The Senate endorsed changes Wednesday that will make is much
more difficult for school districts to hire employees who have ever retired
from a public employer.
The body approved the measure on a 24-10 vote, giving it the two-thirds
majority required for passage.
The legislation, filed as SB 18,
creates a mandatory three-month "clean break" between retirement and
employment and levees financial penalties against individuals who retire and
return to work in the public sector.
Sen. Tom Nelson, R-Lead, introduced the legislation, calling it "necessary
legislation" to provide for the stability of the state retirement system.
The practice costs the fund $5.2 million annually and, as currently permitted
in state law, risks IRS intervention and sanction, he said.
Not all lawmakers were willing to accept the recommendations
of the South Dakota
Sen. Gene Abdullah, R-Brandon, challenged the IRS’s interest
in sanctioning the system, and made repeated calls for documentation to support
Sen. Nelson’s claim.
Other lawmakers, led by Sen. Julie Bartling, D-Burke, tried
to remove the waiting period and individual penalties. She urged her lawmakers
to keep return-to-work provisions in place, arguing that the restrictions would
rob school districts and other local government entities of qualified
employees. Her amendment failed, gaining support from just 11 lawmakers.
The legislation now moves onto the House.