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ACT OF THE GENERAL ASSEMBLY 2007-2008

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NO. 162.  AN ACT RELATING TO PUBLIC AGENCY DEFERRED COMPENSATION PLANS.

(S.354)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  3 V.S.A. § 650 is amended to read:

§ 650.  DEFINITIONS

The following definitions shall apply throughout this chapter unless the context requires otherwise:

(1)  “Board” means the Vermont state retirement board.

(2)  “Deferred compensation agreement” means any agreement authorized by this chapter entered into between a public agency and an employee of that agency providing for a reduction in the employee’s compensation in return for the agency’s promise to make deferred payments in the future.

(3)(2)  “Employee” means any employee of a public agency whether appointed, elected or under contract to whom compensation is paid.

(3)  “Other public agency” means a public agency described in subdivision (4)(B) or (C) of this section.

(4)  “Public agency” means:

(A)  the state, acting as a single unit employer on behalf of the general assembly and state agencies, departments, boards or commissions;

(B)  any a county or municipality as defined in section subdivision 4303(4) of Title 24; and

(C)  any a school district as defined in section subdivision 11(a)(10) of Title 16 or a supervisory union as defined in subdivision 11(a)(23) of Title 16.

(5)  “State board” means the Vermont state retirement board.

(6)  “Teachers’ board” means the Vermont state teachers’ retirement board.

Sec. 2.  3 V.S.A. § 651 is amended to read:

§ 651.  DEFERRED COMPENSATION PLANS AUTHORIZED

(a)  Subject to collective bargaining rights of state employees involved, the state or any county, municipality, or school district, or supervisory union may, through any public agency, enter into a contractual agreement with any employee of that agency to defer, in whole or in part, that employee’s compensation.  Payroll reductions shall be made, in each instance, by the appropriate payroll officer.

(b)  The state board may establish and administer a plan that conforms with Section 457 of the Internal Revenue Code for the purpose of providing a deferred compensation program for state employees, including members of the general assembly, and for the employees of other public agencies that elect to participate in the state plan.

(c)  Other public agencies may establish and administer a plan for the purpose of providing a deferred compensation program for their employees.

(d)  The state board and other public agencies, which have or will establish a defined contribution deferred compensation plan, shall create a trust to conform with Section 457 the appropriate sections of the Internal Revenue Code.  The teachers’ board may create an investment program that will provide public agencies set forth in subdivision 650(4)(C) of this title operating plans under Subsection 403(b) of the Internal Revenue Code with investment options.

(e)  All assets and income which have been or shall be withheld or deferred  deposited pursuant to this chapter by the state of Vermont or its political subdivisions other public agencies shall be held in trust in any funding vehicle permitted by Subsection 403(b) and Section 457 of the Internal Revenue Code for the exclusive benefit of the plan’s plans’ participants and their beneficiaries until such time as the funds are distributed to the participant or the beneficiary of the participant in accordance with the terms of the deferred compensation plan.

(f)  For state employees, including members of the general assembly, the state board shall be the trustees of the deferred compensation plan that conforms to Section 457 of the Internal Revenue Code, and the state treasurer shall be the custodian of the funds in the trust.  All payments from such the funds shall be made by the state treasurer or the treasurer’s authorized agent.  An investment program established by the teachers’ board shall be optional for public agencies set forth in subdivision 650(4)(C) of this title.  The public agency shall be the trustees of its plans created under Subsection 403(b) of the Internal Revenue Code.

(g)  Any political subdivision administering a plan as a trust shall be required to name one or more persons as trustees of such plan, and to establish provisions relating to the removal or resignation of a trustee, the appointment of a successor and the methods by which the trustee may take necessary action as required under the plan.

Sec. 3.  EFFECTIVE DATE

This act shall take effect upon passage.

Approved:  May 20, 2008



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us