49-13-303 - Supplemental benefit established -- Defined contribution plan options -- Contribution by employer and employee -- Immediate vesting of contributions -- Plans to be separate -- Tax-qualifie
49-13-303. Supplemental benefit established -- Defined contribution plan options --Contribution by employer and employee -- Immediate vesting of contributions -- Plans tobe separate -- Tax-qualified status of plans.
(1) (a) Participating employers in Level A under Section 49-13-301, which areparticipating educational institutions or participating employers whose activities are associatedwith participating educational institutions, shall make a nonelective contribution on behalf of eachof its regular full-time employees who are members of this system an amount equal to at least1.5% of the member's compensation to a defined contribution plan qualified under Section 401(k)of the Internal Revenue Code which is selected by the regular full-time employee and which issponsored by the board, by that Level A employer, or by a group of similar Level A employers,and which has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
(b) All other Level A participating employers under Section 49-13-301 shall make anonelective contribution on behalf of each of its regular full-time employees who are members ofthis system an amount equal to at least 1.5% of the member's compensation to the definedcontribution plan qualified under Section 401(k) of the Internal Revenue Code which is sponsoredby the board.
(c) The member or participating employer may make additional payments to either thequalified 401(k) plan which receives the 1.5% employer contribution described in this Subsection(1), or to any other defined contribution plan qualified under Section 401(k) of the InternalRevenue Code which is selected by the member and sponsored by the board, that Level Aemployer, or a group of similar Level A employers, and which has been grandfathered underSection 1116 of the Federal Tax Reform Act of 1986.
(2) (a) Participating employers in Level B under Section 49-13-301 may makenonelective contributions on behalf of each of its regular full-time employees who are members ofthis system to the 401(k) defined contribution plan sponsored by the board or to a qualified plansponsored by the participating employer which has been grandfathered under Section 1116 ofthe Federal Tax Reform Act of 1986.
(b) The member may also make voluntary deferrals to the same 401(k) plan which themember selected to receive the employer contribution described in Subsection (2)(a).
(3) Each qualified defined contribution 401(k) plan is separate and distinct from any otherqualified defined contribution 401(k) plan for all purposes, including purposes of fiduciaryliability and plan administration.
(4) A member may not make voluntary deferrals to any other qualified 401(k) plansponsored by a state or local government.
(5) The total amount contributed by the participating employer and the member underSubsection (1) or (2) vests to the member's benefit immediately and is nonforfeitable.
(6) The board may request from any other qualified 401(k) plan under Subsection (1) or(2) any relevant information pertaining to the maintenance of its tax qualification under theInternal Revenue Code.
(7) The board may take any action which in its judgment is necessary to maintain thetax-qualified status of its 401(k) defined contribution plan under federal law.
Renumbered and Amended by Chapter 250, 2002 General Session