(a) The state or any political subdivision of the state may, by contract, agree with any employee to defer, in whole or in part, any portion of such employee's compensation and may subsequently, with the consent of the employee, contract for, purchase or otherwise procure, for the purpose of funding a deferred compensation program for such employee, (1) an investment savings account, (2) a fixed or variable life insurance or annuity contract from any life underwriter licensed by this state who represents an insurance company licensed to contract business in this state, or (3) a beneficial interest in an investment trust established by an organization of public employers, the assets of which are managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations, from an entity registered as a broker-dealer under statutes and regulations of the state governing the sale of securities, provided the employee shall be furnished prior to purchase with disclosures substantially comparable to the disclosures required under the Securities Act of 1933 and the Investment Company Act of 1940 for the sale of similar nonexempt products.

(b) The State Comptroller or the officer designated by the chief executive officer of any other political subdivision is authorized to enter into such contractual agreements with employees of the state or the political subdivision, as the case may be, on behalf of the state or the political subdivision to defer any portion of that employee's compensation.

(c) The administration of the deferred compensation program shall be under the direction of the State Comptroller or the officer designated by the particular political subdivision. Payroll deductions shall be made, in each instance, by the appropriate payroll officer. The administrator of the deferred compensation program may contract with a private corporation or institution for providing consolidated billing and other administrative services with respect thereto.

(d) For the purposes of this section: “Employee” means any person, whether appointed, or elected, including members of the General Assembly, or under contract, providing services for the state or a political subdivision, for which compensation is paid; and “investment savings account” means a savings account in a state bank and trust company, national banking association, mutual savings bank, savings and loan association or federal savings and loan association or a share account in a credit union or federal credit union established to receive the deferred compensation of a state employee under the deferred compensation plan established by the State Comptroller or the officer designated by a political subdivision pursuant to this section.

(e) Notwithstanding any other provision of law to the contrary, those persons designated to administer the deferred compensation program are hereby authorized to make (1) deposits or payments to such investment savings accounts, (2) payment of premiums for the purchase of fixed or variable life insurance or annuity contracts, or (3) payments for interests in investment trusts established by an organization of public employers and managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations under the deferred compensation program. Such payments shall not be construed to be a prohibited use of the general assets of the state or the other political subdivision.

(f) The state may, by contract, agree with any employee to defer, in whole or in part, any portion of such employee's compensation and may subsequently, with the consent of the employee, contract for, purchase or otherwise procure, for the purpose of funding a deferred compensation program for such employee, shares of an investment company, registered under the Investment Company Act of 1940, which shares are registered under the Securities Act of 1933, including equity, fixed income, short-term or money market mutual funds. Notwithstanding any other provision of law to the contrary, those persons designated by the state to administer the deferred compensation program are hereby authorized to make deposits or payments to an investment company, registered under the Investment Company Act of 1940, for the purchase of shares of such investment company, which shares are registered under the Securities Act of 1933, including equity, fixed income, short-term or money market mutual funds. Such payments shall not be construed to be a prohibited use of the general assets of the state.

(g) Upon request of a political subdivision of the state, the State Comptroller shall make available to the employees of the political subdivision the deferred compensation program provided to state employees under such additional terms and conditions as the State Comptroller may prescribe.

(P.A. 73-578; P.A. 76-254, S. 10, 11; P.A. 80-22, S. 1; P.A. 90-208, S. 1; P.A. 91-72, S. 1; P.A. 97-103; P.A. 01-80, S. 10.)

History: P.A. 76-254 amended definition of “employee” in Subsec. (d) to include members of general assembly; P.A. 80-22 included purchase of investment savings accounts under Subsecs. (a) and (e) and defined “savings account” in Subsec. (d); P.A. 90-208 added Subsecs. (a)(3) and (e)(3) allowing investment in certain retirement fund and amended the section to apply only to the state and political subdivisions of the state; P.A. 91-72 amended Subsec. (a)(3) by replacing existing Subdiv. with new provisions re beneficial interest in certain investment trusts and amended Subsec. (e) by deleting provisions re retirement funds and adding provisions re investment trusts in Subdiv. (3); P.A. 97-103 added Subsec. (f) establishing a deferred compensation program funded by shares of a registered investment company; P.A. 01-80 made technical changes in Subsecs. (a) and (e) and added Subsec. (g) re availability of deferred compensation program provided to state employees to employees of a political subdivision of the state.