Email FacebookTwitterMenu burgerClose thin

South Dakota Retirement System

south dakota retirement system

The state retirement system of South Dakota covers the multiple types of employees working on behalf of the state. The South Dakota Retirement System (SDRS) is a cost-sharing, multi-employer retirement system for public employees, and it supports over 200,000 participants. SDRS excels in providing retirement, disability and survivor benefits for state employees and political subdivisions. If you’re new to pensions and would value some extra assistance navigating the complex system, SmartAsset’s financial advisor matching tool can pair you with financial advisors who will best meet your needs.

Types of Retirement Systems in South Dakota

South Dakota has a substantial number of retirement systems for it public employees, with distinct offerings across many different public employments. The benefits and retirement requirements that accompany these plans are based on what the position entails. According to the SDRS website, whether a South Dakota resident works as a teacher, doctor, county supervisor, engineer, accountant or another type of public employee, SDRS vows to provide a secure retirement.

Currently, eligible members of SDRS include permanent, full-time employees of public schools, the state, the Board of Regents, city and county governments and other public entities. Separating into spheres, SDRS includes three classes of members: Class A general members, Class B public safety and judicial members and Class C Cement Plant members.

South Dakota Retirement Systems

System TitleEligible Employees
Legislative Employees of South Dakota StateAll eligible State of South Dakota employees of the legislature, including public employees whose employers have elected to participate, and elected members of the State Legislature and President of the Senate.
Teachers and Administrative Employees of the South Dakota Public School DistrictsThis classification covers all educators, teachers and school employees in South Dakota public schools.
Faculty and Administration of the South Dakota Board of RegentsPublic workers employed by the S.D. Board of Regents, both part-time and full-time.
Municipal Employees of the StatePublic workers employed by the S.D. Board of Regents, both part-time and full-time.
Faculty and Administration of the South Dakota Board of RegentsGeneral employees, firefighters and police
officers serving in the participating cities, with South Dakota state general laws governing distinct eligibility.
County Employees of the StatePublic employees working on behalf of their given county — considered “local” employees rather than state employees.

The retirement systems South Dakota offers for its public employees aim to offer the members therein full financial security during retirement. Beyond that, due to any disability or death, the benefits provided will be enough to support the worker and his or her family regardless of circumstance. The assistance from the SDRS Trust Fund helps accomplish this feat. Contributions from both the employees themselves, as well as the employers, help bolster that fund.

Overview of South Dakota’s Main Retirement Systems by Membership Classes

south dakota retirement system

The South Dakota Retirement System has three main categories of membership, which enable employees to better understand their specific benefits. The categories are Class A, Class B Public Safety and Class B Judicial.

Class A

  • All state administrative employees
  • Board of Regents employees
  • Teachers/educators
  • Classified employees of participating school districts
  • General employees of participating municipalities and counties
  • All elected officials (excluding justices and judges) may choose to participate

Class B

  • State law enforcement officers
  • Municipal police officers
  • Municipal firefighters
  • County sheriffs
  • Deputy county sheriffs
  • Correctional security staff
  • Parole agents
  • Air rescue firefighters
  • Campus security officers
  • Court services officers
  • Juvenile corrections agents
  • Conservation officers
  • Park rangers
  • Approved jailer

Class B Judicial members

  • Justices
  • Judges
  • Magistrate judges

Judiciary careers typically begin in middle age. That results in a condensed time frame during which to accumulate benefits.

Retirement Taxes in South Dakota


On a federal level, you don’t pay taxes on the money you contribute to your pension plan. That makes it a tax-deferred account. However, any payments you take directly from your pension after you retire will be taxed as income. The good news is that you’ll still have the chance to decide whether you’d prefer to have these funds withheld from each pension check or if you’d rather make estimated tax payments.

You can’t predict how much will be withheld from your income. Many factors that change year to year may have an impact. But luckily, the government will do those calculations for you and supply you with a refund (or charge the dividends) at the end of the year. Retirement plans, like many of South Dakota’s, include rollovers. In this instance, you send your money directly from your pension plan to a separate tax-deferred retirement account. If, instead, you have a Roth IRA, you’ll need to pay taxes up-front—but your distributions will be tax-free.


As detailed in our thorough South Dakota Retirement Tax Friendliness Guide, the state of South Dakota is generally tax-friendly toward its retirees. It does not tax Social Security or retirement account withdrawals. You pay standard tax rates on wages. And the marginal state tax rate is 0%. Finally, you don’t pay taxes on public and private pension incomes. Suffice it to say, retirees are in good hands. South Dakota has no estate tax.

Current Financial Health of the South Dakota Retirement System

south dakota retirement system

The current state of the South Dakota Retirement System, per its 2017 report, is excellent. It has seen vast percentage increases in benefits rolled out for those on its retirement plans. There have also been upticks in value and income for such public work jobs.

Tips for a Successful Retirement

  • Even with all the benefits of a state-set pension you find with the South Dakota Retirement System, retirement can nonetheless prove difficult to prepare for. Help from a financial advisor might be the best way to get your ducks in a row. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Creating a financial plan is the best way to ensure that you’re not under-saving. This will make it easier to decide where you want to end up financially, which can make retirement more attainable.

Photo credit: ©, ©, ©