ENTITLED An Act to revise certain provisions relating to the South Dakota Retirement System.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That 3-12C-101 be AMENDED:
3-12C-101. Terms as used in this chapter mean:
(1) "Actuarial accrued liability," the present value of all benefits less the present value of future normal cost contributions;
(2) "Actuarial experience analysis," a periodic report that reviews basic experience data and furnishes actuarial analysis that substantiates the assumptions adopted for the purpose of making an actuarial valuation of the system;
(3) "Actuarial valuation," a projection of the present value of all benefits and the current funded status of the system, based upon stated assumptions as to rates of interest, mortality, disability, salary progressions, withdrawal, and retirement as established by a periodic actuarial experience analysis that takes into account census data of all active members, vested terminated members, and retired members and their beneficiaries under the system;
(4) "Actuarial value funded ratio," the actuarial value of assets divided by the actuarial accrued liability;
(5) "Actuarial value of assets," equal to the fair value of assets;
(6) "Actuarially determined contribution rate," the fixed, statutory contribution rate, no less than the normal cost rate with expenses assuming the minimum COLA, and no greater than the normal cost rate with expenses assuming the maximum COLA;
(7) "Air rescue firefighters," employees of the Department of the Military who are stationed at Joe Foss Field, Sioux Falls, and who are directly involved in firefighting activities on a daily basis;
(8) "Approved actuary," any actuary who is a member of the American Academy of Actuaries or an Associate or a Fellow of the Society of Actuaries who meets the qualification standards of the American Academy of Actuaries to issue actuarial opinions regarding the system or any firm retaining such an actuary on its staff and who is appointed by the board to perform actuarial services;
(9) "Assumed rate of return," the actuarial assumption adopted by the board pursuant to 3-12C-227 as the annual assumed percentage return on trust fund assets, compounded;
(10) "Beneficiary," the person designated by a member of the system to receive any payments after the death of such member;
(11) "Benefits," the amounts paid to a member, spouse, child, or beneficiary as a result of the provisions of this chapter;
(12) "Board," the Board of Trustees of the South Dakota Retirement System;
(13) "Calendar quarter," a period of three calendar months ending March thirty-first, June thirtieth, September thirtieth, or December thirty-first of any year;
(14) "Campus security officers," employees of the Board of Regents whose positions are subject to the minimal educational training standards established by the law enforcement standards commission pursuant to chapter 23-3, who satisfactorily complete the training required by chapter 23-3 within one year of employment, and whose primary duty as sworn law enforcement officers is to preserve the safety of the students, faculty, staff, visitors, and the property of the university. The employer shall file with the system evidence of the appointment as a sworn law enforcement officer at the time of employment and shall file evidence of satisfactory completion of the training program pursuant to chapter 23-3 within one year of employment;
(15) "Certified school employee," any employee of a participating unit who is required to have a certificate as defined in subdivision 13-42-1(3);
(16) "Class A credited service," service credited as a Class A member of the system;
(17) "Class A member," any member other than a Class B member or a Class C member and is either a foundation member or a generational member;
(18) "Class B credited service," service credited as a Class B member of the system;
(19) "Class B member," a member who is a justice, judge, state law enforcement officer, magistrate judge, police officer, firefighter, county sheriff, deputy county sheriff, correctional security staff, parole agent, air rescue firefighter, campus security officer, court services officer, juvenile corrections agent, conservation officer, or park ranger and is either a foundation member or a generational member;
(20) "Class C credited service," service credited as a Class C member of the system;
(21) "Class C member," any member of the cement plant retirement plan including any retiree or any vested member;
(22) "Class D credited service," service credited as a Class D member of the system;
(23) "Class D member," any member that was a member of the Department of Labor and Regulation employees' retirement plan as of June 30, 2020;
(24) "Classified employee," an employee of a public school district who is not required by law to be a certified school employee, an employee of any college or university under the control of the Board of Regents who is not a faculty member or an administrator and comes within the provisions of chapter 3-6D, an employee of a public corporation, an employee of a chartered governmental unit, and any other participating employee not elsewhere provided for in this chapter;
(25) "Comparable level position," a member's position of employment that is generally equivalent to the member's prior position of employment in terms of required education, required experience, required training, required work history, geographic location, and compensation and benefits;
(26) "Conservation officers," employees of the Department of Game, Fish and Parks and the Division of Wildlife or Division of Custer State Park who are employed pursuant to 41-2-11 and whose positions are subject to the requirements as to education and training provided in chapter 23-3;
(27) "Consumer price index," the consumer price index for urban wage earners and clerical workers calculated by the United States Bureau of Labor Statistics;
(28) "Contributory service," service to a participating unit during which contributions were made to a South Dakota retirement system, which may not include years of credited service as granted in 3-12C-509 or 3-12C-511;
(29) "Correctional security staff," the warden, deputy warden, and any other correctional staff holding a security position as verified by the Department of Corrections and approved by the Bureau of Human Resources and the Bureau of Finance and Management, and determined by the board as Class B members;
(30) "Court services officers," persons appointed pursuant to 26-7A-8;
(31) "Covered employment," a member's employment as a full-time employee of a participating unit;
(32) "Deputy county sheriff," an employee of a county that is a participating unit, appointed by the board of county commissioners pursuant to 7-12-9 and 7-12-10, whose position is subject to the minimum educational and training standards established by the law enforcement standards commission pursuant to chapter 23-3. The term does not include jailers or clerks appointed pursuant to 7-12-9 and 7-12-10 unless the participating unit has requested that the jailer be considered as a deputy county sheriff and the board has approved the request;
(33) "Effective date of retirement," the first day of the month in which retirement benefits are payable;
(34) "Eligible retirement plan," the term eligible retirement plan includes those plans described in section 402(c)(8)(B) of the Internal Revenue Code;
(35) "Eligible rollover distribution," any distribution to a member of accumulated contributions pursuant to 3-12C-602. The term does not include any portion of a distribution that represents contributions made to the system on an after tax basis nor distributions paid as a result of the member reaching the required beginning date;
(36) "Employer," the State of South Dakota and any department, bureau, board, or commission of the State of South Dakota, or any of its governmental or political subdivisions or any public corporation of the State of South Dakota that elects to become a participating unit;
(37) "Employer contributions," amounts contributed by the employer of a contributing member, excluding member contributions made by an employer after June 30, 1984, pursuant to 3-12C-401;
(38) "Equivalent public service," any public service other than as a justice, a judge, or a magistrate judge and comparable to Class B service as defined by this section, if the service is in the employ of a public entity that is not a participating unit;
(39) "Fair value of assets," the total assets of the system at fair market value for securities traded on exchanges; for securities not traded on exchanges, a value based on similar securities; and for alternative investments, reported net asset value;
(40) "Fair value funded ratio," the fair value of assets divided by the actuarial accrued liability;
(41) "Fiduciary," any person who exercises any discretionary authority or control over the management of the system or the management or disposition of its assets, renders investment advice for a fee or other compensation, direct or indirect, or has any authority or responsibility to do so, or has any discretionary authority or responsibility in the administration of the system;
(42) "Foundation member," any member of the system whose contributory service began before July 1, 2017;
(43) "Foundation retiree," any foundation member who has retired with a benefit payable from the system;
(44) "Firefighter," any full-time firefighter who works at least twenty hours a week and at least six months a year. The term does not include any volunteer firefighter;
(45) "Full-time employee," any employee who is considered full-time by the participating unit and is customarily employed by the participating unit for twenty hours or more a week and at least six months a year, regardless of classification of employment as seasonal, temporary, leased, contract, or any other designation;
(46) "Fund," public employees' retirement fund or funds established for the purposes of administration of this chapter;
(47) "General employee," any full-time municipal employee who is not a firefighter or a police officer;
(48) "Generational member," any member of the system whose contributory service began after June 30, 2017;
(49) "Generational retiree," any generational member who has retired with a benefit payable from the system;
(50) "Health care provider," a physician or other health care practitioner licensed, registered, certified, or otherwise authorized by law to provide specified health services;
(51) "Internal Revenue Code," or "code," the Internal Revenue Code as in effect as of January 1, 2022;
(52) "Juvenile corrections agent," a designee of the secretary of corrections charged with the care, custody, and control of juveniles committed to the Department of Corrections until the age of twenty-one or a person who is charged with the care, custody, and control of juveniles at a juvenile corrections facility under the control of a participating unit;
(53) "Law enforcement officer," any agent of the state division of criminal investigation, officer of the South Dakota Highway Patrol, police officer, county sheriff, deputy county sheriff, or firefighter;
(54) "Member," any person who is contributing or has made contributions to the system and is either a foundation member or generational member. A person's membership ceases when the person withdraws his or her accumulated contributions after termination of employment;
(55) "Member contributions," amounts contributed by members, including member contributions made by an employer after June 30, 1984, pursuant to 3-12C-401;
(56) "Military service," a period of active duty with the United States Army, the United States Navy, the United States Air Force, the United States Marine Corps, or the United States Coast Guard, from which duty the member received an honorable discharge or an honorable release;
(57) "Municipality," any incorporated municipal government under chapter 9-3 or any chartered governmental unit under the provisions of Article IX of the Constitution of the State of South Dakota;
(58) "Noncontributory service," for foundation members, service delineated in subdivisions 3-12C-502(2), (5), (7), and (8), and for generational members, service pursuant to 3-12C-514;
(59) "Normal cost," the expected long-term cost of the system benefits and expenses expressed as a percentage of payroll;
(60) "Normal retirement," the termination of employment and application for benefits by a member with three or more years of contributory service or noncontributory service on or after the member's normal retirement age;
(61) "Other public benefits," eighty percent of the primary insurance amount or primary social security benefits that would be provided under federal social security;
(62) "Other public service," service for the government of the United States, including military service; service for the government of any state or political subdivision thereof; service for any agency or instrumentality of any of the foregoing; or service as an employee of an association of government entities described in this subdivision;
(63) "Park rangers," employees of the Department of Game, Fish and Parks within the Division of Parks and Recreation and whose positions are subject to the requirements as to education and training provided in chapter 23-3 and whose primary duty is law enforcement in the state park system;
(64) "Parole agent," an e