Colorado Legislative Council Staff
NO FISCAL IMPACT
December 12, 1997
Steve Tammeus (866-2756)
TITLE: CONCERNING THE STATE DEFERRED COMPENSATION PLAN.
Summary of Assessment
This bill abolishes the existing state Deferred Compensation Committee, under the Department of Personnel, and establishes a new state Deferred Compensation Committee with a modified membership. The bill specifies the terms for elected members who represented plan participants at the time the committee was abolished and requires the committee to establish the procedure for the election of those committee members.
The bill specifies that assets and income of the state deferred compensation plan shall not be general assets of the state. The bill requires all assets and income of the deferred compensation plan to be held in trust for the exclusive benefit of the plan participants and their beneficiaries, and to pay plan expenses per the federal internal revenue code. The committee shall be the trustee of any trust that is established.
The bill changes the name of the Deferred Compensation Fund to the Deferred Compensation Administration Fund. Administration fees deducted from participating employee contributions are credited to this fund to pay administrative expenses. The bill requires all investment earnings of the fund to be credited to the fund, and all unexpended moneys to be retained within the fund.
The bill creates the Deferred Compensation Plan Asset Fund and requires compensation deferred by plan participants to be credited to the fund unless otherwise invested according to law. All investment income earned by the deferred compensation while on deposit in the Asset Fund shall be credited to the Deferred Compensation Administration Fund.
The bill will become effective on July 1, 1998.
This bill conforms law to a recent federal revision to section 457 of the Internal Revenue Code which requires that 457 deferred compensation plans no longer be held as assets of a government employer. The bill also conforms law to the current administrative practices of the Deferred Compensation Committee.
This bill will not affect state, or local government, expenditures or revenue. Therefore, the bill is assessed as having no fiscal impact.