MISSISSIPPI LEGISLATURE

2018 Regular Session

To: Finance

By: Senator(s) Doty

Senate Bill 2642

AN ACT TO AMEND SECTIONS 25-14-3, 25-14-5, 25-14-7, 25-14-9, 25-14-11, 25-14-13 AND 25-14-15, MISSISSIPPI CODE OF 1972, TO DEFINE CERTAIN TERMS IN THE GOVERNMENT EMPLOYEES' DEFERRED COMPENSATION PLAN LAW; TO CLARIFY INVESTMENT OPTIONS UNDER SUCH LAW; TO CLARIFY THE ADMINISTRATION OF THE DEFERRED COMPENSATION PLAN ADMINISTERED BY THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE ADMINISTRATION OF OTHER DEFERRED COMPENSATION PLANS AUTHORIZED UNDER SUCH LAW; AND FOR RELATED PURPOSES.

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  Section 25-14-3, Mississippi Code of 1972, is amended as follows:

     25-14-3. * * *For the purposes of  As used in this chapter * * *, the term:

          (a)  "Employee" means any person, whether appointed, elected, or under contract, providing services for the State of Mississippi, state agencies, counties, municipalities, or other political subdivisions, for which compensation is paid.

          (b)  "Mississippi Government Employees' Deferred Compensation Plan and Trust" means an eligible tax-deferred compensation plan under Section 457 of the Internal Revenue Code, 26 USC Section 457, and applicable federal regulation administered by the Public Employees' Retirement System of Mississippi.

          (c)  "Plan document" means the written instrument setting out the terms and conditions related to the operation and administration of a deferred compensation plan.

          (d)  "Plan sponsor" means the State of Mississippi when referencing the Mississippi Government Employees' Deferred Compensation Plan and Trust.  Otherwise, it means any county, municipality or other political subdivision of the state that offers a deferred compensation plan under Section 457 of the Internal Revenue Code, 26 USC Section 457, and applicable federal regulations.

     SECTION 2.  Section 25-14-5, Mississippi Code of 1972, is amended as follows:

     25-14-5.  (1)  The Mississippi Government Employees' Deferred Compensation Plan and Trust is established.  The plan is an eligible tax-deferred compensation plan under Section 457 of the Internal Revenue Code, 26 USC Section 457, and applicable federal regulations and shall be administered by the Public Employees' Retirement System of Mississippi.  Other plan sponsors may establish a plan that is an eligible tax-deferred compensation plan under Section 457 of the Internal Revenue Code, 26 USC Section 457, and applicable federal regulations.  The plan shall be administered pursuant to applicable law and the plan document.

     (2)  In the administration of a deferred compensation plan established under this chapter, the Public Employees' Retirement System of Mississippi or the plan sponsor of plans other than Mississippi Government Employees' Deferred Compensation Plan and Trust established by a county, municipality or other political subdivision, may adopt a plan document and any other regulations as are reasonable and necessary to assure the orderly functioning of the plan.  The State of Mississippi, or any state agency, county, municipality or other political subdivision may, by written contract, agree with any employee to defer, in whole or in part, any portion of that employee's income, * * * and up to the limits established by Internal Revenue Code, 26 USC Section 457.  A county, municipality or other political subdivision, except community and junior college districts, may make contributions to the plan on behalf of actively participating members on a uniform basis through an employer contribution agreement as provided for in the * * * Mississippi Deferred Compensation Plan and Trust Plan Document deferred compensation plan's plan document if making the contribution does not conflict with any other state law. * * *Those funds may subsequently be used to purchase a fixed or variable life insurance or annuity contract authorized for purchase by the Public Employees' Retirement System of Mississippi for the purpose of protecting its obligation to the deferred compensation program for the employee from any life underwriter duly licensed by this state who represents an insurance company licensed to contract fixed and variable annuities and fixed or variable life insurance business in this state and authorized by the Public Employees' Retirement System of Mississippi to offer their products in the plan, or to purchase any investments authorized for purchase by the Public Employees' Retirement System of Mississippi under Section 25‑11‑121, or to invest those monies in a fund or funds maintained by a corporate trustee, which fund or funds are used as an investment media for retirement, pension or profit sharing plans that are tax qualified for that purpose.  However, in the administration of this plan, the Public Employees' Retirement System of Mississippi may adopt such regulations as are reasonable and necessary to assure the orderly functioning of the plan, but those regulations shall not unreasonably restrict all licensed life underwriters and insurance companies described in this section from concurrently participating in providing contracts authorized under this section.

     (3)  Except as otherwise provided in subsection (4) of this section and notwithstanding anything in any other law to the contrary * * *notwithstanding, the deferred portion of the employee's compensation, the plan and the monies in the plan created by this chapter are exempt from any state, county or municipal ad valorem taxes, income taxes, premium taxes, privilege taxes, property taxes, sales and use taxes and any other taxes not so named, until the deferred compensation is paid to the employee or beneficiary and exempt from levy, garnishment, attachment or any other process whatsoever.

     (4)  The Mississippi Government Employees' Deferred Compensation Plan and Trust may include Roth accounts pursuant to 26 USC Section 402A of the Internal Revenue Code or any other post-tax vehicle contribution allowed pursuant to the Internal Revenue Code if permitted under the plan document.  A participant's Roth or other allowable post-tax contribution into a deferred compensation account shall be treated by the employer as includable in the participant's income at the time the participant would have received that amount in compensation if the participant had not made a deferred election.  A participant's Roth or other allowable post-tax contribution into a deferred compensation account and any associated earnings are exempt from levy, garnishment, attachment or any other process whatsoever and may be withdrawn tax-free if the requirements for a qualified distribution under the Internal Revenue Code are met.

     SECTION 3.  Section 25-14-7, Mississippi Code of 1972, is amended as follows:

     25-14-7.  (1)  The administration of the Mississippi Government Employees' Deferred Compensation * * * program Plan and Trust shall be under the direction of the Public Employees' Retirement System of Mississippi * * * or the appropriate officer designated by a county, municipality or other political subdivision.  The deferred compensation program and shall be operated in accordance with the * * * guidelines laws established by * * * the Internal Revenue * * * Service Code, 26 USC Section 457 and related federal laws, as reflected in the plan document as may be modified from time to time by the board of trustees.  Payroll reductions shall be made, in each instance, by the appropriate payroll officer.  The * * * administrator of a deferred compensation program Public Employees' Retirement System of Mississippi may contract with a private corporation or institution for providing consolidated billing and other administrative services if deemed * * * necessary by the administrator appropriate.

     The Board of Trustees of the Public Employees' Retirement System of Mississippi may * * * levy authorize such charges and fees on participants' contributions as may reasonably be necessary to provide for the administrative expenses of operating the deferred compensation * * * program plan, including, but not limited to, the services of auditors, legal advisors, consultants, money managers and third-party administrators.

     (2)  The administration of deferred compensation plans established by this chapter, other than Mississippi Government Employees' Deferred Compensation Plan and Trust, shall be under the direction of the plan sponsor.  The deferred compensation plan shall be operated in accordance with the applicable federal laws as reflected in the plan document as may be modified from time to time by the plan sponsor.  Payroll reductions shall be made, in each instance, by the appropriate payroll officer.  The administrator of a deferred compensation program may contract with a private corporation or institution for providing consolidated billing and other administrative services if deemed appropriate.  The plan sponsor may authorize such charges and fees on participants' contributions as may reasonably be necessary to provide for the administrative expenses of operating the deferred compensation program, including, but not limited to, the service of auditors, legal advisors, consultants, money managers and third-party administrators.

     SECTION 4.  Section 25-14-9, Mississippi Code of 1972, is amended as follows:

     25-14-9.  (1)  Notwithstanding any other provision of law to the contrary, the Public Employees' Retirement System of Mississippi * * * or the appropriate officer of a county, municipality, or other political subdivision designated to administer a deferred compensation program is hereby authorized to invest the monies held pursuant to a deferred compensation program in as the administrator of the Mississippi Government Employees' Deferred Compensation Plan and Trust is authorized to contract with providers to offer investment options, including, but not limited to, fixed and variable life insurance or annuity contracts; * * * or to purchase mutual funds, collective investment trusts or common group trusts that provide for the pooling of assets of employee benefits trusts, separate accounts or any other investment vehicles, including funds exempt from registration as securities that invest in any investments authorized for purchase by the Public Employees' Retirement System of Mississippi under Section 25-11-121 * * *, Mississippi Code of 1972; or to invest such monies in a fund or funds maintained by a corporate trustee, which fund or funds are used as an investment media for retirement, pension or profit sharing plans that are tax qualified for such purpose or benefit responsive contracts issued by insurance companies, banks or financial institutions.  While any portion of the program's assets are invested in a collective investment trust or a common group trust, such trust shall constitute a part of the program and the instruments creating the trust shall constitute a part of the program documentation.

     (2)  Notwithstanding any other provision of law to the contrary, the appropriate officer of a county, municipality, or other political subdivision designated to administer a deferred compensation program established by this chapter is authorized to invest money held pursuant to a deferred compensation program in fixed and variable life insurance or annuity contracts, or to purchase any investments authorized for purchase by the Public Employees' Retirement System of Mississippi under Section 25-11-121, or to invest such monies in a fund or funds maintained by a corporate trustee, which fund or funds are used as an investment media for retirement, pension or profit-sharing plans that are tax qualified for such purpose.

     SECTION 6.  Section 25-14-11, Mississippi Code of 1972, is amended as follows:

     25-14-11. * * *  The  A deferred compensation * * *program plan established by this chapter shall exist and serve in addition to other retirement, pension, or benefit systems established by * * *the State of Mississippi, state agencies, counties, municipalities, or other political subdivisions of the State of Mississippi. * * * The  A deferred compensation * * *program plan established by this chapter shall not supersede, make inoperative, or reduce any benefits provided by the Public Employees' Retirement System of Mississippi, * * *by the Teachers' Retirement System of Mississippi, by programs established under the general municipal employees' retirement act, or by any other retirement, pension, or benefit program established by law.

     SECTION 8.  Section 25-14-13, Mississippi Code of 1972, is amended as follows:

     25-14-13.  Notwithstanding any other provision of law to the contrary, any compensation deferred under this chapter shall be considered part of an employee's compensation for purposes of any other employee retirement, pension, or benefit * * *program plan.  No deferral of income under the deferred compensation * * * program plan shall effect a reduction of any retirement, pension, or other benefit * * *program plan provided by law.

     SECTION 10.  Section 25-14-15, Mississippi Code of 1972, is amended as follows:

     25-14-15.  Except as provided in Section 25-14-5(4) and notwithstanding any other provision of this chapter or any other provision of law to the contrary, any sum deferred under * * * the a deferred compensation * * *program plan established by this chapter shall not be included for the purposes of computation of any taxes withheld on behalf of any employee.

     SECTION 11.  This act shall take effect and be in force from and after July 1, 2018.