S.D. Codified Laws § 3-12C-310
If a participating unit determines that a governmental function is to be privatized, the participating unit shall pass a resolution to that effect determining the date that its employees will cease to be public employees eligible for membership in the system. The participating unit shall notify the system and the employees affected of the resolution and, after the effective date, cease to make contributions to the South Dakota Retirement System as required in §§ 3-12C-401 and 3-12C-403. Any member affected by privatization is entitled to the benefits accrued as of the effective date under the provisions of chapter 3-12C. For the purposes of determining eligibility for vesting and early retirement pursuant to § 3-12C-1111, years of service with the successor employer shall be considered.
SDCL 3-12C-310