FOR IMMEDIATE RELEASE : Wednesday, April 11, 2012
CONTACT: Sara Rabern, (605) 773-3215
Court Upholds South Dakota Retirement System Legislative Modification
PIERRE, S.D. – Attorney General Marty Jackley announced today that a trial judge upheld the Legislature’s 2010 modification of the cost of living adjustments (COLA) to South Dakota Retirement System (SDRS) benefits. SDRS provides retirement and other benefits to state and local government employees. A retired circuit court judge filed a lawsuit challenging the constitutionality of the Legislature’s actions, alleging the legislation unlawfully modified his contractual right to an unalterable level of retirement benefits including an annual 3.1% COLA increase.
In granting the State’s Motion for Summary Judgment, the trial judge ruled that the plaintiff had no contractual right to a forever 3.1 % COLA. The trial court determined that the legislature had the ability to modify the COLA in order to maintain the financial integrity of the system. Prior to the legislature’s actions SDRS actuaries had concluded that SDRS was no longer sound due to the substantial investment losses the SDRS suffered resulting from the 2008 market collapse.