2023 -- H 5374

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LC000234

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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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

     Referred To: House Municipal Government & Housing

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 36-13-1 and 36-13-1.1 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 (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.

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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 that effective January 1, 2024, any participating municipality as

defined in § 45-21-2 may elect to offer to its employees the deferred compensation plans offered

by the state. The account of any municipal employee who participates in the state deferred

compensation plan would be subject to the same administration, rules, and regulations as are

applicable and applied to the accounts of employees in the state deferred compensation plan.

     This act would take effect upon passage.

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