§ 36-13-1 - Deferred compensation plans authorized.
SECTION 36-13-1
§ 36-13-1 Deferred compensation plansauthorized. – (a) The state or any city, town, or other political subdivision may, bycontract, agree with any employee to defer, in whole or in part, any portion ofthat employee's compensation, and may subsequently contract with financialinstitutions for the purchase of government securities or with other financialentities for the purchase of mutual funds, and procure a fixed or variable lifeinsurance or annuity contract for the purpose of providing funds to meet itsobligations under a deferred compensation program for the employees from anyfinancial institutions or from any life underwriters duly licensed by thisstate who represents an insurance company licensed to contract business in thisstate.
(b) In the administration of a deferred compensation plan forstate employees authorized under this chapter, after [October 1,1998], the state shall engage three companies ("Authorized Companies") toadminister such deferred compensation plans. After [October 1, 1998],only such Authorized Companies shall be entitled to enroll state employees insuch deferred compensation plans in accordance with the following guidelines:
(1) Employees must have the option of purchasing or investingin alternative financial products referred to herein which have been approvedby the State Investment Commission;
(2) The alternative financial products shall include, withoutlimitation, a variable product and a fixed product;
(3) The Authorized Companies (or an entity related thereto)must:
(i) Be selected in accordance with the provisions of thischapter,
(ii) Covenant that all employees covered under any planauthorized under this chapter shall, at all times, be granted the unfetteredright to cancel, change, liquidate, amend or interchange any investmentcontract or product purchased in any such plan without such employees incurringa financial penalty or fee of any kind or nature imposed by contract, and
(iii) Be granted equal access to all eligible employees;
(4) Procedures shall be established to ensure thatpersonalized information regarding employees shall not be provided to thirdparties by the Authorized Companies. "Personalized Information" shall include,without limitation, social security numbers, home addresses, telephone numbers,amounts invested, medical or disability information; and
(5) The Authorized Companies shall be permitted to offer anyfinancial product referred to herein which shall have been approved by theState Investment Commission. Notwithstanding any other provisions of thissection (b), if the department of administration determines that less thanthree companies are qualified to be engaged as Authorized Companies because of(a) insufficient experience in the administration of deferred compensationplans or (b) a failure to assure adherence to the guidelines set forth herein,the state may engage less than three Authorized Companies.
(6) If any provision of this section or the applicationthereof to any person or circumstances is held invalid, that invalidity shallnot affect other provisions or applications of the section which can be giveneffect without the invalid provision or application, and to this end theprovisions of this section are declared to be severable.