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:

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

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Compensation Plans" is hereby amended to read as follows:

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     36-13-1. Deferred compensation plans authorized. -- (a) The state or any city, town, or

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other political subdivision may, by contract, agree with any employee to defer, in whole or in

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part, any portion of that employee's compensation, and may subsequently contract with financial

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institutions for the purchase of government securities or with other financial entities for the

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purchase of mutual funds, and procure a fixed or variable life insurance or annuity contract for

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the purpose of providing funds to meet its obligations under a deferred compensation program for

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the employees from any financial institutions or from any life underwriters duly licensed by this

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state who represents an insurance company licensed to contract business in this state.

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      (b) In the administration of a deferred compensation plan for state employees authorized

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

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("Authorized Companies") to administer such deferred compensation plans. After October 1,

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1998, only such Authorized Companies shall be entitled to enroll state employees in such

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deferred compensation plans in accordance with the following guidelines:

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      (1) Employees must have the option of purchasing or investing in alternative financial

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products referred to herein which have been approved by the State Investment Commission;

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      (2) The alternative financial products shall include, without limitation, a variable product

 

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and a fixed product;

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      (3) The Authorized Companies (or an entity related thereto) must:

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      (i) Be selected in accordance with the provisions of this chapter,

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      (ii) Covenant that all employees covered under any plan authorized under this chapter

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shall, at all times, be granted the unfettered right to cancel, change, liquidate, amend or

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interchange any investment contract or product purchased in any such plan without such

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employees incurring a financial penalty or fee of any kind or nature imposed by contract, and

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      (iii) Be granted equal access to all eligible employees;

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      (4) Procedures shall be established to ensure that personalized information regarding

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employees shall not be provided to third parties by the Authorized Companies. "Personalized

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Information" shall include, without limitation, social security numbers, home addresses,

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telephone numbers, amounts invested, medical or disability information; and

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      (5) The Authorized Companies shall be permitted to offer any financial product referred

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to herein which shall have been approved by the State Investment Commission. Notwithstanding

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any other provisions of this section (b), if the department of administration determines that less

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than three companies are qualified to be engaged as Authorized Companies because of (a)

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insufficient experience in the administration of deferred compensation plans or (b) a failure to

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assure adherence to the guidelines set forth herein, the state may engage less than three

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Authorized Companies.

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      (6) If any provision of this section or the application thereof to any person or

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circumstances is held invalid, that invalidity shall not affect other provisions or applications of

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the section which can be given effect without the invalid provision or application, and to this end

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the provisions of this section are declared to be severable.

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     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

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

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

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     This act would take effect upon passage.

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LC004277

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