(a) Any city in the State of Arkansas organized and operating under a management form of municipal government is authorized and empowered to enter into a deferred compensation agreement with any employee of the city for the purpose of deferring payment of any portion of the employee's salary or income and to deposit the deferred compensation funds with a third party, agreed to in writing by the employee, in trust, with directions that the funds be paid to the employee as authorized by the deferred compensation agreement.
(b) For the purposes of this section, a “deferred compensation agreement” is any agreement approved by the city for its employees and executed by an employee of the city, the city, and a third party, as trustee, chosen by the employee, where the third party agrees to pay a periodic income to the employee in the event of retirement or disability or to the employee's beneficiary in the event of death.
(c) Deferred compensation funds deposited with a third party trustee as provided for in this section may be invested and reinvested by the trustee in any manner which, in its sole discretion, it deems desirable, notwithstanding legal limitations on the investment of public funds as provided for by the laws of the State of Arkansas.