House Bill No. 96
Introduced By R. johnson
By Request of the Department of Administration
A Bill for an Act entitled: "An Act increasing the number and kind of investment options available in the state and political subdivision deferred compensation plans; amending section
19-50-102, MCA; and providing an immediate effective date and a retroactive applicability date ."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 19-50-102, MCA, is amended to read:
"19-50-102. Deferred compensation programs permitted -- rules. (1) The state or a political subdivision may establish deferred compensation plans that are eligible under section 457 of the Internal Revenue Code of 1954, as amended or superseded, and in compliance with regulations of the U.S. department of the treasury. Eligible deferred compensation plans for employees may be established in addition to any retirement, pension, or other benefit plan administered by the state or a political subdivision.
(2) An employee may enter into a written agreement with the state or a political subdivision to defer a part of his the
employee's compensation to one or more of the investment options provided in subsection (4) for the purpose of investment
as provided by this chapter. The total amount deferred may not exceed the employee's annual salary and may not exceed the
amounts permitted under applicable sections of the Internal Revenue Code.
(3) Compensation deferred pursuant to this chapter is included as compensation for the purpose of computing retirement or pension benefits.
(4) The amount of compensation deferred under this chapter may be used to purchase department or an appropriate officer
of a political subdivision shall from time to time select the type of investment options and the financial institutions or
entities in which state or political subdivision employee deferred compensation plan funds may be invested. The investment
options and entities may include:
(a) shares in a state deferred compensation investment fund established pursuant to Title 17 for the purpose of
administering a state-invested deferred compensation plan. All contributions made by participants in the state deferred
compensation investment fund and all interest or increase in the fund shall must be credited to the fund. These
state-invested funds may be commingled with other state investment funds, but separate accounts accounting must be
maintained for participants in the state deferred compensation investment fund. The assets of the fund must be maintained
for the benefit of participants and may not be diverted except for paying the reasonable expenses for administering the state
deferred compensation investment fund.
(b) savings accounts in federally insured financial institutions;
(c) life insurance contracts and fixed annuity and variable annuity contracts from companies that are licensed to do
business in the state and subject to regulation by the insurance commissioner; or
(d) investment funds managed pursuant to investment services contracts maintained by the department or an appropriate officer of a political subdivision with investment managers registered with the United States securities and exchange commission;
(e) mutual funds provided through contracts maintained by the department or an appropriate officer of a political subdivision with mutual fund companies regulated by the United States securities and exchange commission; or
(d)(f) any a combination of subsections (4)(a), (b), or (c) above, as specified by the participant through (4)(e).
(5) The shares, accounts, or contracts so purchased are the exclusive property of and stand in the name of the state of
Montana or a political subdivision until distributed to an employee in a manner provided in the plan agreement established
by the administrator deferred compensation plan funds invested pursuant to this section and the income from those funds
must be held in a trust, custodial account, or insurance contract for the exclusive benefit of participants and their
beneficiaries.
(5)(6) The administrator may allocate any necessary costs against the assets and interest earnings accumulated in funds,
accounts, or contracts established under this chapter.
(6)(7) The department or appropriate officer of a political subdivision shall promulgate rules not inconsistent with this
chapter for the proper administration of deferred compensation plans established under this chapter."
NEW SECTION. Section 2. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to compensation deferred by employees, as defined in 19-50-101, and to deferred compensation plans established before [the effective date of this act].
NEW SECTION. Section 3. Effective date. [This act] is effective on passage and approval.
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