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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