INSURANCE AND ANNUITIES MANAGEMENT: DEFERRED COMPENSATION AND ANNUITIES

Deferred Compensation—

Section 457

A political subdivision or institution of higher education may contract with an employee for the deferment of any part of the employee’s compensation. A contract created under this section need not be in writing and may be communicated to the plan administrator electronically or by any other means approved by the plan's trustees. Gov’t Code 609.007(a), (d)–(e)

College District Plan

A junior college district, either alone or by contract with other political subdivisions or institutions of higher education, may create and administer a deferred compensation plan, the federal income tax treatment of which is governed by Section 457 of the Internal Revenue Code of 1986, and its subsequent amendments, for its employees and may assess a fee on each participating employee for administering the plan.

The organization and implementation of such a deferred compensation plan shall be in accordance with Government Code Chapter 609.

Gov’t Code 609.102, .702

Texa$aver

Pursuant to Government Code Chapter 609, Subchapter C and 34 Administrative Code Chapter 87, employees of community colleges and junior colleges are eligible to participate in the Texa$aver plan only if such community college or junior college has opted to participate in the Texa$aver 457 plan. 34 TAC 87.5(d)

Payroll Deductions

Except as provided by Government Code 609.5025, to participate in a deferred compensation plan, an employee must consent in the contract to automatic payroll deductions in an amount equal to the deferred amount. Gov’t Code 609.007(c)

Annuities—Section

403(b)

The governing board of a state-supported institution of higher education, including a college district, may enter into agreements with the entity's employees for the purchase of annuities or for contributions to any type of investment for the entity’s employees as authorized in Section 403(b), Internal Revenue Code of 1986, and its subsequent amendments.

The governing board, as appropriate, may:

1. Reduce the salary of participants when authorized by the participants and shall apply the amount of the reduction to the

purchase of annuity contracts or to contributions to any type of investment authorized in Section 403(b), Internal Revenue

Code of 1986, and its subsequent amendments, the exclusive control of which will vest in the participants; and

2. Develop a system to allow or require participants to electronically authorize participation, purchases of annuity contracts,

and contributions to investments.

Art. 6228a-5, Sec 1-2, V.A.T.S.