Section 64. The state treasurer, on behalf of the commonwealth, may contract with an employee to defer a portion of that employee's compensation and may, for the purposes of funding a deferred compensation program for the employee, established under the United States Internal Revenue Code, the ''Code'', invest the deferred portion of the employee's income in a life insurance or annuity contract, mutual fund, a bank investment trust, or additional investment alternatives available under the program. The treasurer, before making the investment, shall solicit bids from fund managers, investment managers and insurance companies authorized to conduct business within the commonwealth under chapter 175, mutual fund managers and banks, which bids shall be sealed, and opened at a time and place designated by the treasurer. A bid submitted by an insurance company, mutual fund, bank investment trust or other fund manager or investment manager, to fund the deferred compensation program shall, where applicable, clearly indicate the interest rate which shall be paid on the deferred funds, the commissions which will be paid to the salesmen, the load imposed for the purpose of administering the funds, mortality projections, expected payouts, tax implications for participating employees and other information as the treasurer may require. Any contract entered into between an employee and the commonwealth under this section shall include the information in terms the employee can reasonably be expected to understand.

As used in this section the word ''employee'' shall have the same meaning as ''employee'' in section 1 of chapter 32 and shall include members of the state police temporarily assigned to and paid by the Massachusetts Department of Transportation, the Massachusetts Port Authority or any other board, agency, commission or authority to which they may be temporarily assigned and by which they are paid, and consultants and independent contractors who are natural persons paid by the commonwealth.

An employee may defer compensation; provided, however, that such deferral shall not exceed the maximum allowable under the Code, as amended and in effect for the taxable year, and appropriate regulations under the Code.

Such deferred compensation program shall be in addition to and not a part of the retirement program or pension system as provided under said chapter 32 and any other benefit program provided by law for such employee. Any compensation deferred under such a plan shall continue to be included as regular compensation, as defined in said section 1 of said chapter 32, for the purpose of computing the retirement and pension benefits earned by any such employee, but any compensation so deferred shall not be included in the computation of any taxes withheld on behalf of any such employee.

The state treasurer, on behalf of the commonwealth, shall contract with every person, who is receiving compensation from the commonwealth for services performed for the commonwealth and who is not eligible for membership or has exercised an option not to participate in the state retirement system in chapter 32, to defer a portion of that person's compensation, and shall invest the deferred portion of that person's income in a deferred compensation program established under said Code. For persons holding positions which would have rendered the holder of the position eligible for participation in the commonwealth's deferred compensation program on November 5, 1990, the state treasurer shall contract for plan years prior to January 1, 1993, to defer 6 per cent of that person's regular compensation, as defined in section 1 of chapter 32 for the period subsequent to December 31, 1945, but no greater than the maximum deferral allowable for that person under said Code for government deferred compensation programs. For persons holding positions which would not have rendered the holder of the position eligible for participation in the commonwealth's deferred compensation program on November 5, 1990, the state treasurer shall contract to defer 71/2 per cent of that person's regular compensation, as defined in said section 1 of said chapter 32 for the period subsequent to December 31, 1945, but no greater than the maximum deferral allowable for that person under said Code for government deferred compensation programs.

Notwithstanding this section, the state treasurer need not contract with any part-time, seasonal or temporary employee not required by said Code to participate in a public retirement system. All contracts formed with part-time, seasonal or temporary employees under the previous paragraph shall entitle the employee to a single-sum distribution of the employee's deferrals plus reasonable interest.

Nothing in this section shall be construed to create or grant any rights not previously enjoyed under chapter 32A or chapter 150E.