2022 -- H 7649

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LC003865

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- DEFERRED COMPENSATION

PLANS

     

     Introduced By: Representatives Casey, Kazarian, Kennedy, Noret, Amore, Craven,
Messier, Williams, O'Brien, and Edwards

     Date Introduced: March 02, 2022

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 36-13-1 and 36-13-1.1 of the General Laws in Chapter 36-13 entitled

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"Deferred Compensation Plans" are hereby amended to read as follows:

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     36-13-1. Deferred compensation plans authorized.

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     (a) The state or any city, town, or other political subdivision may, by contract, agree with

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any employee to defer, in whole or in part, any portion of that employee's compensation, and may

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subsequently contract with financial institutions for the purchase of government securities or with

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other financial entities for the purchase of mutual funds, and procure a fixed or variable life

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insurance or annuity contract for the purpose of providing funds to meet its obligations under a

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deferred compensation program for the employees from any financial institutions or from any life

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underwriters duly licensed by this state who represents an insurance company licensed to contract

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business in this state.

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     (b) In the administration of a deferred compensation plan for state employees in the state

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plan authorized under this chapter, after October 1, 1998, the state shall engage three companies

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("Authorized Companies") to administer such deferred compensation plans. After October 1, 1998,

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only such Authorized Companies shall be entitled to enroll state employees in such the state

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deferred compensation plans in accordance with the following guidelines:

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     (1) Employees must have the option of purchasing or investing in alternative financial

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products referred to herein which have been approved by the State Investment Commission;

 

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     (2) The alternative financial products shall include, without limitation, a variable product

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and a fixed product;

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     (3) The Authorized Companies (or an entity related thereto) must:

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     (i) Be selected in accordance with the provisions of this chapter,

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     (ii) Covenant that all employees covered under any plan authorized under this chapter shall,

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at all times, be granted the unfettered right to cancel, change, liquidate, amend or interchange any

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investment contract or product purchased in any such plan without such employees incurring a

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financial penalty or fee of any kind or nature imposed by contract, and

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     (iii) Be granted equal access to all eligible employees;

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     (4) Procedures shall be established to ensure that personalized information regarding

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employees shall not be provided to third parties by the Authorized Companies. "Personalized

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Information" shall include, without limitation, social security numbers, home addresses, telephone

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numbers, amounts invested, medical or disability information; and

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     (5) The Authorized Companies shall be permitted to offer any financial product referred to

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herein which shall have been approved by the State Investment Commission. Notwithstanding any

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other provisions of this section (b), if the department of administration determines that less than

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three companies are qualified to be engaged as Authorized Companies because of (a) insufficient

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experience in the administration of deferred compensation plans or (b) a failure to assure adherence

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to the guidelines set forth herein, the state may engage less than three Authorized Companies.

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     (6) If any provision of this section or the application thereof to any person or circumstances

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is held invalid, that invalidity shall not affect other provisions or applications of the section which

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can be given effect without the invalid provision or application, and to this end the provisions of

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this section are declared to be severable.

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     (c) Effective January 1, 2023, any participating municipality as defined in § 45-21-2 may

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elect to offer to its municipal employees the deferred compensation plans offered by the state. The

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account of any municipal employee who participates in the state deferred compensation plan shall

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be subject to the same administration, charges, costs, rules, and regulations as are applicable and

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applied to the accounts of employees in the state deferred compensation plan.

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     36-13-1.1. State investment commission.

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     The state investment commission shall, from time to time, select the financial institutions

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and/or entities in which the state shall invest the funds under the deferred compensation plan for

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state employees in the state plan.

 

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- DEFERRED COMPENSATION

PLANS

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     This act would provide that effective January 1, 2023, any participating municipality as

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defined in § 45-21-2 may elect to offer to its employees the deferred compensation plans offered

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by the state. The account of any municipal employee who participates in the state deferred

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compensation plan would be subject to the same administration, rules, and regulations as are

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applicable and applied to the accounts of employees in the state deferred compensation plan.

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     This act would take effect upon passage.

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