May 6, 1977

Mr. Thomas C. Todd, State Superintendent 
Division of Elementary and Secondary Education 
New Office Building 
Pierre, South Dakota 57501

Official Opinion No. 77-44

Commencement of state retirement benefits

Dear Mr. Todd:

You have requested an opinion based on the following factual situation:

FACTS: 

“X,” a former employee of the division reached his normal retirement age in January, 1977, and terminated his employment with the division January 31, 1977.  “X” submitted an application for retirement benefits to the South Dakota Retirement System in March, 1977, with a request that his retirement benefits commence February 1, 1977.

Based on the above factual situation, you have asked the following question:

QUESTION: 

Under the provisions of SDCL 3-12 and in particular SDCL 3-12-90, what is the starting date for retirements that “X” is entitled to?

SDCL 3-12-90 provides: 
    
The termination of employment of a member with five or more years of credited service on or after his normal retirement age for any cause other than death shall be deemed to be a retirement.  Upon such retirement, he shall be entitled to a normal retirement allowance with the first payment to commence on the first day of the month following his retirement or as specified in the member's application for retirement, whichever is later; and the last payment as of the first day of the month in which his death occurs.

The applicable language in the above statute is quite explicit. A retirant is eligible to receive his first payment on the first day of the month immediately following his formal retirement unless he otherwise specifies a later time. However, implicit in SDCL 3-12-90 is the requirement that a retirant make application for benefits on application forms adopted and approved by the board of trustees (SDCL 3-12-56).

Therefore, a payment could obviously not be made until the application is received and processed by the administrator of the retirement system.  The board of trustees has adopted and filed an administrative rule (47:07:03:01) establishing thirty days as the period for processing applications and mailing the first payment to the retirant.

The answer to your question is as follows:  “X” is eligible to receive benefits commencing February 1, 1977, as that is the month immediately succeeding his retirement.  However, the actual disbursement of monthly payments will not begin until application of “X” is received.  At that time, “X” is entitled to the benefits for the months of February and subsequent months in order to bring his payments up to date.  “X” has a vested right which cannot be modified or abrogated by procedural requirements.

Respectfully submitted,

William J. Janklow
Attorney General

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