2023 -- S 0228 SUBSTITUTE A
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S TATE OF RHODE IS LAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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A N A C T
RELATING TO PUBLIC OFFICERS AND EMPLOYE ES -- DEFERRED COMPENSATIO N
PLANS
Introduced By: Senators Murray, LaMountain, McKenney, Tikoian, Euer, Sosnowski, F.
Lombardi, Ciccone, DiMario, and Picard
Date Introduced: February 16, 2023
Referred To: Senate Finance
It is enacted by the General Assembly as follows:
SECTION 1. Sections 36-13-1, 36-13-1.1 and 36-13-3 of the General Laws in Chapter 36-1
13 entitled "Deferred Compensation Plans" are hereby amended to read as follows: 2
36-13-1. Deferred compensation plans authorized. 3
(a) The state or any city, town, or other political subdivision may, by contract, agree with 4
any employee to defer, in whole or in part, any portion of that employee’s compensation, and may 5
subsequently contract with financial institutions for the purchase of government securities or with 6
other financial entities for the purchase of mutual funds, and procure a fixed or variable life 7
insurance or annuity contract for the purpose of providing funds to meet its obligations under a 8
deferred compensation program for the employees from any financial institutions or from any life 9
underwriters duly licensed by this state who represents an insurance company licensed to contract 10
business in this state. 11
(b) In the administration of a deferred compensation plan for state employees in the state 12
plan authorized under this chapter, after October 1, 1998, the state shall engage three companies 13
("Authorized Companies") to administer such deferred compensation plans. After October 1, 1998, 14
only such Authorized Companies shall be entitled to enroll state employees in such the state 15
deferred compensation plans in accordance with the following guidelines: 16
(1) Employees must have the option of purchasing or investing in alternative financial 17
products referred to herein which have been approved by the State Investment Commission; 18
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(2) The alternative financial products shall include, without limitation, a variable product 1
and a fixed product; 2
(3) The Authorized Companies (or an entity related thereto) must: 3
(i) Be selected in accordance with the provisions of this chapter, 4
(ii) Covenant that all employees covered under any plan authorized under this chapter shall, 5
at all times, be granted the unfettered right to cancel, change, liquidate, amend or interchange any 6
investment contract or product purchased in any such plan without such employees incurring a 7
financial penalty or fee of any kind or nature imposed by contract, and 8
(iii) Be granted equal access to all eligible employees; 9
(4) Procedures shall be established to ensure that personalized information regarding 10
employees shall not be provided to third parties by the Authorized Companies. “Personalized 11
Information” shall include, without limitation, social security numbers, home addresses, telephone 12
numbers, amounts invested, medical or disability information; and 13
(5) The Authorized Companies shall be permitted to offer any financial product referred to 14
herein which shall have been approved by the State Investment Commission. Notwithstanding any 15
other provisions of this section (b), if the department of administration determines that less than 16
three companies are qualified to be engaged as Authorized Companies because of (a) insufficient 17
experience in the administration of deferred compensation plans or (b) a failure to assure adherence 18
to the guidelines set forth herein, the state may engage less than three Authorized Companies. 19
(6) If any provision of this section or the application thereof to any person or circumstances 20
is held invalid, that invalidity shall not affect other provisions or applications of the section which 21
can be given effect without the invalid provision or application, and to this end the provisions of 22
this section are declared to be severable. 23
(c) Effective January 1, 2024, any participating municipality as defined in § 45-21-2 may 24
elect to offer to its municipal employees the deferred compensation plans offered by the state. The 25
account of any municipal employee who participates in the state deferred compensation plan shall 26
be subject to the same administration, charges, costs, rules, and regulations as are applicable and 27
applied to the accounts of employees in the state deferred compensation plan. 28
36-13-1.1. State investment commission. 29
The state investment commission shall, from time to time, select the financial institutions 30
and/or entities in which the state shall invest the funds under the deferred compensation plan for 31
state employees in the state plan. 32
36-13-3. Administration of program. 33
The administration of the deferred compensation program within each state agency, 34
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department, board, commission, or institution shall be under the direction of the director or 1
principal officer of that particular agency, department, board, commission, or institution. Each city, 2
town, or other political subdivision shall designate an officer to administer the deferred 3
compensation program, including deferred compensation plans offered to municipal employees 4
pursuant to § 36-13-1(c). Reductions in payroll shall be made, in each instance, by the appropriate 5
payroll officer. The administrator of the deferred compensation program may contract with a 6
private corporation or institution for providing consolidated billing and other administrative 7
services. 8
SECTION 2. This act shall take effect upon passage. 9
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- DEFERRED COMPENSATIO N
PLANS
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This act would provide that effective January 1, 2024, any participating municipality as 1
defined in § 45-21-2 may elect to offer to its employees the deferred compensation plans offered 2
by the state. The account of any municipal employee who participates in the state deferred 3
compensation plan would be subject to the same administration, rules, and regulations as are 4
applicable and applied to the accounts of employees in the state deferred compensation plan. 5
This act would take effect upon passage. 6
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