2016 -- S 2754

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LC004277

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES - DEFERRED COMPENSATION

PLANS

     Introduced By: Senators DiPalma, Coyne, Lombardi, Conley, and Lombardo

     Date Introduced: March 10, 2016

     Referred To: Senate Finance

     (General Treasurer)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 36-13-1 of the General Laws in Chapter 36-13 entitled "Deferred

Compensation Plans" is 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 authorized

under this chapter, after October 1, 1998, the state shall engage up to three (3) 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

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 (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.

     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 the state with the flexibility to engage up to three (3) authorized

companies to administer its deferred compensation plans rather than the current statutory mandate

to hire three (3) companies to do this task.

     This act would take effect upon passage.

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LC004277

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