2007 California Government Code Chapter 16. Deferred Compensation

CA Codes (gov:21670-21685)

GOVERNMENT CODE
SECTION 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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