Leaders examining the South Dakota Retirement System are considering increasing the retirement age to 67. It’s one of many proposed changes experts say could keep the pension program sustainable. State lawmakers must approve any new regulations, and the SDRS executive director says none of them impact people currently enrolled.
The South Dakota Retirement System has about 80,000 members. It’s the consolidated retirement program for state employees, school districts, most cities, counties, and other public entities.
Rob Wylie is the executive director of the SDRS. He says the system needs changes because demographics are changing.
“We’re living longer. We’re starting work later,” Wylie says. “We’re approaching employment in the public sector somewhat differently now than what it was many years ago, and we’re trying to come up with some new ideas that will help sustain the plan and balance the benefit features for all the members in the plan.”
Wylie says among other moves the new plan adds two years to the retirement age for both regular members and public safety officials. Leaders also recommend eliminating special early retirement and lowering the minimum cost-of-living adjustment.
“It is something we’ve been working on for a long time,” Wylie says. “Some of the features here have gone back in our discussions even a decade, but in the last two years the board meets quarterly and every single meeting we’ve talked about how to fine-tune and how this would fit into a workforce like the workforce here in South Dakota that is a mature workforce, but, at the same time, we need to support those people but also give the young people that want to join something that they see as more valuable.”
Wylie says that includes more variable benefits that offer more risk and potential reward.
The SDRS executive director says board members voted Wednesday to move the recommendations to state lawmakers. They will finalize changes in December ahead of the 2016 legislative session.
Wylie says the new regulations would apply to people entering the South Dakota Retirement System. All current, former and retired members of the SDRS remain in the current plan.
Tune in to Dakota Midday on Tuesday, September 8 to hear an in-depth discussion about potential changes to the pension program.