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2007 California Government Code Chapter 16. Deferred Compensation
CA Codes (gov:21670-21685)
GOVERNMENT CODESECTION 21670-21685
21670. The board may establish a deferred compensation program for California public employees. The program shall be made available to all employees of an employer under procedures established by the board unless participation is subject to the terms of any memorandums of understanding between the employer and the employees. 21671. The deferred compensation program may grant the maximum tax-deferred savings available under current federal law, and may provide for employer as well as employee contributions. The program may include, but is not limited to, one or more of the following plans: (a) A deferred compensation plan qualified under Section 457 of Title 26 of the United States Code. (b) A tax-sheltered annuity qualified under Section 403(b) of Title 26 of the United States Code. Section 770.3 of the Insurance Code shall not apply to the board for the purposes of contracting for those annuities. (c) Any other form of deferred compensation arrangement authorized by the provisions of Title 26 of the United States Code and approved by the board. 21672. The deferred compensation program may include any or all of the following components: (a) Investment fund options for participants, as part of the deferred compensation program administered for state employees by the Department of Personnel Administration. (b) Investment fund options for other participants. (c) Annuity contracts on behalf of all participants. 21673. (a) The investment fund options under subdivision (b) of Section 21672 may include, but not be limited to, any or all of the following: (1) Mortgage-backed securities funds, including securities backed by California residential real estate mortgages. (2) Equity funds. (3) Balanced funds. (4) Corporate bond funds. (5) Government bond funds. (6) Stable principal funds, including certificates of deposit and money market accounts. (7) Guaranteed investment contracts. (b) The board shall research any one or combination of investment options for offer to members, including the feasibility of creating an option for investment in the program established under Section 20200. 21674. (a) Investment fund options under subdivision (a) of Section 21672 shall be provided through a written interagency agreement between the board and the Department of Personnel Administration. (b) Participating employers, other than the state, shall enter into a written contractual agreement with the board. (c) Employees participating under the deferred compensation program shall enter into written salary reduction agreements with their employers, for the purpose of making deferrals or for annuity contracts. 21675. All development and administration costs of the deferred compensation program shall be paid by employers and plan participants. 21676. The Public Employees' Deferred Compensation Fund is hereby established. Notwithstanding any other provision of law, the board may retain a bank or trust company to serve as repository of the fund. The board may also retain a bank or trust company to serve as a custodian for safekeeping, recordkeeping, delivery, securities valuation, investment performance reporting, or other services in connection with investment of the fund. Notwithstanding Section 13340, all moneys in the fund are continuously appropriated, without regard to fiscal years, to the board to carry out the purposes of this article. 21677. The Public Employees' Deferred Compensation Fund shall consist of the following sources and receipts and disbursements shall be accounted for as set forth below: (a) Premiums determined by the board and paid by employers and plan participants for the cost of administering the deferred compensation program. (b) Asset management fees as determined by the board assessed against investment earnings of investment options or other investments funds provided by the board to either the state or other public employers. Asset management fees shall be disclosed to plan participants. (c) Deferrals or contributions to be paid monthly by participating employers or plan participants for investment by the board pursuant to this article. The moneys shall be deposited in the investment corpus account within the Public Employees' Deferred Compensation Fund, and invested in accordance with the fund option or fund selected by the plan participants. (d) Disbursements to plan participants shall be paid from a disbursement account within the Public Employees' Deferred Compensation Fund, in accordance with current federal law pertaining to tax-deferred savings plans. (e) The board shall offer a savings account equivalent plan among those deferred compensation accounts made payable to plan participants. (f) Income, of whatever nature, earned on the Public Employees' Deferred Compensation Fund shall be credited to the appropriate account. Participant accounts shall be individually posted to reflect net asset value for each fund in which the participant invests. (g) The board has the exclusive control of the administration and investment of the Public Employees' Deferred Compensation Fund. 21678. The board, if authorized by another statute, may make expenditures from the asset management and services account in the Public Employees' Deferred Compensation Fund to conduct studies of other retirement-related benefits for the participants in this system, expend moneys to start up new retirement-related benefit programs for participants, to fund positions, or compensate employees. 21679. The officers and employees of this system shall discharge their duties with respect to the deferred compensation plan solely in the interest of the plan participants in the following manner: (a) For the exclusive purpose of providing deferred compensation to plan participants and defraying reasonable expenses of administering the plan. (b) In the selection of investment options with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims. (c) By diversifying the investment options available to participants of the plan so as to minimize the risk of large losses and by using reasonable diligence to accurately inform all employees and participants as to all plan options. (d) In accordance with the documents and instruments governing the plan insofar as those documents and instruments are consistent with this article. 21680. Except as otherwise provided by law, the officers and employees of this system shall not engage in a transaction with regard to a deferred compensation plan if they know or should know that the transaction constitutes, directly or indirectly, any of the following: (a) The sale, exchange, or leasing of any property from the plan to a participant in the plan for less than adequate consideration, or from a participant in the plan to the plan for more than adequate consideration. (b) The lending of money or other extension of credit from the plan to a participant in the plan without the receipt of adequate security and a reasonable rate of interest, or from a participant in the plan to the plan with the provision of excessive security or an unreasonably high rate of interest. (c) The furnishing of goods, services, or facilities from the plan to a participant in the plan for less than adequate consideration, or from a participant in the plan to the plan for more than adequate consideration. (d) The transfer to, or use by or for the benefit of, a participant in the plan of any assets of the plan for less than adequate consideration. 21681. The officers and employees of this system shall not do any of the following: (a) Deal with the assets of the plan in their own interest or for their own account. (b) In their individual or in any other capacity, act in any transaction involving the plan on behalf of a party, or represent a party, whose interests are adverse to the interests of the plan or the interests of the participants in the plan. (c) Receive any consideration for their personal account, or any gift, from any party dealing with the plan in connection with a transaction involving the assets of the plan. 21682. This chapter shall not be construed to prohibit officers and employees of this system from participating in the deferred compensation plan, on the same terms as other state employees or participants. 21683. This system may require an investment manager or recordkeeper contracted with, or appointed by, this system be subject to the duties set forth in Section 21679. 21684. Nothing in this article is intended to lessen the scope of personal liability of the officers and employees of this system as it pertains to acts or conduct of a criminal nature or acts or conduct constituting gross negligence. 21685. Notwithstanding any other provision of this part, the following definitions govern the construction of this chapter: (a) "Participating employer" means any California public agency, including, but not limited to, any office of the county superintendent of schools, school district, community college district, or public agency defined by Section 20056. (b) "Employer" means any city, county, city and county, district, school district, community college district, county superintendent of schools, and other public authority or body within this state. (c) "Plan participant" means any person enrolled in the deferred compensation program established by this chapter.
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