2011 Retaining Effective Teachers Policy
The state should ensure that excessive resources are not committed to funding teachers' pension systems.
As of June 30, 2010, the most recent date for which an actuarial valuation is available, South Dakota's teacher pension system is 96.3 percent funded and has a 30-year amortization period. This means that if the plan earns its assumed rate of return and maintains current contribution rates, it would take the state 30 years to pay off its unfunded liabilities. Both levels are better than regulatory recommendations, and South Dakota's system is financially sustainable, according to actuarial benchmarks.
South Dakota does not commit excessive resources toward its teachers' retirement system. The mandatory employee and employer contribution rates to the defined benefit plan are 6 percent each. These rates are set by state statute. Both of these rates are reasonable, considering that teachers and local districts are also contributing to Social Security.
South Dakota Retirement System, Comprehensive Annual Financial Report, for the Fiscal Year Ended June 30, 2010 http://www.sdrs.sd.gov/publications/documents/CAFR2010.pdf
South Dakota recognized the factual accuracy of this analysis.