| Chapter 173 |
| 2023 -- H 5374 SUBSTITUTE A Enacted 06/20/2023 |
| A N A C T |
| RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- DEFERRED COMPENSATION PLANS |
Introduced By: Representatives Casey, Kazarian, O'Brien, Craven, Edwards, Baginski, and Noret |
| Date Introduced: February 03, 2023 |
| It is enacted by the General Assembly as follows: |
| SECTION 1. Sections 36-13-1, 36-13-1.1 and 36-13-3 of the General Laws in Chapter 36- |
| 13 entitled "Deferred Compensation Plans" are hereby amended to read as follows: |
| 36-13-1. Deferred compensation plans authorized. |
| (a) The state or any city, town, or other political subdivision may, by contract, agree with |
| any employee to defer, in whole or in part, any portion of that employee’s compensation, and may |
| subsequently contract with financial institutions for the purchase of government securities or with |
| other financial entities for the purchase of mutual funds, and procure a fixed or variable life |
| insurance or annuity contract for the purpose of providing funds to meet its obligations under a |
| deferred compensation program for the employees from any financial institutions or from any life |
| underwriters duly licensed by this state who represents an insurance company licensed to contract |
| business in this state. |
| (b) In the administration of a deferred compensation plan for state employees in the state |
| plan authorized under this chapter, after October 1, 1998, the state shall engage three companies |
| ("Authorized Companies") to administer such deferred compensation plans. After October 1, 1998, |
| only such Authorized Companies shall be entitled to enroll state employees in such the state |
| deferred compensation plans in accordance with the following guidelines: |
| (1) Employees must have the option of purchasing or investing in alternative financial |
| products referred to herein which have been approved by the State Investment Commission; |
| (2) The alternative financial products shall include, without limitation, 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 this chapter, |
| (ii) Covenant that all employees covered under any plan authorized under this chapter shall, |
| at all times, be granted the unfettered right to cancel, change, liquidate, amend or interchange any |
| investment contract or product purchased in any such plan without such employees incurring a |
| 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 that personalized information regarding |
| employees shall not be provided to third parties 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 any financial product referred to |
| herein which shall have been approved by the State Investment Commission. Notwithstanding any |
| other provisions of this section subsection (b), if the department of administration determines that |
| less than three companies are qualified to be engaged as Authorized Companies because of (a) |
| insufficient experience in the administration of deferred compensation plans 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 application thereof to any person or circumstances |
| is held invalid, that invalidity shall not affect other provisions or applications of the section which |
| can be given effect without the invalid provision or application, and to this end the provisions of |
| this section are declared to be severable. |
| (c) Effective January 1, 2024, any participating municipality as defined in § 45-21-2 may |
| elect to offer to its municipal employees the deferred compensation plans offered by the state. The |
| account of any municipal employee who participates in the state deferred compensation plan shall |
| be subject to the same administration, charges, costs, rules, and regulations as are applicable and |
| applied to the accounts of employees in the state deferred compensation plan. |
| 36-13-1.1. State investment commission. |
| The state investment commission shall, from time to time, select the financial institutions |
| and/or entities in which the state shall invest the funds under the deferred compensation plan for |
| state employees in the state plan. |
| 36-13-3. Administration of program. |
| The administration of the deferred compensation program within each state agency, |
| department, board, commission, or institution shall be under the direction of the director or |
| principal officer of that particular agency, department, board, commission, or institution. Each city, |
| town, or other political subdivision shall designate an officer to administer the deferred |
| compensation program, including deferred compensation plans offered to municipal employees |
| pursuant to § 36-13-1(c). Reductions in payroll shall be made, in each instance, by the appropriate |
| payroll officer. The administrator of the deferred compensation program may contract with a |
| private corporation or institution for providing consolidated billing and other administrative |
| services. |
| SECTION 2. This act shall take effect upon passage. |
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| LC000234/SUB A |
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