(1) At the request of an employee and as part of the employee’s compensation arrangement, the board of a school district may purchase a tax-deferred investment for an employee for retirement or other purposes and may make payroll allocations in accordance with the arrangement to pay for the tax-deferred investment. The allocation shall be made in a manner which will qualify all or part of the tax-deferred investment for the benefit afforded under the federal internal revenue code or other federal income tax law. The employee shall own the tax-deferred investment. The employee’s rights under it shall be nonforfeitable except for failure to make required payments.

  (2) The board shall not have liability because of its purchase of tax-deferred investments for employees.

  (3) This section shall be applied in a nondiscriminatory manner to employees of the school district.

  (4) As used in this section, “tax-deferred investment” means an annuity contract, interest in a mutual fund, or other investment device that qualifies for deferral of federal income taxes under the federal internal revenue code or other federal income tax law.