SDRS does not have loan or hardship withdrawal provisions. While you are an active, contributing member of SDRS, you cannot make withdrawals or borrow funds from your SDRS account. Your SDRS funds are only available for withdrawal if you terminate employment.
If you terminate employment before three years of contributory service
You are entitled to receive your accumulated contributions (100 percent of your employee contributions plus credited interest and 50 percent of your employer contributions and credited interest) as a refund in the form of a lump‐sum distribution if you leave employment prior to attaining three years of contributory service. (Note for members who ended contributory service prior to July 1, 2010: your accumulated contributions include 100 percent of your employee contributions plus credited interest and 75 percent of your employer contributions and credited interest.)
You may choose to leave your accumulated contributions with SDRS for up to 10 years from your date of termination. Interest earnings will continue to be credited for 10 years. If you have not returned to SDRS‐covered employment after 10 years, your accumulated contributions must be withdrawn during the 11th year. If you do not withdraw your accumulated contributions during the 11th year and SDRS is not able to locate you, you will forfeit your accumulated contributions.
If you terminate employment after three years of contributory service
If you have at least three years of contributory service, you are a vested member and entitled to retirement benefits when you reach retirement age. Therefore, if you terminate employment with an SDRS employer after three years of contributory service but before you are eligible for early retirement, you have two options: you may leave the funds with SDRS until you can begin drawing retirement benefits or you may forfeit your benefit and take a refund of your accumulated contributions.
If you choose to leave your funds with SDRS, you can receive lifetime retirement benefits when you reach retirement age.
Your benefits are based on your accumulated credited service and Final Average Compensation (FAC). The annual SDRS cost-of-living adjustment may affect your FAC during any period that you are not employed with an SDRS employer unit. Be advised, if you leave from and subsequently return to an SDRS employer unit, any cost-of-living increases accrued in the period that you are not employed with an SDRS employer unit will not be included in your FAC calculation.
If you choose to forfeit your lifetime retirement benefit to take a refund of your accumulated contributions, you are entitled to receive 100 percent of your employee contributions plus credited interest and 85 percent of your employer contributions and credited interest in the form of a lump‐ sum distribution. (Note for members who ended contributory service prior to July 1, 2010: your accumulated contributions include 100 percent of your employee contributions plus credited interest and 100 percent of your employer contributions and credited interest.)
For additional information on refund payment options and tax implications, please call the SDRS office at 605-773-3731.
Refunding Your SDRS Retirement Funds brochure
Note: The right to withdraw accumulated contributions ceases upon returning to employment with an SDRS participating unit.