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BILL AS INTRODUCED 2007-2008

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S.354

Introduced by   Senator Hartwell of Bennington District and Senator White of Windham District

Referred to Committee on

Date:

     Subject:  Executive branch; retirement; deferred compensation programs

Statement of purpose:  This bill proposes to: (1) require the Vermont pension investment committee to administer the state of Vermont deferred compensation plan that conforms to Section 403(b) of the Internal Revenue Code; (2) expand the types of employers who are eligible to participate in the deferred compensation plans; and (3) create a new statewide plan that would be available to a variety of nonprofit employers, including all public school districts.

AN ACT RELATING TO PUBLIC AGENCY DEFERRED COMPENSATION PLANS

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)  “Committee” means the Vermont pension investment committee.

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

(5)  “Other eligible entity” means a nonprofit corporation or other employer authorized by the Internal Revenue Code to participate in the deferred compensation programs authorized under this chapter.

(4)(6)  "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 county or municipality as defined in section subdivision 4303(4) of Title 24; and

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


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 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.  Other eligible entities may participate.  Payroll reductions shall be made, in each instance, by the appropriate payroll officer.

(b)  The board may establish and administer a plan that conforms with Section 457 of the Internal Revenue Code and the committee may establish and administer a plan that conforms with Section 403(b) of the Internal Revenue Code for the purpose of providing a deferred compensation program programs for state employees, including members of the general assembly, and for the employees of other public agencies, and for the employees of other eligible entities 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 board and other public agencies, which have or will establish a defined contribution plan, shall create a trust to conform.  The board shall also create a trust to conform with Section 457 of the Internal Revenue Code.  The committee shall create a trust to conform with Section 403(b) of the Internal Revenue Code.

(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 shall be held in trust in any funding vehicle vehicles permitted by Section 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 board shall be the trustees of the deferred compensation plan that conforms with Section 457 of the Internal Revenue Code, the committee shall be the trustees of the deferred compensation plan that conforms with Section 403(b) of the Internal Revenue Code, and the state treasurer shall be the custodian of the funds in the trust trusts.  All payments from such the funds shall be made by the state treasurer or the treasurer's authorized agent.

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Sec. 3.  VERMONT PENSION INVESTMENT COMMITTEE;

               AUTHORITY TO NEGOTIATE

The Vermont pension investment committee may negotiate, and in its discretion enter into a new contract, with the existing 457 plan vendor if the committee is able to obtain a favorable fee rate by amending the present contract to provide a deferred compensation plan to add a plan that conforms to Section 403(b) of the Internal Revenue Code.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us