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26.555.20 101st Legislative Session 65
2026 South Dakota Legislature
Senate Bill 65
ENROLLED
AN ACT
ENTITLED An Act to revise certain required minimum distribution provisions of the
South Dakota Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 3-13-60 be AMENDED:
3-13-60. If a participant died on or before December 31, 2021, and before
required distribution of the participant's benefits commenced, the participant's interest
must be distributed as follows:
(1) If the participant has a surviving spouse, the surviving spouse must receive
benefits over the life of the surviving spouse beginning as soon as administratively
possible and effective the month after the participant's death; or
(2) If the participant has no surviving spouse, the participant's remaining interest must
be distributed in a lump sum payment to the designated beneficiary within five
years from the date of the participant's death.
Section 2. That § 3-13-62 be AMENDED:
3-13-62. Notwithstanding any contrary provisions, the following distribution
provisions are effective for any participant death after December 31, 2021, subject to any
regulations or other guidance issued under the Setting Every Community Up for
Retirement Enhancement Act, Pub. L. No. 116-94, Div. O, 133 Stat. 2534 (2019) or Pub.
L. No. 117-328, Div. T, 136 Stat. 4459 (2022):
(1) If the participant dies before the distribution of the participant's entire account,
regardless of whether any distributions commenced before the participant's death,
and the participant has a designated beneficiary:
(a) The entire account must be distributed to the designated beneficiary by
December thirty-first of the calendar year containing the tenth anniversary
of the participant's death;
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(b) Notwithstanding subsection (a), if the designated beneficiary is an eligible
designated beneficiary, the eligible designated beneficiary may elect for the
participant's account to be distributed by:
(i) December thirty -first of the calendar year containing the tenth
anniversary of the participant's death; or
(ii) Beginning no later than December thirty -first of the calendar year
immediately following the calendar year in which the participant
died, over the life of the eligible designated beneficiary or over a
period not exceeding the life expectancy of the eligibl e designated
beneficiary. If the eligible designated beneficiary is the surviving
spouse, payment under this paragraph is not required until the later
of December thirty-first of the calendar year immediately following
the calendar year in which the partic ipant died or December thirty -
first of the calendar year in which the participant would have
attained the applicable age, as provided in § 3-13-58. The surviving
spouse is deemed to have elected treatment in accordance with
section 401(a)(9)(B)(iv) of the Internal Revenue Code and any
applicable guidance, unless the spouse elects otherwise. If the
eligible designated beneficiary does not elect a method of
distribution, the participant's account must be distributed in
accordance with paragraph (ii) of this subsection; or
(c) Upon either the death of an eligible designated beneficiary before
distribution of the participant's entire account or the attainment of the age
of majority for an eligible designated beneficiary who is a minor child under
subsection (4)(b), subsection (1)(b) no longer applies and the remainder of
the entire account must be distributed to the designated beneficiary by
December thirty-first of the calendar year containing the tenth anniversary
of the eligible designated beneficiary's death or December thirty-first of the
calendar year containing the tenth anniversary of the date the minor child
reached the age of majority, respectively;
(2) If the participant dies before distribution of the account begins and the participant
has no designated beneficiary, the participant's account must be distributed by
December thirty-first of the calendar year containing the fifth anniversary of the
participant's death. If the participant dies after distribution of the account begins
and the participant has no designated beneficiary, any remaining portion of the
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account must continue to be distributed at least as rapidly as under the method of
distribution in effect at the time of the participant's death;
(3) Any distribution required under the incidental death benefit requirements of
Internal Revenue Code section 401(a) must be treated as distributions required
under this section; and
(4) For purposes of this section, "eligible designated beneficiary" means a designated
beneficiary who, as of the date of the death of the participant, is:
(a) The surviving spouse of the participant;
(b) A child of the participant, who has not reached the age of majority, provided
that the child ceases to be an eligible designated beneficiary as of the date
the child reaches the age of majority;
(c) Disabled within the meaning of Internal Revenue Code section 72(m)(7);
(d) Chronically ill within the meaning of Internal Revenue Code section
7702B(c)(2), except that the requirements of subparagraph (A)(i) may only
be treated as met if there is a certification that, as of the date of
certification, the period of inability desc ribed in the subparagraph with
respect to the individual is indefinite and reasonably expected to be lengthy
in nature; or
(e) Any other individual who is not more than ten years younger than the
participant.
Section 3. That § 3-13A-23.3 be AMENDED:
3-13A-23.3. If a participant died on or before December 31, 2021, and before
required distribution of the participant's benefits commenced, the participant's interest
must be distributed as follows:
(1) If the participant has a surviving spouse, the surviving spouse must receive
benefits over the life of the surviving spouse beginning as soon as administratively
possible and effective the month after the participant's death; or
(2) If the participant has no surviving spouse, the participant's remaining interest must
be distributed in a lump sum payment to the designated beneficiary within five
years from the date of the participant's death.
Section 4. That § 3-13A-23.5 be AMENDED:
3-13A-23.5. Notwithstanding any contrary provisions, the following distribution
provisions are effective for any participant death after December 31, 2021, subject to any
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regulations or other guidance issued under the Setting Every Community Up for
Retirement Enhancement Act, Pub. L. No. 116-94, Div. O, 133 Stat. 2534 (2019) or Pub.
L. No. 117-328, Div. T, 136 Stat. 4459 (2022):
(1) If the participant dies before the distribution of the participant's entire account,
regardless of whether any distributions commenced before the participant's death,
and the participant has a designated beneficiary:
(a) The entire account must be distributed to the designated beneficiary by
December thirty-first of the calendar year containing the tenth anniversary
of the participant's death;
(b) Notwithstanding subsection (a), if the designated beneficiary is an eligible
designated beneficiary, the eligible designated beneficiary may elect for the
participant's account to be distributed by:
(i) December thirty -first of the calendar year containing the tenth
anniversary of the participant's death; or
(ii) Beginning no later than December thirty -first of the calendar year
immediately following the calendar year in which the participant
died, over the life of the eligible designated beneficiary or over a
period not exceeding the life expectancy of the eligib le designated
beneficiary. If the eligible designated beneficiary is the surviving
spouse, payment under this paragraph is not required until the later
of December thirty-first of the calendar year immediately following
the calendar year in which the p articipant died or December thirty -
first of the calendar year in which the participant would have
attained the applicable age, as provided in § 3-13A-23.1. The
surviving spouse is deemed to have elected treatment in accordance
with section 401(a)(9)(B)(iv) of the Internal Revenue Code and any
applicable guidance, unless the spouse elects otherwise. If the
eligible designated beneficiary does not elect a method of
distribution, the participant's account must be distributed in
accordance with paragraph (ii) of this subsection; or
(c) Upon either the death of an eligible designated beneficiary before
distribution of the participant's entire account or the attainment of the age
of majority for an eligible designated beneficiary who is a minor child under
subsection (4)(b), subsection (1)(b) no longer applies and the remainder of
the entire account must be distributed to the designated beneficiary by
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December thirty-first of the calendar year containing the tenth anniversary
of the eligible designated beneficiary's death or December thirty-first of the
calendar year containing the tenth anniversary of the date the minor child
reached the age of majority, respectively;
(2) If the participant dies before distribution of the account begins and the participant
has no designated beneficiary, the participant's account under the plan must be
distributed by December thirty -first of the calendar year containing the fifth
anniversary of the participant's death. If the participant dies after distribution of
the account begins and the participant has no designated beneficiary, any
remaining portion of the account must continue to be distributed at least as rapidly
as under the method of distribution in effect at the time of the participant's death;
(3) Any distribution required under the incidental death benefit requirements of
Internal Revenue Code section 401(a) must be treated as distributions required
under this section; and
(4) For purposes of this section, "eligible designated beneficiary" means a designated
beneficiary who, as of the date of the death of the participant, is:
(a) The surviving spouse of the participant;
(b) A child of the participant, who has not reached the age of majority, provided
that the child ceases to be an eligible designated beneficiary as of the date
the child reaches the age of majority;
(c) Disabled within the meaning of Internal Revenue Code section 72(m)(7);
(d) Chronically ill within the meaning of Internal Revenue Code section
7702B(c)(2), except that the requirements of subparagraph (A)(i) may only
be treated as met if there is a certification that, as of the date of the
certification, the period of inability described in the subparagraph with
respect to the individual is indefinite and reasonably expected to be lengthy
in nature; or
(e) Any other individual who is not more than ten years younger than the
participant.
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An Act to revise certain required minimum distribution provisions of the South Dakota
Retirement System.
I certify that the attached Act originated in
the:
Senate as Bill No. 65
Secretary of the Senate
President of the Senate
Attest:
Secretary of the Senate
Speaker of the House
Attest:
Chief Clerk of the House
Senate Bill No. 65
File No. ____
Chapter No. ______
Received at this Executive Office
this _____ day of _____________,
2026 at ____________M.
By
for the Governor
The attached Act is hereby
approved this ________ day of
______________, A.D., 2026
Governor
STATE OF SOUTH DAKOTA,
ss.
Office of the Secretary of State
Filed ____________, 2026
at _________ o'clock __M.
Secretary of State
By
Asst. Secretary of State