revise the conditions for in-service distributions from the South Dakota deferred compensation plan.

2026 Regular Session

The bill rewrites when and how in-service withdrawals from the SD Deferred Compensation Plan can be taken, including updated eligibility, limits, and required approvals.

Signed by the Governor on 2026-02-23 S.J. 350

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Purpose and intent

The bill revises the eligibility criteria and timing for in-service distributions from the state’s deferred compensation plan. The goal is to adjust when participants can access funds while employed (in service) to align with updated administrative rules and participant needs.

It appears to streamline or specify the circumstances under which participants may take in-service withdrawals, potentially broadening or narrowing eligibility, and clarifying documentation and processes.

Key provisions and changes (as inferred from passage history)

Establishes revised conditions for in-service distributions from the South Dakota Deferred Compensation Plan. While the exact text is not provided here, typical changes in this area may include:

Eligible trigger events or age/time-based requirements (e.g., attaining a certain age, completing a service milestone, or certain financial hardship criteria).
Limits on the amount or frequency of in-service distributions (e.g., minimum withdrawal amounts, periodic limits, or annual caps).
Required notice, approval, and documentation standards for participants requesting distributions.
Administrative procedures for plan administrators to implement the revised rules (e.g., roles, timelines, and record-keeping).

The bill is framed to adjust the “conditions” rather than create a wholesale change to the plan structure, suggesting targeted modifications to when and how in-service distributions can be taken.

Who is affected

Participants in the South Dakota Deferred Compensation Plan, including state employees and other plan participants, who may seek in-service distributions.

Plan administrators and the state retirement/benefits office responsible for approving and processing in-service withdrawal requests.

Employers sponsoring or administering the plan may need to align internal procedures with the revised provisions.

Procedural and timeline aspects

Legislative process milestones:

January 13, 2026: First read in Senate; referred to Senate Retirement Laws.
January 20, 2026: Do Pass in Senate Retirement Laws, with unanimous vote; placed on consent.
January 22–23, 2026: Senate passage (Do Pass), House reception and readings follow.
February 9–10, 2026: House actions culminating in Do Pass with unanimous YEAS; ready for executive action.
February 12–17, 2026: Passed by both chambers; delivered to and signed by Governor.
February 23, 2026: Governor signs SB 54 into law (S.J. 350).

Effective date: The text provided does not specify, but typically when signed, such measures take effect on a specified date (often the effective date is upon signing or a future date stated in the bill). Check the enrolled bill or statutory language for the exact effective date and any phased-in requirements.

Practical considerations for readers

If you are an in-service distribution applicant, you should review the revised conditions to determine eligibility and any changes to required documentation or withdrawal limits.

Plan sponsors and administrators should update internal policies, consent forms, and participant communications to reflect the new criteria and processes.

Notes

The exact statutory language and numerical details (e.g., age thresholds, withdrawal limits, notice periods) are not included in the provided materials. For precise provisions and any transitional rules, refer to the enrolled bill text and the final statute as published after the February 2026 signing.

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