Lifetime income from SDRS of at least 50 percent of Final Average Compensation (FAC) at normal retirement for career members with credited service of at least 30 years for Class A members, 25 years for Class B Public Safety members, and 20 years for Class B Judicial members.

Proportionate lifetime income from SDRS for members who participate in SDRS for less than a career.

Additional Member Savings

SDRS will educate members of the need for additional savings and will encourage members to accumulate personal savings of at least 100 percent of annual pay at retirement to provide retirement benefits in addition to those provided by SDRS and Social Security.

Total Retirement Income

Educate, advise, and encourage members to plan for retirement by establishing a total retirement income goal based on their unique circumstances and considering benefits available from SDRS, Social Security, and personal savings.

Overview of the System

The South Dakota Retirement System (SDRS) is a cost sharing, multiple employer, public employee retirement system. SDRS provides retirement, disability, and survivor benefits for employees of the state of South Dakota and its political subdivisions. SDRS is a qualified defined benefit retirement plan under Section 401(a) of the Internal Revenue Code and is exempt from Federal income taxes. The benefits are funded through member and employer contributions and investment income. SDRS benefits are based on the member's final average compensation, the member's years of credited service, and a benefit multiplier. Retirement benefits are payable for member's lifetime. Surviving spouse benefits are also available.

Members of SDRS include full-time employees of public schools, the State, the Board of Regents, city and county governments, and other public entities. For purposes of participation, the definition of a full-time employee is any employee who is considered full-time by the participating unit and is customarily employed by the participating unit for 20 hours or more a week and at least 6 months a year, regardless of classification of employment as seasonal, temporary, leased, contract, or any other designation.

SDRS includes four classes of members: Class A general members, Class B public safety and judicial members, Class C Cement Plant members, and Class D Department of Labor members. (Class C Cement Plant members: Former members of the Cement Plant Retirement Plan were merged into SDRS effective April 1, 2014; Class D Department of Labor members: Former members of the Department of Labor Pension Plan were merged into SDRS effective July 1, 2020.)

SDRS is one plan with two different benefit designs. Class A and B members that joined SDRS prior to July 1, 2017, are Foundation members. Class A and B members joining SDRS on and after July 1, 2017, are Generational members. Covered employees are required by statute to contribute a percentage of their salary to SDRS. All participating employers are required to contribute an amount equal to the members' contributions. Contributions are 6 percent of salary for Class A members, 8 percent for Class B Public Safety members, and 9 percent for Class B Judicial members. The right to receive retirement benefits vests after three years of contributory service. All benefits receive an annual cost-of-living adjustment (COLA) between 0 percent and 3.5 percent. The process to determine the COLA considers affordability based on SDRS' Fair Value Funded Ratio and the annual inflation rate as defined by the Consumer Price Index (CPI-W).

Foundation members: Normal retirement age for Class A and Class B Judicial Foundation members is age 65 (age 55 for Class B Public Safety Foundation members). The special early retirement option provides an unreduced benefit when specific combinations of age and credited service are met. Special early retirement is based on the Rule of 85 for Class A members, the Rule of 80 for Class B Judicial members, and the Rule of 75 for Class B Public Safety members.

Generational members: Normal retirement age for Class A and Class B Judicial Generational members is age 67 (age 57 for Class B Public Safety Generational members).

All retirement benefits that do not meet the above criteria for Foundation and Generational members may be payable at a reduced level.

SDRS Administration and Management Group