SECTIONS 21670-21685 - California Statutes

GOVERNMENT CODE

SECTION 21670-21685

21670. The board may establish one or more tax-preferred retirement
savings programs for California public employees. These programs
shall be made available to all employees of a participating 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. A tax-preferred retirement savings program established
pursuant to Section 21670 may grant the maximum tax-preferred
retirement savings opportunities 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 described under Section 457 of
Title 26 of the United States Code.
(b) A program described 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 a tax-preferred retirement savings
arrangement authorized by the provisions of Title 26 of the United
States Code and approved by the board.

21671.5. The design and administration of a tax-preferred
retirement savings program established pursuant to Section 21670
shall conform with the applicable provisions of Title 26 of the
United States Code.

21672. A tax-preferred retirement savings program may include one
or more 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.
(d) Asset management, administrative, or related services.

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) Except for investments made pursuant to subdivision (a),
participating employers shall enter into a written contractual
agreement with the board.
(c) Participants shall enter into contractual agreements that are
required to effectuate participation in a tax-preferred retirement
savings program, including employees participating under a program
described in subdivision (a) or (b) of Section 21671, or any other
program that provides for the deferral of compensation program or
written salary reduction agreements with their employers, for the
purpose of making deferrals or for annuity contracts.

21675. All development and administration costs of tax-preferred
retirement savings programs 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:
(a) Establish one or more accounts, trusts, group trusts, or
similar vehicles within the fund.
(b) Retain a bank, trust company, or similar entity to serve as
repository of the fund, or of any account, trust, group trust, or
other similar vehicle within 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 or of any account, trust,
group trust, or similar vehicle within 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 chapter.

21677. The Public Employees' Deferred Compensation Fund shall
consist of the following sources and receipts, for which
disbursements shall be accounted for as set forth below:
(a) Fees determined by the board and paid by employers and plan
participants for the cost of administering the tax-preferred
retirement savings programs.
(b) Asset management fees as determined by the board assessed
against investment earnings of investment options or other investment
funds provided by the board to either the state or other public
employers. Asset management fees shall be disclosed to participants.
(c) (1) Deferrals or contributions to be paid monthly by
participating employers or participants for investment by the board
pursuant to this chapter. The moneys shall be deposited in the
appropriate account, trust, group trust, or similar vehicle within
the Public Employees' Deferred Compensation Fund, and invested in
accordance with the fund option or fund selected by the participants.
(2) Deferrals or contributions paid by a contracting agency shall
be paid through an electronic funds transfer method prescribed by the
board. This payment requirement is effective upon declaration by the
board.
(3) A contracting agency that is unable, for good cause, to comply
with paragraph (2), may apply to the board for a waiver that allows
the agency to pay in an alternate manner as prescribed by the board,
but not by credit card payment.
(d) Disbursements shall be paid from the appropriate account,
trust, group trust, or similar vehicle within the Public Employees'
Deferred Compensation Fund, in accordance with the provisions of this
chapter, the documents and instruments governing the tax-preferred
retirement savings program, and current federal law pertaining to
tax-preferred savings programs.
(e) The board shall offer a savings account equivalent program
among those deferred compensation accounts made payable to
participants.
(f) Net earnings on the Public Employees' Deferred Compensation
Fund shall be credited to the appropriate account, trust, group
trust, or similar vehicle. 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 tax-preferred retirement savings
program solely in the interest of the participants in the following
manner:
(a) For the exclusive purpose of providing tax-preferred
retirement savings to participants and defraying reasonable expenses
of administering the program.
(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 so as to minimize the risk of large losses and by using
reasonable diligence to accurately inform all employees and
participants as to all options.
(d) In accordance with the documents and instruments governing the
programs insofar as those documents and instruments are consistent
with this chapter.

21680. Except as otherwise provided by law, the officers and
employees of this system shall not engage in a transaction with
regard to a tax-preferred retirement savings program 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
program to a participant for less than adequate consideration, or
from a participant to the program for more than adequate
consideration.
(b) The lending of money or other extension of credit from the
program to a participant without the receipt of adequate security and
a reasonable rate of interest, or from a participant to the program
with the provision of excessive security or an unreasonably high rate
of interest.
(c) The furnishing of goods, services, or facilities from the
program to a participant for less than adequate consideration, or
from a participant to the program for more than adequate
consideration.
(d) The transfer to, or use by or for the benefit of, a
participant of any assets of the program 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 program in their own interest or
for their own account.
(b) In their individual or in any other capacity, act in any
transaction involving the program on behalf of a party, or represent
a party, whose interests are adverse to the interests of the program
or the interests of the participants.
(c) Receive any consideration for their personal account, or any
gift, from any party dealing with the program in connection with a
transaction involving the assets of the program.

21682. This chapter shall not be construed to prohibit officers and
employees of this system from participating in a tax-preferred
retirement savings program, on the same terms as other state
employees or participants.

21683. This system may require an investment manager or
recordkeeper under contract 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 that has elected
to contract for a tax-preferred retirement savings program for any or
all of its employees.
(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) "Participant" means any person enrolled in a tax-preferred
retirement savings program established by this chapter.