CRG(LEGAL) - INSURANCE AND ANNUITIES MANAGEMENT: DEFERRED COMPENSATION AND ANNUITIES
Deferred Compensation – Section 457
The ESC, either alone or by contract with other political subdivisions, 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 Chapter 609, Subchapter B, Government Code.
Gov't Code Ch. 609
The ESC may contract with an employee for the deferment of any part of the employee's compensation.
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(a), (c)
Roth Contribution Programs
The ESC may, if authorized by federal law, establish a program in accordance with the applicable federal law under which an employee may designate all or a portion of the employee's contribution under a 457 plan as a Roth contribution at the time the contribution is made or convert all or a portion of the employee's previous contribution under the plan to a Roth contribution. Gov't Code 609.1025
Annuities – Section 403(B)
The ESC may enter into an agreement with an employee to reduce the employee's salary for the purposes of making direct contributions to or purchases of an annuity or investment product that meets the requirements of Internal Revenue Code Section 403(b) and otherwise satisfies the definition of "qualified investment product." The ESC may enter into a salary reduction agreement only if the qualified investment product is an eligible qualified investment and is registered with the Teacher Retirement System (TRS) under V.A.T.S. Article 6228-5, Section 8A. Art. 6228a-5, Sec. 4(7), 5(a), V.A.T.S.