CHAPTER 146
FORMERLY
HOUSE BILL NO. 381
AS AMENDED BY SENATE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 29, DELAWARE CODE BY CREATING A NEW CHAPTER TO BE DESIGNATED AS CHAPTER 60A, RELATING TO THE ESTABLISHMENT OF A DEFERRED COMPENSATION PROGRAM FOR PUBLIC EMPLOYEES OF THE STATE OF DELAWARE AND A DEFERRED COMPENSATION COUNCIL, DEFINING THE COUNCIL'S ORGANIZATION, POWERS, DUTIES, AND FUNCTIONS, AND PROVIDING A SUPPLEMENTARY APPROPRIATION TO IMPLEMENT THE PROVISIONS OF THIS ACT.
WHEREAS, since 1971 the State of Delaware has offered its public employees the opportunity to participate in a deferred compensation program; and
WHEREAS, such deferred compensation program offers unique tax advantages to participating employees and employment incentives which benefit the State; and
WHEREAS, it is desirable that such deferred compensation program be continued and expanded; and
WHEREAS, at present no single State agency has the responsibility or the power to adequately manage and administer a deferred compensation program of the type desired.
NOW, THEREFORE:
Be it enacted by the General Assembly of the State of Delaware.
Section 1. Title 29, Delaware Code, is hereby amended by adding a new Chapter thereto to be designated as Chapter 60A to read as follows:
"CHAPTER 60A. DEFERRED COMPENSATION FOR PUBLIC OFFICERS AND EMPLOYEES OF THE STATE OF DELAWARE.
The purpose of this Chapter is to create a vehicle through which all employees of the State of Delaware may, on a voluntary basis, provide for additional retirement income security through a program of deferred compensation. The deferred compensation program provided by this Chapter shall be in addition to any retirement or other benefit program provided by law for employees of the State of Delaware.
(1) 'Deferred compensation' means income earned as a public officer or employee of the State of Delaware which, pursuant to a written agreement between the State and the employee, is set aside for retirement purposes.
(0) 'Deferred compensation program' means such plan or plans of deferred compensation as may be adopted by the Deferred Compensation Council.
(1) 'Employee' means an individual who is employed by the State of Delaware including elected or appointed officials, and who receives compensation wholly or in part directly from the State Treasury or from the Treasury through an agency within the State that is wholly or in part supported by the State. Individuals hired on a temporary basis or as consultants shall not qualify as employees.
§6053. Deferred compensation council.
(a) There shall be established a Deferred Compensation Council for public employees of the State of Delaware which shall consist of seven (7) members, as follows:
(1) The Secretary of Finance, State Treasurer, Director of Personnel, and the State Insurance Commissioner shall serve ex-officio as members.
(2) Two (2) of the remaining three (3) members shall be State employees and they shall be appointed by the Governor.
(3) The seventh member shall be a representative of the public at large and shall be appointed by the Governor.
(4) Those members who do not serve ex-officio shall be appointed for terms of three (3) years, commencing, in each case, from the date of appointment; provided, however, that in the initial appointments, members shall, as designated by the Governor at the time of appointment, serve one, two, and three year terms respectively.
(5) In the case of vacancy on the Council for any reason other than expiration of the term of office, the Governor shall fill such a vacancy for the unexpired term.
(b) The Council shall, subject to any applicable contract provisions, undertake to obtain as favorable conditions of tax treatment as possible, both in the existing program and any later amendments thereto or any later programs as to such matters as: terms of distribution, designation of beneficiaries, withdrawal upon disability, financial hardship, or termination of public employment, and other optional provisions.
(c) The Council shall be responsible for the general administration of the provisions of this Chapter. Such responsibility shall include, but not be limited to:
(1) The adoption of Rules and Regulations for the administration of this Chapter.
(2) Establishment and implementation of deferred compensation plans including the power to contract for any and all services that may be required to implement such plans.
(d) Except for ex-officio members, all members of the Council shall be entitled to reimbursement for those travel and other expenses made necessary by their official duties that are approved by the State Treasurer.
(e) The Council shall be jointly chaired by the Secretary of Finance and the State Treasurer.
(f) The Council shall hold regular meetings at least once each quarter, which meetings shall be open to the public in accordance with §5109, Title 29 of the Delaware Code.
(g) Four (4) members of the Council shall constitute a quorum and shall have the power to conduct any and all business authorized under this Chapter as long as one (1) member present is not an ex-officio member.
(h) Council members shall not be liable for any loss sustained by the Deferred Compensation Program as a result of their official acts, unless such acts constitute gross negligence or willful wrong doing.
§6054. Administration and reports.
(a) The clerical administration of the Deferred Compensation Program shall be the responsibility of the Office of the State Treasurer.
(b) All plans of deferred compensation which may be adopted shall provide that each participating employee will be furnished a quarterly statement of his account, on a .form approved by the Council, showing at least the amount of income deferred, the investments purchased, and the charges assessed on such purchases.
(c) Each plan of deferred compensation which may be adopted shall provide that in the event of non-renewal or termination, all accounts enrolled in the plan, including all records, investments and proceeds thereof, shall be transferred to an agent designated by the Council.
(d) At the close of the fiscal year, the Office of the State Treasurer, at the direction of the Council, shall prepare an annual report for submission to the Governor, and the General Assembly. Such reports shall summarize the activities of the Council during the preceding year and shall report on the status of the Deferred Compensation Program and its various elements.
§6055. Payroll deductions.
The Department of Finance and the State Treasurer are authorized to make payroll deductions under this Chapter pursuant to regulations adopted by the Council, for any public officer or employee of the State of Delaware who has authorized such deductions in writing. The Treasurer of the State of Delaware shall account for all such payroll deductions and shall make payment of such deductions in accordance with regulations adopted by the Council. Any income deferred under such a plan shall continue to be included as regular compensation for the purpose of computing the contributions to and benefits from the State Employees' Pension Plan. Any sum so deferred shall not be included in the computation of any Federal or State income taxes withheld on behalf of any such employee, but shall be included for computation of Social Security Administration contributions.
§6056. Maximum amount deferrable.
Any provision of this Chapter notwithstanding, the maximum amount of income which any one employee may elect to defer after the date of enactment of this Chapter shall not exceed his net compensation per month under this and any other similar program.
§6057. Limitation on investments.
The Deferred Compensation Program may offer any of the following investment options and none other:
(a) Savings accounts in federally insured banking institutions.
(b) United States Government bonds or debt instruments.
(c) Life insurance and annuity contracts, provided the companies offering such contracts are subject to regulation by the Insurance Commissioner of the State of Delaware.
(d) Investment funds registered under the Investment Company Act of 1940.
(e) Securities which are traded on the New York Stock Exchange.
The Deferred Compensation Program shall be audited once each year by the State Auditor of Accounts. The Council shall make appropriate arrangements to pay the Auditor of Accounts for the cost of the audit and is required to act within a reasonable period of time upon any recommendations made by the Auditor of Accounts.
The full cost of administering the Deferred Compensation Program shall be borne by the participants in accordance with regulations adopted by the Council. Such costs shall include reimbursement of the Office of the State Treasurer for all expenses incident to the clerical administration of the program pursuant to §6054, including material, equipment and employee compensation."
Section 2. The sum of five thousand dollars ($5,000.00) is hereby advanced to the Council and appropriated for the fiscal year ending June 30, 1975, for the purpose of implementing the provisions of this Act. This appropriation shall be considered as a supplementary appropriation and shall be paid out of funds not otherwise appropriated, and any portion thereof which is unexpended and unemcumbered as of June 30, 1975, shall revert to the general fund. This sum shall constitute a cost of administering the Deferred Compensation Program, as set forth in §6058, and shall be reimbursed to the general fund not later than June 30, 1976.
Section 3. If any provision of this Chapter or the application thereof to any person or circumstance is held to be invalid, such invalidity shall not affect other provisions or application of this Chapter which can be given effect without the invalid provision or application and to that end the provisions of this Chapter are declared to be severable.