(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.

Terms Used In Rhode Island General Laws 36-13-1

  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Contract: A legal written agreement that becomes binding when signed.
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • town: may be construed to include city; the words "town council" include city council; the words "town clerk" include city clerk; the words "ward clerk" include clerk of election district; the words "town treasurer" include city treasurer; and the words "town sergeant" include city sergeant. See Rhode Island General Laws 43-3-9

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

History of Section.
P.L. 1975, ch. 34, § 1; P.L. 1982, ch. 447, § 1; P.L. 1995, ch. 182, § 1; P.L. 1995, ch. 225, § 1; P.L. 1998, ch. 459, § 1; P.L. 1999, ch. 151, § 1; P.L. 2011, ch. 363, § 33.