Section 21 Deferred compensation program for employees
Section 21. The authority may contract with an employee to defer a portion of such employee’s compensation and may, for the purpose of funding a deferred compensation program for such employee established in accordance with the U.S. Internal Revenue Code, hereinafter referred to as the Code, invest the deferred portion of such employee’s compensation in a life insurance or annuity contract, mutual fund or bank investment trust. The authority shall, before making any such investment, solicit bids from insurance companies authorized to conduct business within the commonwealth pursuant to chapter one hundred and seventy-five, mutual fund managers and banks, which bids shall be sealed and opened at a time and place designated by the authority. Any bid submitted by an insurance company, mutual fund or bank investment trust to fund the deferred compensation program, where applicable, shall clearly indicate the interest rate which shall be paid on the deferred funds, any commissions which will be paid, any load imposed for the purpose of administering the funds, mortality projections, expected payouts, tax implications for participating employees and such other information as the authority may require. Any contract entered into between an employee and the authority pursuant to this section shall include all such 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” as defined in section one of chapter thirty-two and shall also include consultants and independent contractors who are natural persons paid by the authority.
An employee may defer compensation so long as such deferral is the lesser of seven thousand five hundred dollars or thirty-three and one-third percent of his includible compensation for a taxable year; provided, however, that for one or more of the last three taxable years ending before he attains normal retirement age, an employee may defer the lesser of fifteen thousand dollars or the sum of (1) seven thousand five hundred dollars or thirty-three and one-third percent of his includible compensation for such year; plus (2) a sum not more than the total deferrable compensation for prior taxable years that had not in fact been deferred in such years.
Such deferred compensation program shall be in addition to, and not part of, the retirement or pension system as provided under chapter thirty-two and any other benefit program provided by law for such employee. Any compensation deferred under such program shall continue to be included as regular compensation, as defined in section one of said chapter thirty-two, for the purpose of computing the retirement and pension benefits earned by any such employee; provided, however, that any compensation so deferred shall not be included in the computation of any taxes withheld on behalf of any such employee.