The Senate Retirement Laws Committee has scheduled a hearing for Jan. 21 to consider a collection of legislative proposals that will reshape return-to-work rules, limit the cost-of-living adjustments for retirees and eliminate the optional spouse protection provision.
The package – found in SB 18, SB 19 and SB 20 – was endorsed last November by the South Dakota Retirement System (SDRS) Board of Directors. According to SDRS, the changes are necessary to improve the long-term stability of the system.
Changes to the return-to-work provisions, also known as retire-rehire, are certain to draw the most attention.
The return-to-work changes (SB 18), create a mandatory three-month break in service for anyone who retires and then is rehired into any employer that pays into SDRS. The bill also contains several punitive provisions related to retire-rehire, including an SDRS surcharge to employers for allowing a retire-rehire.
SDRS officials have said the limitations to retire-rehire will make the system IRS audit-proof and save money. ASBSD supports the employment decisions of local school boards and opposes the changes to retire-rehire policies.
The package (SB 20) also includes revisions to the cost-of-living adjustment for retirees. Currently, benefit payments increase at 3.1 percent annually due to the adjustment, also referred to as COLA. If the legislation passes, COLA increases will be 2.1 to 3.1 percent each year, depending on CPI-W.
The final piece (SB 19) prohibits new enrollments in a program that allows SDRS members to purchase an optional spouse protection plan. For individuals who currently buy into the program, the contribution will increase to 1.5 percent.