Changes to Existing Law

26.555.19 26.555.20 101st Legislative Session 65 2026 South Dakota Legislature Senate Bill 65 Introduced by: The Chair of the Committee on Retirement Laws at the request of the South Dakota Retirement System Underscores indicate new language. Overstrikes indicate deleted language. ENROLLED AN ACT ENTITLED An Act to revise certain required minimum distribution provisions of the South 1 Dakota Retirement System. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 3-13-60 be AMENDED: 4 3-13-60. If a participant dies died on or before December 31, 2021, and before 5 required distribution of the participant's benefits has begun commenced, the participant's 6 interest shall must be distributed as follows: 7 (1) If the participant has a surviving spouse, the surviving spouse shall must receive 8 benefits over the life of the surviving spouse beginning as soon as administratively 9 possible and effective the month after the participant's death; or 10 (2) If the participant has no surviving spouse, the participant's remaining interest shall 11 must be distributed in a lump sum payment to the designated beneficiary within 12 five years from the date of the participant's death. 13 Section 2. That § 3-13-62 be AMENDED: 14 3-13-62. Notwithstanding any contrary provisions, effective for any participant 15 death after December 31, 2021, the following distribution provisions shall take effect are 16 effective for any participant death after December 31, 2021, subject to any regulations or 17 other guidance issued under the Setting Every Community Up for Retirement 18 Enhancement (SECURE) Act of 2019, Act, Pub. L. No. 116-94, Div. O, 133 Stat. 2534 (2019) 19 or Pub. L. No. 117-328, Div. T, 136 Stat. 4459 (2022): 20 (1) If the participant dies before the distribution of his or her the participant's entire 21 account (, account, regardless of whether any distributions had begun commenced before 22 the participant's death), death, and the participant has a designated beneficiary: 23 26.555.19 2 65 Underscores indicate new language. Overstrikes indicate deleted language. (a) The entire account shall must be distributed to the designated beneficiary 1 by December thirty-first of the calendar year containing the tenth 2 anniversary of the participant's death; 3 26.555.20 2 65 SB65 ENROLLED (b) Notwithstanding subsection (a), if the designated beneficiary is an eligible 4 designated beneficiary, the eligible designated beneficiary may elect for the 5 participant's account to be distributed by: 6 (i) December thirty-first of the calendar year containing the tenth 7 anniversary of the participant's death,; death; or 8 (ii) Beginning no later than December thirty-first of the calendar year 9 immediately following the calendar year in which the participant 10 died, over the life of the eligible designated beneficiary or over a 11 period not exceeding the life expectancy of the eligible designated 12 beneficiary. If the eligible designated beneficiary is the surviving 13 spouse, payment under this subsection (b)(ii) paragraph is not 14 required until the later of December thirty-first of the calendar year 15 immediately following the calendar year in which the participant died 16 or December thirty-first of the calendar year in which the participant 17 would have attained age seventy the applicable age, as provided in § 3-13-58. The surviving spouse is deemed to have elected treatment in accordance with section 401(a)(9)(B)(iv) of the Internal Revenue Code and one-half (age seventy-two 18 with respect to a participant who would have attained age seventy 19 and one-half after December 31, 2019). any applicable guidance, unless the spouse elects otherwise. If the eligible designated 20 beneficiary does not elect a method of distribution, the participant's 21 account shall be distributed in accordance with this subsection 22 (b)(ii); the applicable age, as provided in § 3-13-58. The surviving 23 spouse is deemed to have elected treatment in accordance with 24 section 401(a)(9)(B)(iv) of the Internal Revenue Code and any 25 applicable guidance, unless the spouse elects otherwise. If the 26 eligible designated beneficiary does not elect a method of 27 distribution, the participant's account must be distributed in 28 accordance with paragraph (ii) of this subsection; or 29 (c) Upon either the death of an eligible designated beneficiary before 30 distribution of the participant's entire account or the attainment of the age 31 of majority for an eligible designated beneficiary who is a minor child under 32 subsection (4)(b), subsection (1)(b) no longer applies and the remainder of 33 the entire account shall must be distributed to the designated beneficiary 34 by December thirty-first of the calendar year containing the tenth 35 26.555.19 3 65 Underscores indicate new language. Overstrikes indicate deleted language. anniversary of the participant's death eligible designated beneficiary's death 1 or December thirty-first of the calendar year containing the tenth 2 anniversary of the date the minor child reached the age of majority, 3 respectively; 4 (2) If the participant dies before distributions of his or her distribution of the account 5 begins and the participant has no designated beneficiary, the participant's account 6 under the plan shall must be distributed by December thirty-first of the calendar 7 year containing the fifth anniversary of the participant's death. If the participant 8 dies after distribution of the account begins and the participant has no designated 9 beneficiary, any remaining portion of the 26.555.20 3 65 SB65 ENROLLED account shall must continue to be 10 distributed at least as rapidly as under the method of distribution in effect at the 11 time of the participant's death; 12 (3) Any distribution required under the incidental death benefit requirements of 13 Internal Revenue Code section 401(a) shall must be treated as distributions 14 required under this section; and 15 (4) For purposes of this section, the term, "eligible designated beneficiary," beneficiary" means a 16 designated beneficiary who, as of the date of the death of the participant, is: 17 (a) The surviving spouse of the participant; 18 (b) A child of the participant, who has not reached the age of majority. 19 However, majority, provided that the child ceases to be an eligible designated 20 beneficiary as of the date the child reaches the age of majority; 21 (c) Disabled within the meaning of Internal Revenue Code section 72(m)(7); 22 (d) Chronically ill within the meaning of Internal Revenue Code section 23 7702B(c)(2) (, 7702B(c)(2), except that the requirements of subparagraph (A)(i) thereof 24 may only be treated as met if there is a certification that, as of such the 25 date of certification, the period of inability described in such the 26 subparagraph with respect to the individual is an indefinite one which is and 27 reasonably expected to be lengthy in nature); nature; or 28 (e) Any other person individual who is not more than ten years younger than 29 the participant. 30 Section 3. That § 3-13A-23.3 be AMENDED: 31 3-13A-23.3. If a participant dies died on or before December 31, 2021, and before 32 required distribution of the participant's benefits has begun, the participant’s commenced, 33 the participant's interest shall must be distributed as follows: 34 26.555.19 4 65 Underscores indicate new language. Overstrikes indicate deleted language. (1) If the participant has a surviving spouse, the surviving spouse shall must receive 1 benefits over the life of the surviving spouse beginning as soon as administratively 2 possible and effective the month after the participant's death; or 3 (2) If the participant has no surviving spouse, the participant's remaining interest shall 4 must be distributed in a lump sum payment to the designated beneficiary within 5 five years from the date of the participant's death. 6 Section 4. That § 3-13A-23.5 be AMENDED: 7 3-13A-23.5. Notwithstanding any contrary provisions, effective for any participant 8 death after December 31, 2021, the following distribution provisions shall take effect are 9 effective for any participant death after December 31, 2021, subject to any 26.555.20 4 65 SB65 ENROLLED regulations or 10 other guidance issued under the Setting Every Community Up for Retirement 11 Enhancement (SECURE) Act of 2019, Act, Pub. L. No. 116-94, Div. O, 133 Stat. 2534 (2019) 12 or Pub. L. No. 117-328, Div. T, 136 Stat. 4459 (2022): 13 (1) If the participant dies before the distribution of his or her the participant's entire 14 account (, account, regardless of whether any distributions had begun commenced before 15 the participant's death), death, and the participant has a designated beneficiary: 16 (a) The entire account shall must be distributed to the designated beneficiary 17 by December thirty-first of the calendar year containing the tenth 18 anniversary of the participant's death; 19 (b) Notwithstanding subsection (a), if the designated beneficiary is an eligible 20 designated beneficiary, the eligible designated beneficiary may elect for the 21 participant's account to be distributed by: 22 (i) December thirty-first of the calendar year containing the tenth 23 anniversary of the participant's death,; death; or 24 (ii) Beginning no later than December thirty-first of the calendar year 25 immediately following the calendar year in which the participant 26 died, over the life of the eligible designated beneficiary or over a 27 period not exceeding the life expectancy of the eligible designated 28 beneficiary. If the eligible designated beneficiary is the surviving 29 spouse, payment under this subsection (b)(ii) paragraph is not 30 required until the later of December thirty-first of the calendar year 31 immediately following the calendar year in which the participant died 32 or December thirty-first of the calendar year in which the participant 33 would have attained age seventy the applicable age, as provided in § 3-13A-23.1. The surviving spouse is deemed to have elected treatment in accordance with section 401(a)(9)(B)(iv) of the Internal Revenue Code and one-half (age seventy-two 34 26.555.19 5 65 Underscores indicate new language. Overstrikes indicate deleted language. with respect to a participant who would have attained age seventy 1 and one-half after December 31, 2019). any applicable guidance, unless the spouse elects otherwise. If the eligible designated 2 beneficiary does not elect a method of distribution, the participant's 3 account shall be distributed in accordance with this subsection 4 (b)(ii); the applicable age, as provided in § 3-13A-23.1. The 5 surviving spouse is deemed to have elected treatment in accordance 6 with section 401(a)(9)(B)(iv) of the Internal Revenue Code and any 7 applicable guidance, unless the spouse elects otherwise. If the 8 eligible designated beneficiary does not elect a method of 9 distribution, the participant's account must be distributed in 10 accordance with paragraph (ii) of this subsection; or 11 (c) Upon either the death of an eligible designated beneficiary before 12 distribution of the participant's entire account or the attainment of the age 13 of majority for an eligible designated beneficiary who is a minor child under 14 subsection (4)(b), subsection (1)(b) no longer applies and the remainder of 15 the entire account shall must be distributed to the designated beneficiary 16 by 26.555.20 5 65 SB65 ENROLLED December thirty-first of the calendar year containing the tenth 17 anniversary of the participant's death eligible designated beneficiary's death 18 or December thirty-first of the calendar year containing the tenth 19 anniversary of the date the minor child reached the age of majority, 20 respectively; 21 (2) If the participant dies before distributions of his or her distribution of the account 22 begins and the participant has no designated beneficiary, the participant's account 23 under the plan shall must be distributed by December thirty-first of the calendar 24 year containing the fifth anniversary of the participant's death. If the participant 25 dies after distribution of the account begins and the participant has no designated 26 beneficiary, any remaining portion of the account shall must continue to be 27 distributed at least as rapidly as under the method of distribution in effect at the 28 time of the participant's death; 29 (3) Any distribution required under the incidental death benefit requirements of 30 Internal Revenue Code section 401(a) shall must be treated as distributions 31 required under this section; and 32 (4) For purposes of this section, the term, "eligible designated beneficiary," beneficiary" means a 33 designated beneficiary who, as of the date of the death of the participant, is: 34 (a) The surviving spouse of the participant; 35 26.555.19 6 65 Underscores indicate new language. Overstrikes indicate deleted language. (b) A child of the participant, who has not reached the age of majority. 1 However, majority, provided that the child ceases to be an eligible designated 2 beneficiary as of the date the child reaches the age of majority; 3 (c) Disabled within the meaning of Internal Revenue Code section 72(m)(7); 4 (d) Chronically ill within the meaning of Internal Revenue Code section 5 7702B(c)(2) (, 7702B(c)(2), except that the requirements of subparagraph (A)(i) thereof 6 may only be treated as met if there is a certification that, as of such the 7 date of the certification, the period of inability described in such the 8 subparagraph with respect to the individual is an indefinite one which is and 9 reasonably expected to be lengthy in nature); nature; or 10 (e) Any other person individual who is not more than ten years younger than 11 the participant. 12 26.555.20 6 65 SB65 ENROLLED An Act to revise certain required minimum distribution provisions of the South Dakota Retirement System. I certify that the attached Act originated in the: Senate as Bill No. 65 Secretary of the Senate President of the Senate Attest: Secretary of the Senate Speaker of the House Attest: Chief Clerk of the House Senate Bill No. 65 File No. ____ Chapter No. ______ Received at this Executive Office this _____ day of _____________, 2026 at ____________M. By for the Governor The attached Act is hereby approved this ________ day of ______________, A.D., 2026 Governor STATE OF SOUTH DAKOTA, ss. Office of the Secretary of State Filed ____________, 2026 at _________ o'clock __M. Secretary of State By Asst. Secretary of State