Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
Partially
Explanation:
The state has implemented automatic enrollment for its employees, and employers participating in the South Dakota deferred compensation plan. Political subdivisions not participating in the state deferred compensation program are not authorized to include automatic enrollment provisions in their own plans.
Relevant State Laws – S.D. Codified Laws § 3-10-4, § 3-13-56, § 3-13-49.1
Employees of the state and political subdivisions may authorize their employer to withhold a designated amount from their salary for a retirement annuity or accounts, or both, purchased for their benefit. S.D. Codified Laws § 3-10-4
South Dakota Retirement System Board of Trustees may establish an automatic enrollment feature within the South Dakota deferred compensation plan. Any automatic enrollment feature “shall apply to newly-employed members hired after a specified future date, any state employees not participating in the deferred compensation plan as of June 30, 2019, and employees of any other automatic enrollment unit that elects automatic enrollment for its employees.” Any automatic enrollment feature “shall apply only to the employees of those participating units that choose the automatic enrollment feature for the unit’s employees.” S.D. Codified Laws § 3-13-56.
In addition to participation in the South Dakota deferred compensation plan, political subdivisions are authorized to establish deferred compensation programs and participation in such programs shall be by written agreement between the employees and the governing body of the political subdivision. S.D. Codified Laws § 3-13-49.1