South Dakota Retirement System Sees 2027 COLA at 2% as Inflation Could Reach 4.4%
Updated
Updated · Mitchell Republic · Jun 16
South Dakota Retirement System Sees 2027 COLA at 2% as Inflation Could Reach 4.4%
1 articles · Updated · Mitchell Republic · Jun 16
Summary
A 2% cost-of-living adjustment is projected for South Dakota retirees in 2027, extending a five-year run in which annual increases have trailed inflation.
Inflation has already risen 2.92% since the last 2025 reading and could hit 4.4% later this year, while the pension plan can miss its inflation target if returns fall short of its 6.5% assumption.
The system remains 100% funded and is tracking about 11% investment returns this fiscal year, but officials said fixed 6% employee and 6% employer contributions leave little room to fully match inflation.
Actuaries also warned of a roughly 30% chance no annual COLA will be issued in 2031, which could force changes to the retirement benefits process.
Board members are now weighing a new COLA goal—such as 'affordable inflation protection'—after officials said recent retirees from 2016 to 2022 have fallen behind inflation more than older cohorts.