2021 S.D. Legislature: SD Retirement System is one of best in the nation

This week the Retirement Laws Committee will jointly convene with the South Dakota Retirement System Board of Trustees to hear updates as to the investments which fund the entire South Dakota Retirement System. The South Dakota Retirement System office is located in Sioux Falls. 

Over the past decades the South Dakota Retirement System has become known as the best managed system in the United States. It is interesting to read articles from investment reporting agencies and find that they are often unable to compare the South Dakota Retirement System with retirement accounts in other states. The reason for that is because South Dakota’s system has been managed so well that it rates more like a private investment firm and throws off comparisons to other states. The credit for such excellence goes to Matt Clark and his staff. Mr. Clark oversees the fund and has been training his staff to carry on his investment model into the future.  

I’ve mentioned before that part of the reason the SD Retirement System succeeds is due to the fact that the Legislature simply places its stamp of approval on Mr. Clark’s work, and we avoid any type of micromanagement. The state has many people like Matt who serve throughout the various agencies and we are blessed to have so many committed employees. That level of commitment really shows through with the Retirement System because Mr. Clark has spent his entire decades-long career there and his predecessor started the program with similar policies and goals. The Investment Account is managed to succeed in both good and even in troubled financial times. The account is approximately $13 billion and growing.

The Legislature will meet in Pierre next week to hear the annual Governor’s Budget Address. As I have served in the House over the past many years and now as a member of the Appropriations Committee, it has always been a sad reminder that the Legislature remains an afterthought when it comes to the budgeting process. And, as one might expect, the budget drives policy decisions.  

As a result of the Legislature being mostly excluded from the budgeting process, we continue to see problems within our state government, such as what has happened in both the Department of Health and Human Services (specifically with mental healthcare) and in the Department of Corrections. Neither of those departments are adequately funding employee wages. And the result is a very high turnover rate as well as endangering both the staff and the people under their care.  

During my time as the Speaker Pro Tem, I had our LRC staff send a letter to each of the agencies of state government asking them to provide to me their budget requests for the upcoming year. A couple of the agency Secretaries responded but the word apparently got out to the other Departments and I received no further information. So, each year the Legislature is not included in the initial agency requests, and, as a result, we find ourselves in the dark as to many of the actual needs that will have a tremendous impact on the function of those agencies. That needs to change.

The focus of the Appropriations process needs to return to many of our state’s core responsibilities, but we cannot do that job if we are kept in the dark as to actual needs until they become a ‘crisis’. And we need to have the political will to change the ‘business as usual’ approach in state government.

There are solutions to many of these problems, but we need to have Legislative leaders who recognize the weakness of our process, and, we need to have support for those changes from the Executive branch as well.

So, we now begin the Legislative season. It’s very important that we hear from you if there are particular issues to discuss or specific pieces of legislation that you would like to see brought forward.

As always, feel free to contact me (steven.haugaard@sdlegislature.gov) with questions or comments. You can also go to www.sdlegislature.gov to listen in on the meetings or to see what else is happening in state government.