Amend CSSB 1952, in PART 1 of the bill, by adding the
following appropriately numbered ARTICLE and renumbering
subsequent ARTICLES in PART 1 appropriately:
ARTICLE ___. DEFERRED COMPENSATION PLANS
SECTION ____.01. Section 609.006(d), Government Code, is
amended to read as follows:
(d) The comptroller [board of trustees of the Employees
Retirement System of Texas] may adopt rules necessary to make a
deferred compensation plan established under Subchapter C a
qualified plan under federal law, including federal rules and
regulations.
SECTION ____.02. Section 609.007(b), Government Code, is
amended to read as follows:
(b) The comptroller [board of trustees of the Employees
Retirement System of Texas] may contract with an employee of a state
agency participating in a deferred compensation plan for the
deferment of any part of the employee's compensation.
SECTION ____.03. Section 609.010(a), Government Code, is
amended to read as follows:
(a) The comptroller [board of trustees], a state agency, a
political subdivision, a plan administrator, or an employee of any
of those persons is not liable to a participating employee for the
diminution in value or loss of all or part of the participating
employee's deferred amounts or investment income because of market
conditions or the failure, insolvency, or bankruptcy of a qualified
vendor.
SECTION ____.04. Sections 609.502(a)-(d), Government Code,
are amended to read as follows:
(a) The comptroller [board of trustees of the Employees
Retirement System of Texas] is the trustee and the plan
administrator of a 401(k) plan known as TexaSaver established under
this subchapter.
(b) The comptroller [board of trustees] is the trustee and
the plan administrator of a 457 plan established under this
subchapter.
(c) The comptroller [board of trustees] shall administer
all aspects of each plan.
(d) The comptroller [board of trustees] may designate a
person to assist in the execution of the comptroller's [board's]
authority and responsibilities as plan administrator.
SECTION ____.05. Section 609.503, Government Code, is
amended to read as follows:
Sec. 609.503. CHANGING AMOUNT DEFERRED. An employee may
change the amount to be deferred by notifying the comptroller
[board of trustees] in accordance with the requirements of the
comptroller [board of trustees].
SECTION ____.06. Section 609.504, Government Code, is
amended to read as follows:
Sec. 609.504. INVESTMENT AND TRANSFER OF DEFERRED AMOUNTS
AND INCOME. After execution of a contract under Section 609.007,
the comptroller [board of trustees] shall:
(1) invest the deferred amounts and investment income
of the employee in the qualified investment products designated by
the employee; and
(2) promptly transfer the deferred amounts and
investment income of the employee from one qualified investment
product to another in accordance with the requirements of the
comptroller [board of trustees].
SECTION ____.07. Section 609.505, Government Code, is
amended to read as follows:
Sec. 609.505. QUALIFIED VENDOR. (a) The comptroller
[board of trustees], in accordance with rules adopted under this
subchapter, may contract with a vendor qualified to participate in
a deferred compensation plan.
(b) In a contract under Subsection (a), the comptroller
[board of trustees] may require the vendor to be audited annually by
an independent auditor paid by the vendor.
(c) A vendor or investment product having an ownership or
other financial interest in the contractor selected by the
comptroller [board of trustees] to administer a deferred
compensation plan is not qualified to participate in that plan.
(d) The comptroller [board of trustees] shall select
vendors or investment products based on the quality of investment
performance, proven ability to manage institutional assets,
minimum net worth requirements, fee structure, compliance with
applicable federal and state laws, and other criteria established
by the comptroller [board]. The comptroller [board of trustees]
shall determine the minimum and maximum number of vendors and
investment products that may be offered by a plan at any particular
time.
SECTION ____.08. Section 609.506, Government Code, is
amended to read as follows:
Sec. 609.506. INSURANCE COMPANY AS QUALIFIED VENDOR. On
written request, the Texas Department of Insurance shall certify in
writing to the comptroller [board of trustees] whether an insurance
company is eligible to be a qualified vendor under rules adopted by
the comptroller [board]. The comptroller [board] is entitled to
rely on the certification.
SECTION ____.09. Section 609.508, Government Code, is
amended to read as follows:
Sec. 609.508. RULES. The comptroller [board of trustees]
may adopt rules, including plans and procedures, and orders
necessary to carry out the purposes of this subchapter, including
rules or orders relating to:
(1) the selection and regulation of vendors for a
deferred compensation plan;
(2) the regulation of the practices of agents employed
by vendors;
(3) the disclosure of information concerning
investment products;
(4) the regulation of advertising materials to be used
by vendors;
(5) the submission of financial information by a
vendor; and
(6) the development of a system to facilitate
electronic authorization, distribution, transfer, and investment
of deferrals.
SECTION ____.10. Section 609.509, Government Code, is
amended to read as follows:
Sec. 609.509. CONTRACTS FOR GOODS AND SERVICES. (a) The
comptroller [board of trustees] may contract for necessary goods
and consolidated billing, accounting, and other services to be
provided in connection with a deferred compensation plan.
(b) In a contract under Subsection (a), the comptroller
[board of trustees] may provide for the comptroller [board] to
audit periodically the person with whom the contract is made. The
audit may cover:
(1) the proper handling and accounting of state or
trust funds; and
(2) other matters related to the proper performance of
the contract.
(c) The comptroller [board of trustees] may contract with a
private entity to conduct the audit under Subsection (b).
SECTION ____.11. Section 609.511, Government Code, is
amended to read as follows:
Sec. 609.511. FEE. (a) The comptroller [board of trustees]
may assess a fee against participating employees or qualified
vendors, or both the employees and the qualified vendors, in the
manner and to the extent it determines necessary to cover the costs
of administering the plan.
(b) The comptroller [board of trustees] shall determine the
method for computing and assessing a fee under this section.
SECTION ____.12. Sections 609.512(c), (g), (h), and (i),
Government Code, are amended to read as follows:
(c) The comptroller [board of trustees] shall administer
each trust fund.
(g) The comptroller [board of trustees] may establish
accounts in a trust fund that the comptroller [it] considers
necessary, including an account for the administration of the
deferred compensation plan for which the trust fund was
established.
(h) The comptroller [board of trustees] may transfer assets
from one account of a trust fund to another account of the fund for
financial management purposes if adequate arrangements are made to:
(1) reimburse the account from which the transfer is
made; and
(2) pay administrative expenses.
(i) The comptroller [board of trustees] may invest and
reinvest money in a trust fund subject only to the duty of care
provided by Section 815.307 that would apply if the investments
were being made for the Employees Retirement System of Texas.
SECTION ____.13. Section 609.513, Government Code, is
amended to read as follows:
Sec. 609.513. DISCRETIONARY TRANSFER. (a) The comptroller
[board of trustees] may transfer an employee's deferred amounts and
investment income from a qualified investment product to the trust
fund of the deferred compensation plan in which the employee
participates if the comptroller [board of trustees] determines that
the transfer is in the best interest of the plan and the employee.
(b) The comptroller [board of trustees] is not required to
give notice of a transfer under Subsection (a) to the employee
before the transfer occurs.
(c) Promptly after a transfer under Subsection (a) occurs,
the comptroller [board of trustees] shall give to the employee a
notice that:
(1) states the reason for the transfer; and
(2) requests that the employee promptly designate
another qualified investment product to receive the transferred
amount.
SECTION ____.14. Section 609.514, Government Code, is
amended to read as follows:
Sec. 609.514. ALTERNATIVE TO FUND DEPOSIT. Instead of
depositing deferred amounts and investment income in the trust fund
of the deferred compensation plan, the comptroller [board of
trustees] may invest them in a qualified investment product
specifically designated by the comptroller [board] for that
purpose.
SECTION ____.15. Section 609.515, Government Code, is
amended to read as follows:
Sec. 609.515. FIDUCIARY INSURANCE. In the administration
of a deferred compensation plan, the comptroller [board of
trustees] may purchase liability insurance for the coverage of the
comptroller and the [trustees,] employees[,] and agents of the
comptroller [board] in the amounts that the comptroller [board], in
the comptroller's [its] sole discretion, considers reasonable and
necessary.
SECTION ____.16. Section 609.001(1), Government Code, is
repealed.
SECTION ____.17. The changes in law made by this article do
not affect rules adopted, contracts entered into, contractors,
vendors, or products selected, fee amounts prescribed, or
investments or transfers in effect immediately before the effective
date of this Act, and those rules, contracts, selections, fees,
investments, and transfers remain in effect until amended or
changed by an action of the comptroller of public accounts.