Distribution by direct rollover--Promulgation of rules

A member who elects to withdraw accumulated contributions, as provided for in § 3-12C-602 , or a member's surviving spouse or nonspouse beneficiary who receives a lump-sum payment pursuant to § 3-12C-409 , may receive the distribution directly. An eligible rollover distribution may be transferred by the system in a direct rollover to no more than one eligible retirement plan under § 401, 403(b), 408, 408A, or 457(b) of the Internal Revenue Code, as identified by a member or a member's surviving spouse if the individual so elects. A member's nonspouse beneficiary may transfer a portion or all of the member's account by rollover to an eligible plan under § 408 or 408A. The board shall promulgate rules pursuant to chapter 1-26 , to comply with federal mandates regarding rollover distributions. The system is not required to make an independent determination as to whether the plan identified by a member, surviving spouse, or nonspouse beneficiary qualifies as an eligible retirement plan. By electing a direct rollover and identifying the eligible retirement plan to which an eligible rollover distribution is to be made, a member, surviving spouse, or nonspouse beneficiary represents to the system that the identified plan qualifies as an eligible retirement plan. If a member, surviving spouse, or nonspouse beneficiary does not elect a direct rollover, the distribution must be issued in the name of, and directly to, that individual. Source: SL 1993, ch 42 , § 5; SL 1995, ch 24 , § 17; SL 1998, ch 15 , § 7; SL 2009, ch 20 , § 2; SDCL § 3-12-76.3; SL 2019, ch 22 , § 1; SL 2025, ch 27 , § 39.