical services personnel,” a person licensed by the Board of Medical and Osteopathic Examiners in accordance with chapter 36-4B or licensed or certified by the Department of Health in accordance with chapter 34-11 who actively practices emergency medical services;
(37) "Employer," the State of South Dakota and any department, bureau, board, or commission of the State of South Dakota, or any of its governmental or political subdivisions or any public corporation of the State of South Dakota that elects to become a participating unit;
(38) "Employer contributions," amounts contributed by the employer of a contributing member, excluding member contributions made by an employer after June 30, 1984, pursuant to § 3-12C-401;
(39) "Equivalent public service," any public service other than as a justice, a judge, or a magistrate judge and comparable to Class B service as defined by this section, if the service is in the employ of a public entity that is not a participating unit;
(40) "Fair value of assets," the total assets of the system at fair market value for securities traded on exchanges; for securities not traded on exchanges, a value based on similar securities; and for alternative investments, reported net asset value;
(41) "Fair value funded ratio," the fair value of assets divided by the actuarial accrued liability;
(42) "Fiduciary," any person who exercises any discretionary authority or control over the management of the system or the management or disposition of its assets, renders investment advice for a fee or other compensation, direct or indirect, or has any authority or responsibility to do so, or has any discretionary authority or responsibility in the administration of the system;
(43) "Foundation member," any member of the system whose contributory service began before July 1, 2017;
(44) "Foundation retiree," any foundation member who has retired with a benefit payable from the system;
(45) "Firefighter," any full-time firefighter who works at least twenty hours a week and at least six months a year. The term does not include any volunteer firefighter;
(46) "Full-time employee," any employee who is considered full-time by the participating unit and is customarily employed by the participating unit for twenty hours or more a week and at least six months a year, regardless of classification of employment as seasonal, temporary, leased, contract, or any other designation;
(47) "Fund," public employees' retirement fund or funds established for the purposes of administration of this chapter;
(48) "Gaming enforcement agent," any employee of the South Dakota Commission on Gaming who is appointed pursuant to § 42-7B-56 and who must, as a condition of employment, be law enforcement certified;
(49) "General employee," any full-time municipal employee who is not a firefighter or a police officer;
(50) "Generational member," any member of the system whose contributory service began after June 30, 2017;
(51) "Generational retiree," any generational member who has retired with a benefit payable from the system;
(52) "Health care provider," a physician or other health care practitioner licensed, registered, certified, or otherwise authorized by law to provide specified health services;
(53) "Juvenile corrections agent," a designee of the secretary of corrections charged with the care, custody, and control of juveniles committed to the Department of Corrections until the age of twenty-one or a person who is charged with the care, custody, and control of juveniles at a juvenile corrections facility under the control of a participating unit;
(54) "Law enforcement officer," any agent of the state division of criminal investigation, officer of the South Dakota Highway Patrol, police officer, county sheriff, deputy county sheriff, or firefighter;
(55) "Member," any person who is contributing or has made contributions to the system and is either a foundation member or generational member. A person's membership ceases when the person withdraws his or her accumulated contributions after termination of employment;
(56) "Member contributions," amounts contributed by members, including member contributions made by an employer after June 30, 1984, pursuant to § 3-12C-401;
(57) "Military service," a period of active duty with the United States Army, the United States Navy, the United States Air Force, the United States Marine Corps, or the United States Coast Guard, from which duty the member received an honorable discharge or an honorable release;
(58) "Municipality," any incorporated municipal government under chapter 9-3 or any chartered governmental unit under the provisions of Article IX of the Constitution of the State of South Dakota;
(59) "Noncontributory service," for foundation members, service delineated in subdivisions 3-12C-502(2), (5), (7), and (8), and for generational members, service pursuant to § 3-12C-514;
(60) "Normal cost," the expected long-term cost of the system benefits and expenses expressed as a percentage of payroll;
(61) "Normal retirement," the termination of employment and application for benefits by a member with three or more years of contributory service or noncontributory service on or after the member's normal retirement age;
(62) "Other public benefits," eighty percent of the primary insurance amount or primary social security benefits that would be provided under federal social security;
(63) "Other public service," service for the government of the United States, including military service; service for the government of any state or political subdivision thereof; service for any agency or instrumentality of any of the foregoing; or service as an employee of an association of government entities described in this subdivision;
(64) "Park rangers," employees of the Department of Game, Fish and Parks within the Division of Parks and Recreation and whose positions are subject to the requirements as to education and training provided in chapter 23-3 and whose primary duty is law enforcement in the state park system;
(65) "Parole agent," an employee of the Department of Corrections employed pursuant to § 24-15-14 who is actually involved in direct supervision of parolees on a daily basis;
(66) "Participating unit," the State of South Dakota and any department, bureau, board, or commission of the State of South Dakota, and any of its political subdivisions or any public corporation of the State of South Dakota that has employees who are members of the retirement system created in this chapter;
(67) "Plan year," a period extending from July first of one calendar year through June thirtieth of the following calendar year;
(68) "Police officer," any employee in the police department of any participating municipality holding the rank of patrol officer, including probationary patrol officer, or higher rank and whose position is subject to the minimum educational and training standards established by the law enforcement officers standards commission pursuant to chapter 23-3. The term does not include civilian employees of a police department nor any person employed by a municipality whose services as a police officer require less than twenty hours a week and six months a year. If a municipality which is a participating unit operates a city jail, the participating unit may request that any jailer appointed pursuant to § 9-29-25 be considered a police officer, subject to the approval of the board;
(69) "Political subdivision" includes any municipality, school district, county, chartered governmental unit, public corporation or entity, and special district created for any governmental function;
(70) "Present value of all benefits," the present value of all benefits expected to be paid to all retired, terminated, and active members and beneficiaries, based on past and future credited service and future compensation increases;
(71) "Present value of benefits earned to date," the present value of the benefits currently being paid to retired members and their beneficiaries, the present value of the benefits payable to terminated members, and the actuarial accrued liability of active members, based on the actuarial assumptions and methods used in the actuarial valuation;
(72) "Projected compensation," a deceased or disabled member's final average compensation multiplied by the COLA commencing each July first for each complete twelve-month period elapsed between the date of the member's death or disability, whichever occurred earlier, and the date the member would attain normal retirement age or the benefit commences, whichever occurred earlier;
(73) "Projected service," the credited service plus the service that the member would have been credited with at normal retirement age had the member continued in the system and received credit at the same rate the member was credited during the year covered by the compensation that was used in the calculation of the disability or family benefit;
(74) "Qualified military service," service in the uniformed services as defined in § 414(u)(5) of the Internal Revenue Code;
(75) "Required beginning date," the later of April first of the calendar year following the calendar year in which the member attains age seventy and one-half or April first of the calendar year following the calendar year in which the member retires;
(76) "Retiree," any foundation or generational member who retires with a lifetime benefit payable from the system;
(77) "Retirement," the severance of a member from the employ of a participating unit with a retirement benefit payable from the system;
(78) "Retirement benefit," the monthly amount payable upon the retirement of a member;
(79) "Single premium," the lump-sum amount paid by a supplemental pension participant pursuant to a supplemental pension contract in consideration for a supplemental pension benefit;
(80) "Social investment," investment, divestment, or prohibition of investment of the assets of the system for purposes other than maximum risk-adjusted investment return, which other purposes include ideological purposes, environmental purposes, political purposes, religious purposes, or purposes of local or regional economic development;
(81) "State employees," employees of the departments, bureaus, commissions, and boards of the State of South Dakota;
(82) "Supplemental pension benefit," any single-premium immediate pension benefit payable pursuant to §§ 3-12C-1504 and 3-12C-1505;
(83) "Supplemental pension contract," any agreement between a participant and the system upon which a supplemental pension is based, including the amount of the single premium, the type of pension benefit, and the monthly supplemental pension payment amount;
(84) "Supplemental pension contract record," the record for each supplemental pension participant reflecting relevant participant data; a designation of any beneficiary, if any; the amount of the participant's funds rolled into the fund; the provisions of the participant's supplemental pension contract; and supplemental pension payments made pursuant to the contract;
(85) "Supplemental pension participant," any member who is a retiree receiving a benefit from the system, or, if the member is deceased, the member's surviving spouse who is receiving a benefit from the system, and who chooses to purchase a supplemental pension benefit pursuant to the provisions of this chapter;
(86) "Supplemental pension spouse," any person who was married to a supplemental pension participant at the time the participant entered into the supplemental pension contract;
(87) "System," the South Dakota Retirement System created in this chapter;
(88) "Trustee," a member of the board of trustees;
(89) "Unfunded actuarial accrued liability," the actuarial accrued liability less the actuarial value of assets.
Source: SL 1967, ch 303, § 2; SDCL § 3-12-2; SL 1968, ch 216, § 1; SL 1970, ch 25, § 1; SL 1973, ch 24, §§ 1, 2; SL 1974, ch 35, § 2; SL 1975, ch 38, § 6; SL 1975, ch 39, §§ 2, 3; SL 1976, ch 40, § 1; SL 1977, ch 28, §§ 1 to 3; SL 1977, ch 29; SL 1977, ch 31, §§ 1 to 3; SL 1978, ch 31; SL 1978, ch 32, § 5; SL 1979, ch 26, § 1; SL 1980, ch 31, § 1; SL 1982, ch 32, § 1; SL 1982, ch 33; SL 1982, ch 34, § 1; SL 1982, ch 35; SL 1983, ch 17; SL 1983, ch 18; SL 1983, ch 19, §§ 1, 2; SL 1983, ch 22, § 2; SL 1984, ch 23, § 1; SL 1985, ch 24, §§ 1, 2; SL 1986, ch 37, §§ 1-3, 11; SL 1987, ch 35; SL 1987, ch 36, §§ 1, 2; SL 1988, ch 30, §§ 1 to 3; SL 1988, ch 31; SL 1989, ch 21, § 40; SL 1989, ch 38, §§ 5, 9; SL 1989, ch 238, § 3; SL 1990, ch 36; SL 1991, ch 29, §§ 1, 2; SL 1991, ch 30; SL 1992, ch 30, § 1; SL 1992, ch 34, §§ 1, 2; SL 1993, ch 38, §§ 1, 2; SL 1993, ch 39, § 1; SL 1993, ch 40; SL 1993, ch 41; SL 1993, ch 42, §§ 1-3; SL 1993, ch 44, §§ 2, 3; SL 1994, ch 32, §§ 1, 2; SL 1994, ch 34, §§ 1, 2; SL 1995, ch 18, §§ 1, 2, 4; SL 1995, ch 23, § 1; SL 1995, ch 24, §§ 1, 11, 15; SL 1996, ch 29, § 1; SL 1996, ch 30, §§ 1, 5; SL 1997, ch 25, § 1; SL 1997, ch 26, § 1; SL 1997, ch 27, § 1; SL 1998, ch 15, §§ 1, 2, 3, 4, 5; SL 1998, ch 16, § 1; SL 1998, ch 17, § 1; SL 1998, ch 17, § 2; SL 1998, ch 18, § 1; SL 1998, ch 19, § 1; SL 1998, ch 110, § 2; SL 1999, ch 14, §§ 1, 2; SL 1999, ch 15, § 1; SL 2000, ch 24, §§ 1, 2; SL 2002, ch 22, §§ 1, 2; SL 2004, ch 35, § 1; SL 2004, ch 36, §§ 1, 2; SL 2004, ch 37, §§ 1, 2; SL 2004, ch 38, § 7; SL 2004, ch 40, §§ 5 to 7; SL 2004, ch 42, §§ 3 to 11; SL 2005, ch 24, §§ 1, 2; SL 2006, ch 17, § 1; SL 2008, ch 20, §§ 1 to 6; SL 2008, ch 21, § 1; SL 2008, ch 24, § 2; SL 2009, ch 138, § 3; SL 2010, ch 20, §§ 1 to 6; SL 2010, ch 21, § 2; SL 2010, ch 23, §§ 3, 4, eff. Apr. 1, 2010; SL 2010, ch 77, § 2; SL 2011, ch 1 (Ex. Ord. 11-1), § 18, eff. Apr. 12, 2011; SL 2011, ch 20, § 1; SL 2012, ch 26, §§ 1 to 6; SL 2013, ch 20, §§ 2 to 5; SL 2014, ch 18, § 1; SL 2014, ch 20, §§ 19 to 22; SL 2014, ch 21, §§ 8, 9 eff. Apr. 1, 2014; SL 2015, ch 25, §§ 1 to 3; SL 2016, ch 32, § 56; SL 2017, ch 27, § 4; SL 2017, ch 28, § 6; SL 2018, ch 32, §§ 1 to 4; SL 2018, ch 33, §§ 1 to 6; SDCL § 3-12-47; SL 2019, ch 22, §§ 2, 45; SL 2019, ch 23, § 1; SL 2019, ch 24, § 1; SL 2020, ch 12, § 1; SL 2020, ch 13, § 3; SL 2021, ch 29, § 8, eff. Apr. 1, 2021; SL 2022, ch 14, § 1; SL 2022, ch 15, § 1; SL 2023, ch 14, § 1; SL 2023, ch 15, § 1; SL 2023, ch 16, § 1; SL 2024, ch 1 (Ex. Ord. 24-1), § 35, eff. Apr. 8, 2024.
3-12C-102. Actuarial equivalent defined.
For the purposes of this chapter, the term, actuarial equivalent, is a benefit of equal value, computed on the basis of the interest rate, mortality, and baseline COLA assumptions adopted by the board for purposes of the actuarial valuation. If the board adopts a select and ultimate rate of interest, the interest rate is the ultimate rate. Mortality is based on a unisex rate that is fifty percent male and fifty percent female for employees and beneficiaries, based on the mortality rates for retired employees and beneficiaries, including, if the board adopts a generational mortality table, a generational projection of mortality improvement with the member's and beneficiary's ages as of the date of the calculation assumed to be in the calendar year in which the plan year containing the date of the calculation begins. If the board adopts distinct mortality tables for the different categories of retired members or beneficiaries, the mortality rates must be based on a weighted blend of the tables with the weighting based on the percentage of accrued benefits for each category of members as the actuarial valuation immediately preceding the date of adoption of the mortality tables. The system shall make the interest rate, mortality, and baseline COLA assumptions public.
Source: SL 2016, ch 32, § 51; SL 2017, ch 27, § 6; SDCL § 3-12-47.5; SL 2019, ch 22, § 1; SL 2023, ch 16, § 2.
3-12C-103. Child defined.
For purposes of administering benefits pursuant to this chapter, the term, child, means an unmarried dependent child of the member, who has not passed the child's nineteenth birthday and each unmarried dependent child, who is totally and permanently disabled, either physically or mentally, regardless of the child's age, if the disability occurred before age nineteen. It includes a stepchild or a foster child who depends on the member for support and lives in the household of the member in a regular parent-child relationship. It also includes any child of the member conceived during the member's lifetime and born after the member's death.
For purposes of making beneficiary-type payments pursuant to this chapter, the term, child, means a person entitled to take as a child via intestate succession pursuant to the provisions of title 29A.
Source: SL 2019, ch 22, § 3.
3-12C-104. COLA or cost of living adjustment defined.
The term, COLA or cost of living adjustment, means the annual increase, if any, as determined by § 3-12C-704, in the amount of the benefit provided on July first, compounded annually. However, no COLA may be provided unless the member has received benefit payments for at least the consecutive, twelve-month period before July first.
Source: SL 2017, ch 27, § 1; SDCL § 3-12-47.10; SL 2019, ch 22, §§ 4, 45; SL 2021, ch 26, § 1.
3-12C-105. Compensation defined.
For the purposes of this chapter, the term, compensation, means gross wages paid to a member by the employer for credited service rendered during the period for which the payment was earned. Compensation includes any amount reported as wages, tips, and other compensation on the member's federal form W-2 wage and tax statement, except as otherwise excluded in this section; any amount of member contributions made by an employer after June 30, 1984, pursuant to § 3-12C-401; and any amount contributed by a member to a plan that meets the requirements of section 125, 401, 403, 408, or 457 of the Internal Revenue Code.
Compensation does not include any allowance, payment, or reimbursement for travel, meals, lodging, moving, uniforms, or any other expense that is incidental to employment and paid or reimbursed by the employer; any lump sum payment for sick leave; any lump sum payment for annual leave; any payment for, or in lieu of, insurance coverage of any kind or any other employee benefit paid by an employer directly to a member or directly to a third party on behalf of a member or a member and any dependent; any allowance or payment for housing or vehicles; any temporary payment paid as a lump sum or over a period of time that is not due to additional duties; any amount paid in a one-time lump sum payment or over a period of time and based on or attributable to retirement or an agreement to retire in the future or results in an incentive to retire; any payment made upon dismissal or severance; any worker's compensation payment; and any payment contingent on a member terminating employment at a specified time in the future paid or payable in a lump sum or over a period of time.
Source: SL 2016, ch 32, § 52; SL 2017, ch 28, § 1; SL 2017, ch 28, § 2, eff. Jan. 1, 2018; SDCL § 3-12-47.6; SL 2019, ch 22, § 1; SL 2020, ch 12, § 11.
3-12C-106. Contributing member defined.
For the purposes of this chapter, a contributing member is any member for whom the system receives an employer contribution report that includes the member's employee and employer contributions indicating that the member is an active member. A member's active membership is terminated and the member is no longer a contributing member when the system receives notice of termination from an employer, accompanied by the member's final employee and employer contributions.
Source: SL 2016, ch 32, § 53; SDCL § 3-12-47.7; SL 2019, ch 22, § 1.
3-12C-107. Disability defined.
The term, disability or disabled, means any medically determinable physical or mental impairment that prevents a member from performing the member's usual duties for the member's employer, even with accommodations, or performing the duties of a comparable level position for the member's employer. The term excludes any condition resulting from a willful, self-inflicted injury.
Source: SL 2019, ch 22, § 5.
3-12C-108. Effective rate of interest defined.
For the purposes of this chapter, the phrase, effective rate of interest, means the interest at an annually compounded rate to be established by the board for each fiscal year. The rate shall be no greater than ninety percent of the average ninety-one day United States treasury bill rate for the immediately preceding calendar year and in no event may the rate be more than the rate established by the board pursuant to § 3-12C-227 for investment return for purposes of the actuarial valuation. If a member withdraws contributions pursuant to § 3-12C-602 or 3-12C-604, or if benefits are payable under § 3-12C-409, the interest shall be as annually compounded on the preceding June thirtieth.
Source: SL 2016, ch 32, § 54; SDCL § 3-12-47.8; SL 2019, ch 22, § 1.
3-12C-109. Minimum actuarial requirement to support benefits defined.
For the purposes of this chapter, the phrase, minimum actuarial requirement to support benefits, means the normal cost and the interest on and amortization of the unfunded actuarial accrued liability over a period not to exceed twenty years, all expressed in terms of a percentage of covered payroll and based on the baseline COLA or the restricted COLA, as applicable. If the actuarial value of assets exceeds the actuarial accrued liability, the minimum actuarial requirement to support benefits includes recognition of the amount by which the actuarial value of assets exceeds the actuarial accrued liability. However, in no event may the recognition reduce the minimum actuarial requirement to support benefits to a percentage less than the contribution rate.
Source: SL 2018, ch 33, § 13; SDCL § 3-12-120.4; SL 2019, ch 22, § 1; SL 2023, ch 16, § 3.
3-12C-110. Spouse defined.
The term, spouse, means a person who was married to the member at the time of the death of the member and whose marriage was both before the member's retirement and more than twelve months before the death of the member.
Source: SL 2019, ch 22, § 6.
3-12C-111. Terminated defined.
The term, terminated, means complete severance of employment from public service of any member by resignation or discharge, not including leave of absence, layoff, vacation leave, sick leave, or jury duty, and involving all termination proceedings routinely followed by the member's participating unit, including payment to the member for unused vacation leave, payment to the member for unused sick leave, payment to the member for severance of an employment contract, severance of employer-provided health insurance coverage, severance of employer-provided life insurance coverage, or severance of any other such employer-provided perquisite of employment granted by the member's participating unit to an active employee.
Source: SL 2019, ch 22, § 7.
3-12C-112. Vested defined.
The term, vested, means the right to a retirement benefit from the system based on the provisions of this chapter after three years of contributory service or noncontributory service, even if the member leaves the employment of a participating unit, if the member does not withdraw accumulated contributions.
Source: SL 2019, ch 22, § 8.
3-12C-113. Internal Revenue Code references.
For the purposes of this chapter, the term, Internal Revenue Code, or code, means the Internal Revenue Code as in effect as of January 1, 2024.
Source: SL 2023, ch 14, § 2; SL 2024, ch 21, § 1.
3-12C-201. Citation of chapter.
This chapter shall be cited as the South Dakota Retirement Act.
Source: SL 1974, ch 35, § 84; SDCL § 3-12-128; SL 2019, ch 22, § 1.
3-12C-202. System managed by board--Standard of conduct--Legal advice.
The system shall be under the Board of Trustees. The Board of Trustees shall be held to the standard of conduct of a fiduciary and shall carry out its functions solely in the interest of the members and benefit recipients and for the exclusive purpose of providing benefits and defraying reasonable expenses incurred in performing such duties as required by law. The system may not engage in any activity that is not solely designed to provide for the exclusive benefit of the members and benefit recipients of the system. The attorney general is the legal adviser to the board.
Source: SL 1967, ch 303, § 3; SDCL § 3-12-4; SL 1968, ch 216, § 1; SL 1973, ch 2, § 22 (a) to (d); SL 1973, ch 25; SDCL Supp, §§ 3-12-4.1, 3-13-4.1, 13-45-8.1, 16-8-7.1; SL 1974, ch 35, § 12; SL 1979, ch 27, § 3; SL 1992, ch 30, § 2; SL 2010, ch 21, § 1; SDCL § 3-12-54; SL 2019, ch 22, § 1.
3-12C-203. Board of Trustees created--Composition.
There is created a governing authority of the system known as the Board of Trustees. Voting representation on the board shall be the following:
(1) Two state employee members;
(2) Two certified school employee members;
(3) A participating municipality member;
(4) A participating county member;
(5) A participating classified employee member;
(6) A current contributing Class B member other than a justice, judge, or magistrate judge;
(7) A justice, judge, or magistrate judge;
(8) One head of a principal department established pursuant to § 1-32-2, or one head of a bureau under the Department of Executive Management established pursuant to § 1-33-3 appointed by the Governor;
(9) An individual appointed by the Governor;
(10) A county commissioner of a participating county;
(11) A school district board member;
(12) An elected municipal official of a participating municipality;
(13) A retiree; and
(14) A faculty or administrative member employed by the Board of Regents and not subject to the provisions of chapter 3-6D.
A representative of the State Investment Council shall serve as an ex officio nonvoting member.
Source: SL 1967, ch 303, § 3; SDCL § 3-12-4; SL 1968, ch 216, § 1; SL 1973, ch 25; SL 1974, ch 35, § 3; SL 1975, ch 38, § 7; SL 1976, ch 39, § 8; SL 1977, ch 28, § 4; SL 1979, ch 27, § 1; SL 1994, ch 33; SL 2018, ch 33, § 7; SDCL § 3-12-48; SL 2019, ch 22, § 1; SL 2020, ch 12, § 2.
3-12C-204. Election of trustees--Terms of office.
Each group of retirement system members who are vested or are currently contributing or employers as set out in § 3-12C-203 shall elect its own trustee or trustees in a separate election. The board shall promulgate rules, pursuant to chapter 1-26, to carry out the elections. The regular term of office of a trustee is four years and expires on June thirtieth. The appointees of the Governor shall serve at the pleasure of the Governor. The appointee of the Investment Council shall serve at the pleasure of the Investment Council. Except for appointees of the Governor and Investment Council, upon the death or resignation of a trustee, the board shall appoint a successor. The successor trustee shall fill the position immediately and serve until the June thirtieth that is no less than three but no more than four years after taking office.
Source: SL 1959, ch 84, § 6; SDC Supp 1960, § 15.3910; SL 1961, ch 255, §§ 5, 6; SL 1965, ch 220, §§ 5, 6; SL 1967, ch 303, § 3; SDCL §§ 3-12-4, 9-15-4 (5), 9-15-5, 13-45-9; SL 1968, ch 216, § 1; SL 1970, ch 106, § 1; SL 1973, ch 25; SL 1974, ch 35, §§ 5 to 7; SL 1976, ch 41; SL 1977, ch 28, § 14; SL 1979, ch 27, § 2; SL 2011, ch 21, § 1; SDCL § 3-12-49; SL 2019, ch 22, § 1; SL 2019, ch 23, § 7.
3-12C-205. Resignation of trustee due to loss of qualifying status--Filling of vacancy.
If any trustee no longer serves in the capacity that qualified the trustee for membership on the board, the trustee is considered to have resigned from the board on June thirtieth of the following calendar year. The vacancy created by the resignation shall be filled through the annual election process. However, if the vacancy is not filled through the annual election process, the board shall fill the vacancy by appointment. The person elected or appointed shall serve a four-year term regardless of the time remaining in the term of the trustee who ceased serving in the qualifying capacity. The provisions of this section do not apply to any trustee who, on January 1, 2019, is no longer serving in the capacity that qualified the trustee.
Source: SL 1959, ch 84, § 8; SDC Supp 1960, § 15.3912; SL 1961, ch 255, § 7; SDCL §§ 9-15-6, 13-45-12; SL 1970, ch 106, § 2; SL 1974, ch 35, § 11; SL 1982, ch 32, § 2; SL 2011, ch 21, § 2; SDCL § 3-12-53; SL 2019, ch 22, § 1; SL 2019, ch 23, § 6.
3-12C-206. Trustees--Oath of office.
Each trustee, after being appointed or elected, shall take and file in the Office of the Secretary of State the oath required by § 3-1-5.
Source: SL 1959, ch 84, § 7; SDC Supp 1960, § 15.3911; SL 1961, ch 255, § 8; SL 1967, ch 303, § 3; SDCL §§ 3-12-5, 9-15-8, 13-45-10; SL 1968, ch 216, § 1; SL 1974, ch 35, § 8; SDCL § 3-12-50; SL 2019, ch 22, §§ 9, 45; SL 2022, ch 15, § 2.
3-12C-207. Compensation and expenses of trustees.
The trustees shall receive per diem compensation and allowable expenses for their services as trustees as are fixed pursuant to § 4-7-10.4.
Source: SL 1967, ch 303, § 3; SDCL § 3-12-6; SL 1968, ch 216, § 1; SL 1974, ch 35, § 9; SDCL § 3-12-51; SL 2019, ch 22, § 1.
3-12C-208. Meetings of board--Chair and vice chair--Votes required for decision.
The board shall meet at least twice each year, and shall adopt its own rules of procedure. A majority of trustees constitutes a quorum. At the first meeting of each fiscal year the board shall elect from the board's membership a chair and a vice chair. At least eight concurrent votes and a majority of the members present are required for a decision by the board for any of its meetings.
Source: SL 1959, ch 84, §§ 9, 10; SDC Supp 1960, §§ 15.3913, 15.3914; SL 1961, ch 255, §§ 9 (a), 10; SL 1963, ch 285; SL 1965, ch 220, §§ 7, 8; SL 1967, ch 303, § 3 (1), (2); SDCL §§ 3-12-7, 3-12-8, 9-15-10, 9-15-17, 13-45-13, 13-45-14; SL 1968, ch 216, § 1; SL 1974, ch 35, § 10; SL 2012, ch 26, § 7; SL 2016, ch 31, § 1; SDCL § 3-12-52; SL 2019, ch 22, § 1.
3-12C-209. Appointment of executive director--Compensation--Employment of personnel--Bond.
The board shall appoint an executive director, qualified by training and experience, to serve at the pleasure of the board. The board shall fix the compensation for the executive director. The compensation shall be based on a compensation policy, adopted by the board, that considers an analysis of the compensation and responsibilities of executive directors of regional statewide retirement systems. The board may adjust the salary of the executive director annually in accordance with the state employee salary policy as enacted by the Legislature in each corresponding year.
The board shall report any change in the executive director's compensation above the state employee salary policy to the Retirement Laws Committee before July first for the upcoming fiscal year. The change in compensation above the state employee salary policy is effective if approved by the majority vote of the Retirement Laws Committee.
The executive director may hire additional employees as may be required to transact the business of the retirement system and shall fix the remuneration for such services.
The board shall require the bonding of the executive director in an amount set by the board that shall be included under the state employees' blanket bond. The premium may be charged to the fund.
Source: SL 1967, ch 303, § 3 (4), (5); SDCL §§ 3-12-9, 3-12-10; SL 1968, ch 216, § 1; SL 1974, ch 35, § 13; SL 1979, ch 27, § 4; SL 1980, ch 32; SL 1995, ch 17; SL 1998, ch 20, § 1; SL 2016, ch 31, § 2; SL 2017, ch 30, § 1; SL 2018, ch 35, § 1; SDCL § 3-12-55; SL 2019, ch 22, § 1.
3-12C-210. Expense fund continued--Transfer from retirement system fund--Report of budget--Appropriation and disbursement for expenses.
The South Dakota Retirement System expense fund is continued and the board is authorized to transfer from the South Dakota Retirement System fund an annual amount not to exceed three percent of the annual contributions received by the system, and the money transferred is appropriated for the payment of the administrative costs of the system. The board shall report its proposed annual budget to the Legislature for approval. Expenditures from all funds shall be disbursed on warrants drawn by the state auditor and shall be supported by vouchers approved by the executive director of the system.
Source: SL 1967, ch 303, § 12; SDCL § 3-12-42; SL 1968, ch 216, § 1; SL 1970, ch 25, § 12; SL 1974, ch 35, § 18; SL 1976, ch 42; SL 2011, ch 1 (Ex. Ord. 11-1), § 33, eff. Apr. 12, 2011; SL 2016, ch 31, § 5; SDCL § 3-12-61; SL 2019, ch 22, § 1.
3-12C-211. Rules for administration.
The Board of Trustees may promulgate rules necessary to establish uniform procedures for the administration of the system and to insure uniformity of application of the provisions of this chapter. Rules may be adopted in the following areas:
(1) Membership and class of membership;
(2) Contributions and the collection of contributions;
(3) Criteria and procedures for the determination of applications for, and payment of disability benefits;
(4) Procedure for applications for benefits and the payment of benefits;
(5) Election of trustees; and
(6) Procedure for the conduct of meetings of the board.
The rules shall be promulgated pursuant to chapter 1-26 and shall be in accordance with the provisions of this chapter.
Source: SL 1967, ch 303, § 3 (9); SDCL § 3-12-11; SL 1968, ch 216, § 1; SL 1974, ch 35, § 15; SL 1983, ch 22, § 1; SL 2017, ch 27, § 7; SDCL § 3-12-58; SL 2019, ch 22, § 1.
3-12C-212. Applications for membership or benefits--Picture identification required.
Applications for membership or any benefit shall be made to the executive director on forms approved by the system. Each application shall be accompanied by a copy of the person's current driver license or other picture identification card issued by a government agency or tribe.
Source: SL 1974, ch 35, § 14; SL 2016, ch 31, § 3; SDCL § 3-12-56; SL 2019, ch 22, §§ 12, 45; SL 2021, ch 27, § 1.
3-12C-213. Grievance procedure--Administrative and judicial review.
Any person aggrieved by a final determination made by the system's staff may request review of the final determination and a decision by the executive director if the request is made in writing within thirty days after receiving the final determination. The person, if then aggrieved by the executive director's decision, may appeal the decision, if the person files a written notice of appeal with the executive director within thirty days of the date of the decision. The notice shall identify the person appealing and the decision appealed. The appeal shall be conducted by a hearing examiner in accordance with chapter 1-26. The hearing examiner, after hearing the evidence in the matter, shall make proposed findings of fact and conclusions of law, and a proposed decision. The executive director shall accept, reject, or modify the findings, conclusions, and decision of the hearing examiner and such action constitutes the final agency decision. Alternatively, the executive director may appoint the hearing examiner to make the final agency decision. The final agency decision may be appealed to circuit court pursuant to chapter 1-26. The executive director may arrange for the assistance of private counsel throughout the appeal process.
Source: SL 2008, ch 22, § 1; SL 2016, ch 31, § 4; SL 2018, ch 33, § 8; SDCL § 3-12-57.1; SL 2019, ch 22, § 1.
3-12C-214. Correction of records--Adjustment for underpayment or overpayment--Limitation.
If any change or error in the records of the system or any participating unit results in any person receiving from the system less than the person would have been entitled to receive had the records been correct, the executive director shall correct the error and, as far as practicable, shall adjust the payment to provide the person the amount to which the person is correctly entitled.
If any change or error in the records of the system or any participating unit results in any person receiving from the system more than the person would have been entitled to receive had the records been correct, the executive director shall correct the error and, as far as practicable, shall recover the overpayment to reflect the amount to which the person is correctly entitled. The board shall promulgate rules, pursuant to chapter 1-26, concerning the methods by which an overpayment shall be repaid, including an actuarial equivalent. However, the recovery of an overpayment is limited to the amount attributable to any error that occurred during the six-year period immediately before the discovery of the error. This limitation does not apply in the case of fraud, intentional misrepresentation, material omission, or other fault on the part of a member or beneficiary.
Source: SL 1959, ch 84, § 38; SDC Supp 1960, § 15.3942; SL 1961, ch 255, § 40; SDCL §§ 9-15-68, 13-45-70; SL 1970, ch 25, § 13; SDCL Supp, § 3-12-44; SL 1974, ch 35, § 68; SL 2015, ch 28, § 1; SL 2016, ch 31, § 23; SDCL § 3-12-114; SL 2019, ch 22, § 1.
3-12C-215. Confidentiality of records--Exceptions.
Any information contained in any record pertaining to a member of the system is confidential and shall be used for the sole purpose of carrying into effect the provisions of this chapter, chapter 3-13, and chapter 3-13A. Any record containing the information is not open to inspection by any person or entity except the member, the board, the employees of the system, or the member's employer. The information and records may be released to the member or with the member's consent. The information and records may also be released pursuant to a court order or subpoena.
Source: SL 2002, ch 22, § 5; SDCL § 3-12-58.1; SL 2019, ch 22, § 1; SL 2020, ch 12, § 3.
3-12C-216. Exemption of contributions and benefits from taxation and process.
The rights of a person to a benefit, return of accumulated contributions, the benefit itself, any optional benefits and any other right accrued or accruing under the provisions of this chapter and all moneys belonging to the system are hereby exempt from any state, county, municipal, or other local tax and may not be subject to execution, garnishment, attachment, operation of bankruptcy or insolvency laws or any other process of law whatsoever and shall be unassignable, except as required under applicable law, including any qualified domestic relations order as defined in § 414(p) of the Internal Revenue Code, or as is otherwise specifically provided in this chapter.
Source: SL 1959, ch 84, § 40; SDC Supp 1960, § 15.3943; SL 1961, ch 255, § 42; SDCL §§ 9-15-70, 13-45-69; SL 1970, ch 25, § 13; SDCL Supp, § 3-12-45; SL 1974, ch 35, § 69; SL 1985, ch 24, § 3; SL 2013, ch 20, § 11; SDCL § 3-12-115; SL 2019, ch 22, § 1.
3-12C-217. Domestic relations orders--Determination as to whether qualified--Restrictions on provisions.
For purposes of § 3-12C-216, the system shall determine if a domestic relations order is a qualified domestic relations order. Upon receipt of a domestic relations order, the system shall promptly issue a written notice of receipt to the member and any alternate payee. Within a reasonable period of time, the system shall issue a determination indicating if the domestic relations order qualifies as a plan-approved domestic relations order in accordance with § 414(p) of the Internal Revenue Code.
No order may require the payment of benefits to an alternate payee before the retirement of a member or the withdrawal of a member's accumulated contributions for a distribution to an alternate payee. In addition, no order may require the payment of monthly benefits to an alternate payee after the death of the member.
No order approved after July 1, 2018, may require the payment of benefits to the alternate payee's estate after the death of the alternate payee. The amount paid in monthly benefits to the alternate payee shall be paid to the member after the death of the alternate payee.
Source: SL 2018, ch 33, § 11; SDCL § 3-12-115.1; SL 2019, ch 22, § 1.
3-12C-218. Business name of system--Treasurer.
The Board of Trustees shall transact all business and hold all cash in the name of the South Dakota Retirement System. The state treasurer shall be the treasurer of the system.
Source: SL 1967, ch 303, § 3 (3); SDCL § 3-12-13; SL 1968, ch 216, § 1; SL 1974, ch 35, §§ 1, 17; SDCL § 3-12-60; SL 2019, ch 22, § 1.
3-12C-219. Use of fund restricted.
No part of the fund created by this chapter may be used for any purpose other than for the exclusive benefit of members and their beneficiaries, payment of reasonable administrative expenses of the system, and reimbursement of overpayments made by employers. No participating unit may receive any amounts from the fund except such amounts which may remain after the satisfaction of all liabilities of the system to its members.
Source: SL 1984, ch 23, § 3; SL 2012, ch 26, § 10; SDCL § 3-12-72.1; SL 2019, ch 22, § 1.
3-12C-220. Diversion of funds prohibited--Legislative policy.
In order to ensure employee confidence in the preservation and management of the South Dakota Retirement System, it is legislative policy that there should be no legislative enactment nor administrative action which would have the effect, directly or indirectly, of diverting any funds of the system to any purpose other than the administration and support of the benefits of members of the system.
Source: SL 1990, ch 34; SDCL § 3-12-72.3; SL 2019, ch 22, § 1.
3-12C-221. Rights of members on termination of system or discontinuance of contributions.
If the system is terminated, or if contributions to the system are discontinued, the rights of all members to benefits that have accrued as of the date of termination or discontinuation of contributions shall vest. A member's recourse against the fund shall be limited by the extent to which the member's benefits are funded.
Source: SL 1984, ch 23, § 4; SDCL § 3-12-72.2; SL 2019, ch 22, §§ 13, 45.
3-12C-222. Application of forfeitures.
Forfeitures arising because of termination of employment before the member becomes eligible for benefits or for any other reason shall be applied to reduce the costs of the system and not to increase the benefits otherwise payable to members.
Source: SL 1984, ch 23, § 5; SDCL § 3-12-76.2; SL 2019, ch 22, § 1.
3-12C-223 . Investment of assets by investment council--Pooling of funds--Standards for investment--Compliance with federal divestiture enactments.
The State Investment Council as provided in § 4-5-12 is responsible for the investment of the assets of the system. The Investment Council may pool the several retirement funds for investment purposes and the investment of the funds is not restricted by the provisions of § 4-5-26 , but is governed by the provisions of § 4-5-27 . The assets of the system may not be managed in any manner for the purposes of social investment. The State Investment Council shall invest member trust funds in a manner that is solely designed to provide for the exclusive benefit of the members and benefit recipients of the system. The foregoing provisions notwithstanding, the State Investment Council shall establish a shareholder activism policy to engage and promote compliance with federal divestiture enactments by the United States Congress and to recognize the risks associated with companies doing business in the countries identified. Once the United States Congress has acted, the State Investment Council may initiate the shareholder activism policy on its own accord, or shall do so at the direction of the Legislature by resolution. The State Investment Council shall report semi-annually on council actions related to the shareholder activism policy. The report shall include an analysis of the success of the policy in accomplishing the goal of promoting compliance with the federal enactments and its impact on all sales of affected companies.
Source: SL 1974, ch 35, § 71; SL 1989, ch 39; SL 2010, ch 21, § 3; SDCL § 3-12-117 ; SL 2019, ch 22, § 1; SL 2020, ch 12, § 4.
3-12C-224. Quadrennial independent report on investment performance.
The board shall retain the services of an independent contractor, not involved in the investment process, to make a report to the board not less than every four years on the investment performance results of the assets of the retirement funds.
Source: SL 1974, ch 35, § 72; SL 2016, ch 31, § 25; SDCL § 3-12-118; SL 2019, ch 22, § 1.
3-12C-225. Review of investment policy when return lower than average--Report to Governor and Legislature.
In the event the investment return on the common stock portfolio or bond portfolio is lower than the average return achieved by other institutional investors of pension funds, then the Investment Council shall review the way in which the assets are being invested and the sources of investment advice being utilized to determine what changes, if any, are desirable to produce an investment return equal to or greater than the average, and shall make a report to the Governor and the Legislature on the investment performance results and any changes necessary to improve the investment return.
Source: SL 1974, ch 35, § 73; SDCL § 3-12-119; SL 2019, ch 22, § 1.
3-12C-226. Annual actuarial valuation of system--Scope of valuation.
To determine and verify the adequacy of the member and employer contributions to the system, an actuarial valuation of the system shall be made annually by an approved actuary.
The actuarial valuation shall include:
(1) A demonstration of the relationship of the current member and employer contributions, expressed as a percentage of payroll, to the minimum actuarial requirement to support benefits; and
(2) The current year's actuarial value funded ratio and fair value funded ratio as well as the ratios from the prior actuarial valuations.
Source: SL 1974, ch 35, § 74; SL 1996, ch 27; SL 2004, ch 42, § 13; SL 2018, ch 33, § 12; SDCL § 3-12-120; SL 2019, ch 22, §§ 14, 45.
3-12C-227. Actuarial assumptions on which valuation based--Report of change.
The actuarial valuation required by § 3-12C-226 shall be based on actuarial assumptions adopted by the Board of Trustees as a result of an actuarial experience analysis. The board may not make any change in the actuarial assumptions unless the approved actuary retained to make the actuarial valuation certifies that the change is reasonable. If the board makes any such change, it shall report the change to the Governor and to the Retirement Laws Committee. The report shall include the actuary's and board's analysis of the conditions that led to the change.
Source: SL 1974, ch 35, § 76; SL 1980, ch 31, § 2; SL 2004, ch 42, § 2; SDCL § 3-12-121; SL 2019, ch 22, § 1.
3-12C-228. Funding of system--Review--Report--Corrective action.
The board shall review the funding of the system and shall make a report to the Governor and the Retirement Laws Committee if the funding of the system does not meet both of the following conditions:
(1) The fair value funded ratio is greater than or equal to one hundred percent; and
(2) The contribution rate meets or exceeds the minimum actuarial requirement to support benefits.
The report shall include recommendations for the circumstances and timing for any corrective action, including benefit changes, to improve the conditions in subdivisions (1) and (2). For Class D members, corrective action is limited to reducing or eliminating the cost of living adjustment. Based on this report and the recommendations of the board, the Legislature may adopt corrective action to improve the conditions in subdivisions (1) and (2).
Eligibility for benefits, the amount of any benefit, and the rate of member contributions established in this chapter are not the contractual rights of any member and are subject to change by the Legislature for purposes of corrective action to improve the conditions in subdivisions (1) and (2).
Source: SL 1974, ch 35, § 75; SL 1986, ch 37, § 12; SL 2004, ch 42, § 1; SL 2008, ch 20, § 15; SL 2013, ch 21, § 1; SL 2016, ch 31, § 26; SL 2017, ch 27, § 2; SL 2018, ch 33, § 14; SDCL § 3-12-122; SL 2019, ch 22, § 1; SL 2020, ch 13, § 4.
3-12C-229. Annual report of funded status of system.
At the beginning of each legislative session, the board shall provide the Governor and the Legislature with an annual report of the funded status of the system for the fiscal year that ended the previous June thirtieth.
Source: SL 2017, ch 27, § 3; SDCL § 3-12-122.1; SL 2019, ch 22, § 1.
3-12C-230. Record of board proceedings--Annual report .
The board shall keep complete records of its proceedings which shall be open to public inspection. The board shall prepare an annual report setting forth its financial information for the previous fiscal period including the amount of the accumulated cash and securities of the system, and the results of the most recent actuarial valuation. A copy of the report shall be available on the system's website.
Source: SL 1967, ch 303, § 3 (11); SDCL § 3-12-12; SL 1968, ch 216, § 1; SL 1974, ch 35, § 16; SL 1977, ch 28, § 5; SDCL § 3-12-59; SL 2019, ch 22, §§ 10, 45.
3-12C-301. Members of system.
All of the following full-time employees are included as members in the system:
(1) All state employees;
(2) All certified school employees;
(3) All justices, judges, and magistrate judges;
(4) All police officers and firefighters of participating municipalities;
(5) All general employees of participating municipalities;
(6) All employees of participating counties;
(7) All classified employees of school districts that are participating with the school districts' classified employees and all other classified employees;
(8) All employees of the Board of Regents; and
(9) All state law enforcement officers.
Source: SL 1957, ch 142, § 8; SL 1959, ch 84, § 15; SDC Supp 1960, §§ 15.3919 (1), 44.06A08; SL 1961, ch 255, § 17; SL 1963, ch 86, § 1; SL 1965, ch 220, § 13; SL 1967, ch 303, § 4; SDCL §§ 3-12-19, 3-13-12, 9-15-25, 9-15-26, 13-45-21; SL 1968, ch 56, § 1; SL 1968, ch 216, § 1; SDCL Supp, § 3-12-19.2; SL 1974, ch 35, § 19; SL 1975, ch 38, § 8; SL 1976, ch 39, § 7; SL 1981, ch 13, § 1; SL 2012, ch 26, § 8; SDCL § 3-12-62; SL 2019, ch 22, § 1; SL 2020, ch 12, § 5; SL 2021, ch 29, § 9, eff. Apr. 1, 2021.
3-12C-302. Membership in system--Exclusions.
Membership in the system shall exclude the following:
(1) All elective officials except justices and judges, unless the official is currently contributing or has previously contributed to the system or the official has elected and is otherwise qualified to become a member of the system;
(2) The governing body of any participating county, municipality, or other political subdivision; and
(3) All personnel employed by the municipality of Sioux Falls before July 1, 2013. However, any person employed before July 1, 2013, who separates from service with the municipality of Sioux Falls and is subsequently rehired by the municipality of Sioux Falls and begins working after June 30, 2013, as a full-time employee shall be a member of the system.
Source: SL 1967, ch 303, § 4; SDCL § 3-12-20; SL 1968, ch 216, § 1; SDCL Supp, § 3-12-20.1; SL 1973, ch 24, § 3; SL 1974, ch 35, § 20; SL 1975, ch 38, § 9; SL 1975, ch 39, § 4; SL 1976, ch 39, § 6; SL 1977, ch 30, § 1; SL 1980, ch 33, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 33, eff. Apr. 12, 2011; SL 2013, ch 19, § 2; SL 2015, ch 25, § 4; SL 2016, ch 31, § 7; SDCL § 3-12-63; SL 2019, ch 22, § 1; SL 2019, ch 23, § 3; SL 2020, ch 13, § 5; SL 2021, ch 29, § 10, eff. Apr. 1, 2021.
3-12C-303. Newly elected officials permitted to join system--Requirements--Credited service.
A newly-elected official, who is a full-time employee of a participating unit and not a member of the system, may elect to become a member. However, the official shall make the election when the official is first eligible to participate in the system, and the official's election is irrevocable for as long as the official is an elected official. If the official is a current contributing member or has previously contributed to the system, the elected official shall participate in the system. If an elected official has elected not to participate in the system, the official is not eligible to make a new election. The official's credited service is limited to service for which contributions are made.
Source: SL 1967, ch 303, § 4; SDCL § 3-12-21; SL 1968, ch 216, § 1; SL 1970, ch 25, § 3; SL 1974, ch 35, § 21; SDCL § 3-12-64; SL 2019, ch 22, § 1; SL 2019, ch 23, § 2; SL 2021, ch 29, § 11, eff. Apr. 1, 2021.
3-12C-304 . Continuation of previously established retirement plan--Vote of employees required to participate in consolidated system.
Any political subdivision or public corporation may operate a retirement plan created prior to July 1, 1974, unless the retirement plan of the political subdivision or public corporation is accepted in the system created by this chapter. Notwithstanding the provisions of this section and § 3-12C-306 , no political subdivision or public corporation with a retirement plan may be accepted as a participating unit unless two-thirds of the members of the retirement plan vote to become members of the system created by this chapter.
Source: SL 1974, ch 35, § 23; SDCL § 3-12-65 ; SL 2019, ch 22, § 1; SL 2020, ch 12, § 6.
3-12C-305. Newly established retirement plans of political subdivisions and public corporations to participate in consolidated system.
No political subdivision or public corporation, including municipalities, counties, and chartered governmental units, may establish any retirement plan unless such political subdivision or public corporation becomes a participating unit of the system created in this chapter.
Source: SL 1974, ch 35, § 24; SDCL § 3-12-66; SL 2019, ch 22, § 1.
3-12C-306. Election by political subdivision or public corporation to participate in consolidated system.
Any political subdivision and any public corporation, including municipalities, counties and chartered governmental units in the State of South Dakota, may become a participating unit by a duly passed resolution of its governing body. Any political subdivision not participating in the system on June 30, 1985, may become a participating unit for only its class A members or only its class B members, or for both classes together. If a political subdivision elects to participate for either one class of members or for both classes, all full-time employees in that class or classes shall become members.
Source: SL 1961, ch 255, § 16; SL 1965, ch 220, § 12; SL 1967, ch 303, § 10; SDCL §§ 3-12-36, 9-15-24; SL 1968, ch 216, § 1; SL 1974, ch 35, § 25; SL 1985, ch 25; SDCL § 3-12-67; SL 2019, ch 22, § 1; SL 2021, ch 29, § 12, eff. Apr. 1, 2021.
3-12C-307. Coverage of joint employees of participating and nonparticipating political subdivisions.
If a participating unit and a nonparticipating South Dakota political subdivision or public corporation agree to provide certain public services on a joint basis, they may agree to consider persons employed pursuant to the agreement as if they were solely employees of the participating unit for the exclusive purposes of the system created in this chapter. The total compensation paid a person because of the employment shall be considered compensation paid by the participating unit and services rendered by the person because of the employment shall be considered service rendered by the employee to the participating unit.
Source: SL 1973, ch 51, § 1; SDCL Supp, § 9-15-25.1; SL 1974, ch 35, § 26; SDCL § 3-12-68; SL 2019, ch 22, §§ 15, 45.
3-12C-308. Accrued benefit deposit required when political subdivision or public corporation joins consolidated system--Participation by employees--Deferred payment of deposit.
Employees of an eligible political subdivision or public corporation not participating in the systems consolidated into the system created by this chapter, may become a participating unit in the system if the unit commits to deposit an amount equal to the present value of benefits earned to date, based on the employee's prior service to the unit to be covered by the system. The expense of the actuarial determination of this amount shall be borne by the applicant. All eligible employees of an applicant shall participate in the system upon admission. If the unit is unable to deposit this amount in a single sum, the unit shall have the option to pay the amount by periodic level installments over a period up to twenty years, the value of which, when discounted for compound interest at the assumed rate of return, is equal to the amount due at the date of participation.
Source: SL 1967, ch 303, § 10; SDCL § 3-12-36; SL 1968, ch 216, § 1; SL 1974, ch 35, § 27; SL 2004, ch 42, § 12; SL 2016, ch 31, § 9; SDCL § 3-12-69; SL 2019, ch 22, §§ 43, 45.
3-12C-309. Effective date of participation of employees of participating unit.
The date when the participation of the employees of a participating unit may commence shall be at the beginning of the first month of a calendar quarter.
Source: SL 1967, ch 303, § 10; SDCL § 3-12-37; SL 1968, ch 216, § 1; SL 1974, ch 35, § 28; SL 2009, ch 20, § 1; SDCL § 3-12-70; SL 2019, ch 22, § 1.
3-12C-310. Privatization of governmental function.
If a participating unit determines that a governmental function is to be privatized, the participating unit shall pass a resolution to that effect determining the date that its employees will cease to be public employees eligible for membership in the system. The participating unit shall notify the system and the employees affected of the resolution and, after the effective date, cease to make contributions to the South Dakota Retirement System as required in §§ 3-12C-401 and 3-12C-403. Any member affected by privatization is entitled to the benefits accrued as of the effective date under the provisions of chapter 3-12C. For the purposes of determining eligibility for vesting and early retirement pursuant to § 3-12C-1111, years of service with the successor employer shall be considered.
Source: SL 1997, ch 30, § 1; SL 2016, ch 31, § 11; SDCL § 3-12-72.4; SL 2019, ch 22, § 1.
3-12C-401. Rate of contributions--Deduction from pay--Employer to make members' contributions.
Any employee included in § 3-12C-301 shall make a contribution to the system, except as specified in § 3-12C-1405, and the employer shall make an equal contribution to the system, except as otherwise specified, at the following rates:
(1) Class A members: five percent of compensation through June 30, 2002, and six percent of compensation after June 30, 2002;
(2) Justices, judges, and magistrate judges: nine percent of compensation;
(3) All other Class B members: eight percent of compensation.
The employer shall cause to be deducted on each payroll of the employee for each payroll period the contribution payable by the employee as provided in this section.
Except for those contributions specified in § 3-12C-1405, contributions required of employees by this section shall be made by the participating unit pursuant to the provisions of § 414(h)(2) of the Internal Revenue Code. The contributions shall be classified as employee contributions for all purposes under this chapter. An employee may not receive the amount of the contributions directly rather than as contributions under this section.
Source: SL 1967, ch 303, § 5; SDCL §§ 3-12-22, 3-12-23; SL 1968, ch 216, § 1; SL 1974, ch 35, § 29; SL 1977, ch 31, § 5; SL 1982, ch 38; SL 1984, ch 23, § 2; SL 1989, ch 38, § 8; SL 2000, ch 23, § 1; SL 2010, ch 23, § 5, eff. Apr. 1, 2010; SL 2013, ch 20, § 6; SDCL § 3-12-71; SL 2019, ch 22, § 1; SL 2020, ch 12, § 7.
3-12C-402. Additional contribution for foundation members by participating unit.
Each participating unit shall make an additional contribution in the amount of six and two-tenths percent of any foundation member's compensation in each calendar year that exceeds the maximum taxable amount for social security for the calendar year. The additional contributions shall be made only for Class A foundation members and may not be treated as employer contributions.
Source: SL 2002, ch 23, § 5; SL 2016, ch 32, § 37; SDCL § 3-12-91.1; SL 2019, ch 22, § 1.
3-12C-403. Monthly transmission of contributions--Deposit in fund.
All employee and employer contributions to the system and the necessary supporting data shall be transmitted by the employer at least monthly to the system. Each monthly transmission for each respective calendar month shall be completed by the fifteenth day of the following month. All supporting data shall be transmitted electronically in a format determined by system personnel. All contributions shall be deposited with the state treasurer in the fund established to administer this chapter. If any participating unit fails to deliver contributions with respect to compensation paid in any month and the necessary supporting data by the fifteenth day of the following month, the participating unit shall pay to the system a penalty equal to five percent of the delinquent contributions. The delinquent contributions and the penalty shall bear interest at the assumed rate of return from the date due until the date paid. In calculating accumulated contributions, all contributions with respect to compensation paid in any fiscal year shall be included in the calculation of interest credited for that fiscal year.
Source: SL 1959, ch 84, § 28; SDC Supp 1960, § 15.3932 (3); SL 1961, ch 255, § 29; SL 1965, ch 220, § 21; SL 1967, ch 50, § 4; SL 1967, ch 303, § 5; SDCL §§ 3-12-22 to 3-12-24, 3-12-28, 9-15-49, 13-45-32; SL 1968, ch 216, § 1; SL 1970, ch 25, § 4; SL 1974, ch 35, § 30; SL 1978, ch 32, § 1; SL 1986, ch 38; SL 2008, ch 20, § 7, eff. Jan. 1, 2009; SL 2016, ch 31, § 10; SDCL § 3-12-72; SL 2019, ch 22, § 1.
3-12C-404. Deduction of delinquent contributions from payments due from state--Penalty and interest.
If any participating unit becomes delinquent thirty or more days by failure or refusal to pay any amounts due to the system, the state treasurer shall, upon certification by the executive director of the delinquency, withhold and deduct the amount of the delinquency, penalty, and interest as specified in § 3-12C-403 from the next succeeding payment or payments of any money in the hands of the state treasurer due and payable to the participating unit.
Source: SL 1959, ch 84, § 30; SDC Supp 1960, § 15.3934 (2); SL 1967, ch 50, § 5; SDCL § 13-45-38; SL 1970, ch 25, § 13; SDCL Supp, § 3-12-23.1; SL 1974, ch 35, § 32; SL 2008, ch 20, § 8, eff. Jan. 1, 2009; SL 2016, ch 31, § 12; SDCL § 3-12-74; SL 2019, ch 22, § 1.
3-12C-405. Service records and employee information furnished by employers.
The officers responsible for the personnel records of employees of each participating unit shall file with the Board of Trustees, in such form as the board shall from time to time prescribe, a detailed statement of all service rendered by each eligible employee of the system; and shall furnish such other information as the board shall from time to time require in the operation of the system.
Source: SL 1967, ch 303, § 10; SDCL § 3-12-39; SL 1968, ch 216, § 1; SL 1974, ch 35, § 31; SDCL § 3-12-73; SL 2019, ch 22, § 1.
3-12C-406. Knowing transmission of report with excluded compensation as misdemeanor.
Any person or employer who transmits a report of compensation to the system knowing that some or all of the compensation is excluded by § 3-12C-105, is guilty of a Class 1 misdemeanor.
Source: SL 2017, ch 28, § 5; SDCL § 3-12-47.13; SL 2019, ch 22, § 1.
3-12C-407. Accumulated contributions defined for foundation members.
For any foundation member, the term, accumulated contributions, means the sum of:
(1) All contributions made by the member, including member contributions made by an employer after June 30, 1984, pursuant to § 3-12C-401;
(2) For a member whose contributory service concluded after June 30, 2010, eighty-five percent of the employer contributions or noncontributory service if the member had three years or more of contributory service and fifty percent of the employer contributions if the member had less than three years of service; or for a member whose contributory service concluded before July 1, 2010, one hundred percent of the employer contributions or noncontributory service if the member had three years or more of contributory service and seventy-five percent of the employer contributions if the member had less than three years of service;
(3) Member redeposits and member credited service purchases pursuant to §§ 3-12C-504, 3-12C-509, and 3-12C-511; and
(4) The effective rate of interest earned on the sum of subdivisions (1), (2), and (3).
Source: SL 2016, ch 32, § 24; SDCL § 3-12-89.2; SL 2019, ch 22, §§ 19, 45.
3-12C-408. Accumulated contributions defined for generational members.
For any generational member, the term, accumulated contributions, means the sum of:
(1) All contributions made by the member;
(2) Eighty-five percent of the contributions made by the member's employer if the member has three years or more of contributory service or noncontributory service, or fifty percent of the contributions made by the employer if the member has less than three years of contributory service or noncontributory service;
(3) Member credited service purchases pursuant to §§ 3-12C-504, 3-12C-509, and 3-12C-511; and
(4) The effective rate of interest on the sum of subdivisions (1), (2), and (3).
Source: SL 2016, ch 32, § 1; SDCL § 3-12-500; SL 2019, ch 22, § 1.
3-12C-409. Refund of unpaid accumulated contributions upon termination--Reversion of unclaimed payments to system.
After all benefits currently or potentially payable under any provision of this chapter have terminated, if the aggregate benefits paid to a member and the member's surviving spouse and minor children, including any distribution of the member's variable retirement account, are less than the member's accumulated contributions, the amount by which the accumulated contributions exceed total payments made to date shall be paid in a lump sum as provided in this section.
Amounts payable under this section shall be paid as follows:
(1) To the beneficiary or entity designated by the member, if any is designated;
(2) If no beneficiary or entity is designated, then to the member's surviving spouse;
(3) If no beneficiary or entity is designated and there is no surviving spouse, then to all surviving children, irrespective of age, on a share-alike basis; or
(4) If no beneficiary or entity is designated, there is no surviving spouse, and there are no surviving children, then to the member's estate.
If no claim for payment due upon the death of a deceased member is made within three years from date of death, the payment shall revert to the system. However, a claim may be honored after the expiration of the three-year reversion period if, in the opinion of the executive director, payment of the claim is warranted by exceptional circumstances.
Source: SL 1974, ch 35, § 64; SL 1986, ch 37, § 9; SL 1995, ch 24, § 16; SL 1997, ch 29, § 1; SL 1998, ch 15, § 21; SL 1999, ch 15, § 7; SL 2006, ch 21, § 1; SL 2010, ch 20, § 12; SL 2014, ch 20, § 30; SL 2015, ch 27, § 1; SL 2016, ch 32, § 46; SL 2017, ch 27, § 19; SDCL § 3-12-110; SL 2019, ch 22, § 1.
3-12C-410. Lump-sum payments where designated beneficiary does not survive member--Reversion to system of unclaimed payments.
If a designated beneficiary does not survive the member, any lump-sum payment that may be due shall be payable to the member's surviving spouse. If there is no surviving spouse, the payment shall be payable to all of the member's surviving children, irrespective of age, on a share-alike basis. If there is no surviving spouse and no surviving children, the payment shall be payable to the estate of the deceased member. If no claim for payment due upon the death of a deceased member is made within three years from date of death, the payment shall revert to the system. However, a claim may be honored after the expiration of the three-year reversion period if, in the opinion of the executive director, payment of the claim is warranted by exceptional circumstances.
Source: SL 1967, ch 303, § 8 as added by SL 1968, ch 216, § 1; SDCL Supp, § 3-12-29.1; SL 1974, ch 35, § 70; SL 2006, ch 21, § 2; SL 2016, ch 31, § 24; SDCL § 3-12-116; SL 2019, ch 22, § 1.
3-12C-501. Uniform application of service credit rules.
Any period of credited service granted under the rules and regulations adopted by the Board of Trustees must be applied uniformly and consistently to all members.
Source: SL 1974, ch 35, § 45; SDCL § 3-12-89; SL 2019, ch 22, § 1.
3-12C-502. Credited service defined for foundation members.
For any foundation member, the term, credited service, means:
(1) Years of service, or fractions thereof, for which member contributions were made to the system;
(2) Years of noncontributory service, or fractions thereof, credited before July 1, 1974, previously credited under the provisions of the retirement systems consolidated pursuant to § 3-12C-1601;
(3) Any period of authorized leave of absence or sick leave with pay for which deductions for member contributions are made, deposited, and credited to the fund;
(4) Any period of authorized leave of absence or sick leave without pay or temporary layoff, during or for which a member obtained credit by payments to the fund made in lieu of salary deductions;
(5) Any period during which a member is on an authorized leave of absence to enter military service, if the member fulfills the provisions of § 3-12C-514;
(6) Years of service, or fractions thereof, by faculty and administrators employed by the board of regents before April 1, 1964, credited pursuant to §§ 3-12C-1611 and 3-12C-1612;
(7) Years of noncontributory service, or fractions thereof, earned before July 1, 1967, but not credited under the South Dakota public employee retirement system as it was consolidated pursuant to § 3-12C-1601 because the person earned the service prior to attaining the age of thirty. The service shall be credited only to those persons who are contributing members on July 1, 1987. No service may be credited pursuant to this subdivision to any member who has withdrawn the member's accumulated contributions after July 1, 1967; and
(8) Years of noncontributory service, or fractions thereof, earned by a member from July 1, 1967, to June 30, 1974, inclusive, but not credited under the South Dakota public employee retirement system because of the age and service restrictions established under that system.
Source: SL 2016, ch 32, § 25; SDCL § 3-12-89.3; SL 2019, ch 22, § 1.
3-12C-503. Credited service defined for generational members.
For any generational member, the term, credited service, means the sum of the following:
(1) Years of service, or fractions thereof, for which member contributions were made to the system;
(2) Any period of authorized leave of absence or sick leave with pay for which deductions for member contributions are made, deposited, and credited to the fund;
(3) Any period of authorized leave of absence or sick leave without pay or temporary layoff, during or for which a member obtained credit by payments to the fund made in lieu of salary deductions; and
(4) Any period during which a member is on an authorized leave of absence to enter military service, if the member fulfills the provisions of § 3-12C-514.
Source: SL 2016, ch 32, § 2; SDCL § 3-12-501; SL 2019, ch 22, § 1.
3-12C-504. Purchase of prior service credit--Calculation of amount due.
A current contributing member of the system may receive credited service by election to make, or have made on the member's behalf, contributions, based on the higher of the member's current compensation, or the member's final compensation calculated as if the member retired on the date of election, at an actuarially- determined percentage times the member rate, for each year of service for which the member wishes to receive credit, if:
(1) The current contributing member of the system could have established credit for any South Dakota public service by making contributions under this chapter or any prior law; or
(2) The current contributing member was not permitted to establish credit for any South Dakota public service.
The amount of the credited service and the rate of contribution shall be at class A rates unless the service for which credit is sought was rendered as a class B member in which case class B rates shall apply. If a participating unit has failed to pay employer or member contributions to the system on behalf of a member as required under this chapter or under any predecessor system consolidated pursuant to § 3-12C-1601, the amount due the system shall be calculated in accordance with this section.
The member rate in effect as of July 1, 2001, shall be used in calculation of the purchase cost of any service performed prior to July 1, 2002, if a contract to purchase such service is in place prior to July 1, 2004. The member rate in effect on and after July 1, 2002, shall be the basis for calculation of the purchase cost of any service if the contract to purchase such service is not in place until on or after July 1, 2004.
Source: SL 1974, ch 35, § 40; SL 1977, ch 28, § 8; SL 1980, ch 31, § 4; SL 1984, ch 24, § 5; SL 1989, ch 38, § 16; SL 2002, ch 23, § 2; SL 2004, ch 39, § 1; SDCL § 3-12-83; SL 2019, ch 22, § 1.
3-12C-505. Prospective increase for credited service related to years of noncontributory service.
Any increase in a retired member's benefit as a result of credited service related to years of noncontributory service, or fractions thereof, earned by a member from July 1, 1967, to June 30, 1974, inclusive, but not credited under the South Dakota public employee retirement system because of the age and service restrictions established under the system shall be prospective only from July 1, 1997.
Source: SL 1997, ch 25, § 2; SL 2016, ch 32, § 30; SDCL § 3-12-47.1; SL 2019, ch 22, § 1.
3-12C-506. Refund for purchase cost of noncontributing service.
Any member who, pursuant to the provisions of § 3-12C-504, has purchased a portion or all of the member's noncontributory service earned by a member from July 1, 1967, to June 30, 1974, inclusive, but not credited under the South Dakota public employee retirement system because of the age and service restrictions established under the system is entitled to a refund of such purchase cost.
Source: SL 1997, ch 25, § 3; SL 2016, ch 32, § 31; SDCL § 3-12-47.2; SL 2019, ch 22, § 1.
3-12C-507. Repealed.
Source: SL 1996, ch 30, § 2; SDCL § 3-12-83.1; SL 2019, ch 22, § 1; SL 2020, ch 12, § 9.
3-12C-508. Repealed.
Source: SL 1996, ch 30, § 3; SL 2008, ch 20, § 11; SL 2013, ch 20, § 7; SDCL § 3-12-83.2; SL 2019, ch 22, § 1; SL 2020, ch 12, § 10.
3-12C-509. Purchase of prior service credit for public service not covered by retirement plan.
If a current contributing member with at least five years of contributory service in the system has other public service for which the member is not entitled to retirement benefits from another public retirement system, the member may elect to deposit or have deposited on the member's behalf an amount equal to an actuarially-determined percentage times the Class A rate of contribution multiplied by the higher of the member's annual compensation at the time of making the election, or the member's final compensation calculated as if the member retired on the date of the member's election, for each year of other public service for which the member wishes to receive credit as a Class A member.
The member rate in effect as of July 1, 2001, shall be used in calculation of the purchase cost of any service performed prior to July 1, 2002, if a contract to purchase such service was in place prior to July 1, 2004. The member rate in effect on and after July 1, 2002, shall be the basis for calculation of the purchase cost of any service if the contract to purchase such service is not in place until on or after July 1, 2004.
Source: SL 1974, ch 35, § 41; SL 1980, ch 31, § 5; SL 1984, ch 24, § 6; SL 1989, ch 38, § 17; SL 2002, ch 23, § 3; SL 2004, ch 39, § 2; SDCL § 3-12-84; SL 2019, ch 22, § 1; SL 2023, ch 14, § 3.
3-12C-510. Acquisition of credited service through transfer of funds--Requirements.
A contributing member may acquire credited service by utilizing a trustee to trustee transfer of funds, excluding any after tax employee contributions, from a member's individual retirement plan that meets the requirements of sections 403(b) or 457 of the Internal Revenue Code to pay the cost of purchase pursuant to § 3-12C-504, 3-12C-509, or 3-12C-511.
Source: SL 2002, ch 22, § 4; SL 2008, ch 20, § 12; SL 2013, ch 20, § 8; SDCL § 3-12-84.1; SL 2019, ch 22, §§ 18, 45.
3-12C-511. Purchase of nonqualified permissive service credit allowed.
Notwithstanding the restrictions contained in §§ 3-12C-504 and 3-12C-509, a current contributing member with over five years of contributory service in the system may purchase nonqualified permissive service credit as defined in and pursuant to the provisions of § 415(n) of the Internal Revenue Code.
Source: SL 2003, ch 94, § 2; SL 2009, ch 21, § 1; SL 2013, ch 20, § 9; SDCL § 3-12-84.2 SL 2019, ch 22, § 1.
3-12C-512. Acquisition of credited service for members mobilized into certain federal military service.
If a contributing member was mobilized into federal military service pursuant to the provisions of United States Code Title 10 after February 1, 2002, but prior to September 30, 2004, the member, after returning to active membership in the system, may acquire credited service at the rates in effect prior to July 1, 2004, for a period of two years after the member's release from such federal military service, the cost provisions of §§ 3-12C-504, 3-12C-509, and 3-12C-518 notwithstanding. All other provisions in regard to credited service acquisition apply.
Source: SL 2005, ch 25, § 1; SDCL § 3-12-84.3; SL 2019, ch 22, § 1.
3-12C-513. Service credit for leave of absence--Contributions to cover period of absence.
A member taking a leave of absence authorized by the member's employer may receive credited service during the leave if employee and employer contributions are made to the system during the leave by or on behalf of the employee. The contributions shall be at the rates in effect during the leave and shall be based on the member's rate of compensation immediately prior to the leave. If a member's rate of compensation causes the member's compensation for the calendar year to exceed the maximum taxable amount for social security, the contributions shall include the additional contribution pursuant to § 3-12C-402. The contributions shall be transmitted to the system at least monthly. For purposes of calculation of benefits, the member shall be considered to have received compensation during the period of the leave at the rate used to calculate the contributions made during the leave. If contributions are not made during the leave, the member may receive credited service for the leave by making contributions, or having contributions made on the member's behalf as provided in § 3-12C-504.
Source: SL 1967, ch 303, § 9; SDCL § 3-12-31; SL 1968, ch 216, § 1; SL 1970, ch 25, § 9; SL 1973, ch 27; SL 1974, ch 35, § 42; SL 1980, ch 31, § 7; SDCL § 3-12-85; SL 2019, ch 22, § 1; SL 2019, ch 23, § 5.
3-12C-514. Credited service for leave of absence due to qualified military service--Return to employment after discharge.
A member shall receive credited service for leave of absence due to qualified military service, authorized in advance by the employer, without contribution by the employee or employer if the member returns to the employ of a participating unit within one year from the member's date of discharge from the member's initial period of qualified military service and if the member remains in the employ of a participating unit for at least one year. The member may not receive credited service for any voluntary extension of qualified military service at the instance of the member beyond the initial period of enlistment, induction, or call to active duty. Credited service granted under this section shall be only for the initial period of time that the member is performing qualified military service. No credited service granted under this section may be considered to represent either member contributions or employer contributions for purposes of contribution withdrawals pursuant to this chapter.
If the member returns to the employ of the member's employer unit within one year of discharge from the initial period of qualified military service, but does not remain in the employ of the unit for at least one year, the member shall be granted credited service for the initial period of qualified military service pursuant to § 414(u)(8) of the Internal Revenue Code if the member deposits with the system employee contributions for the initial period of the qualified military service as provided for in § 414(u)(8)(C). The contributions shall be made in a lump sum, shall be based on the member's compensation immediately prior to the leave of absence, and shall be without interest. The participating unit that was the member's employer prior to the leave of absence shall deposit employer contributions in an equal amount with the system. Other provisions of this chapter notwithstanding, the member need not be a contributing member at the time the member deposits the contributions. The member is subject to the time limitations for payment provided for in § 414(u)(8)(C).
Source: SL 1970, ch 25, § 9; SDCL Supp, § 3-12-31; SL 1973, ch 27; SL 1974, ch 35, § 42; SL 1995, ch 24, § 12; SL 2008, ch 20, § 13; SL 2011, ch 20, § 2; SL 2013, ch 20, § 10; SDCL § 3-12-86; SL 2019, ch 22, § 1.
3-12C-515. Death or disability of member on leave of absence due to qualified military service--Return to service date and benefits.
If a member on leave of absence performing initial qualified military service dies, the member shall be considered to have returned from the leave of absence on the day before the member's death and become a contributing member for purposes of survivor benefits, if the member has at least one year of credited service before the member's death, including the initial period of qualified military service. If the member was contributing for additional survivor protection benefits pursuant to § 3-12C-1001 immediately before the leave of absence, the member shall be considered to have resumed the contributions on the day before the member's death.
If a member on leave of absence performing initial qualified military service becomes disabled pursuant to the disability criteria set out in this chapter, the member shall be considered to have returned from the leave of absence on the day before the member's discharge date and become a contributing member for purposes of eligibility for disability benefits pursuant to § 3-12C-812, if the member has at least three years of credited service including the period of initial qualified military service. The provisions of § 3-12C-812 notwithstanding, the member need not have been deemed to be a contributing member on the date of the member's disabling event.
Source: SL 2011, ch 20, § 3; SL 2016, ch 31, § 16; SDCL § 3-12-86.1; SL 2019, ch 22, §§ 16, 45.
3-12C-516. Members receiving differential wage payments.
To the extent required by § 414(u)(12) of the Internal Revenue Code, a member receiving differential wage payments, as defined under § 3401(h)(2) of the Internal Revenue Code, from a member's employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of calculating final average compensation and applying the limits on annual additions under § 415(c) of the Internal Revenue Code. This provision shall be applied to all similarly situated members in a reasonably equivalent manner.
Source: SL 2016, ch 31, § 17; SDCL § 3-12-86.2; SL 2019, ch 22, § 1; SL 2023, ch 14, § 4.
3-12C-517. Valuation of purchased prior service credit--Installment payments--Death of member--Adjustment when installments not paid.
Payment of a deposit with the system for credited service pursuant to §§ 3-12C-504 to 3-12C-514, inclusive, shall be determined and due at the time the notice of intention to make the payment is received by the system. The amount due may be paid by periodic, level installments over a period of up to ten years, the value of which, when discounted for interest at the assumed rate of return, is equal to the amount due at the date of the notice. If a member dies before completion of the installment payments, the surviving spouse may complete the payments due the system, but, unless the payments are being made by a participating unit, the amount shall be paid in full within ninety days of the member's death or retirement. If the periodic payments are not completed or paid when due, the executive director may make an appropriate adjustment to the credited service, benefits payable under this chapter, or schedule of payments to allow for the default. Any member participating in installment payments pursuant to this section before July 1, 1989, shall have the balance due on July 1, 1989, recalculated pursuant to §§ 3-12C-504 and 3-12C-509 and shall have the installment payments due after June 30, 1989, recalculated accordingly.
Source: SL 1974, ch 35, § 43; SL 1977, ch 28, § 9; SL 1980, ch 31, § 6; SL 1989, ch 38, § 18; SL 1996, ch 30, § 4; SL 2008, ch 20, § 14; SL 2016, ch 31, § 18; SDCL § 3-12-87; SL 2019, ch 22, § 1; SL 2020, ch 12, § 12.
3-12C-518. Conversion of credited service.
A current contributing Class B member other than a justice, judge, or magistrate judge, may convert credited service as a county sheriff or deputy county sheriff before January 1, 1980, or credited service as a county sheriff or deputy county sheriff while not certified from January 1, 1980, to June 30, 1988, inclusive; credited service as a police officer while not certified from July 1, 1983, to June 30, 1988, inclusive; credited service as a correctional security staff member before July 1, 1978; credited service as a conservation officer before July 1, 1983; credited service as a parole agent before July 1, 1991; and credited service as an air rescue firefighter before July 1, 1992, from credited service as a Class A member with benefits provided in accordance with § 3-12C-1106 to credited service as a Class B member other than a justice, judge, or magistrate judge, with benefits provided in accordance with § 3-12C-1107, by election to make, or have made on the member's behalf, contributions based on the higher of the member's current compensation, or the member's final average compensation calculated as if the member retired on the date of election, at an actuarially-determined percentage times each year of service for which the member wishes to receive Class B credit. The provisions of this section also apply to a current contributing Class B member, other than a justice, judge, or magistrate judge, who previously has purchased equivalent public service pursuant to the provisions of § 3-12C-509.
Payment of a deposit with the system for the conversion of credited service in accordance with this section shall be determined and due at the time the notice of intention to make the payment is received by the system. The amount due may be paid by periodic level installments over a period of up to ten years, the value of which, if discounted for interest at the assumed rate of return, is equal to the amount due at the date of the notice. If a member dies before completion of the installment payments, the surviving spouse may complete the payments due to the system, but unless the payments are being made by a participating unit, the amount shall be paid in full within ninety days of the member's death or retirement. If the periodic payments are not completed or paid when due, the executive director may make a pro rata adjustment to the credited service, benefits payable under this chapter or schedule of payments to allow for the default.
If the credited service of any member or group of members becomes Class B credited service on a prospective basis after June 30, 1993, the prior credited service as a Class A member may be converted to Class B credited service in accordance with this section. If a jailer becomes a Class B member other than a justice, judge, or magistrate judge, the jailer is eligible to convert prior credited service as a jailer under this section.
Source: SL 1993, ch 44, § 1; SL 1997, ch 27, § 3; SL 1999, ch 14, § 3; SL 2003, ch 24, § 1; SL 2004, ch 39, § 3; SL 2004, ch 40, § 9; SL 2008, ch 20, § 16; SL 2012, ch 26, § 12; SL 2016, ch 31, § 28; SL 2018, ch 32, § 6; SDCL § 3-12-130; SL 2019, ch 22, § 1.
3-12C-519. Purchase of certain public service as Class B service.
If a current contributing Class B member of this system, other than a justice, a judge, or a magistrate judge, has equivalent public service for which the member is not entitled to retirement benefits from another public retirement system, the member may elect to deposit or have deposited on the member's behalf an amount equal to an actuarially-determined percentage times the appropriate Class B rate of contribution multiplied by the higher of the member's annual compensation at the time of making the election, or the member's final average compensation calculated as if the member retired on the date of the election, for each year of equivalent public service for which the member wishes to receive credit as a Class B member.
Source: SL 1997, ch 27, § 2; SL 2004, ch 39, § 4; SL 2004, ch 40, § 10; SDCL § 3-12-130.1; SL 2019, ch 22, § 1.
3-12C-520. Prior service credit on return of nonvested member to employment.
If a nonvested member who has terminated employment and has left the member's accumulated contributions in the system returns to employment with a participating unit, the system shall credit the member's prior service time toward the total length of service necessary for the member to obtain the credited service necessary for benefits provided by this chapter.
Source: SL 1972, ch 22; SDCL Supp, § 3-12-32; SL 1974, ch 35, § 36; SL 1998, ch 18, § 3; SL 2008, ch 20, § 9; SDCL § 3-12-78; SL 2019, ch 22, § 1.
3-12C-601. Retirement benefit to terminated member with vested right--Calculation.
A terminated member who has a vested right in the system may leave the member's accumulated contributions on deposit with the system and receive a retirement benefit commencing at the member's retirement. In calculating such benefit, the member's final average compensation shall be increased by the COLA commencing each July first for each complete twelve-month period between the member's last termination and the date on which the member's retirement benefit commences.
Source: SL 1974, ch 35, § 33; SL 1982, ch 32, § 4; SL 1986, ch 37, § 4; SL 1998, ch 17, § 3; SL 2004, ch 40, § 8; SL 2010, ch 20, § 9; SL 2017, ch 27, § 10; SDCL § 3-12-75; SL 2019, ch 22, § 1.
3-12C-602. Withdrawal of accumulated contributions on leaving covered employment--Picture identification required--Limitation.
A member who has left covered employment may withdraw the sum of the member's accumulated contributions upon application to the system and submission of a copy of the member's current driver license or other picture identification card issued by a government agency or tribe. If the member is married, the spouse shall sign the application and provide a copy of the spouse's current driver license or other picture identification card issued by a government agency or tribe.
A member who withdraws the member's accumulated contributions pursuant to this section forfeits all credited service and benefits provided in this chapter.
The right to withdraw accumulated contributions ceases if the member returns to covered employment with a participating unit.
Source: SL 1967, ch 303, § 8; SDCL § 3-12-30; SL 1968, ch 216, § 1; SL 1974, ch 35, § 34; SL 1977, ch 28, § 6; SL 1995, ch 24, § 13; SL 1998, ch 15, § 6; SL 2018, ch 33, § 9; SDCL § 3-12-76; SL 2019, ch 22, § 1; SL 2019, ch 23, § 4; SL 2021, ch 27, § 2.
3-12C-603. Distribution by direct rollover.
A member who elects to withdraw accumulated contributions as provided in § 3-12C-602, or a member's surviving spouse or nonspouse beneficiary who receives a lump-sum payment pursuant to § 3-12C-409, may receive the distribution directly. Eligible rollover distributions may be transferred by the system in a direct rollover to no more than one eligible retirement plan identified by a member, a member's surviving spouse, or a member's nonspouse beneficiary if the individual so elects. The board shall promulgate rules pursuant to chapter 1-26 to comply with federal mandates regarding rollover distributions. The system is not required to make an independent determination as to whether the plan identified by a member, surviving spouse, or nonspouse beneficiary qualifies as an eligible retirement plan. By electing a direct rollover and identifying the eligible retirement plan to which an eligible rollover distribution is to be made, a member, surviving spouse, or nonspouse beneficiary represents to the system that the identified plan qualifies as an eligible retirement plan. If a member, surviving spouse, or nonspouse beneficiary does not elect a direct rollover, the distribution shall be issued in the name of, and directly to, that person.
Source: SL 1993, ch 42, § 5; SL 1995, ch 24, § 17; SL 1998, ch 15, § 7; SL 2009, ch 20, § 2; SDCL § 3-12-76.3; SL 2019, ch 22, § 1.
3-12C-604. Contributions left in system on termination of employment without vested right--Maximum period--Forfeiture.
A member of the system who is not vested may leave the member's accumulated contributions in the system upon termination of employment for a period not to exceed ten years from the date of termination. However, no additional contributions may be made to the system by the member or a participating unit following the date of termination and no benefits in the retirement system may accrue to a member of the system following the date of termination, except as provided in § 3-12C-310. If the member withdraws the member's accumulated contributions, membership in the system terminates. At the end of the ten-year period, no further interest may be credited with respect to contributions and no further investment return may be credited with respect to any variable retirement account. If the member fails to withdraw the member's accumulated contributions within eleven years following the member's termination, the member shall forfeit all rights to the member's accumulated contributions, variable retirement account, and to any credited service in connection therewith, if the system has made reasonable efforts to notify the member of the member's withdrawal rights and the effect of this section.
Source: SL 1972, ch 22; SDCL Supp, § 3-12-32; SL 1974, ch 35, § 35; SL 1984, ch 24, § 1; SL 1998, ch 15, § 8; SL 1998, ch 18, § 2; SL 2016, ch 32, § 33; SDCL § 3-12-77; SL 2019, ch 22, § 1.
3-12C-605. Uncollected payments from system--Reversion.
If any payment from the system remains uncollected, the payment shall revert to the system and all rights to the payment shall terminate, if the system has made reasonable efforts to notify the person entitled to the payment of the person's right to the payment and the effect of this section.
Source: SL 1984, ch 24, § 2; SDCL § 3-12-77.1; SL 2019, ch 22, §§ 20, 45.
3-12C-606. Reinstatement of terminated rights.
Any rights which have terminated pursuant to the provisions of § 3-12C-604 or 3-12C-605 may be reinstated upon presentation to the executive director of a request for reinstatement of those rights and competent evidence of the rights.
Source: SL 1984, ch 24, § 4; SL 2016, ch 31, § 13; SDCL § 3-12-77.3; SL 2019, ch 22, § 1.
3-12C-607. Early withdrawal precludes additional refund.
No member or former member of the system who has withdrawn contributions from the system before July 1, 1998, may receive any additional refund pursuant to this chapter.
Source: SL 1998, ch 15, § 31; SDCL § 3-12-77.4; SL 2019, ch 22, §§ 21, 45.
3-12C-608. Eligibility for benefits upon becoming full-time employee within twelve months after withdrawal.
Notwithstanding any provision of this chapter to the contrary, whenever a member withdraws accumulated contributions under § 3-12C-602 and becomes a full-time employee within twelve months after withdrawal, contributions must have been made to the system for a period of twelve consecutive months before the member is eligible for benefits pursuant to § 3-12C-901. The member shall furthermore be ineligible to apply for additional survivor protection pursuant to § 3-12C-1001 as a new member of the system. To be eligible for a disability benefit pursuant to § 3-12C-803 or 3-12C-812, the member must have at least three years of contributory service since the date of the last withdrawal unless the member was disabled by accidental means while performing the usual duties for the employer.
Source: SL 1993, ch 39, § 2; SL 2014, ch 20, § 31; SDCL § 3-12-131; SL 2019, ch 22, § 1; SL 2021, ch 29, § 13, eff. Apr. 1, 2021.
3-12C-701. Benefits only payable monthly--Lump-sum payments prohibited unless specified.
A member in the system may claim the benefits provided for in this chapter only in the form of a monthly benefit payment and only after such time as these benefits are payable. Unless otherwise specifically provided, no member or a former member of the system may receive a lump-sum cash payment in lieu of the normal retirement benefit.
Source: SL 1967, ch 303, § 8; SDCL § 3-12-29; SL 1968, ch 216, § 1; SL 1970, ch 25, § 7; SL 1974, ch 35, § 66; SL 2017, ch 27, § 22; SDCL § 3-12-112; SL 2019, ch 22, § 1.
3-12C-702. Person's birthday for purposes of eligibility.
For the purposes of determining eligibility for, and the amount of, any benefit payable pursuant to this chapter, the first day of the month in which a person's birthday falls is considered a person's birthday.
Source: SL 2016, ch 32, § 55; SDCL § 3-12-47.9; SL 2019, ch 22, § 1.
3-12C-703. COLA applied to benefits--COLA elimination.
The COLA payable shall be applied annually to all benefits except those based on the member's accumulated contributions, variable retirement account, or contribution credit. However, the COLA shall be eliminated for any period of time that a retired member reenters covered employment in the system, unless the member retired as a Class B member other than a justice, judge, or magistrate judge and subsequently has reentered covered employment as a Class A member, or unless the member retired without a benefit suspension pursuant to § 3-12C-1402 and then reentered active status before July 1, 2004. Such elimination shall cease when the member again retires and draws either a refund or an additional retirement benefit.
Source: SL 1974, ch 35, § 44; SL 2004, ch 38, § 2; SL 2005, ch 26, § 1; SL 2017, ch 27, § 12; SDCL § 3-12-88; SL 2019, ch 22, § 1; SL 2021, ch 26, § 2.
3-12C-704. Determination of COLA payable.
The COLA payable is the baseline COLA or the restricted COLA, as applicable. The baseline COLA is equal to the increase in the consumer price index, but no less than zero percent and no greater than three and one-half percent. The restricted COLA is equal to the increase in the consumer price index, but no less than zero percent and no greater than the restricted COLA maximum as determined in subdivision (2) of this section. The board shall establish the COLA payable for each fiscal year, based on the fair value funded ratio and the minimum actuarial requirement to support benefits as of the prior July first and the increase in the consumer price index for the preceding third calendar quarter compared to the consumer price index for the third calendar quarter for the base year (the previous year in which the consumer price index was the highest), by utilizing one of the following subdivisions, as applicable:
(1) If the system meets the criteria in subdivisions 3-12C-228(1) and (2) based on the baseline COLA assumption adopted by the board, the COLA payable is the baseline COLA; or
(2) If the system does not meet the criteria in subdivisions 3-12C-228(1) and (2) based on the baseline COLA assumption adopted by the board, the system shall calculate a restricted COLA maximum in accordance with the board's funding policy that is equal to the actuarially determined annual COLA rate that results in the criteria in subdivisions 3-12C-228(1) and (2) being satisfied, if achievable. The COLA payable is the restricted COLA. If the criteria in subdivisions 3-12C-228(1) and (2) cannot be satisfied, the COLA payable is zero percent.
Source: SL 2019, ch 22, § 23; SL 2021, ch 26, § 3; SL 2023, ch 16, § 4.
3-12C-705. Date of application of prorated payment of COLA.
Application of prorated payment of the COLA applies only to benefits which were first payable after July 1, 1998, but before July 1, 2010.
Source: SL 2010, ch 20, § 8; SL 2017, ch 27, § 5; SDCL § 3-12-47.4; SL 2019, ch 22, § 1.
3-12C-706. Modified monthly benefit permitted.
The board may provide under its rules for a modified monthly benefit to a member or beneficiary in lieu of the monthly benefit payable under any provision of this chapter if the benefit is not greater than the actuarial equivalent of the benefit due the member or beneficiary under this chapter.
Source: SL 1968, ch 216, § 1; SDCL Supp, § 3-12-41; SL 1970, ch 25, § 11; SL 1974, ch 35, § 62; SL 2017, ch 27, § 18; SDCL § 3-12-108; SL 2019, ch 22, §§ 24, 45.
3-12C-707. Highest annual compensation .
To calculate benefits pursuant to §§ 3-12C-805, 3-12C-901, and 3-12C-1004 before July 1, 2004, the system shall use the member's highest annual compensation earned by the member during any one of the last three years of contributory service, so long as it is not more than one hundred fifteen percent of the member's final compensation calculated as of the date of the member's death or disability.
Source: SL 2019, ch 22, § 25.
3-12C-708. Time of termination of benefits.
Monthly benefits paid to a member cease on the last day of the month in which the member died. Monthly benefits paid to a surviving spouse cease on the last day of the month in which the surviving spouse died. Monthly benefits paid to a child cease on the last day of the month in which the child died or the last day of the month in which the child became ineligible, whichever occurs first.
Source: SL 1974, ch 35, § 67; SDCL § 3-12-113; SL 2019, ch 22, §§ 40, 45.
3-12C-709. Duplicate benefits prohibited unless from another member's contributions.
No person shall be entitled to receive a benefit provided under more than one provision of this chapter at one time, unless such benefit is derived from the contributions of another member.
Source: SL 1974, ch 35, § 63; SL 1977, ch 28, § 13; SDCL § 3-12-109; SL 2019, ch 22, § 1.
3-12C-710. Member who leaves employment--Spouse and minor children.
A member who leaves the employment of a participating unit is not entitled to disability benefits and the member's surviving spouse and minor children are not entitled to any benefits pursuant to this chapter.
Source: SL 2019, ch 22, § 22.
3-12C-711. Rules regulating maximum annual benefit--Tax qualification--Limitation year defined.
Pursuant to chapter 1-26, the board shall adopt rules regulating the maximum annual benefit that may be paid to a member. The rules shall be consistent with maintaining the tax qualification of the system. No benefit may exceed the limitations imposed by § 415 of the Internal Revenue Code. For the purposes of administering the limitations imposed by § 415, the term, limitation year, means a period extending from July first of one calendar year through June thirtieth of the following calendar year.
Source: SL 1984, ch 23, § 6; SL 1996, ch 29, § 2; SL 1997, ch 32, § 2; SL 2002, ch 22, § 3; SL 2013, ch 20, § 1; SDCL § 3-12-89.1; SL 2019, ch 22, § 1.
3-12C-712. Compensation limits in Internal Revenue Code § 401(a)(17) .
Any compensation in excess of the limits established in § 401(a)(17) of the Internal Revenue Code shall be disregarded for purposes of contributions and benefit calculations under the system. Any benefit calculations for members subject to the limits established in § 401(a)(17) of the Internal Revenue Code but for whom the limitation on compensation did not apply before January 1, 2018, shall be based on unlimited compensation for credited service before January 1, 2018, and limited compensation for credited service as of January 1, 2018.
Source: SL 2017, ch 28, § 3, eff. Jan. 1, 2018; SDCL § 3-12-47.12; SL 2019, ch 22, § 1.
3-12C-713. Contribution credit defined--Payment of contribution credit and credited investment return.
For purposes of this section, the term, contribution credit, means the employer and member contributions, reduced by any variable retirement contributions, on compensation not included in the computation of final average compensation as a result of the final average compensation limits provided pursuant to §§ 3-12C-1104 and 3-12C-1202.
The contribution credit plus the credited investment return on the contribution credit is payable at the retirement, disability, or death of the member. The credited investment return, which shall be credited annually as of June thirtieth, is the South Dakota Investment Council's reported money-weighted investment return of the system, net of fees, for the completed fiscal year. Any contribution credit made during the fiscal year shall receive one-half year's credited investment return for that year. For any account distributed during the fiscal year, the estimated investment return shall be credited to the end of the month before the date on which the contribution credit is paid.
The contribution credit plus credited investment return is payable to the member commencing a retirement benefit or a disability benefit three consecutive calendar months after the effective date of the benefit. The contribution credit plus credited investment return is payable to a member's child who is eligible for a family benefit or a member's spouse who is eligible for a surviving spouse benefit, upon the death of the member. No contribution credit is payable to any member who withdraws accumulated contributions from the system or to any beneficiary who receives a lump sum payment of accumulated contributions. For the purpose of paying a distribution, the amount payable is the total of contribution credit plus credited investment return or the total contribution credit, whichever is greater. The amount may be paid in a lump sum, rolled over to the South Dakota deferred compensation plan, rolled over to another eligible plan, or used to purchase a supplemental pension benefit. However, the purchase of a supplemental pension benefit is only available upon the member's retirement.
Source: SL 2017, ch 29, § 7; SDCL § 3-12-47.11; SL 2019, ch 22, § 1; SL 2021, ch 27, § 3.
3-12C-801. Criteria for determining disability--Uniform application.
The Board of Trustees shall set the criteria for determining the disability of members. Methods of disability determination shall be applied uniformly and consistently to all members applying for the disability benefits.
Source: SL 1974, ch 35, § 54; SDCL § 3-12-100; SL 2019, ch 22, § 1.
3-12C-802. Disability documentation inadmissible for proceedings relative to workers' compensation.
An application for disability benefits pursuant to this chapter, any associated evidence and documents, and the disability determination and decision related thereto shall be inadmissible and nondeterminative for any associated proceeding relative to Title 62.
Source: SL 1995, ch 23, § 3; SDCL § 3-12-142; SL 2019, ch 22, § 1.
3-12C-803. Disability benefits eligibility--Applications before July 1, 2015--Required information--Filing deadline.
A contributing member who becomes disabled and who has acquired at least three years of contributory service or noncontributory service since the member's most recent entry into active status and prior to becoming disabled or was disabled by accidental means while performing usual duties for an employer, is eligible for a disability benefit if the disability is expected to be of long, continued, and indefinite duration of at least one year. In order to be eligible for a disability benefit, a member must be disabled on the date the member's contributory service ends. Any member who fails to file an application for disability benefits with the executive director within three years after the date the member's contributory service ends, forfeits all rights to disability benefits. Any information required for a complete application must be received within one year after the application for disability benefits was received. If the required information is not received by the system within one year after the application is received, the member may reapply. For purposes of this section, a transfer within a participating unit, or a change in employment from one participating unit to another participating unit if there is no break in contributory service, does not constitute a new entry into active status. The provisions of this section apply to any member whose application for disability benefits is received by the system before July 1, 2015.
Source: SL 1974, ch 35, § 52; SL 1977, ch 28, § 11; SL 1979, ch 30, § 2; SL 1980, ch 31, § 3; SL 1992, ch 3; SL 2004, ch 37, § 3; SL 2005, ch 24, § 5; SL 2014, ch 20, § 24; SL 2016, ch 31, § 21; SDCL § 3-12-98; SL 2019, ch 22, § 1.
3-12C-804. Employer certification of inability to provide effective accommodations or comparable employment--Applications before July 1, 2015.
No application for disability benefits pursuant to § 3-12C-803 may be determined until the employer has certified to the system that, within the employer's understanding of the member's medical condition and the employer's knowledge of the member's employment requirements and duties, the employer is unable to provide to the member either effective accommodations in the member's current position or comparable level employment in another position.
Source: SL 1995, ch 23, § 2; SL 2006, ch 19, § 2; SL 2014, ch 20, § 32; SDCL § 3-12-141; SL 2019, ch 22, § 1.
3-12C-805. Amount of monthly disability benefit--Applications before July 1, 2015.
The disability benefit for the first thirty-six months shall be equal to fifty percent of the member's final average compensation immediately preceding the date of disability, increased by ten percent of such compensation for each child to a maximum of four such children.
Starting with the thirty-seventh month, if the member is eligible for and receiving disability benefits from social security, the disability benefit from the system is equal to the greater of the amount paid during the first thirty-six months less the amount of primary social security or the amount of the member's unreduced accrued retirement benefit as of the date of disability. If the member's unreduced accrued retirement benefit is the greater, it is immediately payable by the system notwithstanding any other provisions to the contrary. In no event may the annual amount of a disability benefit be less than twenty percent of the compensation on which the initial disability benefit was based.
Starting with the thirty-seventh month, if the member is not eligible for and receiving disability benefits from social security, the disability benefit from the system is equal to the greater of twenty percent of the compensation on which the initial disability benefit was based or the amount of the member's unreduced accrued retirement benefit as of the date of disability. If the member's unreduced accrued retirement benefit is the greater, it is immediately payable by the system notwithstanding any other provisions to the contrary. The disability benefit shall be paid only in the form of monthly installments. The provisions of this section apply to any member whose application for disability benefits is received by the system prior to July 1, 2015.
Source: SL 1974, ch 35, § 53; SL 1994, ch 32, § 3; SL 2004, ch 40, § 2; SL 2014, ch 20, § 25; SDCL § 3-12-99; SL 2019, ch 22, § 1.
3-12C-806. Elimination or addition of disability benefit pertaining to children--Applications before July 1, 2015.
That portion of a disability benefit that is payable on account of children shall be eliminated as each child becomes ineligible. However, the portion of a disability benefit that is payable on account of children shall increase if a disabled member gains an additional child who is eligible. All other provisions in § 3-12C-807 do not apply to members receiving a disability benefit pursuant to this chapter. The provisions of this section apply to any member whose application for disability benefits is received by the system before July 1, 2015.
Source: SL 1994, ch 32, § 4; SL 2011, ch 22, § 1; SL 2014, ch 20, § 26; SL 2016, ch 31, § 22; SDCL § 3-12-99.1; SL 2019, ch 22, § 1.
3-12C-807. Deduction of other public benefits from disability benefit--Reduction when children become ineligible--Applications before July 1, 2015.
Disability benefits shall be reduced by an amount equal to the unmodified benefits paid or payable under other public systems. Disability benefits payable on account of children shall be reduced when children become ineligible. In no event may the annual amount of a disability benefit be less than the greater of six percent of the compensation on which the disability benefit is based or six hundred dollars a year.
However, any disability benefit effective prior to July 1, 1994, and payable on or after that date may not be reduced by any benefit payable on account of a veteran's disability or from any insured or self-insured short-term disability plan sponsored by an employer and paid for by the employee or paid for under a salary reduction plan. Further, any disability benefit effective prior to July 1, 1994, and payable on or after July 1, 1995, may not be reduced by any benefit payable on account of a federal military retirement or a federal national guard retirement. The provisions of this section apply to any member whose application for disability benefits is received by the system prior to July 1, 2015.
Source: SL 1974, ch 35, § 55; SL 1986, ch 37, § 7; SL 1993, ch 43, §§ 1, 2; SL 1994, ch 36; SL 1995, ch 20; SL 2014, ch 20, § 27; SDCL § 3-12-101; SL 2019, ch 22, § 1.
3-12C-808. Conversion of disability benefit to retirement benefit at retirement age--Applications before July 1, 2015.
When a person who is receiving a disability benefit reaches age sixty-five, or at such later date if there are no eligible children, or if over age sixty at the time of commencement of disability, after a period of five years, the member's disability benefit shall be terminated and thereafter the member shall receive the benefit payable for service retirement at that age, calculated on the projected compensation and projected service. If a person who received a disability benefit returns to employment prior to normal retirement age, the member's credited service shall include the time of disability. The provisions of this section apply to any member whose application for disability benefits is received by the system prior to July 1, 2015.
Source: SL 1974, ch 35, § 57; SL 1992, ch 33; SL 2014, ch 20, § 28; SDCL § 3-12-103; SL 2019, ch 22, § 1.
3-12C-809. Termination of disability benefit based on application before July 1, 2015.
A member's disability benefit that was based on an application received by the system prior to July 1, 2015, shall terminate thirty days after the earliest of the following:
(1) The member no longer is disabled;
(2) The member no longer is subject to the medical condition that caused the disability;
(3) The member refuses to undergo a medical examination requested by the system for the purpose of reviewing the medical condition that caused the disability;
(4) The member returns to continuous employment in the position the member held prior to becoming disabled; or
(5) The member returns to continuous employment in a position of comparable level to the position the member held prior to becoming disabled.
However, a member's disability benefit shall terminate immediately if the member's disability benefit is converted to a service retirement benefit pursuant to § 3-12C-808.
Source: SL 2006, ch 19, § 1; SL 2014, ch 20, § 29; SDCL § 3-12-103.1; SL 2019, ch 22, § 1.
3-12C-810. Maximum amount of disability benefit--Reporting earned income--Applications before July 1, 2015.
For the first thirty-six months of a disability benefit provided by § 3-12C-805, the maximum amount a member may receive in any calendar year from the disability benefit and earned income, as defined in § 32(c)(2) of the Internal Revenue Code, is one hundred percent of the member's final average compensation. Starting with the thirty-seventh month of the disability benefit, the maximum amount that a member may receive in any calendar year from disability benefits provided by the federal Social Security Act equal to the primary insurance amount, the disability benefit provided by this chapter and earned income, as defined in § 32(c)(2) of the Internal Revenue Code, is one hundred percent of the member's final average compensation. The maximum amount shall be indexed for each full fiscal year during which the member is eligible for such disability benefit by the COLA. Any amount exceeding this maximum amount shall reduce each monthly disability benefit payable pursuant to § 3-12C-805 in the following fiscal year on a pro rata basis.
Any member eligible to receive a disability benefit shall report to the system in writing any earned income of the member. The report shall be filed with the system before June first following the end of each calendar year in which a disability benefit is paid. A disabled member may file a signed copy of the member's individual income tax return in lieu of the report. No report or return need be filed for the calendar year the member dies or converts to a normal or early retirement benefit under this chapter. The disability benefit of any member failing to file a report or return as required in this section shall be suspended until the report or return is filed. The reduction may occur, however, only if a disability benefit is being paid by the system, but may not reduce the disability benefit below the minimum provided for in § 3-12C-805.
This section applies to any member receiving or entitled to receive a disability benefit pursuant to § 3-12C-803.
Source: SL 1995, ch 23, §§ 4, 5; SL 2004, ch 40, § 4; SL 2012, ch 26, § 13; SL 2013, ch 20, § 12; SL 2014, ch 20, § 33; SL 2016, ch 31, § 29; SL 2017, ch 27, § 27; SDCL § 3-12-143; SL 2019, ch 22, § 1.
3-12C-811. Disability benefits for applications received after June 30, 2015 .
The provisions of §§ 3-12C-812 to 3-12C-828, inclusive, apply to any member whose application for disability benefits is received by the system after June 30, 2015.
Source: SL 2019, ch 22, § 27.
3-12C-812. Disability benefits eligibility .
A contributing member who becomes disabled and who has acquired at least three years of contributory service or noncontributory service since the member's most recent entry into active status and before becoming disabled, or was disabled by accidental means while performing usual duties for an employer, is eligible for disability benefits if the disability is expected to be of long, continued, and indefinite duration of at least one year and the member is disabled on the date the member's contributory service ends. For purposes of this section, a transfer within a participating unit, or a change in employment from one participating unit to another participating unit if there is no break in contributory service, does not constitute a new entry into active status.
Source: SL 2014, ch 20, § 1; SL 2016, ch 31, § 36; SDCL § 3-12-201; SL 2019, ch 22, §§ 28, 45.
3-12C-813. Application for disability benefits--Required information--Filing deadline.
Any member seeking disability benefits pursuant to § 3-12C-812 shall submit an application to the executive director. Any information required for a complete application must be received within one year after the application for disability benefits was received. If the required information is not received by the system within one year after the application is received, the member may reapply.
Any member, who fails to file an application for disability benefits with the executive director within three years after the date the member's contributory service ends, forfeits all rights to disability benefits.
Source: SL 2014, ch 20, § 2; SL 2016, ch 31, § 37; SDCL § 3-12-202; SL 2019, ch 22, § 1.
3-12C-814. Employer information--Employment history and accommodations.
No application for disability benefits pursuant to § 3-12C-812 may be determined until the member's employer has submitted a completed form and supporting documentation that provides the member's position, usual duties of the position, any modifications or accommodations provided, and the member's employment history with the employer.
Source: SL 2014, ch 20, § 3; SDCL § 3-12-203; SL 2019, ch 22, § 1; SL 2024, ch 22, § 1.
3-12C-815. Health care provider information--Disability--Other medical documentation.
No application for disability benefits pursuant to § 3-12C-812 may be determined until a health care provider has completed a form providing an evaluation of the member’s diagnosis, complicating conditions, including limitations or restrictions, and the member’s ability to perform the duties required by the member’s employment. If no form is provided by a health care provider, the member must submit other medical documentation of the diagnosis, complicating conditions, including limitations or restrictions, and the member’s ability to perform usual duties required by the member’s employment.
Source: SL 2014, ch 20, § 4; SDCL § 3-12-204; SL 2019, ch 22, § 1; SL 2024, ch 22, § 2.
3-12C-816. Advice of disability advisory committee--Independent examination or assessment--Notice of disapproval of application.
Upon receipt of an application for disability benefits after June 30, 2015, along with statements from a health care provider and the member's employer, the executive director shall determine whether the member is eligible for disability benefits. The executive director may request the advice of the disability advisory committee with respect to any application. The recommendation of the disability advisory committee is not binding on the executive director. The disability advisory committee or the executive director may require an independent medical examination of the member to be conducted by a disinterested health care provider selected by the disability advisory committee or the executive director to evaluate the member's condition. The disability advisory committee or the executive director may require a functional capacity assessment of the member to be conducted by a licensed professional qualified to administer such an assessment. The assessment may be used to evaluate the member's qualification for benefits. Refusal to undergo an examination or assessment pursuant to this section is cause for denying the application.
If the executive director determines that the member is not disabled, a notice of the executive director's determination and the reasons for the determination shall be sent by certified mail to the member's last known address.
Source: SL 2014, ch 20, § 5; SL 2016, ch 31, § 38; SDCL § 3-12-205; SL 2019, ch 22, § 1.
3-12C-817. Notice of approval of disability benefits--Commencement of benefits.
If the executive director determines that the member whose application was received pursuant to § 3-12C-816, meets the qualifications to receive disability benefits, a notice of the executive director's determination shall be sent by certified mail to the member's last known address. A member whose application for disability benefits is approved shall receive the benefits beginning with the month following the date on which the member's contributory service terminates. If any member fails to terminate contributory service within one year after receiving notice that the member's application has been approved, the member's application approval expires.
Source: SL 2014, ch 20, § 6; SL 2016, ch 31, § 39; SDCL § 3-12-206; SL 2019, ch 22, § 1.
3-12C-818. Calculation of disability benefits--Foundation members.
The disability benefit approved pursuant to § 3-12C-817 is the greater of the following calculations:
(1) Twenty-five percent of the foundation member's final average compensation at the date of disability; or
(2) The foundation member's unreduced accrued retirement benefit at the date of disability.
The disability benefit must be paid in monthly installments for the life of the foundation member unless the benefit terminates pursuant to § 3-12C-822.
For purposes of determining the eligibility of a surviving spouse benefit and administering a qualified domestic relations order, the disability benefit of a foundation member is considered a retirement benefit when the member attains normal retirement age.
Source: SL 2014, ch 20, § 7; SL 2015, ch 26, § 2; SL 2016, ch 32, § 49; SDCL § 3-12-207; SL 2019, ch 22, § 1; SL 2022, ch 15, § 3.
3-12C-819. Disability benefits for generational members.
The disability benefit approved pursuant to § 3-12C-817 is the greater of the following calculations:
(1) Twenty-five percent of the generational member's final average compensation at the date of disability; or
(2) The generational member's unreduced accrued retirement benefit at the date of disability.
The disability benefit shall be paid in monthly installments. The disability benefit of a generational member shall terminate upon attaining normal retirement age, or if the member commences a disability benefit within five years of normal retirement age, after receiving the disability benefit for five years, and thereafter the member shall receive a retirement benefit. In order to start the retirement benefit, the member shall submit a completed retirement application that includes the benefit option elected by the member. The single life benefit is equal to the amount the member received as a disability benefit.
Source: SL 2016, ch 32, § 14; SDCL § 3-12-207.1; SL 2019, ch 22, § 1.
3-12C-820. No credited service for disability benefit period.
No member may receive credited service for the period during which the member receives disability benefits.
Source: SL 2014, ch 20, § 8; SDCL § 3-12-208; SL 2019, ch 22, §§ 29, 45.
3-12C-821. Contributions for period of employment while receiving disability benefits.
If a member receiving disability benefits becomes employed by a participating unit, the member and employer shall make active contributions pursuant to § 3-12C-401 during the period of the employment. The contributions required of the member pursuant to § 3-12C-401 shall be deposited by the member's employer with the system for the benefit of the member to be transferred to an account within the deferred compensation program established pursuant to chapter 3-13. The contributions shall be governed by § 457 of the Internal Revenue Code. Notwithstanding the provisions of § 3-12C-401, the contributions required of the member's employer pursuant to § 3-12C-401 shall be deposited into the member trust fund created by this chapter, but without any association with or credit to the member.
Source: SL 2014, ch 20, § 9; SDCL § 3-12-209; SL 2019, ch 22, §§ 30, 45.
3-12C-822. Termination of disability benefits.
A member's disability benefits terminate if the member is no longer disabled, as certified by a health care provider. Upon receipt of certification the executive director shall determine whether the member meets the qualifications for disability benefits. In making this determination the executive director shall follow the same procedure used in making the initial determination of disability provided in § 3-12C-816. A member's disability benefits shall be suspended and subject to termination if the member refuses to undergo an examination or assessment requested by the disability advisory committee or the executive director. If the executive director finds that the member no longer meets the qualifications for disability benefits, the executive director shall notify the member of this finding by certified mail and the payment of disability benefits shall terminate thirty days after receipt of the notice. The finding by the executive director is subject to appeal and review as a contested case.
Source: SL 2014, ch 20, § 10; SL 2016, ch 31, § 40; SDCL § 3-12-210; SL 2019, ch 22, §§ 31, 45.
3-12C-823. Contributions upon return to covered employment.
If a member's disability benefits have terminated and the member returns to covered employment, the member and employer shall make contributions pursuant to § 3-12C-401.
Source: SL 2014, ch 20, § 11; SDCL § 3-12-211; SL 2019, ch 22, §§ 32, 45.
3-12C-824. Retirement benefit of member who received disability benefits and returned to covered employment.
Upon retirement, a member who received disability benefits and whose benefits were terminated and who returned to covered employment shall receive a retirement benefit based on the member's credited service before receiving disability benefits and after receiving disability benefits. The final average compensation used in the calculation of the retirement benefit is the greater of:
(1) The member's final average compensation at the date of retirement; or
(2) The member's final average compensation at the date of disability, increased by the COLA from the date of the termination of disability benefits to the date of retirement.
Source: SL 2014, ch 20, § 12; SL 2017, ch 27, § 33; SDCL § 3-12-212; SL 2019, ch 22, §§ 33, 45.
3-12C-825. Retirement benefit of member whose disability benefits were terminated but who did not return to covered employment.
Upon retirement, a member who received disability benefits and whose benefits were terminated and who did not return to covered employment shall receive a retirement benefit based on the member's credited service before receiving disability benefits. The final average compensation used in the calculation of the retirement benefit shall be the final average compensation at the date of disability, increased by the COLA from the date of the termination of disability benefits to the date of retirement.
Source: SL 2014, ch 20, § 13; SL 2017, ch 27, § 34; SDCL § 3-12-213; SL 2019, ch 22, §§ 34, 45.
3-12C-826. Family benefit--Member dies before normal retirement age while receiving disability benefits.
Upon the death of a member receiving disability benefits, who dies prior to normal retirement age, a family benefit must be paid on behalf of any eligible child of the member. The monthly amount of the family benefit is the amount of the monthly disability benefits the member received before death. The monthly family benefit must be equally apportioned among any eligible children of the member and must be paid on behalf of any child in accordance with § 3-12C-902. However, if the child is eighteen years of age or older, the benefit is payable directly to the child. As a child becomes ineligible, the family benefit shall be reallocated among any remaining eligible children of the deceased member. The family benefit terminates if there are no eligible children of the deceased member.
Source: SL 2014, ch 20, § 14; SL 2016, ch 31, § 41; SDCL § 3-12-214; SL 2019, ch 22, §§ 35, 45; SL 2022, ch 15, § 4.
3-12C-827. Surviving spouse benefit where member received disability benefits .
If no family benefit is being paid, a surviving spouse of a foundation or generational member who received disability benefits shall, upon attaining the age of sixty-five or sixty-seven, respectively, receive a monthly benefit, payable for the life of the surviving spouse, equal to one of the following calculations, whichever is applicable:
(1) If there was a family benefit paid, sixty percent of the family benefit paid at the time the family benefit ended, increased by the COLA from the date the last family benefit was paid; or
(2) If there was no family benefit paid, sixty percent of the deceased member's disability benefit paid at the time of the member's death, increased by the COLA from the date of the member's death.
Source: SL 2014, ch 20, § 15; SL 2016, ch 32, § 50; SL 2017, ch 27, § 35; SDCL § 3-12-215; SL 2019, ch 22, §§ 36, 45.
3-12C-828. Surviving spouse benefit where member dies after normal retirement age while receiving disability benefits.
If a member dies after normal retirement age while receiving disability benefits, and no other benefits are being paid on behalf of the member, the member's surviving spouse shall receive a surviving spouse benefit, payable in monthly installments, equal to sixty percent of the monthly disability benefit that the member received before death.
Source: SL 2014, ch 20, § 16; SDCL § 3-12-216; SL 2019, ch 22, §§ 37, 45.
3-12C-901. Family and surviving spouse benefits--Death of contributing member before retirement or death of member receiving disability based on application before July 1, 2015--Amount of benefit--Effective date.
On the death of a contributing member before July 1, 2015, and before the earlier of the member attaining normal retirement age or the member's retirement, who has one or more years of contributory service; or if there has been a break in the member's employment of more than one year, one-half year of contributory service having been performed after the end of the last break; or if the member was receiving a disability benefit which commenced after July 1, 1974, and was based on an application received by the system before July 1, 2015, the following benefits shall be paid:
(1) A surviving spouse having the care of children shall receive an annual amount, payable in monthly installments, equal to forty percent of the member's projected compensation, plus ten percent of the projected compensation for each child to a maximum of six children;
(2) The conservator or custodian of each child, on whose account there is no benefit payable under subdivision (1), shall receive on behalf of each child, to a maximum of five children, an annual amount, payable in monthly installments, equal to twenty percent of the member's projected compensation;
(3) If the sum of benefits payable under subdivisions (1) and (2) exceeds one hundred percent of the member's projected compensation, the benefits payable under both subdivisions (1) and (2) shall be proportionally reduced so that the total of the benefits is equal to one hundred percent of the member's projected compensation; and
(4) If there are no benefits being paid under subdivision (1) and the member's accumulated contributions have not been withdrawn pursuant to § 3-12C-906, the spouse who has reached age sixty-five shall, upon the system's receipt of a completed application, receive a monthly payment equal to sixty percent of the amount which would have been payable to the deceased member at normal retirement age based on the member's credited and projected service, projected compensation, and projected primary social security. If the surviving spouse is eligible at the time of the member's death, the benefit is effective the first day of the month following the date on which the member's contributory service terminates. The benefit payable under this subdivision shall be increased by application of the COLA commencing each July first for each complete twelve-month period between the date the member would have reached normal retirement age and the date benefits commence to the spouse.
For benefits payable pursuant to subdivisions (1) or (2), the benefit is effective the first day of the month following the date on which the member's contributory service terminates and is payable upon the receipt of a completed application.
Source: SL 1967, ch 303, § 9 as added by SL 1968, ch 216, § 1; SDCL Supp, § 3-12-29.2; SL 1970, ch 25, § 8; SL 1974, ch 35, § 51; SL 1976, ch 40, § 3; SL 1979, ch 30, § 1; SL 1980, ch 31, § 8; SL 1982, ch 34, § 2; SL 1984, ch 25; SL 1993, ch 213, § 78; SL 1999, ch 16, § 2; SL 2004, ch 40, § 1; SL 2005, ch 24, § 4; SL 2006, ch 18, § 2; SL 2010, ch 20, § 11; SL 2014, ch 20, § 23; SL 2017, ch 27, § 14; SDCL § 3-12-95; SL 2019, ch 22, § 1; SL 2020, ch 12, § 8; SL 2020, ch 15, § 1.
3-12C-902. Payment or delivery to minors.
Any payment of any benefit to a minor pursuant to the provisions of this chapter shall be made on the minor's behalf to a custodian or conservator appointed by law. However, if no custodian or conservator is appointed and the amount payable does not exceed ten thousand dollars each calendar year, payment shall be made to any parent having the care and custody of the minor and with whom the minor resides.
If the child is eighteen years of age or older, the benefit is payable directly to the child. If any payment exceeds ten thousand dollars in a calendar year, payment must be made on the minor’s behalf to a custodian or conservator appointed by law.
Source: SL 2006, ch 18, § 1; SDCL § 3-12-95.1; SL 2019, ch 22, § 1; SL 2022, ch 15, § 5.
3-12C-903. Benefits payable directly to child at age eighteen--Elimination upon ineligibility.
The conservator and custodian provisions of subdivision 3-12C-901(2) and § 3-12C-902 notwithstanding, the benefit becomes payable directly to a child when the child reaches eighteen years of age. The benefit shall be eliminated when the child becomes ineligible.
Source: SL 2011, ch 22, § 3; SL 2016, ch 31, § 19; SDCL § 3-12-95.2; SL 2019, ch 22, § 1.
3-12C-904. Elimination of family benefit as children become ineligible.
The portion of a family benefit that is payable on account of children pursuant to subdivision 3-12C-901(1) shall be eliminated as each child becomes ineligible. The benefit shall be eliminated altogether when the youngest child becomes ineligible.
Source: SL 2011, ch 22, § 2; SL 2016, ch 31, § 20; SDCL § 3-12-95.3; SL 2019, ch 22, § 1.
3-12C-905. Deductions of member's primary social security from benefits.
Seventy-five percent of a member's primary social security, without regard to any improvements, shall be deducted from the benefits provided in subdivisions 3-12C-901(1) and (2).
Source: SL 1974, ch 35, § 51; SL 1977, ch 28, § 10; SL 1986, ch 37, § 6; SL 1994, ch 35, § 1; SDCL § 3-12-96; SL 2019, ch 22, § 1.
3-12C-906. Family benefits in lieu of other death benefits--Election by designated beneficiary to withdraw accumulated contributions.
Family benefits payable under § 3-12C-901 are in lieu of the death benefits payable under any other provision of this chapter except that a designated beneficiary may elect, subject to a deduction for any benefits previously paid, prior to the receipt of the first payment under subdivision 3-12C-901(4), to withdraw the member's accumulated contributions providing there are no children on account of whom benefits are payable under subdivisions 3-12C-901(1) and (2).
Source: SL 1974, ch 35, § 51; SL 1975, ch 39, § 6; SDCL § 3-12-97; SL 2019, ch 22, § 1.
3-12C-907. Family benefit--Deceased member who was working--Total benefit--Effective date.
On the death of a contributing member after June 30, 2015, who has acquired at least three years of contributory service or noncontributory service, or who died while performing usual duties for an employer, and prior to the earlier of the member attaining normal retirement age or the member's retirement, a family benefit must be paid on behalf of any child of the member. The total family benefit is the greater of:
(1) Twenty-five percent of the member's final average compensation at the time of death; or
(2) The member's unreduced accrued retirement benefit at the time of death.
The family benefit is effective the first day of the month following the date on which the member's contributory service terminates and is payable upon the receipt of a completed application. The family benefit, which must be paid in monthly installments, shall be equally apportioned among any children of the member and shall be paid on behalf of any child in accordance with § 3-12C-902. As a child becomes ineligible, the family benefit must be reallocated among any remaining eligible children of the deceased member. The family benefit terminates if there are no eligible children of the deceased member.
Source: SL 2014, ch 20, § 17; SL 2016, ch 32, § 41; SDCL § 3-12-95.4; SL 2019, ch 22, § 1; SL 2020, ch 15, § 2; SL 2022, ch 15, § 6.
3-12C-1001. Election of additional survivor protection--Commencement and termination of additional contribution.
Within three hundred sixty-five days of becoming a member, within ninety days of attaining age thirty-five, or within ninety days of the first anniversary of a marriage, a member may elect to provide the member's spouse with additional survivor protection by increasing the member's contribution by an additional one and five-tenths percent of compensation, which additional contribution may not be matched by the member's employer. The additional contribution shall commence with the first payroll period following the date of the election. It shall continue until the earlier of the member's spouse attaining age sixty-five, the death or disability of the member, the death of the spouse, termination of employment or the termination of the marriage as defined in the rules of the board of trustees. The additional contribution may not be treated as a member contribution for purposes of determining the amount of refund of accumulated contributions. However, the contributions paid prior to January 1, 1979, shall be considered part of accumulated contributions for determining the amount of refund if the member terminates employment. Notwithstanding any other provision of this section, a member who is currently contributing to the system may terminate the additional survivor protection under this section, but all funds contributed for the additional survivor protection shall remain with the system and may not be considered as part of the member's accumulated contributions. For the purposes of implementing this section, the one and two-tenths percent contribution for additional survivor protection was applied to all compensation received on or after July 1, 2004, regardless of when that compensation was earned, and the one and five-tenths percent of compensation shall be applied to all compensation received on or after July 1, 2010, regardless of when that compensation was earned.
Source: SL 1974, ch 35, § 58; SL 1976, ch 40, § 4; SL 1977, ch 28, § 12; SL 1978, ch 33, §§ 1, 3; SL 1982, ch 32, § 6; SL 1995, ch 21; SL 1998, ch 15, § 20; SL 1998, ch 21, § 1; SL 2004, ch 41, § 1; SL 2010, ch 22, § 1; SDCL § 3-12-104; SL 2019, ch 22, § 1.
3-12C-1002. Extension of survivor protection option to current contributing members--Limitation on future extensions.
The additional survivor protection option granted under § 3-12C-1001 is hereby extended to all current contributing members of the system for a period of three months commencing October 1, 1990, and ending December 31, 1990. In no event may the additional survivor protection be made available to a terminated vested member or to a member receiving a retirement benefit from the system. However, the additional survivor protection option may not be so extended again at any time after June 30, 2004.
Source: SL 1982, ch 32, § 7; SL 1986, ch 39; SL 1990, ch 39; SL 2004, ch 41, § 2; SL 2017, ch 27, § 16; SDCL § 3-12-104.1; SL 2019, ch 22, § 1.
3-12C-1003. New enrollments in additional survivor protection prohibited.
The provisions of § 3-12C-1001 notwithstanding, on or after July 1, 2010, no member of the system may enroll in the program created under that section.
Source: SL 2010, ch 22, § 2; SDCL § 3-12-104.2; SL 2019, ch 22, § 1.
3-12C-1004. Amount of additional survivor protection benefits--Termination.
The additional survivor protection payable under § 3-12C-1001, on the death of the member or expiration of benefits that may have been paid pursuant to subdivision 3-12C-901(1) because there is no eligible child, entitles the surviving spouse of the member to an annual amount, payable in monthly installments, equal to forty percent of the member's final average compensation, multiplied by the COLA for each full twelve-month period between the earlier of the date of death or disability of the member and the date the payment of the benefit is due to commence. The additional survivor protection benefit shall continue until the surviving spouse dies or attains age sixty-five, whichever is earlier.
Source: SL 1974, ch 35, § 59; SL 1979, ch 30, § 3; SL 1982, ch 34, § 3; SL 2004, ch 40, § 3; SL 2004, ch 41, § 3; SL 2017, ch 27, § 17; SDCL § 3-12-105; SL 2019, ch 22, § 1.
3-12C-1101. Final average compensation for foundation members whose contributory service concluded before July 1, 2021.
For any foundation member whose contributory service concluded before July 1, 2021, the term, final average compensation, means the highest average annual compensation earned by a member during any period of twelve consecutive calendar quarters during the member's last forty calendar quarters of membership in the system including time during which the member was not a member but for which the member has received credit under the system.
For purposes of determining final average compensation if periods of contributory service are separated by breaks, any service earned from covered employment may be aggregated to constitute a period of twelve consecutive calendar quarters. For any member who has less than twelve but more than four calendar quarters of membership in the system, the member's final average compensation shall be based on the compensation received in all quarters of membership. For any member who has four calendar quarters of membership or less, the member's final average compensation shall be based on the member's annual compensation.
Source: SL 2016, ch 32, § 26; SL 2017, ch 29, § 1; SDCL § 3-12-89.4; SL 2019, ch 22, § 1.
3-12C-1102. Limitations on final average compensation for foundation members whose contributory service concluded before July 1, 2020.
For any foundation member whose contributory service concluded before July 1, 2020, if the compensation received in the last calendar quarter considered exceeds a set percentage of the amount in the highest previous calendar quarter, or if the average compensation received in the last four calendar quarters considered exceeds a set percentage of the amount earned in the highest calendar quarter prior to the last four calendar quarters considered, only the lesser amount shall be considered and the excess may not be included in the computation of final average compensation. Those respective set percentages are as follows:
(1) Before July 1, 2004, one hundred twenty-five percent and one hundred fifteen percent;
(2) Between July 1, 2004, and June 30, 2005, one hundred fifteen percent and one hundred ten percent; and
(3) After June 30, 2005, one hundred five percent and one hundred five percent.
Source: SL 2017, ch 29, § 3; SDCL § 3-12-89.9; SL 2019, ch 22, § 1.
3-12C-1103. Final average compensation for foundation members whose contributory service concludes after June 30, 2021.
For any foundation member whose contributory service concluded after June 30, 2021, and before July 1, 2022, the term, final average compensation, means the highest average annual compensation earned by a member during any period of sixteen consecutive calendar quarters during the member's last forty calendar quarters of membership in the system, including time during which the member was not a member but for which the member has received credit under the system.
For any foundation member whose contributory service concluded after June 30, 2022, the term, final average compensation, means the highest average annual compensation earned by a member during any period of twenty consecutive calendar quarters during the member's last forty calendar quarters of membership in the system, including time during which the member was not a member but for which the member has received credit under the system.
For purposes of determining final average compensation if periods of contributory service are separated by breaks, any service earned from covered employment may be aggregated to constitute a period of consecutive calendar quarters.
For any member who has less than the number of calendar quarters of membership considered in the computation of the member's final average compensation, but more than four, the member's final average compensation shall be based on the compensation received in all quarters of membership. For any member who has four calendar quarters of membership or less, the member's final average compensation shall be based on the member's annual compensation.
Source: SL 2017, ch 29, § 2; SDCL § 3-12-89.8; SL 2019, ch 22, § 1.
3-12C-1104. Limitations on final average compensation for foundation members whose contributory service concludes after June 30, 2020.
For purposes of this section, the term, compensation year, means each separate, mutually exclusive period of four consecutive calendar quarters considered in the computation of final average compensation. The earliest compensation year is the earliest four consecutive calendar quarters considered in the computation of final average compensation, and each subsequent compensation year is the subsequent period of four consecutive calendar quarters beginning after the earliest compensation year and continuing with each compensation year thereafter.
For any foundation member whose contributory service concluded after June 30, 2020, compensation is limited as follows:
(1) Compensation in the earliest compensation year is limited to one hundred five percent of the highest compensation received for any prior four-consecutive-calendar-quarter period during the member's last forty calendar quarters of membership in the system, including time during which the member was not a member but for which the member has received credit under the system; and
(2) Compensation for each subsequent compensation year is limited to one hundred five percent of the highest compensation considered for any prior compensation year, but the amount may not be less than the limit applied in subdivision (1).
Compensation in excess of the limited amount may not be included in the computation of final average compensation but is payable pursuant to § 3-12C-713.
If the earliest compensation year includes one or more quarters from the earliest four consecutive calendar quarters in the member's last forty quarters of membership in the system, that compensation year may not be limited.
Compensation in the last calendar quarter considered in the computation of final average compensation is limited to one hundred five percent of the highest compensation considered for any prior calendar quarter during the member's last forty calendar quarters of membership in the system.
The final average compensation of any foundation member whose contributory service concluded before July 1, 2022, may not be less than the member's final average compensation computed as of June 30, 2017.
Source: SL 2017, ch 29, § 4; SDCL § 3-12-89.10; SL 2019, ch 22, § 1.
3-12C-1105. Normal retirement age for foundation members.
For any foundation member, normal retirement age is age sixty-five for Class A credited service and for Class B credited service as a justice, judge, and magistrate judge and age fifty-five for other Class B credited service.
Source: SL 2016, ch 32, § 28; SDCL § 3-12-89.6; SL 2019, ch 22, § 1.
3-12C-1106. Normal retirement benefit for foundation members for Class A credited service.
Upon retirement, a foundation member shall receive a normal retirement benefit, commencing at normal retirement age or thereafter as provided in § 3-12C-1113, for Class A credited service, equal to the larger of one and seven-tenths percent of final average compensation for each year of Class A credited service before July 1, 2008, plus one and fifty-five hundredths percent of final average compensation for each year of Class A credited service after July 1, 2008, or two and four-tenths percent of final average compensation for each year of Class A credited service before July 1, 2008, plus two and twenty-five hundredths percent of final average compensation for each year of Class A credited service after July 1, 2008, less other public benefits. For purposes of this section, federal military retirement or federal national guard retirement benefits are not other public benefits. For the purposes of this section, any Class A member with a period of employment with any public employer not covered by federal social security shall be presumed to be entitled to the maximum primary social security benefit permitted at the time of retirement. Class A credited service includes all credited service under this or any of the retirement systems consolidated pursuant to § 3-12C-1601.
Source: SL 1967, ch 303, § 7; SDCL § 3-12-27; SL 1968, ch 216, § 1; SDCL Supp, § 3-12-25; SL 1970, ch 25, § 5; SL 1974, ch 35, § 47; SL 1975, ch 39, § 5; SL 1982, ch 39; SL 1986, ch 37, § 5; SL 1987, ch 37, §§ 7, 8; SL 1989, ch 38, § 4; SL 1990, ch 37; SL 1991, ch 32; SL 1993, ch 44, § 4; SL 1994, ch 34, § 3; SL 1997, ch 26, § 2; SL 1998, ch 15, § 15; SL 1999, ch 15, § 2; SL 2000, ch 25, § 1; SL 2002, ch 23, § 1; SL 2008, ch 23, § 1; SL 2016, ch 32, § 36; SDCL § 3-12-91; SL 2019, ch 22, § 1; SL 2023, ch 14, § 5.
3-12C-1107. Normal retirement benefit for foundation members for Class B credited service other than justice, judge, or magistrate judge.
Upon retirement, a foundation member shall receive a normal retirement benefit, commencing at normal retirement age or thereafter as provided in § 3-12C-1113, for Class B credited service other than as a justice, judge, or magistrate judge, equal to two and four-tenths percent of final average compensation for each year of Class B credited service other than as a justice, judge, or magistrate judge before July 1, 2008, plus two percent of final average compensation for each year of Class B credited service other than as a justice, judge, or magistrate judge after July 1, 2008.
Source: SL 1974, ch 35, § 48; SL 1993, ch 44, § 5; SL 1994, ch 34, § 4; SL 1997, ch 26, § 3; SL 1998, ch 15, § 16; SL 1999, ch 15, § 3; SL 2000, ch 25, § 2; SL 2008, ch 23, § 2; SL 2016, ch 32, § 38; SDCL § 3-12-92; SL 2019, ch 22, § 1.
3-12C-1108. Normal retirement benefit for foundation members for Class B credited service as justice, judge, or magistrate judge.
Upon retirement, a foundation member shall receive a normal retirement benefit, commencing at normal retirement age or thereafter as provided in § 3-12C-1113, for the first fifteen years of Class B credited service as a justice, judge, or magistrate judge equal to three and seven hundred thirty-three thousandths percent of final average compensation for each year of Class B credited service as a justice, judge, or magistrate judge before July 1, 2008, plus three and three hundred thirty-three thousandths percent of final average compensation for each year of Class B credited service as a justice, judge, or magistrate judge after July 1, 2008. A foundation member shall also receive for Class B credited service as a justice, judge, or magistrate judge in excess of fifteen years, two and four-tenths percent of final average compensation for each year of Class B credited service as a justice, judge, or magistrate judge before July 1, 2008, plus two percent of final average compensation for each year of Class B credited service as a justice, judge, or magistrate judge after July 1, 2008.
Source: SL 1994, ch 34, § 5; SL 1997, ch 26, § 4; SL 1998, ch 15, § 17; SL 1999, ch 15, § 4; SL 2000, ch 25, § 3; SL 2008, ch 23, § 3; SL 2016, ch 32, § 39; SDCL § 3-12-92.4; SL 2019, ch 22, § 1.
3-12C-1109. Adjustments in benefit for certain retirees based on time and circumstances of retirement.
Each member who retired before July 1, 2008, and each beneficiary of a deceased member who retired prior to July 1, 2008, shall receive a retirement benefit based on the provisions of § 3-12C-1106, 3-12C-1107, or 3-12C-1108 as applicable based on the member's final average compensation, credited service, and other public benefits at retirement and the benefit formulas in §§ 3-12C-1106, 3-12C-1107, and 3-12C-1108 when increased by the COLA from the date of retirement to July 1, 2008.
Increased benefits as provided by any amendment to this section are prospective in nature and are effective July 1, 2008.
Each member or beneficiary of a member who retired before July 1, 1974, who is receiving benefits pursuant to § 3-12C-1605 or each member or beneficiary of a member who elected to retire pursuant to § 3-12C-1606, shall have a benefit increased by an additional two percent as of July 1, 2008, in lieu of the increase provided in this section.
If a member retired before normal retirement age, the benefit shall be adjusted in accordance with the law in effect at the time of retirement. If a member elected an alternate method of payment under the law in effect at the time of retirement, the benefit shall be adjusted in accordance with the law in effect at the time of retirement. If the additional benefit is to be paid to a beneficiary of a deceased member, the additional benefit shall be adjusted in accordance with the law in effect at the time of the member's retirement.
No member or beneficiary whose retirement benefit terminated before July 1, 2008, may receive any benefits pursuant to this section.
Source: SL 1997, ch 26, § 7; SL 1998, ch 15, § 19; SL 1999, ch 15, § 6; SL 2000, ch 25, § 4; SL 2008, ch 23, § 4; SL 2017, ch 27, § 13; SDCL § 3-12-92.6; SL 2019, ch 22, § 1.
3-12C-1110. Reduction age defined for foundation members.
For any foundation member, the term, reduction age, means the age at which the sum of the foundation member's age and credited service equals a number as follows:
(1) For Class A credited service, an age not less than fifty-five and at which the sum of the foundation member's age and credited service equals eighty-five;
(2) For Class B credited service as a justice, judge, or magistrate judge, an age not less than fifty-five and at which the sum of the foundation member's age and credited service equals eighty; and
(3) For Class B credited service other than as a justice, judge, or magistrate judge, an age not less than forty-five and at which the sum of the foundation member's age and credited service equals seventy-five.
Source: SL 2016, ch 32, § 29; SDCL § 3-12-89.7; SL 2019, ch 22, § 1.
3-12C-1111. Early retirement benefits for foundation members.
Any vested foundation member can retire in the ten years preceding the member's normal retirement age and the retirement benefit shall be reduced by the lesser of the following:
(1) One-fourth of one percent for each full month which remains between the date of commencement of payments and the date the member will reach the member's normal retirement age; or
(2) One-fourth of one percent for each full month which remains between the date of commencement of payments and the date the member will reach the member's reduction age.
Source: SL 1967, ch 303, § 7 as added by SL 1968, ch 216, § 1; SDCL Supp, § 3-12-27.1; SL 1970, ch 25, § 6; SL 1974, ch 35, § 60; SL 1978, ch 34, § 1; SL 1986, ch 37, § 8; SL 2016, ch 32, § 44; SDCL § 3-12-106; SL 2019, ch 22, § 1.
3-12C-1112. Adjustment of early retirement benefits for foundation members who retire before eligible for social security.
Any foundation member who retires before being eligible for social security retirement benefits may elect to receive initial retirement benefit payments from the system in an amount greater than the standard benefit payments computed on the basis of the member's age and earnings at retirement. The greater amount, in conjunction with a later reduced amount, shall be the actuarial equivalent of the normal retirement benefit computed on the basis of age at retirement. The greater amount shall be paid until the foundation member reaches the age of sixty-two, at which time the payment from the system shall be the reduced amount so that, as far as possible, the foundation member's combined monthly retirement income from the system and social security shall approximately equal the greater amount paid prior to age sixty-two.
Source: SL 1974, ch 35, § 61; SL 2006, ch 20, § 1; SL 2016, ch 32, § 45; SDCL § 3-12-107; SL 2019, ch 22, § 1.
3-12C-1113. Effective date of retirement benefit of foundation member--Last payment--Retroactive retirement benefits.
Unless a foundation member's required beginning date for retirement occurs first, the early or normal retirement benefit of a foundation member is effective in accordance with whichever of the following is last:
(1) The first day of the month following the date on which the member's contributory service terminated;
(2) The first day of the month following an intervening complete calendar month after the date on which the member's written application for retirement benefits is received by the system; or
(3) The first day of the month specified in the member's application for retirement.
The last payment of the member's benefit is for the month in which the member's death occurs.
Any foundation member who fails to make a timely application for retirement benefits may receive three months of benefits retroactive from the effective date of the member's retirement benefit. However, no foundation member may receive any retroactive benefits for any period of time before the first day of the month following the date on which the member's contributory service terminated.
Source: SL 1967, ch 303, § 7; SDCL § 3-12-27; SL 1968, ch 216, § 1; SDCL Supp, § 3-12-25; SL 1970, ch 25, § 5; SL 1974, ch 35, § 46; SL 1978, ch 32, § 4; SL 1993, ch 42, § 4; SL 2016, ch 32, § 35; SDCL § 3-12-90; SL 2019, ch 22, § 1.
3-12C-1114. Surviving spouse benefit--Retired foundation member--Effective dates.
Upon the death of a foundation retiree or any foundation member who has reached normal retirement age, the surviving spouse is eligible to receive a benefit, payable in monthly installments, equal to sixty percent of the retirement benefit that the foundation member was receiving or was eligible to receive at the time of death. The surviving spouse benefit of a spouse of a retiree is effective the first day of the month following the death of the member and is payable upon the receipt of a completed application. The surviving spouse benefit of a spouse of a member who had reached normal retirement age, but had not begun a retirement benefit, is effective the first day of the month following the date on which the member's contributory service terminates and is payable upon the receipt of a completed application.
Source: SL 1967, ch 303, § 9 as added by SL 1968, ch 216, § 1; SDCL Supp, § 3-12-29.2; SL 1970, ch 25, § 8; SL 1974, ch 35, § 50; SL 1999, ch 16, § 1; SL 2016, ch 32, § 40; SDCL § 3-12-94; SL 2019, ch 22, § 1; SL 2020, ch 15, § 3.
3-12C-1115. Surviving spouse benefit--Foundation member--Calculation of benefit.
If no family benefit is being paid pursuant to § 3-12C-907, a surviving spouse of a contributing foundation member who had acquired at least three years of contributory service or noncontributory service or who died while performing usual duties for the employer and who died after June 30, 2015, is, upon attaining the age of sixty-five, eligible to receive a surviving spouse benefit calculated as follows, whichever is applicable:
(1) If a family benefit had been paid, sixty percent of the family benefit paid at the time the family benefit ended, increased by the COLA from the date the last family benefit was paid; or
(2) If a family benefit had not been paid, sixty percent of the amount calculated pursuant to subsection (a) or (b), whichever is greater, increased by the COLA from the date of the member's death:
(a) Twenty-five percent of the member's final average compensation at the time of the member's death; or
(b) The member's unreduced accrued retirement benefit at the time of the member's death.
The surviving spouse benefit shall be paid, upon receipt of a completed application, in monthly installments for the life of the surviving spouse. If the surviving spouse is eligible at the time of the member's death, the benefit is effective the first day of the month following the date on which the member's contributory service terminates.
Source: SL 2014, ch 20, § 18; SL 2015, ch 26, § 1; SL 2016, ch 32, § 42; SL 2017, ch 27, § 15; SDCL § 3-12-95.5; SL 2019, ch 22, §§ 26, 45; SL 2020, ch 15, § 4.
3-12C-1116. Early surviving spouse benefit for foundation member's spouse.
A foundation member's spouse who would be eligible to receive a surviving spouse benefit at age sixty-five may elect to start the benefit prior to age sixty-five but no earlier than the date on which the surviving spouse attains the age of fifty-five. The early surviving spouse benefit, payable for the life of the surviving spouse, is the surviving spouse benefit reduced by five percent for each full year and prorated for each additional full month between the date the early surviving spouse benefit commences and the date the surviving spouse attains the age of sixty-five.
Source: SL 2014, ch 19, § 1, eff. July 1, 2015; SL 2016, ch 32, § 43; SDCL § 3-12-95.6; SL 2019, ch 22, § 1.
3-12C-1201. Final average compensation defined for generational members.
For any generational member, the term, final average compensation, means the highest average annual compensation earned by a member during any period of twenty consecutive calendar quarters during the member's last forty calendar quarters of membership in the system.
For purposes of determining final average compensation if periods of contributory service are separated by breaks, any service earned from covered employment may be aggregated to constitute a period of twenty consecutive calendar quarters.
For any member who has less than twenty but more than four calendar quarters of membership in the system, the member's final average compensation shall be based on the compensation received in all quarters of membership. For any member who has four calendar quarters of membership or less, the member's final average compensation shall be based on the member's annual compensation.
Source: SL 2016, ch 32, § 3; SL 2017, ch 29, § 5; SDCL § 3-12-502; SL 2019, ch 22, § 1.
3-12C-1202. Limitations on final average compensation for generational members.
For purposes of this section, the term, compensation year, means each separate, mutually exclusive period of four consecutive calendar quarters considered in the computation of final average compensation. The earliest compensation year is the earliest four consecutive calendar quarters considered in the computation of final average compensation and each subsequent compensation year is the subsequent period of four consecutive calendar quarters beginning after the earliest compensation year and continuing with each compensation year thereafter.
For any generational member, compensation is limited as follows:
(1) Compensation in the earliest compensation year is limited to one hundred five percent of the highest compensation received for any prior four-consecutive-calendar-quarter period during the member's last forty calendar quarters of membership in the system, including time during which the member was not a member but for which the member has received credit under the system;
(2) Compensation for each subsequent compensation year is limited to one hundred five percent of the highest compensation considered for any prior compensation year, but the amount may not be less than the limit applied in subdivision (1).
Compensation in excess of the limited amount may not be included in the computation of final average compensation but is payable pursuant to section § 3-12C-713.
If the earliest compensation year includes one or more quarters from the earliest four consecutive calendar quarters in the member's last forty quarters of membership in the system, that compensation year may not be limited.
Compensation in the last calendar quarter considered in the computation of final average compensation is limited to one hundred five percent of the highest compensation considered for any prior calendar quarter during the member's last forty calendar quarters of membership in the system.
Source: SL 2017, ch 29, § 6; SDCL § 3-12-502.1; SL 2019, ch 22, § 1.
3-12C-1203. Normal retirement age for generational members.
For any generational member, normal retirement age is sixty-seven for Class A credited service and for Class B credited service as a justice, judge, and magistrate judge and age fifty-seven for other Class B credited service. The Legislature may increase the normal retirement age for some or all then-contributing members if life expectancy at retirement continues to increase, as substantiated by a periodic actuarial experience analysis that takes into account census data of all active members, vested terminated members, and retired members as well as beneficiaries of the system.
Source: SL 2016, ch 32, § 5; SDCL § 3-12-504; SL 2019, ch 22, § 1.
3-12C-1204. Normal retirement benefit for generational members for Class A credited service.
Upon retirement, a generational member shall receive a normal retirement benefit, commencing at normal retirement age or thereafter, for Class A credited service, equal to one and eight-tenths percent of final average compensation for each year of Class A credited service.
Source: SL 2016, ch 32, § 6; SDCL § 3-12-505; SL 2019, ch 22, § 1.
3-12C-1205. Normal retirement benefit for generational members for Class B credited service other than justice, judge, or magistrate judge.
Upon retirement, a generational member shall receive a normal retirement benefit, commencing at normal retirement age or thereafter, for Class B credited service other than as a justice, judge, or magistrate judge, equal to two percent of final average compensation for each year of Class B credited service other than as a justice, judge, or magistrate judge.
Source: SL 2016, ch 32, § 7; SDCL § 3-12-506; SL 2019, ch 22, § 1.
3-12C-1206. Normal retirement benefit for generational members for Class B credited service as justice, judge, or magistrate judge.
Upon retirement, a generational member shall receive a normal retirement benefit, commencing at normal retirement age or thereafter, equal to three and three hundred thirty-three thousands percent of final average compensation for the first fifteen years of Class B credited service as a justice, judge, or magistrate judge and two percent of final average compensation for each year of Class B credited service as a justice, judge, or magistrate judge in excess of fifteen years.
Source: SL 2016, ch 32, § 8; SDCL § 3-12-507; SL 2019, ch 22, § 1.
3-12C-1207. Early retirement benefits for generational members.
Any vested generational member may elect to start the retirement benefit in the ten years preceding the member's normal retirement age. However, no retirement benefit may be paid unless the member submits a completed retirement application to the system that includes the benefit option elected by the member. The normal retirement benefit shall be reduced by five percent for each full year and prorated for each additional full month between the date the early retirement benefit commences and the date the member attains normal retirement age.
Source: SL 2016, ch 32, § 15; SDCL § 3-12-513; SL 2019, ch 22, § 1.
3-12C-1208. Application for retirement benefit required--Picture identification required--Spouse signature not required.
No retirement benefit may be paid unless the system has received a completed application for a retirement benefit, including the benefit option elected. The application must be signed by the generational member, and the member shall provide a copy of the member's current driver license or other picture identification card issued by a government agency or tribe. If the member is married, the spouse must sign the application and provide a copy of the spouse's current driver license or other picture identification card issued by a government agency or tribe.
A member who is married is not required to obtain the signature of the member's spouse if the member submits a completed form, in which the member certifies, under the penalty of perjury, that the member is unable to obtain the signature of the member's spouse because either:
(1) The member does not know where the member's spouse is and has made a good faith effort to locate the spouse; or
(2) Exceptional circumstances make it inappropriate for the member to obtain the signature of the member's spouse.
If the member is unable to obtain the signature of the member's spouse for either reason, the member must elect the sixty percent joint and survivor benefit pursuant to § 3-12C-1209 and provide documentation to support the assertion of subdivision (1) or (2) of this section.
Source: SL 2016, ch 32, § 11; SDCL § 3-12-510; SL 2019, ch 22, § 1; SL 2021, ch 27, § 4; SL 2024, ch 22, § 3.
3-12C-1209. Monthly benefit options for generational members.
Any generational member applying for a retirement benefit shall elect one of the following monthly benefit options:
(1) A single life benefit that provides a monthly benefit to the member for as long as the member lives and ceases upon the death of the member;
(2) A sixty percent joint and survivor benefit that provides a reduced lifetime monthly benefit to the member, and upon the member's death sixty percent of the reduced benefit continues to the surviving spouse until the death of the surviving spouse; or
(3) A one hundred percent joint and survivor benefit that provides a reduced lifetime monthly benefit to the member, and upon the member's death one hundred percent of the reduced benefit continues to the surviving spouse until the death of the surviving spouse.
The benefits payable to the member and the surviving spouse pursuant to a joint and survivor benefit are based on the ages of the member and the spouse and are the actuarial equivalent of a single life benefit. The monthly benefit of a member electing the joint and survivor benefit is reduced in order to provide for a continuing benefit for the surviving spouse after the member's death. The last payment of the member's benefit is for the month in which the member's death occurs, and any surviving spouse benefit is effective from the first day of the month following the member's death. The benefits payable pursuant to this section shall be paid in accordance with § 401(a)(9) of the Internal Revenue Code.
Source: SL 2016, ch 32, § 9; SDCL § 3-12-508; SL 2019, ch 22, § 1.
3-12C-1210. Irrevocable benefit election by generational members.
If more than one monthly retirement benefit payment has been made to the generational member, the benefit election made by a member is irrevocable and surviving spouse benefits, if elected, may only be paid to the person who is the spouse both at the time of the election and at the time of the member's death and only if the spouse survives the member. The benefit election may not be rescinded in the event of a subsequent divorce or the subsequent death of the spouse.
Source: SL 2016, ch 32, § 10; SDCL § 3-12-509; SL 2019, ch 22, § 1.
3-12C-1211. Effective date of retirement benefit of generational member--Last payment.
Unless a generational member's required beginning date for retirement occurs first, the retirement benefit of a generational member is effective in accordance with whichever of the following is last:
(1) The first day of the month following the date on which the member's contributory service terminated;
(2) The first day of the month following an intervening complete calendar month after the date on which the member's written application for retirement benefits is received by the system; or
(3) The first day of the month specified in the member's application for retirement.
The last payment of the member's benefit is for the month in which the member's death occurs.
Source: SL 2016, ch 32, § 12; SDCL § 3-12-511; SL 2019, ch 22, § 1.
3-12C-1212. Retroactive retirement benefits for generational members.
Any generational member who fails to make a timely application for retirement benefits may receive three months of benefits retroactive from the effective date of the member's retirement benefit. However, no member may receive any retroactive benefits for any period of time before the first day of the month following the date the member's contributory service terminated.
Source: SL 2016, ch 32, § 13; SDCL § 3-12-512; SL 2019, ch 22, § 1.
3-12C-1213. Surviving spouse benefit--Retired generational member--Amount of benefit.
Upon the death of a generational member retiree who elected either a sixty percent or one hundred percent joint and survivor benefit, the surviving spouse is eligible to receive a surviving spouse benefit. The amount of the surviving spouse benefit is based on the election made upon the retirement of the member and is payable on a monthly basis to the surviving spouse for the life of the spouse. The surviving spouse benefit is effective the first day of the month following the death of the member and is payable upon the receipt of a completed application.
Source: SL 2016, ch 32, § 16; SDCL § 3-12-514; SL 2019, ch 22, § 1; SL 2020, ch 15, § 5.
3-12C-1214. Surviving spouse benefit--Generational member dying after normal retirement age but before start of benefit--Amount of benefit.
Upon the death of a generational member who was vested or died while performing usual duties for the employer and who has reached normal retirement age but has not yet begun a retirement benefit, a surviving spouse is eligible to receive a surviving spouse benefit. The surviving spouse benefit is equal to sixty percent of the actuarially reduced amount the member would have received if the member retired on the date of death and elected the sixty percent joint and survivor benefit. The annual benefit shall be divided into monthly payments and is payable for the life of the surviving spouse. The surviving spouse benefit is effective the first day of the month following the date on which the member's contributory services terminates and is payable upon receipt of a completed application.
Source: SL 2016, ch 32, § 17; SDCL § 3-12-515; SL 2019, ch 22, § 1; SL 2020, ch 15, § 6.
3-12C-1215. Amount of surviving spouse benefit for generational member.
If no family benefit is being paid pursuant to § 3-12C-907, a surviving spouse of a contributing generational member who had acquired at least three years of contributory service or noncontributory service or died while performing usual duties for the employer is, upon attaining the age sixty-seven, eligible to receive a surviving spouse benefit as follows:
(1) If a family benefit had been paid, sixty percent of the family benefit paid at the time the family benefit ended, increased by the COLA from the date the last family benefit was paid; or
(2) If a family benefit had not been paid, sixty percent of the amount calculated pursuant to subsection (a) or (b), whichever is greater, increased by the COLA from the date of the member's death:
(a) Twenty-five percent of the member's final average compensation at the time of the member's death; or
(b) The member's unreduced accrued retirement benefit at the time of the member's death.
The surviving spouse benefit shall be paid in monthly installments for the life of the surviving spouse.
Source: SL 2016, ch 32, § 18; SL 2017, ch 27, § 36; SDCL § 3-12-516; SL 2019, ch 22, §§ 38, 45.
3-12C-1216. Early surviving spouse benefit for generational member's spouse.
A generational member's spouse who is eligible to receive a surviving spouse benefit at age sixty-seven may elect to start the benefit in the ten years preceding the spouse attaining the age of sixty-seven. The early surviving spouse benefit, payable for the life of the surviving spouse, is the surviving spouse benefit reduced by five percent for each full year and prorated for each additional full month between the date the early surviving spouse benefit commences and the date the surviving spouse attains the age of sixty-seven.
Source: SL 2016, ch 32, § 19; SDCL § 3-12-517; SL 2019, ch 22, § 1.
3-12C-1301. Variable retirement accounts of generational members--Contributions and credited investment return.
Each generational member shall have a variable retirement account, which consists of variable retirement contributions and the credited investment return. The investment return shall be credited annually as of June thirtieth for all generational members with a variable retirement account on that date. The credited investment return is the South Dakota Investment Council's reported money-weighted investment return of the system, net of fees, for the completed fiscal year. In the case of a distribution during the fiscal year, the credited investment return is the estimated investment return to the end of the month before payment. Any variable retirement contributions made during the fiscal year shall receive one-half year's credited investment return.
Source: SL 2016, ch 32, § 21; SDCL § 3-12-519; SL 2019, ch 22, § 1; SL 2022, ch 15, § 7.
3-12C-1302. Variable retirement contributions of generational members.
Each year the board shall establish the variable retirement contribution for the following fiscal year based on the results of the most current annual actuarial valuation. The variable retirement contribution for any year may be adjusted from zero to one and one-half percent of each contributing generational member's compensation and shall be allocated to each generational member's variable retirement account. The variable retirement contribution for the fiscal year beginning July 1, 2017, shall be one and one-half percent of each contributing member's compensation.
Source: SL 2016, ch 32, § 22; SDCL § 3-12-520; SL 2019, ch 22, § 1.
3-12C-1303. Distributions from generational member's variable retirement account.
The variable retirement account is payable to the generational member when the member commences a retirement benefit or a disability benefit. If a generational member dies before commencing a benefit, the variable retirement account is payable at the death of the member to the member's spouse who meets the requirements for an immediate or deferred surviving spouse benefit under § 3-12C-1214 or 3-12C-1215. For the purpose of paying a distribution, the variable retirement account is the amount in the member's variable retirement account or the total of the variable retirement contributions made on behalf of the member, whichever is greater.
The variable retirement account may be paid in a lump sum, rolled over to the South Dakota deferred compensation plan, rolled over to another eligible plan, or used to purchase a supplemental pension benefit.
The variable retirement account is not payable to any member who withdraws his or her accumulated contributions from the system.
Source: SL 2016, ch 32, § 23; SDCL § 3-12-521; SL 2019, ch 22, § 1; SL 2022, ch 15, § 8; SL 2023, ch 14, § 6.
3-12C-1400. Three consecutive calendar months of separation described.
For purposes of §§ 3-12C-1401 to 3-12C-1406, inclusive, in order to have three consecutive calendar months of separation that start with the member's effective date of retirement, the member may have no employment or any relationship with a participating unit regardless of classification as part-time, seasonal, temporary, leased, contract, or any other designation, during that time.
Source: SL 2021, ch 29, § 1, eff. Apr. 1, 2021.
3-12C-1401. Reemployment of retired member--Separation of service required--Hiring procedures.
Except as provided in § 3-12C-1401.1, a retired member's retirement is invalid if the member is reemployed by a participating unit unless the member's employment relationship with the initial participating unit has been terminated, as defined in this chapter and as required pursuant to Revenue Ruling 57-115 by the Internal Revenue Service, and the member has been separated from service for three consecutive calendar months after the member's effective date of retirement. The initial participating unit's system representative shall certify to the system that the termination of the employment relationship took place. In addition, any second participating unit shall subject the member to all proceedings and requirements associated with the hiring and employment of any new employee by the second participating unit, and that unit's system representative shall so certify to the system. If a single participating unit is both the member's initial participating unit and the member's second participating unit, the unit shall follow all termination procedures and all hiring procedures relative to the member as outlined by this section, and its chief executive officer, the officer's agent, or the chair of the unit's governing commission or board shall so certify.
Source: SL 2004, ch 38, § 6; SL 2010, ch 23, § 8, eff. Apr. 1, 2010; SL 2016, ch 31, § 14; SDCL § 3-12-81.1; SL 2019, ch 22, § 1; SL 2021, ch 29, § 2, eff. Apr. 1, 2021.
3-12C-1401.1. Reemployment of retired member--Limited exception to separation of service requirement.
The provisions of § 3-12C-1401 do not apply if the retired member is at least fifty-nine and a half years of age when the member begins receiving retirement benefits and is employed for less than twelve hundred fifty hours during the fiscal year of the participating unit. However, if the retired member completes twelve hundred fifty hours or more during a fiscal year of the participating unit, the member's benefits shall be suspended. The suspension ceases if the member terminates employment. If the member is subsequently reemployed, the provisions of §§ 3-12C-1401, 3-12C-1405, and 3-12C-1406 apply, where applicable.
Source: SL 2021, ch 29, § 3, eff. Apr. 1, 2021.
3-12C-1402. Reduction of retirement benefit during reemployment before July 1, 2004--Recalculation of additional benefit.
If a retired member whose benefits have been reduced pursuant to § 3-12C-1111 becomes employed as a permanent full-time employee by a participating unit before July 1, 2004, the member's monthly retirement benefit shall be reduced by fifteen percent and the COLA shall be eliminated throughout the period that the member reenters covered employment. If the member remains in such reemployment for at least three years pursuant to the provisions of § 3-12C-1403 and then again retires, the member's additional benefit shall be recalculated to consider only the member's credited service and final compensation earned during reentry.
Source: SL 1970, ch 25, § 13; SDCL Supp, § 3-12-29.3; SL 1974, ch 35, § 65; SL 1982, ch 32, § 8; SL 1986, ch 37, § 10; SL 1997, ch 28, § 2; SL 2004, ch 38, § 3; SL 2017, ch 27, § 20; SDCL § 3-12-111; SL 2019, ch 22, § 1; SL 2021, ch 26, § 4; SL 2022, ch 15, § 9.
3-12C-1403. Retirement benefits for members who reentered covered employment after June 30, 2004 and before April 1, 2010.
If less than three years of contributory service or noncontributory service is acquired after a retired member's reentry into covered employment, the member upon subsequent retirement shall receive a refund of the member's accumulated contributions.
If three years or more of contributory service or noncontributory service is acquired after a retired member's reentry into covered employment, the member upon subsequent retirement may receive either a refund of the member's accumulated contributions or an additional benefit based upon the member's credited service and final compensation earned during such reentry. Only the member's credited service from the subsequent employment shall be taken into account in calculating a reduction pursuant to § 3-12C-1111, if any, in the member's additional benefit. In addition, the COLA applied to the original benefit pursuant to § 3-12C-703 shall be eliminated for the period of reemployment, unless the member retired as a Class B member other than a justice, judge, or magistrate judge and subsequently reentered covered employment as a Class A member.
The provisions of this section apply to any member who retired without any reduction in benefits pursuant to § 3-12C-1111 and who reenters covered employment after June 30, 2004, but before April 1, 2010.
Source: SL 1974, ch 35, § 39; SL 1978, ch 32, § 3; SL 1982, ch 32, § 5; SL 1997, ch 28, § 1; SL 1998, ch 15, § 10; SL 2004, ch 38, § 1; SL 2005, ch 24, § 3; SL 2010, ch 20, § 10; SL 2010, ch 23, § 6, eff. Apr. 1, 2010; SL 2012, ch 26, § 11; SL 2016, ch 31, § 15; SL 2017, ch 27, § 11; SDCL § 3-12-82; SL 2019, ch 22, § 1; SL 2021, ch 26, § 5.
3-12C-1404. Reduction of retirement benefit during reemployment for members who reentered employment between July 1, 2004 and April 1, 2010--Benefit upon subsequent retirement.
If a retired member whose benefits have been reduced pursuant to § 3-12C-1111 becomes employed as a permanent full-time employee by a participating unit on or after July 1, 2004, but before April 1, 2010, the member's monthly retirement benefit must be reduced by fifteen percent and the COLA must be eliminated throughout the period that the member reenters covered employment. If the member remains in reemployment for at least three years pursuant to the provisions of § 3-12C-1403, the member upon subsequent retirement must receive an additional benefit based upon the member's credited service and final average compensation earned during the reentry. Only the member's credited service from the subsequent employment must be taken into account in calculating a reduction pursuant to § 3-12C-1111, if any, in the member's additional benefit. If the member remains in reemployment for a period of less than three years, the member upon subsequent retirement must receive a refund of the member's accumulated contributions. No matter the duration of the member's reemployment, the COLA applied to the original benefit pursuant to § 3-12C-703 must be eliminated for the period of reemployment.
Source: SL 2004, ch 38, § 4; SL 2010, ch 20, § 13; SL 2010, ch 23, § 7, eff. Apr. 1, 2010; SL 2017, ch 27, § 21; SDCL § 3-12-111.1; SL 2019, ch 22, § 1; SL 2021, ch 26, § 6; SL 2022, ch 15, § 10.
3-12C-1405. Retired members--Reentrance to covered employment--Benefits and membership.
Except as provided in § 3-12C-1405.1, if a retired member reenters covered employment at some time after the three consecutive calendar months that start with the member's effective date of retirement, the member's retirement benefits and continued membership shall be administered pursuant to this section.
The member's monthly retirement benefit shall be reduced by fifteen percent and the COLA shall be eliminated throughout the period that the member reenters covered employment. The reduction and elimination shall cease if the member again terminates covered employment. However, the reduction and elimination do not apply if the member retired as a Class B member other than a justice, judge, or magistrate judge and subsequently reenters covered employment as a Class A member.
The contributions required of the member shall be deposited by the member's participating unit with the system for the benefit of the member to be transferred to an account within the deferred compensation program established pursuant to chapter 3-13. The contributions shall be governed by § 457 of the Internal Revenue Code. However, the contributions required of the member's employer unit shall be deposited into the fund created by this chapter, but with no association or credit to the member. The member may not earn any additional benefits associated with the period that the member reenters covered employment.
The provisions of this section do not apply to a Class D member who reenters covered employment.
Source: SL 2010, ch 23, § 2, eff. Apr. 1, 2010; SL 2013, ch 20, § 16; SL 2016, ch 31, § 35; SDCL § 3-12-200; SL 2019, ch 22, §§ 41, 45; SL 2020, ch 13, § 6; SL 2021, ch 29, § 4, eff. Apr. 1, 2021; SL 2021, ch 26, § 7.
3-12C-1405.1. Reemployment of retired member--Limited exception to benefit and membership provisions for part-time employment.
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The provisions of § 3-12C-1405 do not apply if the retired member is reemployed for less than twelve hundred fifty hours during the fiscal year of the participating unit. However, if the retired member completes twelve hundred fifty hours or more during a fiscal year of the participating unit, the provisions of § 3-12C-1405 apply immediately.
Source: SL 2021, ch 29, § 5, eff. Apr. 1, 2021.
3-12C-1405.2. Reemployment of retired member--Employer tracking.
Any participating unit employing a retired member for less than twelve hundred fifty hours during the fiscal year of the participating unit is responsible for tracking the hours of the employee and certifying the hours to the system on a monthly basis.
Source: SL 2021, ch 29, § 6, eff. Apr. 1, 2021.
3-12C-1406. Invalid retirement--Repayment of retirement benefit payments.
Except as provided in § 3-12C-1401.1, if a retired member reenters employment within the three consecutive calendar months that start with the member's effective date of retirement, the member's retirement is deemed invalid. If the member received one or more retirement benefit payments during the invalid retirement, the member shall repay the payments as a lump sum immediately, repay the payments by contractual payments over a period of up to three years, which payments shall include interest at the assumed rate of return, or repay the payments by an actuarial equivalent reduction in eventual monthly benefits.
Source: SL 2010, ch 23, § 1, eff. Apr. 1, 2010; SL 2016, ch 31, § 34; SDCL § 3-12-199; SL 2019, ch 22, § 1; SL 2021, ch 29, § 7, eff. Apr. 1, 2021.
3-12C-1501. Supplemental pension benefit created.
There is hereby established the South Dakota Retirement System supplemental pension benefit. The supplemental pension benefit shall be within and integral to the South Dakota Retirement System. It is the intent of the Legislature that the provisions related to the supplemental pension benefit shall be qualified under § 401(a) of the Internal Revenue Code and that the provisions constitute one aspect of a governmental plan as identified under § 414(d) of that code.
Source: SL 2008, ch 24, § 1; SL 2013, ch 20, § 13; SDCL § 3-12-189; SL 2019, ch 22, § 1.
3-12C-1502. Interest rate assumption--Suspension of new supplemental pension contracts--No right to particular price.
On an annual basis, at minimum, the board shall establish an interest rate assumption upon which the provisions of subsequent supplemental pension contracts shall be based. The board shall establish the assumption on the basis of the recommendations of the system's actuary and the state investment officer. The interest rate assumption may not be greater than the actuarial assumed rate of return for the fund, nor may the interest rate assumption be less than the effective rate of interest. Any other provision of law notwithstanding, the board may suspend issuance of new supplemental pension contracts at any time. Any suspension of new supplemental pension contracts shall be prospective in operation and may not affect supplemental pension contracts already in effect.
The administration of the supplemental pension benefit requires that supplemental pension benefit purchase costs vary from one time period to the next. Consequently, participants who accept the option of a supplemental pension benefit have no expectation or fundamental right to any particular supplemental pension benefit purchase price.
Source: SL 2008, ch 24, § 3; SL 2016, ch 31, § 30; SDCL § 3-12-190; SL 2019, ch 22, § 1.
3-12C-1503. Rollover of funds--Single premium--Contract effective upon signing--Payment of benefits.
A member who is a retiree receiving a benefit from the system, or, if the member is deceased, the member's surviving spouse who is receiving a benefit from the system and is a beneficiary of the funds subject to this section, may become a supplemental pension participant by direct rollover of pretax funds held by the member in a variable retirement account, in contribution credit, or in either or both of the plans created in chapters 3-13 and 3-13A into the fund. Any rollover must be in compliance with the provisions of § 401(a)(31) of the Internal Revenue Code and must be recorded in the participant's supplemental pension contract record. All of a participant's funds rolled into the fund must be expended in full as the single premium for a supplemental pension contract. No single premium may be less than ten thousand dollars. A supplemental pension contract goes into effect when a participant signs the supplemental pension contract. The initial monthly supplemental pension benefit is payable the first day of the first month after the contract goes into effect. Payment of any prior and current supplemental pension benefits must be made within two months after the contract is in effect.
Source: SL 2008, ch 24, § 4; SL 2013, ch 20, § 14; SL 2016, ch 32, § 47; SL 2018, ch 33, § 15; SDCL § 3-12-191; SL 2019, ch 22, § 1; SL 2019, ch 23, § 8; SL 2022, ch 15, § 11.
3-12C-1504. Types of supplemental pension benefits.
A supplemental pension participant who is a retiree receiving a benefit from the system shall receive one of three types of supplemental pension benefits:
(1) A supplemental pension benefit payable monthly for the lifetime of the participant;
(2) A supplemental pension benefit payable monthly for the lifetime of the participant and, upon the death of the participant, a supplemental pension benefit payable monthly to the participant's supplemental pension spouse equal to sixty percent of the monthly benefit amount that the participant was receiving at the time of death; or
(3) A supplemental pension benefit payable monthly for the lifetime of the participant and, upon the death of the participant, a supplemental pension benefit payable monthly to the participant's supplemental pension spouse equal to one hundred percent of the monthly benefit amount that the participant was receiving at the time of death.
A participant who is a retiree receiving a benefit from the system may contract for any of the three types of supplemental pension benefits provided in this section. The contract shall be signed by the supplemental pension participant, and the participant shall provide a copy of the participant's current driver license or other picture identification card issued by a government agency or tribe. If the participant is married, the spouse shall sign the contract and provide a copy of the spouse's current driver license or other picture identification card issued by a government agency or tribe. A participant who is the member's surviving spouse may contract only for a supplemental pension benefit payable monthly for the lifetime of the surviving spouse.
Source: SL 2008, ch 24, § 5; SL 2016, ch 32, § 48; SL 2018, ch 33, § 16; SDCL § 3-12-192; SL 2019, ch 22, § 1; SL 2021, ch 27, § 5.
3-12C-1505. COLA applicable to supplemental pension benefits.
A supplemental pension participant shall receive a COLA applicable to the participant's supplemental pension benefit for each year commencing on the July first following the date on which the benefit was first payable, and equal to the COLA determined under § 3-12C-704. However, no COLA is payable if the participant has received payments for less than twelve months.
Source: SL 2008, ch 24, § 6; SL 2010, ch 20, § 15; SL 2016, ch 31, § 31; SL 2017, ch 27, § 32; SDCL § 3-12-193; SL 2019, ch 22, § 1; SL 2021, ch 26, § 8.
3-12C-1506. Death of participant or spouse--Lump sum distribution to beneficiaries--Time for making claim.
If payment of monthly supplemental pension benefits ceases due to the death of the participant or the death of a supplemental pension spouse, and the total of monthly supplemental pension benefits paid is less than the amount of the participant's single premium, the difference between the total benefits paid and the single premium shall be disbursed in a lump sum as provided in this section. Amounts payable under this section shall be disbursed as follows:
(1) To the beneficiary or entity designated by the participant in the participant's supplemental pension contract record, if any is designated;
(2) If no beneficiary or entity is designated, then to all surviving children of the participant, irrespective of age, on a share-alike basis; or
(3) If no beneficiary or entity is designated and there are no surviving children, then to the participant's estate.
If no claim for payment due upon the death of a deceased participant is made within three years from date of death, the payment shall revert to the system. However, a claim may be honored after the expiration of the three-year reversion period if, in the opinion of the executive director, payment of the claim is warranted by exceptional circumstances.
The provisions of this section are not affected by the provisions of § 3-12C-409 or 3-12C-410.
Source: SL 2008, ch 24, § 7; SL 2016, ch 31, § 32; SDCL § 3-12-194; SL 2019, ch 22, § 1.
3-12C-1507. Contract purchases and benefit payments deemed qualified plan distributed annuity contracts.
Supplemental pension contract purchases and supplemental pension benefit payments administered pursuant to the provisions of §§ 3-12C-1501 to 3-12C-1510, inclusive, are considered to be qualified plan distributed annuity contracts under Internal Revenue Service Treasury Regulation 1.402(c)-2.
Source: SL 2008, ch 24, § 8; SL 2016, ch 31, § 33; SDCL § 3-12-195; SL 2019, ch 22, § 1.
3-12C-1508. Minimum distribution rules--Annual benefit limitations.
Supplemental pension benefit payments shall follow the minimum distribution rules of § 401(a)(9) of the Internal Revenue Code and as set forth in §§ 3-12C-1901 to 3-12C-1905, inclusive, and the annual benefit limitations of § 415(b)(1)(A) of the Internal Revenue Code and as set forth in §§ 3-12C-1801 to 3-12C-1817, inclusive.
Source: SL 2008, ch 24, § 9; SL 2013, ch 20, § 15; SDCL § 3-12-196; SL 2019, ch 22, § 1; SL 2021, ch 28, § 1.
3-12C-1509. Applicability of certain retirement system provisions.
Supplemental pension benefits are not subject to the duplicate benefit provisions of § 3-12C-709, to the participant reemployment restrictions of § 3-12C-703, 3-12C-1402, 3-12C-1403, 3-12C-1404, 3-12C-1405 or 3-12C-1406, nor to the benefit adjustment provisions of § 3-12C-1111 or 3-12C-1112. Supplemental pension benefits are optional benefits granted the protections of the provisions of § 3-12C-216.
Source: SL 2008, ch 24, § 10; SL 2010, ch 23, § 9, eff. Apr. 1, 2010; SDCL § 3-12-197; SL 2019, ch 22, § 1.
3-12C-1510. Exemption from Title 58 and from securities and agent registration.
While performing their official duties under the provisions of §§ 3-12C-1501 to 3-12C-1510, inclusive, the board, the employees of the system, the system's actuary, the State Investment Council, and the employees of the State Investment Council are exempt from the provisions of Title 58 and any associated provisions of state law. Supplemental pension benefits and supplemental pension contracts are exempt from the provisions of Title 58.
To the extent that supplemental pension contracts may be deemed to be securities, they are exempt from securities registration pursuant to subdivision 47-31B-201(1). While performing their official duties under the provisions of §§ 3-12C-1501 to 3-12C-1510, inclusive, the board, the employees of the system, the system's actuary, the State Investment Council, and the employees of the State Investment Council are exempt from agent registration provisions pursuant to subdivision 47-31B-402(b)(3).
Source: SL 2008, ch 24, § 11; SDCL § 3-12-198; SL 2019, ch 22, § 1.
3-12C-1601. Previous retirement systems consolidated--Purpose.
The Supreme and Circuit Court Judicial Retirement System, district county court and municipal court judges retirement program, South Dakota Teachers Retirement System, South Dakota Municipal Retirement System, South Dakota Law Enforcement Retirement System, and South Dakota Public Employees Retirement System are hereby continued as a consolidated system known as the South Dakota Retirement System to provide an orderly means of continuing benefits of those already retired and those eligible to retire from the respective systems.
Source: SL 1967, ch 303, § 1; SDCL § 3-12-3; SL 1968, ch 216, § 1; SL 1974, ch 35, § 1; SL 1976, ch 39, § 4; SDCL § 3-12-46; SL 2019, ch 22, § 1.
3-12C-1602. Intent to provide increased benefits to previously retired members of systems.
It is the intent of the Legislature of the State of South Dakota to provide increased benefits for the already retired members of the retirement systems consolidated into the South Dakota Retirement System created by this chapter and to provide the financial resources necessary to adequately pay for the increased benefits.
Source: SL 1974, ch 35, § 77; SL 2017, ch 27, § 23; SDCL § 3-12-123; SL 2019, ch 22, § 1.
3-12C-1603. Increase in benefits for previously retired members of systems.
Any retired members of the Supreme and Circuit Court Judicial Retirement System, District County Court and Municipal Court Judges Retirement Program, South Dakota Teachers Retirement System, South Dakota Municipal Retirement System, South Dakota Law Enforcement Retirement System, South Dakota Public Employees Retirement System and State Cement Plant Retirement Program as of June 30, 1974, who were receiving or eligible to receive a retirement benefit shall be entitled to an increased monthly benefit commencing with the payment due on or after July 1, 1974, equal to the greater of:
(1) One hundred ten percent of the benefit the member was entitled to on June 30, 1974, under the retirement system from which the member retired; or
(2) Ten dollars times the years of credited contributory service or fraction thereof, under the retirement system from which the member retired, to a maximum of one hundred dollars.
The time, manner, and form of payment of the retirement benefit are not modified by the change in benefits provided by this section.
Source: SL 1974, ch 35, §§ 78, 79; SL 2017, ch 27, § 24; SDCL § 3-12-124; SL 2019, ch 22, § 1.
3-12C-1604. Adjustment of increase for retired members electing optional payment or early retirement.
The amount calculated under subdivision 3-12C-1603(2) will be adjusted to its actuarial equivalent if the retired member had elected an optional form of payment other than the normal form provided by the retirement system from which the member retired, or if the age of a retired member is less than the normal retirement age necessary for receiving a normal retirement benefit as provided by the retirement system from which the member retired.
Source: SL 1974, ch 35, § 79; SL 2017, ch 27, § 25; SDCL § 3-12-125; SL 2019, ch 22, § 1.
3-12C-1605. Previously retired members paid from consolidated fund.
Notwithstanding the repeal on July 1, 1974, of chapters 3-12; 3-13; 9-15; 13-45; certain provisions of chapter 16-8; chapter 16-11A, and certain provisions of chapter 33-13, persons retired under those programs, and teachers retired under the provisions of chapter 51 of the Session Laws of 1939, as amended, who retired pursuant to that act prior to July 1, 1951, and beneficiaries of deceased retirees of those programs, to the extent they are being paid benefits on July 1, 1974, shall be secured in the benefits provided by those provisions from the fund established pursuant to this chapter.
Source: SL 1974, ch 35, § 82; SDCL § 3-12-126; SL 2019, ch 22, § 1.
3-12C-1606. Members of consolidated systems entitled to benefits of prior law--Retention of Codified Laws.
Notwithstanding the repeal on July 1, 1974, of chapters 3-12; 3-13; 9-15; 13-45; certain provisions of chapter 16-8; chapter 16-11A; and certain provisions of chapter 33-13, all members of systems established thereunder shall be entitled to retire at the age, with the length of service and the benefits available to them under those provisions or the provisions of this chapter. For the purposes of this section, the executive director shall retain as part of the permanent files all volumes of the South Dakota Codified Laws.
Source: SL 1974, ch 35, § 83; SL 1975, ch 39, § 7; SL 2016, ch 31, § 27; SDCL § 3-12-127; SL 2019, ch 22, § 1.
3-12C-1607. Amount of benefits for justice or judge mandatorily retired.
Any justice of the Supreme Court or judge of the circuit court of this state who is automatically retired pursuant to the provisions of § 16-1-4.1 or 16-6-31, or who, having reached age seventy, retired before January 7, 1975, and who has not fully qualified for retirement benefits as provided by this chapter shall nevertheless receive retirement benefits in the proportion that his or her total time served bears to fifteen years, or if the justice or judge has served in excess of fifteen years then receive full benefits.
Source: SL 1973, ch 133, § 3; SDCL Supp, § 16-8-9.3; SL 1974, ch 35, § 49; SDCL § 3-12-93; SL 2019, ch 22, §§ 39, 45.
3-12C-1608. Board of Regents employees--Definition of balances.
Terms as used in §§ 3-12C-1608 to 3-12C-1612, inclusive, unless the context otherwise requires, shall mean:
(1) "Board of Regents' balance," the contributions from April 1, 1964, to June 30, 1975, plus accumulated interest, made by the Board of Regents and deposited on behalf of an employee in any pension fund that is established by contract with an insurance company;
(2) "Excess balance," the contributions in addition to those accumulated in the individual balance and made from April 1, 1964, to June 30, 1975, with accumulated interest, by a Board of Regents employee included in the provisions of §§ 3-12C-1608 to 3-12C-1612, inclusive, and deposited in any pension fund that is established by contract with an insurance company;
(3) "Individual balance," the contributions from April 1, 1964, to June 30, 1975, with accumulated interest made on a matching basis by the Board of Regents' employees included in the provisions of §§ 3-12C-1608 to 3-12C-1612, inclusive, and the Board of Regents and deposited on behalf of the employee in any pension fund that is established by contract with an insurance company.
Source: SL 1975, ch 38, § 1; SL 1979, ch 29, § 1; SDCL § 3-12-69.1; SL 2019, ch 22, § 1; SL 2021, ch 27, § 6.
3-12C-1609. Existing regents' contracts preserved--Expansion of retirement plan--Transition.
Nothing in §§ 3-12C-1608 to 3-12C-1612, inclusive, shall be construed to be a termination of any contract made on behalf of the State of South Dakota and its employees by the Board of Regents. The purpose of said sections is to expand the retirement plan of the Board of Regents for faculty and administrators and to allow for the transition of the plan in effect from April 1, 1964, to June 30, 1975, into the South Dakota Retirement System as provided for in this chapter.
Source: SL 1975, ch 38, § 2; SDCL § 3-12-69.2; SL 2019, ch 22, § 1.
3-12C-1610. Contract for purchase of service for Board of Regents.
The Board of Regents shall enter into a contractual agreement with the Board of Trustees on the same basis as a new participating unit for purchase of a maximum of twenty years of service prior to April 1, 1964, pursuant to the provisions of § 3-12C-308 and subject to the provisions of § 3-12C-1611.
Source: SL 1975, ch 38, § 3; SDCL § 3-12-69.3; SL 2019, ch 22, § 1.
3-12C-1611. Contributory service credited to Board of Regents employees--Eligibility of nonparticipating employees--Qualification for prior credited service.
Employees of the Board of Regents shall be credited with contributory service for each year such employee participated in the retirement plan in effect between April 1, 1964, and June 30, 1975. Employees of the Board of Regents who did not participate during all the years that they were eligible to participate in the Board of Regents retirement plan in effect from April 1, 1964, to June 30, 1975, are eligible for credited service only if purchase is made pursuant to § 3-12C-504. Credited service must be obtained for all South Dakota service between April 1, 1964, and June 30, 1975, in order to qualify an employee for credited service prior to April 1, 1964, as granted by § 3-12C-1610.
Source: SL 1975, ch 38, § 4; SDCL § 3-12-69.4; SL 2019, ch 22, § 1.
3-12C-1612. Normal retirement allowance reduced by actuarial equivalent--Deposit of individual balance--Member contributions.
All benefits payable pursuant to § 3-12C-1106 shall be reduced by the actuarial equivalent that could be purchased by a sum of money equal to twice the value of the Board of Regents' balance payable at the member's retirement. The Board of Regents is hereby authorized, if the Board of Regents receives member approval, to deposit with the system the individual balance accumulated in the regents retirement system during the period April 1, 1964, to June 30, 1975. Such deposit shall not include the excess balance as defined in § 3-12C-1608. In the administration of this chapter, the individual balance shall be considered as member contributions.
Source: SL 1975, ch 38, § 5; SL 1976, ch 40, § 2; SL 1979, ch 29, § 2; SDCL § 3-12-69.5; SL 2019, ch 22, § 1.
3-12C-1613. Allowance to surviving spouse of law enforcement officer retired for disability.
The surviving spouse of a disability retiree under the Law Enforcement Officers' Retirement System as consolidated into the South Dakota Retirement System pursuant to § 3-12C-1601 shall upon the death of the member be entitled to an annuity equal to one-half the member's annuity at the time of death. The retirement for disability upon which annuity was based shall have been approved prior to July 1, 1974.
Source: SL 1979, ch 26, § 3A; SDCL § 3-12-94.1; SL 2019, ch 22, § 1; SL 2021, ch 27, § 7.
3-12C-1614. Repealed.
Source: SL 1980, ch 33, § 2; SL 2011, ch 1 (Ex. Ord. 11-1), § 33, eff. Apr. 12, 2011; SL 2012, ch 26, § 9; SL 2016, ch 31, § 6.; SDCL § 3-12-62.1; SL 2019, ch 22, § 1; SL 2020, ch 13, § 7.
3-12C-1615. Rapid City firefighter membership in system--Benefits and credited service.
On July 1, 1982, all employees of the municipality of Rapid City who are participants in the municipality of Rapid City firemen pension fund on June 30, 1982, and all retirees receiving benefits from that fund shall become members of the system. Each employee shall receive credited service under the system for all service earned under the municipality of Rapid City firemen pension fund.
Source: SL 1982, ch 37, § 1; SL 1992, ch 60 § 2; SDCL § 3-12-62.2; SL 2019, ch 22, § 1.
3-12C-1616. Rapid City firefighter retirement benefits--Normal retirement age.
Upon retirement, each employee described in § 3-12C-1615 shall receive the greater of:
(1) The member's retirement benefit calculated under this chapter; or
(2) The retirement benefit calculated under the municipality of Rapid City firemen pension fund based on credited service up to June 30, 1982, and compensation up to June 30, 1982.
The normal retirement age of each such employee is fifty-five.
Source: SL 1982, ch 37, § 2; SL 1992, ch 60, § 2; SL 2017, ch 27, § 8; SDCL § 3-12-62.3; SL 2019, ch 22, § 1.
3-12C-1617. Payments from public employees retirement fund to Rapid City firefighters.
The benefits of the retirees described in § 3-12C-1615 who are entitled to receive benefits from the municipality of Rapid City firemen pension fund on July 1, 1982, shall be paid from the fund established by this chapter.
Source: SL 1982, ch 37, § 3; SL 1992, ch 60, § 2; SDCL § 3-12-62.4; SL 2019, ch 22, § 1.
3-12C-1618. Payments by Rapid City.
The municipality of Rapid City shall pay to the system an amount equal to the present value of all benefits earned by employees described in § 3-12C-1615 up to July 1, 1982, multiplied by the funding ratio set forth in the valuation of the actuarial requirements and financial condition of the system as of June 30, 1980. That amount shall be determined as of the close of business on July 1, 1982, by the system's actuary. Any amount to be paid to the system by the municipality of Rapid City which exceeds the value of the assets of the municipality of Rapid City firemen pension fund, determined as of the date of transfer of the assets, may be paid in periodic installments as provided in § 3-12C-308.
Source: SL 1982, ch 37, § 4; SL 1992, ch 60, § 2; SDCL § 3-12-62.5; SL 2019, ch 22, § 1.
3-12C-1619. Crediting of transfers from Rapid City pension fund.
All amounts transferred to the system from the municipality of Rapid City firemen pension fund which, under the fund, were credited to the accounts of individual employees shall be considered employee contributions under this chapter.
Source: SL 1982, ch 37, § 5; SL 1992, ch 60, § 2; SDCL § 3-12-62.6; SL 2019, ch 22, § 1.
3-12C-1620. Retirement benefits for certain city of Aberdeen employees.
To determine the retirement benefits of Aberdeen ambulance attendants, campus security officers, and court services officers, for credited service earned prior to July 1, 1993, the benefits shall be calculated pursuant to § 3-12C-1106 and for credited service after June 30, 1993, the benefits shall be calculated pursuant to § 3-12C-1107.
Source: SL 1993, ch 38, § 3; SDCL § 3-12-132; SL 2019, ch 22, § 1.
3-12C-1621. Aberdeen firefighters to participate in system.
On July 1, 1994, all members of the municipality of Aberdeen firemen's relief and pension fund on June 30, 1994, including all retirees and benefit recipients, shall become members of the system. Each individual shall receive credited service under the system for all service earned under the municipality of Aberdeen firemen's relief and pension fund.
Source: SL 1994, ch 37, § 1; SDCL § 3-12-133; SL 2019, ch 22, § 1.
3-12C-1622. Eligible benefits for Aberdeen firefighters.
Each individual described in § 3-12C-1621 shall receive the same benefit provided by the municipality of Aberdeen firemen's relief and pension fund on June 30, 1994, and the benefit shall be increased on July 1, 1994, and thereafter in accordance with § 3-12C-703. The benefits of the individuals described in § 3-12C-1621 who are entitled to receive benefits from the municipality of Aberdeen firemen's relief and pension fund as of July 1, 1994, shall be paid from the fund established by this chapter.
Source: SL 1994, ch 37, § 2; SL 2017, ch 27, § 26; SDCL § 3-12-134; SL 2019, ch 22, § 1.
3-12C-1623. Amount to be paid by municipality of Aberdeen.
The municipality of Aberdeen shall pay to the system an amount equal to the present value of all benefits earned by individuals described in § 3-12C-1621 up to July 1, 1994, multiplied by the funding ratio set forth in the valuation of the actuarial requirements and financial condition of the system as of June 30, 1992. That amount shall be determined on July 1, 1994, by the system's actuary. Any amount to be paid to the system by the municipality of Aberdeen which exceeds the value of the assets of the municipality of Aberdeen firemen's relief and pension fund, determined as of the date of transfer, shall be paid pursuant to the provisions of § 3-12C-308.
Source: SL 1994, ch 37, § 3; SDCL § 3-12-135; SL 2019, ch 22, § 1.
3-12C-1624. Funds from Aberdeen municipality considered member contributions.
All amounts transferred to the system from the municipality of Aberdeen firemen's relief and pension fund which, under the Aberdeen firemen's relief and pension fund, were credited to the accounts of individual employees are considered member contributions under this chapter.
Source: SL 1994, ch 37, § 4; SDCL § 3-12-136; SL 2019, ch 22, § 1.
3-12C-1625. Watertown firefighters pension fund members--Credited service.
On July 1, 1995, all members of the city of Watertown firemen pension fund as of June 30, 1995, including all retirees and benefit recipients, shall become members of the system. Each individual shall receive credited service under the system for all service earned under the city of Watertown firemen pension fund.
Source: SL 1995, ch 19, § 1; SDCL § 3-12-62.10; SL 2019, ch 22, § 1.
3-12C-1626. Watertown firefighters benefits paid from the system--Minimum benefit.
Each individual described in § 3-12C-1625 shall receive the same benefit under the form of annuity provided by the city of Watertown firemen pension fund in effect on June 30, 1995, which benefit shall be increased on July 1, 1995, and thereafter in accordance with § 3-12C-703. The benefits of individuals described in § 3-12C-1625 who are entitled to receive benefits from the city of Watertown firemen pension fund as of July 1, 1995, shall be paid from the fund established by this chapter and funded pursuant to §§ 3-12C-1627 and 3-12C-1628.
Firefighters who are not retired on July 1, 1994, are guaranteed a minimum benefit equal to the accrued benefit under the city of Watertown firemen pension fund as of July 1, 1994. If the minimum benefit is paid in lieu of a benefit under this chapter, the minimum benefit may not be increased annually as provided in § 3-12C-703 and the member is not entitled to benefits pursuant to § 3-12C-1114 or subdivision 3-12C-901(4).
Source: SL 1995, ch 19, § 2; SL 2017, ch 27, § 9; SDCL § 3-12-62.11; SL 2019, ch 22, § 1.
3-12C-1627. Payments by Watertown.
The city of Watertown shall pay to the system an amount equal to the present value of all benefits earned by individuals described in § 3-12C-1625 prior to July 1, 1995, and multiplied by the funding ratio set forth in the valuation of the actuarial requirements and financial condition of the system as of June 30, 1994. The amount shall be determined on July 1, 1995, by the system's actuary. Any amount to be paid to the system by the city of Watertown which exceeds the value of the assets of the city of Watertown firemen pension fund, as determined as of the date of transfer, shall be paid pursuant to the provisions of § 3-12C-308.
Source: SL 1995, ch 19, § 3; SDCL § 3-12-62.12; SL 2019, ch 22, § 1.
3-12C-1628. Crediting transfers from city of Watertown firemen pension fund.
All amounts transferred to the system from the city of Watertown firemen pension fund which under the city of Watertown firemen pension fund were credited to the accounts of individual employees are considered member contributions under this chapter.
Source: SL 1995, ch 19, § 4; SDCL § 3-12-62.13; SL 2019, ch 22, § 1.
3-12C-1629. Mitchell firefighters as members of system.
On July 1, 1996, all members of the City of Mitchell firemen's pension plan as of June 30, 1996, including all retirees, vested inactive members, and benefit recipients, shall become members of the system. Each member shall receive credited service under the system for all service earned under the City of Mitchell firemen's pension plan.
Source: SL 1996, ch 28, § 1; SDCL § 3-12-153; SL 2019, ch 22, § 1.
3-12C-1630. Benefits for Mitchell firefighters.
Each retired member or benefit recipient described in § 3-12C-1629 shall receive the same benefit under the form of annuity provided by the city of Mitchell firemen's pension plan as in effect on June 30, 1996, except for the COLA. Each benefit shall be increased on July 1, 2008, and thereafter by the system's COLA. The benefits of members described in § 3-12C-1629 who are entitled to receive benefits from the city of Mitchell firemen's pension plan as of July 1, 1996, shall be paid from the fund established by this chapter.
Source: SL 1996, ch 28, § 2; SL 2008, ch 26, § 1; SL 2010, ch 20, § 14; SL 2017, ch 27, § 28; SDCL § 3-12-154; SL 2019, ch 22, § 1.
3-12C-1631. Calculation of Mitchell firefighter benefits.
Upon retirement, each member described in § 3-12C-1629 who is a vested inactive member on July 1, 1996, or an active firefighter in the employ of the city of Mitchell on July 1, 1996, shall receive the greater of:
(1) The member's retirement benefit calculated under this chapter; or
(2) The member's retirement benefit calculated under the city of Mitchell firemen's pension plan based on credited service up to June 30, 1996, and compensation up to June 30, 1996, and utilizing the plan's benefit terms and benefit formula, but applying the system's COLA, as specified in § 3-12C-1630.
In either case, the retirement benefit shall be paid from the fund established by this chapter.
Source: SL 1996, ch 28, § 3; SL 2008, ch 26, § 2; SL 2017, ch 27, § 29; SDCL § 3-12-155; SL 2019, ch 22, § 1.
3-12C-1632. Amount of payment to system by city of Mitchell.
The city of Mitchell shall pay to the system an amount equal to the present value of all benefits earned by the members described in § 3-12C-1629 up to July 1, 1996, multiplied by the funding ratio set forth in the valuation of the actuarial requirements and financial condition of the system as of June 30, 1996. That amount shall be calculated as of the close of business on June 30, 1996, by the system's actuary. Any amount to be paid to the system by the city of Mitchell which exceeds the value of the assets of the city of Mitchell firemen's pension plan, calculated as of the date of transfer of such assets, may be paid in periodic installments as provided in § 3-12C-308.
Source: SL 1996, ch 28, § 4; SDCL § 3-12-156; SL 2019, ch 22, § 1.
3-12C-1633. Transfer of city of Mitchell firemen's pension plan funds as member contributions.
All amounts transferred to the system from the city of Mitchell firemen's pension plan which under the plan were credited to the accounts of individual employees are considered member contributions under this chapter.
Source: SL 1996, ch 28, § 5; SDCL § 3-12-157; SL 2019, ch 22, § 1.
3-12C-1634. Information required of city of Mitchell.
For purposes of payment of retiree benefits pursuant to § 3-12C-1630 and to calculate the minimum benefit pursuant to § 3-12C-1631, the city of Mitchell shall provide the following information:
(1) Each retired firefighter's benefit as of June 30, 1996, plus that benefits' COLA;
(2) Each active or inactive vested firefighter's accrued benefit as of June 30, 1996;
(3) Each active firefighter's final average compensation as of June 30, 1996;
(4) Each active firefighter's credited service as of June 30, 1996;
(5) Each active firefighter's employee contributions, with interest credited thereon, as of June 30, 1996; and
(6) The annual rate of salary for a first-class firefighter as of June 30, 1996.
Source: SL 1996, ch 28, § 6; SDCL § 3-12-158; SL 2019, ch 22, § 1; SL 2021, ch 26, § 9.
3-12C-1635. Huron firefighters as members of system.
On July 1, 1998, all members of the city of Huron firemen pension fund as of June 30, 1998, including all retirees, any deferred vested members and any benefit recipients, shall become members of the system. Each active member shall receive credited service under the system for all service earned under the city of Huron firemen pension fund.
Source: SL 1998, ch 22, § 1; SDCL § 3-12-159; SL 2019, ch 22, § 1.
3-12C-1636. Benefits for Huron firefighters.
Each retired member, any benefit recipient, or any deferred vested member described in § 3-12C-1635 and in such status before July 1, 1998, shall receive the member's previously selected annuity option as provided under the city of Huron firemen pension fund as in effect on June 30, 1998, but is not eligible for a benefit pursuant to § 3-12C-1114. Each such benefit in effect before July 1, 1998, shall be increased on that date and thereafter in accordance with § 3-12C-703. The retirement benefit of a deferred vested member that goes into effect after July 1, 1998, shall be increased in accordance with § 3-12C-703, but the member's final average compensation may not be increased before retirement by the COLA pursuant to § 3-12C-601. The benefits of members described in § 3-12C-1635 who are entitled to receive benefits from the city of Huron firemen pension fund before July 1, 1998, shall be paid from the fund established by this chapter and funded pursuant to § 3-12C-1638.
Source: SL 1998, ch 22, § 2; SL 2004, ch 40, § 11; SL 2017, ch 27, § 30; SDCL § 3-12-160; SL 2019, ch 22, § 1.
3-12C-1637. Calculation of Huron firefighter benefits.
Upon retirement, each member described in § 3-12C-1635 who is an active firefighter in the employ of the city of Huron on July 1, 1998, shall receive the greater of:
(1) The member's retirement benefit calculated under this chapter; or
(2) The member's retirement benefit calculated under the city of Huron firemen pension fund based on credited service up to June 30, 1998, and compensation up to June 30, 1998, and utilizing the fund's benefit terms and benefit formula.
In either case, such retirement benefit shall be increased in accordance with the provisions of § 3-12C-703, shall be paid from the fund established by this chapter and shall be funded pursuant to §§ 3-12C-1638 and 3-12C-401. Any benefit granted pursuant to subdivision (2) may not include a benefit pursuant to § 3-12C-1114.
Source: SL 1998, ch 22, § 3; SL 2017, ch 27, § 31; SDCL § 3-12-161; SL 2019, ch 22, § 1.
3-12C-1638. Amount of payment to system by City of Huron.
The city of Huron shall pay to the system an amount equal to the present value of all benefits earned by the members described in § 3-12C-1635 up to July 1, 1998, multiplied by the funding ratio set forth in the valuation of the actuarial requirements and financial condition of the system as of June 30, 1998. That amount shall be calculated as of the close of business on June 30, 1998, by the system's actuary. Any amount to be paid to the system by the city of Huron which exceeds the value of the assets of the city of Huron firemen pension fund, calculated as of the date of transfer of such assets, may be paid in periodic installments as provided in § 3-12C-308.
Source: SL 1998, ch 22, § 4; SDCL § 3-12-162; SL 2019, ch 22, § 1.
3-12C-1639. Transfer of city of Huron firemen's pension plan funds as member contributions.
All amounts transferred to the system from the city of Huron firemen pension fund which under the fund were credited to the accounts of individual members are considered member contributions under this chapter.
Source: SL 1998, ch 22, § 5; SDCL § 3-12-163; SL 2019, ch 22, § 1.
3-12C-1640. Information required of city of Huron.
For purposes of payment of retirement or other benefits pursuant to § 3-12C-1636 and to calculate the minimum benefit pursuant to § 3-12C-1637, the city of Huron shall provide the following information:
(1) Each retired firefighter's benefit and form of payment as of June 30, 1998;
(2) Each active or deferred vested firefighter's accrued benefit as of June 30, 1998;
(3) Each active firefighter's final average compensation as of June 30, 1998.
(4) Each active firefighter's credited service as of June 30, 1998;
(5) Each active firefighter's employee contributions, with interest credited thereon as of June 30, 1998; and
(6) The annual rate of salary for a first-class firefighter as of June 30, 1998.
Source: SL 1998, ch 22, § 6; SDCL § 3-12-164; SL 2019, ch 22, § 1.
3-12C-1641. Election by municipality of Sioux Falls to be participating unit.
Notwithstanding the provisions of § 3-12C-306, any employee of the municipality of Sioux Falls who begins working after June 30, 2013, as a full-time employee shall be a member of the system if the municipality of Sioux Falls elects to be a participating unit by a duly passed resolution of its governing body.
Source: SL 2013, ch 19, § 1; SL 2016, ch 31, § 8; SDCL § 3-12-67.1; SL 2019, ch 22, § 1; SL 2021, ch 29, § 14, eff. Apr. 1, 2021.
3-12C-1642. Transfer of funds in cement plan retirement fund.
Upon receipt of the appropriation pursuant to SL 2014, ch 21, § 1, the state treasurer shall transfer the balance of the funds of the cement plant retirement fund to the South Dakota Retirement System trust fund.
Source: SL 2014, ch 21, § 2, eff. Apr. 1, 2014; SDCL § 3-12-217 SL 2019, ch 22, § 1.
3-12C-1643. Members of cement plant retirement plan to be Class C members of system.
On April 1, 2014, all members of the cement plant retirement plan, including any retiree and any vested member, become Class C members of the system. The administration of retirement benefits for Class C members shall continue with the system.
Source: SL 2014, ch 21, § 3, eff. Apr. 1, 2014; SDCL § 3-12-218; SL 2019, ch 22, § 1.
3-12C-1644. Class C members to receive benefits as provided under cement plant retirement plan.
Each Class C member shall receive the same benefit as provided pursuant to the member's respective cement plant retirement plan as in effect on June 30, 2013. The benefits of any Class C member and the member's beneficiaries shall be paid from the fund established by this chapter and funded pursuant to SL 2014, ch 21, § 1 and § 3-12C-1642.
Source: SL 2014, ch 21, § 4, eff. Apr. 1, 2014; SDCL § 3-12-219; SL 2019, ch 22, § 1.
3-12C-1645. Funds transferred from cement plant retirement fund considered member contributions.
Any amount transferred to the system from the cement plant retirement fund pursuant to § 3-12C-1642, which under the cement plant retirement plan were credited to the accounts of individual members, are considered member contributions.
Source: SL 2014, ch 21, § 5, eff. Apr. 1, 2014; SDCL § 3-12-220; SL 2019, ch 22, § 1.
3-12C-1646. Payment of benefits and operational expenses related to Class C members.
Notwithstanding the provisions of § 3-12C-210, any benefit payments and any operational expenses related to Class C members shall be paid from the fund established by this chapter.
Source: SL 2014, ch 21, § 6, eff. Apr. 1, 2014; SDCL § 3-12-221; SL 2019, ch 22, § 1.
3-12C-1647. Promulgation of rules to administer retirement benefits for Class C members.
The board may, pursuant to chapter 1-26, adopt rules to establish uniform procedures for the administration of the retirement benefits of Class C members.
Source: SL 2014, ch 21, § 7, eff. Apr. 1, 2014; SDCL § 3-12-222; SL 2019, ch 22, § 1.
3-12C-1648. Member election to receive lump sum trustee-to-trustee payment in lieu of monthly payments.
Any vested member of the state cement plant retirement plan may elect to receive a lump sum trustee-to-trustee payment in lieu of monthly retirement benefit payments. The amount of the lump sum trustee-to-trustee payment shall be determined by the system's actuary based on the actuarial equivalent of the member's benefit as defined by the cement plant retirement plan. However, no lump sum trustee-to-trustee payment may be made unless both of the following requirements are satisfied:
(1) The member has not received any monthly benefits; and
(2) The member directs a trustee-to-trustee transfer of the lump sum payment to a receiving retirement custodian, trustee, or other approved recipient.
Any eligible member who desires to make the election authorized by this section shall submit an application to the system.
Source: SL 2014, ch 22, § 1; SDCL § 3-12-223; SL 2019, ch 22, § 1.
3-12C-1649. Surviving spouse election to receive lump sum trustee-to-trustee payment in lieu of monthly payments.
Upon the death of a vested member of the state cement plant retirement plan who died prior to starting a monthly retirement benefit, the member's surviving spouse may elect a lump sum trustee-to-trustee payment in lieu of monthly surviving spouse benefit payments. The amount of the lump sum trustee-to-trustee payment shall be determined by the system's actuary based on the actuarial equivalent, as defined by the cement plant retirement plan, of the spouse's age sixty-five survivor benefit. However, no lump sum trustee-to-trustee payment may be made unless the following requirements are satisfied:
(1) Neither the member nor the member's family nor the member's spouse received any monthly benefits from the plan; and
(2) The surviving spouse directs a trustee-to-trustee transfer of the lump sum payment to a receiving retirement custodian, trustee, or other approved recipient.
Any eligible surviving spouse who desires to make the election authorized by this section shall submit an application to the system.
Source: SL 2014, ch 22, § 2; SDCL § 3-12-224; SL 2019, ch 22, § 1.
3-12C-1650 . Department of Labor and Regulation employees' retirement plan--Membership with system--Class D.
As of July 1, 2020, each member of the Department of Labor and Regulation employees’ retirement plan, including any retiree and any vested member, is a Class D member of the system. No additional member may be added to Class D. The administration of retirement benefits for Class D members shall continue with the system in accordance with this chapter and chapter 3-13C.
Source: SL 2020, ch 13, § 1.
3-12C-1651 . Class D membership--Benefits received.
Each Class D member shall receive the same benefit as provided pursuant to the Department of Labor and Regulation employees’ retirement plan as in effect on June 30, 2020, and in accordance with chapter 3-13C. Each Class D member's benefit shall be annually increased by the COLA as determined by § 3-12C-704 . The benefits of any Class D member and the member's beneficiaries and any operational expenses related to Class D members shall be paid from the plan fund established by this chapter.
Source: SL 2020, ch 13, § 2.
3-12C-1701. Correctional security staff benefits.
For purposes of determining the benefits of correctional security staff, for credited service earned prior to July 1, 1978, the benefits shall be calculated pursuant to § 3-12C-1106 and for credited service after July 1, 1978, the benefits shall be calculated pursuant to § 3-12C-1107.
Source: SL 1977, ch 31, § 4; SL 2018, ch 32, § 5; SDCL § 3-12-92.1; SL 2019, ch 22, § 1.
3-12C-1702. Calculation of benefits for sheriffs and deputies--Prior elective rights preserved.
For the purposes of determining the benefits of county sheriffs and deputy county sheriffs, for credited service earned prior to January 1, 1980, the benefits shall be calculated pursuant to § 3-12C-1106 and for credited service after January 1, 1980, the benefits shall be calculated pursuant to § 3-12C-1107. Nothing in this chapter shall be construed as an abridgement of the right of a sheriff to exercise his right to elect to participate pursuant to § 3-12C-303.
Source: SL 1979, ch 26, §§ 2, 3; SDCL § 3-12-92.2; SL 2019, ch 22, § 1.
3-12C-1703. Calculation of benefits of parole agent.
For purposes of determining the benefits of a parole agent, for credited service earned prior to July 1, 1991, the benefits shall be calculated pursuant to § 3-12C-1106 and for credited service after June 30, 1991, the benefits shall be calculated pursuant to § 3-12C-1107.
Source: SL 1991, ch 29, § 3; SDCL § 3-12-92.3; SL 2019, ch 22, § 1.
3-12C-1704. Calculating benefits of air rescue firefighter.
For purposes of determining the benefits of an air rescue firefighter, for credited service earned prior to July 1, 1992, the benefits shall be calculated pursuant to § 3-12C-1106 and for credited service after June 30, 1992, the benefits shall be calculated pursuant to § 3-12C-1107.
Source: SL 1992, ch 34, § 3; SDCL § 3-12-129; SL 2019, ch 22, § 1.
3-12C-1705. Foundation member conservation officers.
For purposes of determining the retirement benefits of foundation member conservation officers, for credited service earned before July 1, 1983, benefits shall be calculated pursuant to § 3-12C-1106 and for credited service earned after June 30, 1983, benefits shall be calculated pursuant to § 3-12C-1107. For purposes of credited service earned before July 1, 1983, a conservation officer has a normal retirement age of sixty-five. For purposes of credited service earned after June 30, 1983, a foundation member conservation officer has a normal retirement age of fifty-five.
Source: SL 1983, ch 19, § 3; SL 1989, ch 38, § 7; SL 2016, ch 32, § 32; SDCL § 3-12-62.8; SL 2019, ch 22, § 1.
3-12C-1706. Benefits of conservation officers employed by Department of Game, Fish and Parks, Division of Custer State Park, and park rangers--Credited service.
To determine the retirement benefits of conservation officers employed by the Department of Game, Fish and Parks, Division of Custer State Park, and park rangers, for credited service earned prior to July 1, 1995, the benefits shall be calculated pursuant to § 3-12C-1106 and for credited service after June 30, 1995, the benefits shall be calculated pursuant to § 3-12C-1107.
Source: SL 1995, ch 18, § 3; SDCL § 3-12-62.9; SL 2019, ch 22, § 1.
3-12C-1801 . Participant--Definition.
For the purposes of this part, a participant is a member, retiree, or the surviving spouse of a member or retiree, who is eligible to participate in the qualified benefit preservation arrangement as determined by § 3-12C-1804.
Source: SL 2020, ch 14, § 1.
3-12C-1802 . Qualified benefit preservation arrangement--Definition.
For the purposes of this part, the qualified benefit preservation arrangement is an arrangement under section 415(m) of the Internal Revenue Code and established in § 3-12C-1803.
Source: SL 2020, ch 14, § 2.
3-12C-1803 . Qualified benefit preservations arrangement--Establishment--Purpose.
The qualified benefit preservation arrangement is established and placed under the management of the board. The purpose of the qualified benefit preservation arrangement is solely to provide a portion of the benefit that would otherwise have been payable by the system except for the limitations under section 415(b) of the Internal Revenue Code, as determined in § 3-12C-1805. The qualified benefit preservation arrangement is intended to constitute a qualified governmental excess benefit arrangement under section 415(m) of the Internal Revenue Code and shall be interpreted and construed consistently with that intent. The qualified benefit preservation arrangement is a portion of the system solely to the extent required under, and within the meaning of, code section 415(m)(3) and § 3-12C-1805.
The qualified benefit preservation arrangement is an exempt governmental deferred compensation plan described in code section 3121(v)(3). Code sections 83, 402(b), 457(a) and 457(f)(1) do not apply to the qualified benefit preservation arrangement. With respect to code section 457(a), the maximum amount that may be deferred under the qualified benefit preservation arrangement on behalf of any participant for the taxable year may exceed both the amount in code section 457(b)(2), as adjusted for cost of living increases, and the percent of the participant's includible compensation referred to in that code section. The system may not hold any assets or income under the qualified benefit preservation arrangement in trust for the exclusive benefit of participants.
Source: SL 2020, ch 14, § 3.
3-12C-1804 . Eligibility to participate.
Effective as of July 1, 2020, a participant is eligible to participate in the qualified benefit preservation arrangement for any calendar year, or portion of the calendar year, during which the participant is entitled to receive a benefit payment from the system, but the benefit is required to be reduced due to the application of the maximum benefit provisions of section 415(b) of the Internal Revenue Code. In that case, the participant may be eligible for a benefit as determined in § 3-12C-1805.
The system shall determine which participants are eligible to participate in the qualified benefit preservation arrangement. Eligibility for participation begins in any month in which a participant is entitled to receive a benefit from the system that is required to be reduced due to the application of the maximum benefit provisions of section 415(b) of the Internal Revenue Code and ends in any month in which the benefit is not limited by code section 415(b) or when all benefits under the system have ended.
Eligibility to participate in the qualified benefit preservation arrangement is limited to those retirees or beneficiaries whose benefits under the system are required to be reduced based upon either of the following:
(1) The rules for retirement before age sixty-two under section 415(b)(2)(C) of the Internal Revenue Code; or
(2) The rules regarding benefits for which there is not an actuarial increase due to retirement after age sixty-five as set forth in section 415(b)(2)(D) of the Internal Revenue Code.
Source: SL 2020, ch 14, § 4.
3-12C-1805 . Benefit payable.
A participant shall receive a portion of the participant's benefit that is equal to the difference between the amount of that participant's monthly retirement benefit paid under the system and the amount that would have been payable to the participant from the system in that month if not for the reduction due to the application of section 415(b) of the Internal Revenue Code, limited by the following conditions:
(1) For any retirement benefit that begins before the member attains age sixty-two, the maximum total benefit payable is equal to the Internal Revenue Code's applicable benefit limit for the calendar year for a retirement at age sixty-two to sixty-five, as if the reduction for retirement before age sixty-two was not applied. Specifically, the qualified benefit preservation arrangement shall pay the amount that exceeds the Internal Revenue Code's benefit limit as actuarially reduced for commencement before age sixty-two but may only pay a benefit up to the applicable benefit limit under section 415(b) of the Internal Revenue Code for the calendar year unreduced for early commencement. When the participant's benefit from the qualified benefit preservation arrangement is combined with the participant's benefit from the system, the participant's total benefit may not exceed the applicable benefit limit under section 415(b) of the Internal Revenue Code for the calendar year, unreduced for early commencement;
(2) For any retirement benefit that begins after age sixty-five, the maximum total benefit payable is equal to the Internal Revenue Code's applicable benefit limit for a retirement at age sixty-two to sixty-five, inclusive, as if the limit was actuarially increased for a retirement at the participant’s retirement age, up to age seventy, and the qualified benefit preservation arrangement shall pay the amount that exceeds the code's benefit limit for retirement at age sixty-two to sixty-five, inclusive. When the participant's benefit from the qualified benefit preservation arrangement is combined with the participant's benefit from the system, the participant's total benefit may not exceed the applicable benefit limit under section 415(b) of the Internal Revenue Code for the calendar year, actuarially increased to the participant’s age at retirement, up to age seventy.
For purposes of the benefits payable from the qualified benefit preservation arrangement, if a participant receives an annual incentive payment based on performance, the incentive payment will be treated as paid in the same calendar quarter of each year considered in the computation of final average compensation. If an annual incentive payment is paid in different calendar quarters in the years considered in the computation of final average compensation, the annual incentive payment will be treated as if it was consistently paid in the fourth calendar quarter.
The benefit payable from the qualified benefit preservation arrangement is limited to the amount that, if combined with the participant’s benefit from the system, does not exceed the amount that would have been payable to the participant from the system in that month if not for the reduction due to the application of section 415(b) of the Internal Revenue Code as adjusted in accordance with section 415(d)(1)(A) of the Internal Revenue Code.
The qualified benefit preservation arrangement shall be computed and is payable under the same terms, at the same time, and to the same person as the related benefit payable under the system. A participant may not elect to defer the receipt of any part of the payment due under the qualified benefit preservation arrangement.
Source: SL 2020, ch 14, § 5.
3-12C-1806 . Cost of living adjustment after benefit begins--Change in benefit payable.
After retirement, the monthly retirement benefit that would have been payable to the participant if not for the application of section 415(b) of the Internal Revenue Code will increase with any cost of living adjustment as determined by the system, and the applicable benefit limits under 415(b) of the Internal Revenue Code will be adjusted in accordance with section 415(d)(1)(A) of the Internal Revenue Code. As a result, the benefit payable from the qualified benefit preservation arrangement may increase or decrease due solely to the interaction of the cost of living adjustment as determined by the system and the applicable benefit limit adjustment in accordance with section 415(d)(1)(A).
Source: SL 2020, ch 14, § 6.
3-12C-1807 . Qualified benefit preservation arrangement--Funding.
The qualified benefit preservation arrangement is, and shall remain, unfunded within the meaning of federal tax laws, and the rights, if any, of any participant to any benefit under the qualified benefit preservation arrangement are limited to those specified in this part.
Source: SL 2020, ch 14, § 7.
3-12C-1808 . Contributions.
The system shall determine the amount necessary to pay the benefits under § 3-12C-1805 for each calendar year. The required contribution will be the aggregate of the benefits payable under § 3-12C-1805 to all participants for the calendar year and an amount determined to be a necessary and reasonable expense of administering the qualified benefit preservation arrangement. Contributions may not be calculated in a manner designed to pay future benefits under § 3-12C-1805 . Each payment of contributions by an employer that would otherwise be made to the system fund will be reduced by the amount necessary to pay the benefits under § 3-12C-1805 , and these contributions will be deposited in the qualified benefit preservation arrangement trust fund. The employer contributions otherwise required under the terms of this chapter shall be divided into those contributions required to pay the benefits under § 3-12C-1805 , and those contributions paid into and accumulated in the system fund to pay the maximum benefits permitted. Under no circumstances may employer contributions to fund the benefits under § 3-12C-1805 be credited to or commingled with contributions paid into and accumulated in the system fund, as otherwise prohibited by §§ 3-12C-219 and 3-12C-1803 . The amount deducted from employer contributions and deposited into the qualified benefit preservation arrangement fund does not increase the amount of employer contributions required under the system fund. Any contributions not used to pay the benefits under § 3-12C-1805 for a current calendar year, together with any income accruing to the qualified benefit preservation arrangement fund, shall be used to pay the administrative expenses of the qualified benefit preservation arrangement for the calendar year. Any contributions not used to pay the benefits under § 3-12C-1805 for the current calendar year that remain after paying administrative expenses shall be used to fund administrative expenses or benefits of participants in future years.
The system shall account separately for the amounts determined to be necessary to provide the benefits under § 3-12C-1805 for each participant. However, this separate accounting does not constitute setting aside these amounts for the benefit of a participant. Benefits under § 3-12C-1805 shall be paid from the qualified benefit preservation arrangement fund.
Any consultant or outside auditor, attorney, or actuary performing services for the system may also perform services for the qualified benefit preservation arrangement. Any fees attributable to services performed with respect to the qualified benefit preservation arrangement are payable solely from the qualified benefit preservation arrangement fund.
Source: SL 2020, ch 14, § 8.
3-12C-1809 . Qualified benefit preservation arrangement trust fund--Establishment--Purpose.
The qualified benefit preservation arrangement trust fund is established as a valid trust under the laws of the state, separate from the system fund, to hold contributions of the employers. Contributions to the qualified benefit preservation arrangement fund shall be held separate and apart from the funds comprising the system fund and may not be commingled with assets of the system fund and must be accounted for separately.
The qualified benefit preservation arrangement fund is maintained solely to provide certain benefits under a qualified governmental excess benefit arrangement within the meaning of section 415(m) of the Internal Revenue Code and to pay reasonable and necessary administrative expenses of the arrangement.
The qualified benefit preservation arrangement fund is intended to be a grantor trust, of which the employer is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the code, and shall be construed accordingly. This provision may not be construed to create an irrevocable trust of any kind.
The South Dakota Investment Council may, if it is determined advisable, hold assets of the qualified benefit preservation arrangement fund uninvested for making distributions under the qualified benefit preservation arrangement or may invest assets of the qualified benefit preservation arrangement as otherwise permitted by law.
Source: SL 2020, ch 14, § 9.
3-12C-1810 . Qualified benefit preservation arrangement assets--Income.
Any assets held by the qualified benefit preservation arrangement to assist in meeting the employer's obligations under the qualified benefit preservation arrangement, including all amounts of employer contributions made under the qualified benefit preservation arrangement, all property and rights acquired or purchased with these amounts, and all income attributable to these amounts shall be held separate and apart from other funds of the employer and will be used exclusively for the uses and purposes of participants and general creditors as set forth in this part. Participants have no preferred claim on, or any beneficial interest in, any assets of the qualified benefit preservation arrangement fund. Any rights created under this part are unsecured contractual rights of a participant against the employer. Any assets held by the qualified benefit preservation arrangement fund are subject to the claims of the employer's general creditors under federal and state law in the event of the employer's insolvency.
Income accruing to the qualified benefit preservation arrangement fund constitutes income derived from the exercise of an essential governmental function upon which the qualified benefit preservation arrangement fund is exempt from tax under sections 115 and 415(m)(1) of the Internal Revenue Code.
Source: SL 2020, ch 14, § 10.
3-12C-1811 . Qualified benefit preservation arrangement--Administration.
The system shall administer the qualified benefit preservation arrangement. The system shall compile and maintain all records necessary for administration. The board has the same rights, duties, and responsibilities respecting the qualified benefit preservation arrangement as it has with respect to the system. The board shall, as necessary and appropriate, take the following actions:
(1) Establish procedures to administer the qualified benefit preservation arrangement not inconsistent with this part and the Internal Revenue Code, and to amend or rescind any of these procedures;
(2) Determine, consistent with this part, applicable law, rules, or regulations, all questions of law or fact that may arise as to eligibility for participation and eligibility for distribution of benefits, and the status of any person claiming benefits under the qualified benefit preservation arrangement;
(3) Make payments from the qualified benefit preservation arrangement fund to participants pursuant to this part;
(4) Contract with a third party to perform designated administrative services under this part;
(5) Construe and interpret this part as to administrative issues and to correct any defect, supply any omission, or reconcile any inconsistency in the qualified benefit preservation arrangement, subject to and consistent with the code; and
(6) Seek appropriate rulings from the Internal Revenue Service with regard to the status of the qualified benefit preservation arrangement under the Internal Revenue Code.
Source: SL 2020, ch 14, § 11.
3-12C-1812 . Qualified benefit preservation arrangement--No assignment.
The rights of a person to a benefit, and the benefit itself, payable under this part are hereby exempt from any state, county, municipal, or other local tax and may not be subject to execution, garnishment, attachment, operation of bankruptcy or insolvency laws, or any other process of law whatsoever and is unassignable and nontransferable, except as otherwise provided by § 3-12C-1809 or otherwise in the same manner as a retirement benefit under the system.
Source: SL 2020, ch 14, § 12.
3-12C-1813 . Conflicts.
In resolving any conflict between provisions of this part, and in resolving any other uncertainty as to the meaning or intention of any provision of the qualified benefit preservation arrangement, the prevailing interpretation shall be the one that causes:
(1) The qualified benefit preservation arrangement to constitute a qualified governmental excess benefit arrangement under the provisions of section 415(m) of the Internal Revenue Code and the qualified benefit preservation arrangement fund to be exempt from tax under sections 115 and 415(m) of the Internal Revenue Code;
(2) The qualified benefit preservation arrangement and the system to comply with all applicable requirements of the code; and
(3) The qualified benefit preservation arrangement and the system to comply with all applicable state laws.
Source: SL 2020, ch 14, § 13.
3-12C-1814 . Limitation of rights.
Neither the establishment or maintenance of the qualified benefit preservation arrangement, nor any amendment to the qualified benefit preservation arrangement, nor any act or omission under the qualified benefit preservation arrangement or resulting from the operation of the qualified benefit preservation arrangement, may be construed:
(1) As conferring upon any participant or any other person a right or claim against the system, board, executive director, trustees, or any employer, except to the extent that the right or claim is specifically expressed and provided in the qualified benefit preservation arrangement;
(2) As creating any responsibility or liability of any employer for the validity or effect of the qualified benefit preservation arrangement;
(3) As a contract between any employer and any participant or other person;
(4) As being consideration for, or an inducement or condition of, employment of any participant or other person, or as affecting or restricting in any manner or to any extent whatsoever the rights or obligations of any employer or any participant or other person to continue or terminate the employment relationship at any time; or
(5) As giving any participant the right to be retained in the employer's service or to interfere with the employer's right to discharge any participant or other person at any time.
Source: SL 2020, ch 14, § 14.
3-12C-1815 . Erroneous payments--Corrections.
Any benefit payment that should not have been made, according to the terms of the qualified benefit preservation arrangement and the benefits provided under the qualified benefit preservation arrangement, may be recovered as provided in § 3-12C-214 .
If in doubt concerning the correctness of any action in making a payment of a benefit, the payment may be suspended until verification as to the correctness of the payment or the person to receive the payment.
Source: SL 2020, ch 14, § 15.
3-12C-1816 . Administration of benefit--Release and receipt.
Any payment to any participant shall, to the extent paid, be in full satisfaction of the participant's claim being paid and may be conditioned on the delivery by the participant of the duly executed receipt and release in a form determined by the system.
Source: SL 2020, ch 14, § 16.
3-12C-1817 . Reservation of power to change.
The Legislature reserves the right at any time and, from time to time, to modify or amend, in whole or in part, any or all of the provisions of the qualified benefit preservation arrangement. No member of the system and no beneficiary of a member acquires any vested right to a payment under the qualified benefit preservation arrangement.
Source: SL 2020, ch 14, § 17.
3-12C-1901. General rule.
The system shall pay all benefits in accordance with a good faith interpretation of the requirements in § 401(a)(9) of the Internal Revenue Code and the regulations in effect under that section, as applicable to a governmental plan within the meaning of section 414(d) of the Internal Revenue Code.
The member's entire interest must be distributed, or begin to be distributed, by the required beginning date, which is April first of the calendar year following the later of:
(1) The calendar year in which the member reaches the applicable age, which is determined as follows:
(a) If the member was born before July 1, 1949, the applicable age is seventy and one-half;
(b) If the member attained age seventy-two before January 1, 2023, the applicable age is seventy-two;
(c) If the member attains age seventy-two after December 31, 2022, the applicable age is seventy-three; or
(d) Effective January 1, 2033, applicable age shall have the meaning set forth in § 401(a)(9)(C)(v) of the Internal Revenue Code; or
(2) The calendar year in which the member retires and separates from service with the member's employer.
A member or beneficiary eligible for benefits must apply for benefits in order to commence distribution of benefits. The system, pursuant to a qualified domestic relations order, may establish separate benefits for a member and alternate payee.
Source: SL 2021, ch 28, § 2; SL 2024, ch 21, § 2.
3-12C-1902. Member's death after distributions begun.
If a member dies after the required distribution of benefits has begun, the remaining portion of the member's interest shall be distributed at least as rapidly as under the same method of distribution before the member's death.
Source: SL 2021, ch 28, § 3.
3-12C-1903. Member's death before required distributions begun.
If a member dies before required distribution of the member's benefits has begun, the member's interest shall be distributed as follows:
(1) If the member has a surviving spouse, the surviving spouse shall receive benefits over the life of the surviving spouse beginning as soon as administratively possible and effective the month after the member's death; or
(2) If the member has no surviving spouse, the member's remaining interest shall be distributed in a lump sum payment to the designated beneficiary within five years from the date of the member's death.
Source: SL 2021, ch 28, § 4.
3-12C-1904. Incidental benefit rule.
The death and disability benefits provided by the system are limited by the incidental benefit rule set forth in § 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation § 1.401-1(b)(1)(i). As a result, the total death or disability benefits payable may not exceed twenty-five percent of the cost for all of the member's benefits received from the system.
Source: SL 2021, ch 28, § 5.
3-12C-1905. Reasonable and made in good faith.
Notwithstanding the other provisions of §§ 3-12C-1901 to 3-12C-1904, inclusive, or the provisions of United States Treasury regulations, benefit options may continue so long as the option satisfies § 401(a)(9) of the Internal Revenue Code based on a reasonable and good faith interpretation of that section.
Source: SL 2021, ch 28, § 6.
