Authority of state or political subdivision

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  1. (a)

    1. (1) The state or a county, city, town, or other political subdivision may agree, by contract, with an employee to defer, in whole or in part, a portion of that employee's future compensation to a deferred compensation program.

    2. (2)

      1. (A) The participation of an employee in the automatic enrollment in a deferred compensation plan under § 21-5-511 is a term of an employee's employment contract.

      2. (B) A separate contract is not required to be executed for an employee to be enrolled in a deferred compensation plan under § 21-5-511.

  2. (b)

    1. (1) The administrator of the deferred compensation program may:

      1. (A) Contract for, purchase, or otherwise procure annuity contracts for the deferred compensation program; and

      2. (B) Through a trust or custodian, contract for, purchase, or otherwise procure fixed or variable life insurance contracts, mutual funds, pooled investment funds, or such other investment vehicles that comply with state and federal laws and which permit the deferral of compensation for income tax and retirement savings purposes.

    2. (2) If an annuity or life insurance contract is purchased, then it must be purchased from an insurance company licensed to contract business in this state, and any insurance agent selling such contracts must be licensed by this state.


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