SDRS Board of Trustees

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ARTICLE 62:01
RETIREMENT Chapter 62:01:01 Definitions, Repealed. 62:01:02 Contributions. 62:01:03 Retirement benefit, Repealed. 62:01:04 Disability benefit. 62:01:05 Election of board of trustees. 62:01:06 Appeals. 62:01:07 Administration. 62:01:08 Benefit limits, Repealed. 62:01:09 Supplemental pension benefit, Repealed.
CHAPTER 62:01:01
DEFINITIONS (Repealed) Section 62:01:01:01 Definition of terms, Repealed.
62:01:01:02 Termination of marriage, Repealed.
62:01:01:03 Care of children, Repealed.
62:01:01:04 Repealed.
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62:01:01:01. Definition of terms. Terms defined in SDCL chapters 3-12C and 3-
13A have the same meaning when used in this article. In addition, terms used in this article
mean:
(1) "Disability advisory committee," a committee composed of the secretary of the
Department of Human Services or a designee, a lawyer, and a physician, the latter two members
both appointed by the executive director;
(2) "Represented group," a group entitled to elect one or more trustees pursuant to
SDCL 3-12C-203 and 3-12C-204. The group to which a member belongs is determined from the
records of the system;
(3) "Employment," for purposes of SDCL 3-12C-809, includes engagement of services
by an employer who is not a participating unit and self-employment;
(4) "Class B public safety member," an individual who is a Class B member other than a
justice, judge, or magistrate judgeRepealed.
Source: 2 SDR 17, effective September 9, 1975; 3 SDR 13, effective August 25, 1976;
transferred from § 47:07:01:01, effective July 1, 1979; 6 SDR 87, effective March 2, 1980; 9
SDR 81, 9 SDR 124, effective July 1, 1983; 24 SDR 160, effective May 24, 1998; 34 SDR 297,
effective June 2, 2008; SL 2016, ch 31, § 62, effective July 1, 2016; 45 SDR 142, effective July
1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-101, 3-12C-204, 3-12C-801, 3-12C-803.
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62:01:01:02. Termination of marriage. For purposes of SDCL 3-12C-1001,
termination of marriage shall occur upon the issuance by a court of a decree of divorce or
annulmentRepealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211, 3-12C-1001.
Law Implemented: SDCL 3-12C-1001.

62:01:01:03. Care of children. For purposes of SDCL 3-12C-901, care of children is
the responsibility for the maintenance, education, and supervision of one or more
childrenRepealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-901.

CHAPTER 62:01:02
CONTRIBUTIONS
Section
62:01:02:01 Determination of Class A or Class B member, Repealed.
62:01:02:02 Repealed.
62:01:02:03 Repealed.
62:01:02:04 Permanent full-time employee -- Probationary period, Repealed. 4
62:01:02:05 Repealed.
62:01:02:06 Refund of active contributions made during period of disability -- Granted
credited service.
62:01:02:07 Leave of absence without pay during service purchase agreement -- Exception for
leave of absence for military service.
62:01:02:08 Active membership defined by period of contributions -- Quarter of service based
on contribution, Repealed.
62:01:02:09 Contribution reports -- Date – Transmittal, Repealed.
62:01:02:10 Preparation and expiration of a contract to purchase credited service.
62:01:02:11 Repealed.

62:01:02:01. Determination of Class A or Class B member. A member is a Class A
member until proof is supplied to the executive director that a member is a Class B member. The
executive director shall change the records when a change of duties requires a change of
classRepealed.
Source: 2 SDR 17, effective September 9, 1975; 3 SDR 13, effective August 25, 1976;
transferred from § 47:07:02:01, effective July 1, 1979; 6 SDR 87, effective March 2, 1980; 9
SDR 81, 9 SDR 124, effective July 1, 1983; SL 2016, ch 31, § 63, effective July 1, 2016; 45
SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-202, 3-12C-211.
Law Implemented: SDCL 3-12C-401, 3-12C-1106, 3-12C-1107.
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62:01:02:04. Permanent full-time employee -- Probationary period. An employee is
a permanent full-time employee if the position held by that employee is classified as a permanent
position and the person holding it is required to work 20 or more hours a week and at least 6
months a year. A probationary employee holding such a position is a permanent full-time
employeeRepealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1, 1983;
45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-101, 3-12C-401.

62:01:02:06. Refund of active contributions made during period of disability --
Granted credited service. If a disabled member receiving credited service pursuant to SDCL 3-
12C-808 and § 62:01:04:05.01 becomes employed by a member employer unit, the member and
employer shall make active contributions during the period of such employment pursuant to
SDCL 3-12C-401. Upon the member's conversion of disabled status to retired status, upon the
member's termination of disabled status or upon the member's termination of employment,
whichever occurs first, the member may request a refund of the member's accumulated
contributions made during that period when the member also was receiving credited service due
to the 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: 33 SDR 212, effective June 4, 2007; SL 2014, ch 20, § 34, effective July 1,
2014; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211. 6
Law Implemented: SDCL 3-12C-104, 3-12C-808.

62:01:02:08. Active membership defined by period of contributions -- Quarter of
service based on contribution. The beginning of a member's period of active membership in the
system is established by the date of the employer contribution report to the system that includes
the member's initial employee and employer contributions. A member's active membership is
terminated when the system receives notice of termination from an employer, accompanied by
the member's final employee and employer contributions. If the system receives any employee
and matching employer contributions on behalf of a member during a calendar quarter, the
member shall be credited with a full calendar quarter of contributory service toward calculating
the member's benefits or determining the member's eligibility for benefits, but not for
determining whether a member's death was active status or inactive statusRepealed.
Source: 33 SDR 212, effective June 4, 2007; 36 SDR 21, effective August 17, 2009; 45
SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-401, 3-12C-403, 3-12C-405.

62:01:02:09. Contribution reports -- Date -- Transmittal. If a participating unit has
one or more than one pay date in a month, the participating unit shall prepare at least one
contribution report per month. However, if a participating unit has no pay date for participating
employees in a particular month, no report is required for that month. Each contribution report
shall be dated no later than the last day of its month. The report shall include any pay date and 7
associated contributions for that month. The contribution report and associated contributions
shall be transmitted to the system as outlined in SDCL 3-12C-403Repealed.
Source: 35 SDR 82, effective October 22, 2008; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-401, 3-12C-403, 3-12C-405.

CHAPTER 62:01:03
RETIREMENT BENEFIT
(Repealed)
Section
62:01:03:01 Repealed.
62:01:03:02 Determination of eligibility for retirement benefit, Repealed.
62:01:03:02.01 Certification when retired member becomes reemployed – Penalty, Repealed.
62:01:03:03 Repealed.
62:01:03:04 Independent status of the surviving spouse benefit if the member was retired
or of retirement age, Repealed.
62:01:03:05 Privatized member's acquisition of certain service credit -- Retirement while
continuing to work for a private employer, Repealed.

62:01:03:02. Determination of eligibility for retirement benefit. Upon receipt of an
application for a retirement benefit, the executive director shall determine whether or not the
applicant is eligible for the benefitRepealed. 8
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; SL 2016, ch 31, § 65, effective July 1, 2016; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-212, 3-12C-1106, 3-12C-1107, 3-12C-1113.

62:01:03:02.01. Certification when retired member becomes reemployed -- Penalty.
If a retired member becomes reemployed by the same employer unit the member retired from
within one year after the member's retirement, the system may require both the member and the
employer unit to certify that:
(1) The member's termination was a complete severance of employment and the member
has been separated from service for three consecutive calendar months as outlined in SDCL 3-
12C-1401;
(2) All standard hiring and employment procedures of the employer unit were followed
in the reemployment process; and
(3) No prior agreement to reemploy the member, either overt or covert, existed between
the member and the employer unit or any officer of the employer unit.
An employer unit's chief executive officer or the officer's agent or the chair of the
employer's governing commission or board shall provide the certification on behalf of the
employer unit. The system shall provide forms for the member's and the employer unit's
certifications. An intentionally false certification provides grounds for legal recourse pursuant to
SDCL 22-29-9.1Repealed.
Source: 36 SDR 21, effective August 17, 2009; SL 2016, ch 31, § 66, effective July 1,
2016; 45 SDR 142, effective July 1, 2019; 47 SDR 138, effective July 1, 2021. 9
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-101, 3-12C-1401, 22-29-9.1.

62:01:03:04. Independent status of the surviving spouse benefit if the member was
retired or of retirement age. The benefit to a surviving spouse upon the death of a member who
had retired or reached normal retirement age is an independent benefit belonging to the surviving
spouse for the purpose of administering an existing qualified domestic relations orderRepealed.
Source: 34 SDR 297, effective June 2, 2008; 35 SDR 82, effective October 22, 2008; 45
SDR 45, effective October 8, 2018; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-216, 3-12C-906, 3-12C-1114, 3-12C-1213, 3-12C-
1214.

62:01:03:05. Privatized member's acquisition of certain service credit -- Retirement
while continuing to work for a private employer. Acquisition of years of service toward
vesting or early retirement granted pursuant to SDCL 3-12C-310 ceases upon the member's
termination of employment with the private employer, even if the member later returns to
employment with that employer. A member in continuing employment with the private employer
need not terminate the private employment in order to receive a retirement benefit from the
system. However, the member may not acquire additional years of service after the member
begins receiving the benefitRepealed.
Source: 37 SDR 214, effective May 30, 2011; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211. 10
Law Implemented: SDCL 3-12C-310.

CHAPTER 62:01:04
DISABILITY BENEFIT
Section
62:01:04:00 Application of chapter.
62:01:04:01 Repealed.
62:01:04:02 Disability -- Beginning of benefits.
62:01:04:03 Disability determination -- Disability advisory committee -- Medical
examination.
62:01:04:04 Repealed.
62:01:04:05 Repealed.
62:01:04:05.01 Termination of disability benefit – Credited service, Repealed.
62:01:04:05.02 Credited service as employee while disabled.
62:01:04:06 Medical examination of member receiving disability benefit -- Refusal.
62:01:04:07 Participating unit -- Filing upon return to service.
62:01:04:08 Repealed.
62:01:04:09 Criteria for determining disability if contributory service ended before July 1,
1995 -- Position of comparable level.
62:01:04:09.01 Criteria for determining disability if contributory service ended after July 1,
1995 – Certification by employer.
62:01:04:10 Member receiving a disability benefit if service ended before July 1, 1994.
62:01:04:11 Repealed.
62:01:04:12 Repealed. 11
62:01:04:13 Income to be included in earned income.

62:01:04:05.01. Termination of disability benefit – Credited service. If a member
receiving a disability benefit ceases to be disabled, elects to convert to a retirement benefit, or is
converted to a retirement benefit pursuant to SDCL 3-12C-808, the disability benefit shall
terminate. The member shall receive credited service for the period during which the member
receives a disability benefit, but, except as provided in SDCL 3-12C-808, not beyond the
member's normal retirement age, Repealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; 24 SDR 160, effective May 24, 1998; 36 SDR 21, effective August 17, 2009; SL 2017, ch
27, § 39, effective July 1, 2017; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-803, 3-12C-808.

CHAPTER 62:01:07
ADMINISTRATION
Section
62:01:07:01 Secretary to board – Filing, Repealed.
62:01:07:02 Inspection and correction of files, Repealed.
62:01:07:03 Waiver of privilege.
62:01:07:04 Authorized agents, Repealed.
62:01:07:05 Procedure for filling a vacancy on the board, Repealed.
62:01:07:06 Beneficiary designated by qualified domestic relations order, Repealed. 12
62:01:07:07 Prospective nature of qualified domestic relations orders, Repealed.
62:01:07:08 Repealed.
62:01:07:09 Lump-sum payments subsequent to annuity payments.
62:01:07:09.01 Opportunity to rescind election of annuity payment option – Overpayments,
Repealed.
62:01:07:09.02 Rollover of lump-sum distribution by inactive member, Repealed.
62:01:07:10 Rollover of beneficiary payment by surviving spouse or other beneficiary,
Repealed.
62:01:07:11 Repealed.
62:01:07:12 Member repayment of overpayments -- Options -- Interest -- Delayed
repayment -- Failure to select an option -- Required notice and presumption,
Repealed.
62:01:07:12.01 Repayment of overpayments by person other than member -- Options --
Interest -- Delayed repayment -- Failure to select an option -- Required notice
and presumption, Repealed.
62:01:07:13 Administration of additional survivor protection contributions and coverage.

62:01:07:01. Secretary to board -- Filing. The executive director shall act as secretary
to the board. Any document required to be filed with the board shall be filed with the executive
directorRepealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; SL 2016, ch 31, § 82, effective July 1, 2016; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211. 13
Law Implemented: SDCL 3-12C-209.

62:01:07:02. Inspection and correction of files. A member of the system, upon request,
may inspect, during regular business hours, any file directly relating to the member. The member
may request correction of any alleged errors in the fileRepealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-405.

62:01:07:04. Authorized agents. Each participating unit may appoint persons to serve
as authorized agents. Each person so appointed shall be an employee of the participating unit. An
authorized agent shall be the agent of the participating unit and shall provide liaison between the
participating unit and the systemRepealed.
Source: 6 SDR 87, effective March 2, 1980; 9 SDR 81, 9 SDR 124, effective July 1,
1983; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-403, 3-12C-405.

62:01:07:05. Procedure for filling a vacancy on the board. The executive director
shall be notified of a vacancy on the board by the vacating board member, by the member's
participating unit's governing body, by the member's employer, or by any other board member. 14
Upon the executive director's receipt of notice, the procedure to fill the vacancy shall be as
follows:
(1) The executive director shall notify all members of the board of the vacancy;
(2) If circumstances permit, the executive director shall ask the incumbent to recommend
a replacement to serve in the incumbent's stead;
(3) If the vacancy is for a trustee to serve on behalf of an employer represented group,
the executive director shall notify the governing body of each participating unit affected by the
vacancy of the vacancy and request the governing body's input in seeking a qualified candidate.
The executive director shall solicit résumés of qualified persons from governing bodies and
interested persons. The résumés shall be submitted to the executive director. If a state-wide
association exists that is made up of members of the employer represented group, the executive
director shall notify the association of the vacancy and request the association's input in seeking
a qualified candidate. If the vacancy is for a trustee to serve on behalf of an employee
represented group, the executive director shall notify all authorized agents for the group affected
by the vacancy of the vacancy and request that all employees affected by the vacancy be advised
of the vacancy. Any interested member of the represented group may submit his or her résumé to
the executive director. If a state-wide association exists that is made up of members of the
employee represented group, the executive director shall notify the association of the vacancy
and request the association's input in seeking a qualified candidate;
(4) The executive director shall provide to each board member a copy of each résumé
received; and 15
(5) At the next board meeting following a sufficient period of time to receive résumés,
the board, by secret ballot, shall select a trustee from among those persons who submitted
résumésRepealed.
Source: 31 SDR 191, effective May 22, 2005; 33 SDR 212, effective June 4, 2007; SL
2016, ch 31, § 84, effective July 1, 2016; SL 2019, ch 23, § 11, effective July 1, 2019; 45 SDR
142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-205.

62:01:07:06. Beneficiary designated by qualified domestic relations order. If a
qualified domestic relations order provides that a member's former spouse shall be treated as a
beneficiary for any payment pursuant to SDCL 3-12C-409, the provision shall supersede any
contrary beneficiary designation by the member. In any such instance, the provision of the
qualified domestic relations order and the member's beneficiary designation shall be
administered in a manner to give full effect to the order and both proportional and equitable
effect to the member's designation of any beneficiary by the memberRepealed.
Source: 32 SDR 203, effective June 5, 2006; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-216, 3-12C-409.

62:01:07:07. Prospective nature of qualified domestic relations orders. The provisions
of a qualified domestic relations order shall be prospective from the date of the order. Any
division of benefits paid prior to the date of the order, service of the order upon the system, or 16
qualification of the order by the system, whichever is later, shall be the responsibility of the
parties to the order. However, the executive director may agree to adjust future payments to
remedy an error in prior payments if the error in prior payments involved the systemRepealed.
Source: 32 SDR 203, effective June 5, 2006; SL 2016, ch 31, § 85, effective July 1, 2016;
45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-216.

62:01:07:09.01. Opportunity to rescind election of annuity payment option --
Overpayments. No member may elect to change normal payment of the member's retirement
annuity in favor of adjusted payments pursuant to SDCL 3-12C-1112, or the opposite, if more
than one monthly retirement annuity payment has been made to the member. If a member who
has received one adjusted payment pursuant to SDCL 3-12C-1112 elects to change to the normal
method of payment, the system shall deduct in lump-sum the amount of the resulting
overpayment from the member's next monthly annuity payment. A deduction may be one
hundred percent of the member's normal benefit, if necessary, and may extend to subsequent
benefit payments, if necessary, to eliminate the overpayment in the shortest time
possibleRepealed.
Source: 37 SDR 214, effective May 30, 2011; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-1106, 3-12C-1107, 3-12C-1108, 3-12C-1112.
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62:01:07:09.02. Rollover of lump-sum distribution by inactive member. A member
who elects to withdraw the member's accumulated contributions pursuant to SDCL 3-12C-
602 may transfer a portion or all of the member's account by rollover to another plan which is
eligible under § 401, 403(b), 408, 408A, or 457(b) of the Internal Revenue CodeRepealed.
Source: 37 SDR 214, effective May 30, 2011; 39 SDR 227, effective July 1, 2013; 45
SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-603.
Law Implemented: SDCL 3-12C-603.

62:01:07:10. Rollover of beneficiary payment by surviving spouse or other
beneficiary. A member's surviving spouse may transfer a portion or all of the member's account
by rollover to another plan which is eligible under §§ 401, 403(b), 408, 408A, or 457(b) of the
Internal Revenue Code. A member's beneficiary who is not the member's surviving spouse may
transfer a portion or all of the member's account by rollover to a plan which is eligible under
§ 408 or 408A of the Internal Revenue CodeRepealed.
Source: 33 SDR 212, effective June 4, 2007; 35 SDR 82, effective October 22, 2008; 39
SDR 227, effective July 1, 2013; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-409, 3-12C-410, 3-12C-603.

62:01:07:12. Member repayment of overpayments -- Options -- Interest -- Delayed
repayment -- Failure to select an option -- Required notice and presumption. Any member 18
required to repay an overpayment of benefits may choose one of the following repayment
methods:
(1) Immediate repayment in a lump-sum from other funds;
(2) Repayment by monthly installments over a period not to exceed three years,
including interest at the system's assumed rate of return;
(3) Repayment by monthly benefit reductions over a period not to exceed three
years, including interest at the system's assumed rate of return; or
(4) Repayment by an actuarial equivalent reduction in monthly benefits as follows:
(a) If the member is a foundation member and does not have a spouse, the
reduction shall continue for the member's lifetime. If the member is a foundation member with a
potential surviving spouse benefit payable, the reduction shall reduce both the member's monthly
benefits and the surviving spouse's monthly benefits and shall continue for both the member's
and the surviving spouse's lifetimes; or
(b) If the member is a generational member and elected a single life benefit,
the reduction shall continue for the member's lifetime. If the member is a generational member
with a joint and survivor benefit payable, the reduction shall reduce both the member's monthly
benefits and the surviving spouse's monthly benefits and shall continue for both the member's
and the surviving spouse's lifetimes.
If a member required to repay an overpayment does not choose a repayment option
within two months after being given notice of the overpayment, the member is deemed to have
chosen to make repayment by an actuarial equivalent reduction in monthly benefits. If repayment
is pursuant to an actuarial equivalent reduction by either the member's choice or the member's
failure to choose a repayment option, system staff shall inform the member that the reduction is 19
unlikely to result in repayment of the exact amount of the overpayment, plus interest if
appropriate, and the member is presumed to so understand.
If repayment is delayed for more than three months, interest on the overpayment amount
shall accrue during the period of delay at the system's assumed rate of return. If any overpayment
is due to a system error, the executive director may absolve any interest accrualRepealed.
Source: 36 SDR 21, effective August 17, 2009; SL 2016, ch 31, § 86, effective July 1,
2016; 45 SDR 45, effective October 8, 2018; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211, 3-12C-214.
Law Implemented: SDCL 3-12C-214.

62:01:07:12.01. Repayment of overpayments by person other than member --
Options -- Interest -- Delayed repayment -- Failure to select an option -- Required notice
and presumption. Any person other than a member who is required to repay an overpayment of
benefits may choose one of the following repayment methods:
(1) Immediate repayment in a lump-sum from other funds;
(2) Repayment by monthly installments over a period not to exceed three years,
including interest at the system's assumed rate of return;
(3) Repayment by monthly benefit reductions over a period not to exceed three
years, including interest at the system's assumed rate of return; or
(4) Repayment by an actuarial equivalent reduction in monthly benefits that
shall continue as long as the benefit is paid.
If the person required to repay an overpayment is receiving a benefit from the system
and does not choose a repayment option within two months after being given notice of 20
the overpayment, the person is deemed to have chosen to make repayment by an actuarial
equivalent reduction in monthly benefits. If repayment is pursuant to an actuarial equivalent
reduction by either the person's choice or the person's failure to choose a repayment option,
system staff shall inform the person that the reduction is unlikely to result in repayment of the
exact amount of the overpayment plus interest if appropriate, and the person is presumed to so
understand.
If repayment is delayed for more than three months, interest on the overpayment
amount shall accrue during the period of delay at the system's assumed rate of return. If any
overpayment is due to a system error, the executive director may absolve any interest
accrualRepealed.
Source: 45 SDR 45, effective October 8, 2018; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211, 3-12C-214.
Law Implemented: SDCL 3-12C-214.

CHAPTER 62:01:08
BENEFIT LIMITS
(Repealed)
Section
62:01:08:01 Maximum annual benefit, Repealed.
62:01:08:02 Repealed.
62:01:08:03 Applicability of limits, Repealed.
62:01:08:04 Repealed.
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62:01:08:01. Maximum annual benefit. Annual benefits payable to a member may not
exceed the amount provided in § 415(b) of the Internal Revenue Code, as indexed pursuant to
§ 415(d)(1) of the Internal Revenue CodeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002; 39 SDR 227, effective July 1, 2013; 45 SDR 45, effective
October 8, 2018; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-711.
Law Implemented: SDCL 3-12C-711.

62:01:08:03. Applicability of limits. If a member has been credited with less than 10
years of credited service, the maximum annual retirement benefit shall be reduced by multiplying
the maximum annual pension by a fraction, the numerator of which is the number of the
member's years of credited service and the denominator of which is 10.
The limits in § 62:01:08:01 apply to a straight life annuity with no ancillary benefits and
to an annuity that constitutes a qualified joint and survivor annuity, provided payment begins
between ages 62 and 65. The limits, however, do not apply to any portion of a benefit resulting
from required member contributions made on an after-tax basis. If payment begins before age 62,
the limits shall be reduced so that they are actuarially equivalent to such a benefit beginning at
age 62. For police or fire fighters who are members of the system, the limit may not be reduced
for retirement before age 62, regardless of retirement age, provided that the member has
completed at least 15 years of credited service. If a member's benefit is limited by the maximum
annual retirement benefit, the member may be eligible for a benefit as determined by SDCL 3-
12C-1805. The interest assumption for purposes of determining actuarial equivalency under this 22
section is five percent annually and the mortality assumption is the Applicable Mortality Table
under § 417(e)(3) of the Internal Revenue Code, as the code is defined in § 3-12C-101Repealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002; 33 SDR 212, effective June 4, 2007; 39 SDR 227,
effective July 1, 2013; SL 2017, ch 27, § 45, effective July 1, 2017; 45 SDR 142, effective July
1, 2019; 47 SDR 138, effective July 1, 2021.
General Authority: SDCL 3-12C-711.
Law Implemented: SDCL 3-12C-711.

CHAPTER 62:01:09
SUPPLEMENTAL PENSION BENEFIT
(Repealed)
Section
62:01:09:01 Definition of participant, Repealed.
62:01:09:02 System may pay a single monthly payment, Repealed.
62:01:09:03 Proof of participant's marital status, Repealed.
62:01:09:04 Increase in supplemental pension spouse's benefit, Repealed.
62:01:09:05 No increase in value of single premium, Repealed.
62:01:09:06 Participant's status as a retiree, Repealed.
62:01:09:07 Basis for monthly benefit, Repealed.
62:01:09:08 Distributions deemed reasonable and made in good faith under federal law,
Repealed.
23
62:01:09:01. Definition of participant. For purposes of this chapter, the term,
participant, has the same meaning as the term, supplemental pension participant, as defined in
SDCL 3-12C-101Repealed.
Source: 34 SDR 297, effective June 2, 2008; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-101.

62:01:09:02. System may pay a single monthly payment. The system may pay the
participant's monthly supplemental pension benefit and the participant's monthly
retirement benefit in a single payment. However, for all other purposes, each shall be regarded as
a separate benefit, including provision of a separate Internal Revenue Service Form 1009-R for
each by the systemRepealed.
Source: 34 SDR 297, effective June 2, 2008; SL 2017, ch 27, § 46, effective July 1,
2017; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-1503.

62:01:09:03. Proof of participant's marital status. A participant who is married at the
time that the participant contracts for a supplemental pension benefit shall provide a copy of the
participant's marriage license to the systemRepealed.
Source: 34 SDR 297, effective June 2, 2008; 43 SDR 57, effective October 17, 2016; 45
SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211. 24
Law Implemented: SDCL 3-12C-1504.

62:01:09:04. Increase in supplemental pension spouse's benefit. A supplemental
pension spouse's benefit shall receive an annual increase in the same manner as does a
participant's benefitRepealed.
Source: 34 SDR 297, effective June 2, 2008; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-1504, 3-12C-1505.

62:01:09:05. No increase in value of single premium. For purposes of calculating any
beneficiary payment, a participant's single premium does not increase in value during the period
of the supplemental pension contractRepealed.
Source: 34 SDR 297, effective June 2, 2008; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-101, 3-12C-1506.

62:01:09:06. Participant's status as a retiree. For purposes of this chapter, a member
of the system who has received payment of at least one monthly retirement benefit is a retiree,
even if the member has returned to employment with a member unit, either with or without
suspension of the retirement benefitRepealed.
Source: 34 SDR 297, effective June 2, 2008; SL 2017, ch 27, § 47, effective July 1,
2017; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211. 25
Law Implemented: SDCL 3-12C-101, 3-12C-1503.

62:01:09:07. Basis for monthly benefit. A participant's monthly benefit shall be based
on the participant's single premium and the current interest rate assumption at the time of
purchase, and shall take into account the participant's age, gender, and marital status at the time
of purchase. A participant shall have no expectation or fundamental right to any particular
monthly benefit amount on any other basis, including the amount of a monthly benefit being paid
to another participantRepealed.
Source: 35 SDR 82, effective October 22, 2008; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-1502, 3-12C-1504.

62:01:09:08. Distributions deemed reasonable and made in good faith under federal
law. Pursuant to Internal Revenue Service Treasury Regulation 1.401(a)(9)-1, any supplemental
pension benefit calculation or payment is deemed to be reasonable and made in good faith under
§ 401(a)(9) of the Internal Revenue CodeRepealed.
Source: 37 SDR 214, effective May 30, 2011; 39 SDR 227, effective July 1, 2013; 45
SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-1501, 3-12C-1507, 3-12C-1508.


26
ARTICLE 62:03
DEFERRED COMPENSATION PLAN
(Repealed)
Chapter
62:03:01 Definitions, Repealed.
62:03:02 Participation in plan, Repealed.
62:03:03 Amounts of deferrals, Repealed.
62:03:04 Participants' accounts and investments, Repealed.
62:03:05 Distributions, Repealed.
62:03:06 Administration, Repealed.
62:03:07 Automatic enrollment, Repealed.

CHAPTER 62:03:01
DEFINITIONS
(Repealed)
Section
62:03:01:01 Definitions, Repealed.
62:03:01:02 Designated Roth contributions treated as deferrals, Repealed.

62:03:01:01. Definitions. In addition to the terms defined in SDCL 3-13-55, terms used
in this article mean: 27
(1) "Account," the record for each participant reflecting the amount of the participant's
deferrals, allocated investment gains and losses, and administrative charges against those
amounts;
(2) "Accounting date," the date on which an investment is valued and the total
investment return is allocated to a participant's account;
(3) "Executive director," the executive director of the South Dakota Retirement System;
(4) "Automatic enrollee," a person who becomes an employee of an automatic
enrollment unit;
(5) "Automatic enrollment unit," any unit of state or local government that participates in
the system and whose leadership chooses to extend the automatic enrollment provisions of
chapter 62:03:07 to the unit's employees;
(6) "Board," the Board of Trustees of the South Dakota Retirement System;
(7) "Compensation," total cash remuneration paid to an employee by a participating
employer for personal services rendered to the participating employer;
(8) "Deferred compensation" or "deferrals," the portion of a participant's compensation
deferred pursuant to this plan, including pre-tax contributions, designated Roth contributions, or
both;
(9) "Dependent," a participant's qualifying child or a participant's qualifying relative,
each as defined in § 152 of the Internal Revenue Code;
(10) "Designated Roth contributions," a participant's deferred compensation that is
includable in the participant's gross income at the time deferred and has been irrevocably
designated as Roth contributions by the participant in accordance with federal law; 28
(11) "Employee," a person providing services to the state or a political subdivision of the
state for which compensation is paid by a participating employer, including employees of any
agency, board, or commission of the state and its political subdivisions; members of the
Legislature; members of any board or commission of the state and any of its political
subdivisions; and persons furnishing services to the state or any political subdivision pursuant to
a contract as independent contractors;
(12) "Includible compensation," the compensation remaining after subtracting any pre-
tax contributions under the plan;
(13) "Normal retirement date," the date a participant retires pursuant to a participating
employer's retirement plan without reduced benefits;
(14) "Participant," an employee of a participating employer who elects to participate in
the plan;
(15) "Participating employer," the state of South Dakota, any of its agencies, boards, and
commissions, and any political subdivision as identified in § 62:03:02:01;
(16) "Participation agreement," the written agreement between employer and employee
under which compensation is deferred pursuant to this plan;
(17) "Pre-tax contributions," a participant's deferred compensation that is not includable
in the participant's gross income at the time deferred;
(18) "Severance from employment," the complete severance of a participant's
employment relationship with a participating employer as set out in § 457(d)(1)(A)(ii) of the
code;
(18A) "System," the South Dakota Retirement System created in SDCL chapter 3-12C; 29
(19) "Third-party administrator," a person who, pursuant to contract, handles
administration of the plan on behalf of the board and the administrator;
(20) "Unforeseeable emergency," severe financial hardship to a participant resulting from
an illness or accident of the participant, of a dependent of the participant, or of a designated
beneficiary of the participant, funeral expenses of a dependent of the participant or of a
designated beneficiary of the participant, severe loss of income that is completely beyond the
control of the participant, loss of the participant's property due to casualty, imminent foreclosure
or eviction from a participant's primary residence, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the participant;
and
(21) "Vendor," a person or organization selected by the state investment officer to
provide investment or insurance products to the planRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
24 SDR 160, effective May 24, 1998; 28 SDR 111, effective February 14, 2002; 33 SDR 212,
effective June 4, 2007; 35 SDR 82, effective October 22, 2008; 39 SDR 227, effective July 1,
2013; 41 SDR 219, effective July 1, 2015; SL 2016, ch 31, § 88, effective July 1, 2016; 45 SDR
45, effective October 8, 2018; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-13-54, 3-13-57.
Law Implemented: SDCL 3-13-49, 3-13-57.

62:03:01:02. Designated Roth contributions treated as deferrals. Unless specifically
stated otherwise, designated Roth contributions shall be treated as deferred compensation for all
purposes under the planRepealed. 30
Source: 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-57.
Law Implemented: SDCL 3-13-57.

CHAPTER 62:03:02
PARTICIPATION IN PLAN
(Repealed)
Section
62:03:02:01 Participation by political subdivisions, Repealed.
62:03:02:02 Participation by employees, Repealed.
62:03:02:03 Enrollment of participants, Repealed.
62:03:02:04 Participation agreement, Repealed.
62:03:02:05 Modification of enrollment, Repealed.
62:03:02:05.01 Employer contributions -- System contributions – Vesting, Repealed.
62:03:02:06 Revocation of enrollment, Repealed.
62:03:02:07 Designation of beneficiary – Distribution of benefits, Repealed.
62:03:02:08 Deferred compensation plans only as supplemental retirement plans,
Repealed.
62:03:02:09 Participation restrictions on or after an unforeseeable emergency distribution,
Repealed.

62:03:02:01. Participation by political subdivisions. Any political subdivision which
participates in the South Dakota retirement system provided in SDCL 3-12C or which 31
participates in a previously established retirement plan pursuant to SDCL 3-12C-304 is a
participating employer in the planRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
24 SDR 160, effective May 24, 1998; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-49.

62:03:02:02. Participation by employees. Any employee receiving compensation from
a participating employer may elect to participate in the planRepealed.
Source: 14 SDR 57, effective October 18, 1987.
General Authority: SDCL 3-13-49, 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:02:03. Enrollment of participants. An eligible employee may become a
participant by signing a participation agreement. Participation becomes effective on the first day
of the month following the date on which the participation agreement is signed. If a new
employee signs and files a participation agreement on the employee's date of hire, that agreement
may become effective immediately. The plan may not accept any deferrals unless a signed
participation agreement is on file in the office of the executive director or the third-party
administratorRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998;
SL 2016, ch 31, § 89, effective July 1, 2016.
General Authority: SDCL 3-13-54. 32
Law Implemented: SDCL 3-13-49.

62:03:02:04. Participation agreement. The executive director shall establish a form of
participation agreement which includes the name, address, social security number, and birthdate
of the participant and the participant's beneficiary; the name and address of the participant's
employer; the participant's selection of investment alternatives; and any other information
necessary for the administration of the planRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998;
SL 2016, ch 31, § 90, effective July 1, 2016.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-50.

62:03:02:05. Modification of enrollment. Subject to the limitations contained in this
article, a participant may modify the terms of the participant's participation at any timeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-49.

62:03:02:05.01. Employer contributions -- System contributions -- Vesting. A
participating employer or the system may make contributions to a participant's account on behalf
of the participant, except during an automatic enrollee's 90-day opt-out period as outlined in
§ 62:03:07:03. Any employer contributions shall be pursuant to a written agreement as outlined
in SDCL 3-13-49.1. The agreement may require contributions by a participant in order to qualify 33
for employer contributions and may establish employer contribution rates that partially or fully
match the participant's contributions. The board shall establish any system contributions. The
board may require contributions by a participant in order to qualify for system contributions and
may establish system contribution rates that partially or fully match the participant's
contributions. Any employer contributions or system contributions shall vest immediately with
the participantRepealed.
Source: 35 SDR 82, effective October 22, 2008.
General Authority: SDCL 3-13-45.
Law Implemented: SDCL 3-13-56.

62:03:02:06. Revocation of enrollment. A participant may cease making deferrals at
any timeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-49.

62:03:02:07. Designation of beneficiary – Distribution of benefits. A participant may
designate a beneficiary to receive the participant's benefits under the plan in case of the death of
the participant. If the beneficiary does not survive the participant or if no beneficiary is
designated, the participant's benefits shall be paid as follows:
(1) To the participant's surviving spouse;
(2) If there is no surviving spouse, then to all surviving children of the participant,
irrespective of age, on a share-alike basis; or 34
(3) If there is no surviving spouse and there are no surviving children, then to the
participant's estateRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 33
SDR 212, effective June 4, 2007.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.
62:03:02:08. Deferred compensation plans only as supplemental retirement plans.
No political subdivision may maintain as its principal retirement plan a deferred compensation
plan unless the deferred compensation plan was established prior to 1974. Any deferred
compensation plan established pursuant to SDCL chapter 3-13 may only be supplemental or
secondary to the political subdivision's primary planRepealed.
Source: 33 SDR 212, effective June 4, 2007; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-12C-211.
Law Implemented: SDCL 3-12C-304, 3-12C-305, 3-13-49.l.

62:03:02:09. Participation restrictions on or after an unforeseeable emergency
distribution. If a participant receives approval of an unforeseeable emergency distribution
pursuant to § 62:03:05:06, the participant shall cease deferrals to the plan before the distribution
may be completed. The participant may not resume deferrals to the plan for six months after the
distributionRepealed.
Source: 36 SDR 21, effective August 17, 2009.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54. 35

CHAPTER 62:03:03
AMOUNTS OF DEFERRALS
(Repealed)
Section
62:03:03:01 Minimum deferral, Repealed.
62:03:03:02 Maximum deferral, Repealed.
62:03:03:02.01 Roth contributions allowed -- Roth and other deferrals permitted in same
year -- Limits, Repealed.
62:03:03:03 Catch up, Repealed.
62:03:03:03.01 Alternative catch up, Repealed.
62:03:03:03.02 Mandated choice between catch up provisions, Repealed.
62:03:03:04 Repealed.

62:03:03:01. Minimum deferral. A participant may not defer less than $25 a
monthRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989.
General Authority: SDCL 3-13-49, 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:03:02. Maximum deferral. Except as provided in § 62:03:03:03, a participant
may not defer more in any plan year than the lesser of the applicable dollar amount associated
with a particular year pursuant to § 457(e)(15)(A) of the code, as indexed after 2006 pursuant to 36
§ 457(e)(15)(B) of the code, or one hundred percent of the participant's includible
compensationRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:03:02.01. Roth contributions allowed -- Roth and other deferrals permitted in
same year -- Limits. A participant may designate that all or a portion of the participant's
deferred compensation be treated as designated Roth contributions. A participant may defer both
designated Roth contributions and pre-tax contributions in the same year. However, total
deferrals may not exceed the annual deferral limit provided in § 62:03:03:02Repealed.
Source: 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-57.
Law Implemented: SDCL 3-13-57.

62:03:03:03. Catch up. Effective for each of the three calendar years immediately
preceding a participant's normal retirement date, a participant may defer twice the dollar amount
specified in § 62:03:03:02Repealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54. 37

62:03:03:03.01. Alternative catch up. Effective for any year that a participant is age 50
years or older, the participant may make an additional elective deferral equal to the applicable
dollar amount associated with a particular year pursuant to § 414(v)(2)(B) of the code, as
indexed after December 31, 2006, pursuant to § 414(v)(2)(C) of the code, in addition to the
participant's maximum deferral under § 62:03:03:02Repealed.
Source: 28 SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:03:03.02. Mandated choice between catch up provisions. A participant may not
exercise both the provisions of § 62:03:03:03 and the provisions of § 62:03:03:03.01 in the same
yearRepealed.
Source: 28 SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

CHAPTER 62:03:04
PARTICIPANTS' ACCOUNTS AND INVESTMENTS
(Repealed)
Section
62:03:04:01 Repealed. 38
62:03:04:02 Ownership of deferrals and investments -- Assets held in trust -- Time limit
on transfers, Repealed.
62:03:04:03 Election of investments by participants, Repealed.
62:03:04:04 Transfer of funds, Repealed.
62:03:04:05 Establishment of accounts, Repealed.
62:03:04:05.01 Additional recordkeeping requirements -- Designated Roth accounts,
Repealed.
62:03:04:06 Allocation of investment return -- Accounting date, Repealed.
62:03:04:07 Accounting dates and valuation, Repealed.
62:03:04:08 Participant statements, Repealed.

62:03:04:02. Ownership of deferrals and investments – Assets held in trust -- Time
limit on transfers. A participant does not have actual ownership of deferrals and investments but
has a contractual right to receive benefits under the plan. In accordance with § 457(g) of the
code, all amounts of compensation deferred under the plan, all property and rights purchased
with such amounts, and all income attributable to such amounts shall be held in trust for the
exclusive benefit of the participant until paid or made available to the participant or the
participant's beneficiary pursuant to the plan. Any trust under the plan shall be established
pursuant to a written agreement that constitutes a valid trust under the law of South Dakota.
All amounts of compensation deferred under the plan shall be transferred to a trust
established under the plan within a period that is not longer than is reasonable for the proper
administration of the accounts of participants. To comply with this requirement, all amounts of
compensation deferred under the plan shall be transferred to a trust established under the plan not 39
later than 15 business days after the end of the month in which the compensation would
otherwise have been paid to the employeeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
24 SDR 160, effective May 24, 1998; 28 SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-53, 3-13-54.

62:03:04:03. Election of investments by participants. Each participant may elect to
have deferrals invested in one or more of the investment alternatives selected by the state
investment officer. A participant may change the election for future deferrals at any
timeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:04:04. Transfer of funds. Subject to any limitations imposed by a vendor or by a
third-party administrator, a participant may elect to transfer any portion of the account balance
from one offered investment alternative to another at any time, provided notice is given to the
third-party administrator. Any costs associated with such a transfer shall be borne by the
participant and shall be deducted from the accountRepealed.
Source: 14 SDR 57, effective October 18, 1987; 14 SDR 95, effective January 10, 1988;
24 SDR 160, effective May 24, 1998. 40
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-53, 3-13-54.

62:03:04:05. Establishment of accounts. An account shall be established for each
participant's pre-tax contributions. A separate account shall be established for each participant's
designated Roth contributions. The accounts shall be the basis for any distribution to the
participant or to the participant's beneficiary, surviving spouse, surviving children, or estate
pursuant to § 62:03:02:07Repealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 39
SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-54, 3-13-57.
Law Implemented: SDCL 3-13-53, 3-13-54, 3-13-57.

62:03:04:05.01. Additional recordkeeping requirements -- Designated Roth
accounts. No contributions other than designated Roth contributions and properly attributable
investment return may be credited to a participant's designated Roth account. The plan shall
maintain separate recordkeeping for each designated Roth account and shall record the year in
which the participant first made a designated Roth contributionRepealed.
Source: 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-57.
Law Implemented: SDCL 3-13-57.
41
62:03:04:06. Allocation of investment return – Accounting date. The total investment
return on any offered investment shall be allocated to the account of each participant based on
the proportion the participant's account bears to all other accounts which have been invested in
the same investment alternative. Allocations shall be made on each accounting date. The last day
of each calendar quarter is an accounting date. The board may provide additional accounting
datesRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-53, 3-13-54.

62:03:04:07. Accounting dates and valuation. Each offered investment alternative
shall be valued on each accounting date. The valuation shall be at market value. Any charges
against the value shall be explicitly disclosedRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-53, 3-13-54.

62:03:04:08. Participant statements. Each participant shall be provided with a
statement of the participant's account by no later than 45 days after the close of each plan
quarterRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-53, 3-13-54. 42
CHAPTER 62:03:05
DISTRIBUTIONS
(Repealed)
Section
62:03:05:01 Conditions for distribution, Repealed.
62:03:05:02 Selection of normal retirement date -- Amendment, Repealed.
62:03:05:03 Severance from employment, Repealed.
62:03:05:04 Beginning of distribution, Repealed.
62:03:05:05 Form of distribution -- Period of distribution, Repealed.
62:03:05:05.01 Distribution directed by participant, Repealed.
62:03:05:06 Unforeseeable emergency, Repealed.
62:03:05:07 In-service distributions of small amounts -- Calculation -- Handling of certain
involuntary distributions, Repealed.
62:03:05:08 Distributions deemed reasonable and made in good faith under federal law,
Repealed.

62:03:05:01. Conditions for distribution. Deferrals may only be distributed if one of
the following conditions has occurred;
(1) Severance from employment with a participating employer;
(2) Death of the participant;
(3) An unforeseeable emergency as set out in § 62:03:05:06;
(4) Requirements are satisfied for an in-service distribution as set out in § 62:03:05:07;
or 43
(5) A participant is called to perform qualified military service for a period in excess of
30 daysRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
28 SDR 111, effective February 14, 2002; 33 SDR 212, effective June 4, 2007; 41 SDR 219,
effective July 1, 2015.
General Authority: SDCL 3-13-49, 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:02. Selection of normal retirement date – Amendment. A participant may
select a normal retirement date. The normal retirement date may not be earlier than the date on
which the participant severs the participant's employment. If a participant does not make a
selection, the participant's normal retirement date is as defined in SDCL chapter 3-12CRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:03. Severance from employment. If a participant returns to employment or
enters into a contract with a participating employer within 30 days after a severance from
employment, no severance from employment occurs for the purposes of the plan. If a participant
provided contractual services to a participating employer, severance from employment occurs at
the expiration of all contracts with a participating employer without expectation of any future
employment or contractual relationship with any participating employerRepealed. 44
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
28 SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-49, 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:04. Beginning of distribution. Distribution of deferrals to a participant shall
begin no earlier than 30 days following the participant's severance from employment with a
participating employer. Any irrevocable election of a benefit commencement date made by a
participant or a beneficiary prior to January 1, 2002, and any defaulted distribution other than a
defaulted distribution to an annuity option are revocable as of January 1, 2002. No distribution to
an independent contractor of a participating employer may begin until one year after the date on
which all contracts with any participating employer have expired. Notwithstanding the
foregoing, distributions of deferrals must be made in accordance with SDCL 3-13-58 to 3-13-63,
inclusiveRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
24 SDR 160, effective May 24, 1998; 28 SDR 111, effective February 14, 2002; 47 SDR 138,
effective July 1, 2021.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:05. Form of distribution – Period of distribution. A participant may elect to
receive the participant's distribution in any of the following forms:
(1) A lump sum; 45
(2) Equal monthly installments over a fixed period; or
(3) Any other form offered by the third-party administrator.
The election must be made prior to the time any amounts become payable. A participant
or a beneficiary who has chosen a payment form other than an annuity shall have the ability to
change that payment option, subject to any administrative restrictions and charges established by
the board.
If the distribution begins prior to the participant's death, the entire interest shall be
distributed over the life expectancy of the participant or the life expectancies of the participant
and a designated beneficiary. Any amount not distributed during the participant's life must be
distributed after the participant's death at least as rapidly as under the distribution method being
used on the date of the participant's death. If the distribution begins after the participant's death,
the entire amount payable to the participant must be paid during a period of no more than five
years, unless the distribution commences within one year and the participant's spouse is the
named beneficiary, then during the life expectancy of the surviving spouseRepealed.
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
24 SDR 160, effective May 24, 1998; 28 SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:05.01. Distribution directed by participant. A participant may direct from
which contributions a withdrawal, including a withdrawal on account of an unforeseeable
emergency, shall be made. The participant may direct that the withdrawal be taken from either 46
pre-tax contributions or designated Roth contributions, or from both pre-tax contributions and
designated Roth contributionsRepealed.
Source: 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-57.
Law Implemented: SDCL 3-13-57.

62:03:05:06. Unforeseeable emergency. If a participant suffers an unforeseeable
emergency, the participant may request an immediate distribution of all or part of the
participant's deferrals. The request shall be made through an application to the third-party
administrator. If the third-party administrator approves the request, the distribution shall be made
to the extent necessary to satisfy the need, including payment of federal income tax withholding,
if necessary. If the third-party administrator denies the request, the participant may appeal the
denial by giving notice of intention to appeal within 30 days after the date of the notice of denial.
No distribution may be made to the extent that the unforeseeable emergency may be relieved
through reimbursement or compensation by insurance or otherwise, by liquidation of the
participant's assets to the extent that the liquidation does not cause severe financial hardship, or
by discontinuation of deferrals under the plan. The need to send a participant's child to college,
divorce proceedings, or the desire to purchase a home are not considered unforeseeable
emergencies. Any amount that is distributed on account of an unforeseeable emergency is not an
eligible rollover distribution and the participant may not elect to have any portion of the
distribution paid directly to an eligible retirement plan.
The provisions of this section do not apply if a distribution may be made pursuant to
§ 62:03:05:07Repealed. 47
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 28
SDR 111, effective February 14, 2002; 33 SDR 212, effective June 4, 2007; 34 SDR 297,
effective June 2, 2008; SL 2016, ch 31, § 91, effective July 1, 2016; 45 SDR 142, effective July
1, 2019; 47 SDR 138, effective July 1, 2021.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:07. In-service distributions of small amounts -- Calculation -- Handling of
certain involuntary distributions. Any other provision of this chapter notwithstanding, a
participant may receive an in-service distribution from the plan, or the executive director may
render an involuntary distribution to the participant, under the following conditions:
(1) The participant is inactive in the plan and has made no deferrals for at least two years
prior to the distribution;
(2) The total distribution – whether elective or involuntary or both – does not exceed
$5,000; and
(3) The participant previously has not received either an elective or an involuntary
distribution under the plan.
If implementing subdivision (2) of this section, the value of a participant's nonforfeitable
account balance shall be determined without regard to that portion of the account balance
attributable to rollover contributions, and earning allocable thereto, within the meaning of
§§ 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e) of the Internal Revenue Code.
If an involuntary distribution is in excess of $1,000 and if the participant does not elect to
have the distribution transferred to an eligible retirement plan pursuant to § 401(a)(31) of the 48
Internal Revenue Code or does not elect to receive the distribution directly, the distribution shall
be transferred to an individual retirement plan of a designated trustee or issuer. The executive
director shall notify the participant in writing that the distribution may be transferred to another
individual retirement planRepealed.
Source: 24 SDR 160, effective May 24, 1998; 28 SDR 111, effective February 14, 2002;
SL 2016, ch 31, § 92, effective July 1, 2016.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:05:08. Distributions deemed reasonable and made in good faith under federal
law. Pursuant to Internal Revenue Service Treasury Regulation 1.401(a)(9)-1, any distribution
under §§ 62:03:05:04 and 62:03:05:05 is deemed to be reasonable and made in good faith under
§ 401(a)(9) of the Internal Revenue CodeRepealed.
Source: 37 SDR 214, effective May 30, 2011; 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

CHAPTER 62:03:06
ADMINISTRATION
(Repealed)
Section
62:03:06:01 Conflict of interest, Repealed.
62:03:06:02 Assignment, Repealed. 49
62:03:07:02.01 Members employed by participating employers other than the state before
automatic enrollment established, Repealed.
62:03:06:03 Trustee-to-trustee transfer and rollover into account, Repealed.
62:03:06:03.01 Trustee-to-trustee transfer from account, Repealed.
62:03:06:03.02 Rollover from account, Repealed.
62:03:06:03.03 In-plan Roth conversion, Repealed.
62:03:06:04 Operation of plan for benefit of participants -- Assets held in trust, Repealed.
62:03:06:05 Repealed.
62:03:06:06 Filing of required forms, Repealed.
62:03:06:07 Correction of errors -- Excess deferrals, Repealed.
62:03:06:08 Correction of errors -- Payroll error, Repealed.

62:03:06:01. Conflict of interest. No employee of a participating employer and no
spouse or dependent of the employee may act as or represent a third party administrator or a
vendor in a matter concerning the plan, except that the South Dakota investment council and its
employees may invest all or part of the fundRepealed.
Source: 14 SDR 57, effective October 18, 1987; 28 SDR 111, effective February 14,
2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-51.1, 3-13-54.
50
62:03:06:02. Assignment. No participant may assign or otherwise alienate any right to
benefits under the plan except through the provisions of a qualified domestic relations order as
defined in § 414(p) of the codeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 33 SDR 212, effective June 4, 2007.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-51.1, 3-13-54.

62:03:06:03. Trustee-to-trustee transfer and rollover into account. To the extent
permitted by law, a participant may transfer a portion or all of the participant's account in another
plan which is eligible under § 401, 403(b), 408, or 457(b) of the code into this plan by trustee-to-
trustee transfer or by rollover. The plan shall account for such amounts separately. A participant
may rollover designated Roth contributions into the plan only if the contributions are a direct
rollover from another plan that permits designated Roth contributions as described in section
402A(e)(1) of the code and only to the extent the rollover is permitted under section 402(c). The
plan shall establish and maintain separate recordkeeping for any Roth rollover paid to the plan
from any eligible retirement plan and shall record the year in which the participant first made a
designated Roth rolloverRepealed.
Source: 14 SDR 57, effective October 18, 1987; 28 SDR 111, effective February 14,
2002; 34 SDR 297, effective June 2, 2008; 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-54, 3-13-57.
Law Implemented: SDCL 3-13-54, 3-13-57.
51
62:03:06:03.01. Trustee-to-trustee transfer from account. For the purpose of
acquiring credited service in a qualified governmental defined benefit retirement plan as
identified under § 401(a) and defined in § 414(d) of the code, a participant may transfer a portion
or all of the participant's account in the plan by trustee-to-trustee transfer to the government
defined benefit retirement planRepealed.
Source: 28 SDR 111, effective February 14, 2002.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:06:03.02. Rollover from account. A participant or a participant's surviving
spouse may transfer a portion or all of the participant's account by rollover to another plan which
is eligible under § 401, 403(b), 408, 408A, or 457 of the code. A participant's beneficiary who is
not the participant's surviving spouse may transfer a portion or all of the participant's account by
rollover to a plan which is eligible under § 408 or 408A of the codeRepealed.
Source: 28 SDR 111, effective February 14, 2002; 33 SDR 212, effective June 4, 2007;
34 SDR 297, effective June 2, 2008; 35 SDR 82, effective October 22, 2008.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:06:03.03. In-plan Roth conversion. A participant may convert his or her pre-tax
contributions to designated Roth contributions within the plan. The amount of the in-plan Roth
conversion is subject to ordinary income taxes in the year of the conversion, and withholding of
federal income tax from the conversion amount is prohibited. Once an in-plan Roth conversion is 52
processed it is irrevocable. The amount of an in-plan Roth conversion shall continue to be taken
into consideration for mandatory distributions. The plan shall establish and maintain separate
recordkeeping for any in-plan Roth conversion made within the plan and shall record the year in
which the participant first made a conversionRepealed.
Source: 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-57.
Law Implemented: SDCL 3-13-57.

62:03:06:04. Operation of plan for benefit of participants – Assets held in trust. The
plan and its assets, until made available to a participant or a beneficiary, shall be maintained in
trust for the sole benefit of the participants of the planRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-53.

62:03:06:06. Filing of required forms. Any form required under the plan which causes
a change on a participant's payroll must be received in the office of the third-party administrator
prior to the first of the month in which the change is to become effective, and the participant
must notify the participant's employer prior to the last date on which the participant's employer
can make payroll changes effective. If a form is filed too late for a change to be made effective
for the next following pay period, the change becomes effective in the subsequent pay
periodRepealed. 53
Source: 14 SDR 57, effective October 18, 1987; 15 SDR 100, effective January 8, 1989;
24 SDR 160, effective May 24, 1998.
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

62:03:06:07. Correction of errors -- Excess deferrals. If, due to an error, a participant
defers more than the permissible amount, the third-party administrator may correct the error by
returning the excess deferral to the participant. For any plan year in which a participant makes
both pre-tax contributions and designated Roth contributions, any corrective distribution shall be
taken first from the participant's designated Roth contributions, and then, if required, from the
pre-tax contributions. However, a participant may elect a different method of
distributionRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998; 39
SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13-54, 3-13-57.
Law Implemented: SDCL 3-13-54, 3-13-57.

62:03:06:08. Correction of errors -- Payroll error. If, due to a payroll error, a
participant's deferral is deposited in an investment alternative other than the one selected by the
participant, the third-party administrator may correct the error by transferring the participant's
deferral to the proper investment alternative, subject to any limitations which may be imposed by
the vendor. No retroactive adjustment may be madeRepealed.
Source: 14 SDR 57, effective October 18, 1987; 24 SDR 160, effective May 24, 1998. 54
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-54.

CHAPTER 62:03:07
AUTOMATIC ENROLLMENT
(Repealed)
Section
62:03:07:01 Automatic enrollment units -- Automatic escalation -- Decision -- Rescission
of unit's status -- Automatic enrollee's status, Repealed.
62:03:07:01.01 Automatic escalation for participating employers that became automatic
enrollment units prior to July 1, 2015, Repealed.
62:03:07:01.02 Start of automatic escalation at election of unit -- Notice required, Repealed.
62:03:07:02 Automatic enrollment, Repealed.
62:03:07:02.01 Members employed by participating employers other than the state before
automatic enrollment established, Repealed.
62:03:07:03 Amount of initial deferral -- Election to opt out -- Time limit -- Refund --
Future participation, Repealed.
62:03:07:03.01 Automatic escalation -- No escalation in first year of hire, Repealed.
62:03:07:04 Automatic enrollment deemed contract -- Exceptions, Repealed.
62:03:07:05 Qualified default investment alternative -- Secondary alternative -- Liability,
Repealed.
62:03:07:06 Notices required for automatic enrollment, Repealed. 55
62:03:07:06.01 Notice of automatic escalation required -- Election to opt out -- Automatic
enrollee status, Repealed.
62:03:07:07 Advance authorization not required -- Exception to other laws, Repealed.

62:03:07:01. Automatic enrollment units -- Automatic escalation -- Decision --
Rescission of unit's status -- Automatic enrollee's status. Any participating employer may
become an automatic enrollment unit. Automatic enrollment includes automatic escalation for
any participating employer becoming an automatic enrollment unit after June 30, 2015. The
decision to become an automatic enrollment unit shall be made by the elected official, the
appointed official, or the governing body in charge of the participating employer. The
participating employer shall become an automatic enrollment unit after notice of the decision has
been delivered in writing to the system. An automatic enrollment unit may choose to rescind
such status at a later date and may do so by delivering written notice of that decision to the
system. However, if such a rescission occurs, the status of any automatic enrollee, including any
automatic enrollee with automatic escalation, who was enrolled in the plan is not
affectedRepealed.
Source: 35 SDR 82, effective October 22, 2008; 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(2),(10).

62:03:07:01.01. Automatic escalation for participating employers that became
automatic enrollment units prior to July 1, 2015. A participating employer who became an
automatic enrollment unit prior to July 1, 2015, may elect to add automatic escalation for its 56
current and future permanent employees. The decision shall be made by the elected official, the
appointed official, or the governing body in charge of the unit and becomes effective after notice
of the decision has been delivered in writing to the systemRepealed.
Source: 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(2), (10).

62:03:07:01.02. Start of automatic escalation at election of unit -- Notice required.
An automatic enrollment unit may elect to commence automatic escalation in either January or
July. Automatic escalation commences the January or July immediately after the automatic
enrollment unit's decision is delivered in writing to the system as long as notice of the decision is
received no later than September 15 for a January start or March 15 for a July start. If the notice
of the unit's decision is received after those dates, automatic escalation commences the following
January or July, as elected by the unitRepealed.
Source: 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(2),(10).

62:03:07:02. Automatic enrollment. Any person who becomes a permanent employee
of a participating employer after the participating employer becomes an automatic enrollment
unit becomes an automatic enrollee in the plan. Any permanent employee of the state who is not
contributing to the plan on June 30, 2019, becomes an automatic enrollee in the plan on July 1,
2019. Any other permanent employee who is not contributing to the plan and who is employed 57
by an automatic enrollment unit that elects automatic enrollment pursuant to § 62:03:07:02.01
becomes an automatic enrollee in the planRepealed.
Source: 35 SDR 82, effective October 22, 2008; 41 SDR 219, effective July 1, 2015; SL
2018, ch 34, § 2, effective July 1, 2018; SL 2019, ch 23, § 12, effective July 1, 2019; 45 SDR
142, effective July 1, 2019.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(2).

62:03:07:02.01. Members employed by participating employers other than the state
before automatic enrollment established. An automatic enrollment unit other than the state
may elect to automatically enroll the unit's permanent employees who are not contributing to the
deferred compensation plan. The automatic enrollment unit may elect to commence automatic
enrollment for these employees on the January or July immediately after the automatic
enrollment unit's decision is delivered in writing to the system as long as notice of the decision is
received no later than September 15 for a January start or March 15 for a July startRepealed.
Source: SL 2018, ch 34, § 3, effective July 1, 2018; SL 2019, ch 23, § 13, effective July
1, 2019.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(2).

62:03:07:03. Amount of initial deferral -- Election to opt out -- Time limit -- Refund
-- Future participation. Upon initially becoming an automatic enrollee, twenty-five dollars per
month shall be deferred to the plan from the compensation of an automatic enrollee unless the 58
automatic enrollee elects not to participate in the plan within 90 days after his or her first pay
date and gives notice of that election to the system, or unless the automatic enrollee elects to
defer an increased amount. The deferred compensation and associated gains or losses of an
automatic enrollee who elects not to participate shall be refunded to the automatic enrollee
within 30 days of receipt of the final contribution by the plan. An automatic enrollee who elects
not to participate, however, is not barred from future voluntary participation in the planRepealed.
Source: 35 SDR 82, effective October 22, 2008; 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(3), (4), (5).

62:03:07:03.01. Automatic escalation -- No escalation in first year of hire. Beginning
in 2016 and each year thereafter, automatic escalation for an automatic enrollee means an
additional ten dollars per month shall be deferred to the plan from the compensation of an
automatic enrollee of an automatic enrollment unit that elected automatic escalation or became
an automatic enrollment unit after June 30, 2015. If the enrollee has one or more investment
alternatives or a Roth account, or any combination thereof, the additional dollars shall be
prorated in the same manner as the enrollee's deferral before the escalation. However, no
automatic escalation may occur for an automatic enrollee unless at least one year has passed
from the enrollee's hire date on which the enrollee became an automatic enrollee. In addition, no
automatic escalation may occur for an automatic enrollee who opts out of automatic escalation or
has lowered his or her deferral to zeroRepealed.
Source: 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56. 59
Law Implemented: SDCL 3-13-56(10).

62:03:07:04. Automatic enrollment deemed contract -- Exceptions. Automatic
enrollment pursuant to § 62:03:07:02 is deemed a contract to participate and to defer the amount
specified in § 62:03:07:03 or revised by § 62:03:07:03.01 or the amount specified by the enrollee
until the automatic enrollee chooses to withdraw from the planRepealed.
Source: 35 SDR 82, effective October 22, 2008; 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(3), (10).

62:03:07:05. Qualified default investment alternative -- Secondary alternative --
Liability. The deferred compensation of an automatic enrollee shall be deposited in a qualified
default investment alternative selected by the state investment officer pursuant to SDCL 3-13-
51.1 unless the automatic enrollee affirmatively selects another investment alternative within the
plan. The state investment officer shall select a qualified default investment alternative for
deferrals from automatic enrollees during the initial 90-day opt-out period and may select an
alternative qualified default investment alternative for accumulated deferrals and subsequent
deferrals from automatic enrollees who exceed the 90-day opt-out period but do not select
another investment alternative. Neither the state investment officer, the system, the third-party
administrator, nor the automatic enrollment unit may be held liable for any loss sustained by an
automatic enrollee whose deferrals are either voluntarily or involuntarily invested in either
qualified default investment alternativeRepealed.
Source: 35 SDR 82, effective October 22, 2008. 60
General Authority: SDCL 3-13-54.
Law Implemented: SDCL 3-13-56.

62:03:07:06. Notices required for automatic enrollment. Within 15 days of the
system's receipt of the automatic enrollee's initial deferral, the system shall provide notice to the
automatic enrollee of the enrollee's right not to participate in the plan.
Within one year after an automatic enrollee's first compensation deferral and annually
thereafter, the system shall provide notice to the automatic enrollee of the enrollee's right to
amend his or her deferral amount and the enrollee's right to amend his or her choice of
investment alternativesRepealed.
Source: 35 SDR 82, effective October 22, 2008; 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(8).

62:03:07:06.01. Notice of automatic escalation required -- Election to opt out --
Automatic enrollee status. The system shall provide no less than 60 days' notice of each annual
automatic escalation pursuant to § 62:03:07:03.01. An enrollee may elect not to participate in
automatic escalation or may elect to defer an additional amount that is less than or greater than
ten dollars. The enrollee shall annually provide notice of any such election no later than
December 15 for an enrollee of an automatic enrollment unit that elected a January start or June
15 for an enrollee of an automatic enrollment unit that elected a July start. If the enrollee elects
not to participate or to defer a lesser amount after the applicable date provided in this section, the
system may not refund the automatic escalation amount to the enrollee. If an enrollee elects not 61
to participate in automatic escalation or elects to defer an additional amount that is less than or
greater than ten dollars, the status of the automatic enrollee pursuant to § 62:03:07:02 is not
affectedRepealed.
Source: 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(10).
62:03:07:07. Advance authorization not required -- Exception to other laws.
Automatic enrollment or automatic escalation pursuant to this chapter does not require advance
authorization by the automatic enrollee. This provision is an exception to the provisions of any
state law requiring employee authorization for a payroll deduction or any similar ordinance of a
local automatic enrollment unitRepealed.
Source: 35 SDR 82, effective October 22, 2008; 41 SDR 219, effective July 1, 2015.
General Authority: SDCL 3-13-54, 3-13-56.
Law Implemented: SDCL 3-13-56(9).

ARTICLE 62:04
SPECIAL PAY RETIREMENT PROGRAM
(Repealed)
Chapter
62:04:01 Definitions and general terminology, Repealed.
62:04:02 Administration, Repealed.
62:04:03 Distributions, Repealed.
62
CHAPTER 62:04:01
DEFINITIONS AND TERMINOLOGY
(Repealed)
Section
62:04:01:01 Definitions in general, Repealed.
62:04:01:02 Definition of specific terms, Repealed.
62:04:01:03 Qualifications in regard to compensation, Repealed.

62:04:01:01. Definitions in general. Terms used in this article have the same meaning
as they are defined in SDCL 3-12C-101 or in SDCL 3-13A-2, unless otherwise so
specifiedRepealed.
Source: 31 SDR 191, effective May 22, 2005; 45 SDR 142, effective July 1, 2019.
General Authority: SDCL 3-13A-4.
Law Implemented: SDCL 3-13A-4.

62:04:01:02. Definition of specific terms. Terms used in this article mean:
(1) "Direct rollover," a payment by the program to an eligible retirement plan specified
by the participant;
(2) "Distributee," a participant or former participant; a participant's or former
participant's surviving spouse with regard to the interest of the surviving spouse; or a
participant's or former participant's former spouse who is an alternate payee under a qualified
domestic relations order, as defined in § 414(p) of the code, with regard to the interest of the
former spouse; 63
(3) "Eligible retirement plan," an individual retirement account described in § 408(a) of
the code; an individual retirement annuity described in § 408(b) of the code; a Roth individual
retirement plan described in § 408A of the code; an annuity plan described in § 403(a) of the
code; or a qualified plan described in § 401 of the code, any of which accepts a participant's or a
participant's surviving spouse's rollover distribution, except that in the case of an eligible rollover
distribution to a beneficiary who is not a participant's surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity;
(4) "Eligible rollover distribution," any distribution of all or any portion of the balance to
the credit of the participant, except that an eligible rollover distribution does not include any
distribution that is one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life or life expectancy of the participant or the joint lives or joint life
expectancies of the participant and the participant's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent the distribution is required under
§ 401(a)(9) of the code; or any other distribution that is reasonably expected to total less than
two hundred dollars during a single plan year;
(5) "Plan year," a calendar year ending on December 31Repealed.
Source: 31 SDR 191, effective May 22, 2005; 34 SDR 297, effective June 2, 2008.
General Authority: SDCL 3-13A-4.
Law Implemented: SDCL 3-13A-4.

62:04:01:03. Qualifications in regard to compensation. A participant's compensation,
for purposes of application of the provisions of SDCL 3-13A-5, paid or made available during a
plan year shall include any elective deferral, as defined in § 402(g)(3) of the code, and any 64
amount which is contributed or deferred by the participant's employer at the election of the
participant and which is not includible in the gross income of the participant by reason of § 125,
§ 132(f)(4), or § 457(b) of the codeRepealed.
Source: 31 SDR 191, effective May 22, 2005; 39 SDR 227, effective July 1, 2013.
General Authority: SDCL 3-13A-4.
Law Implemented: SDCL 3-13A-5.

CHAPTER 62:04:02
ADMINISTRATION
(Repealed)
Section
62:04:02:01 Month of a member's birth date, Repealed.
62:04:02:01. Month of a member's birth date. For purposes of participation in the
program, the first day of the month in which a member's birthday falls shall be considered to be
the member's birthdayRepealed.
Source: 31 SDR 191, effective May 22, 2005.
General Authority: SDCL 3-13A-4.
Law Implemented: SDCL 3-13A-4.

CHAPTER 62:04:03
DISTRIBUTIONS
(Repealed)
Section 65
62:04:03:01 Direct rollovers, Repealed.
62:04:03:02 Repealed.

62:04:03:01. Direct rollovers. Pursuant to SDCL 3-13A-20, a participant or a
participant's surviving spouse may elect, at the time and in the manner prescribed by the third-
party administrator, to have any portion of an eligible rollover distribution paid in a direct
rollover to an eligible retirement plan specified by the participant or the surviving spouse if the
plan is an eligible plan under § 401, 403(b), 408, 408A, or 457 of the code. A participant's
beneficiary who is not the participant's surviving spouse may elect, at the time and in the manner
prescribed by the third-party administrator, to have any portion of an eligible rollover
distribution paid in a direct rollover to a plan specified by the beneficiary if the plan is an eligible
plan under § 408 or 408A of the codeRepealed.
Source: 31 SDR 191, effective May 22, 2005; 33 SDR 212, effective June 4, 2007; 35
SDR 82, effective October 22, 2008.
General Authority: SDCL 3-13A-4.
Law Implemented: SDCL 3-13A-20.