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A BILL TO BE ENTITLED
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AN ACT
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relating to participation by certain state employees in a default |
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investment product under a deferred compensation plan. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 609, Government Code, is |
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amended by adding Section 609.5025 to read as follows: |
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Sec. 609.5025. AUTOMATIC PARTICIPATION; DEFAULT INVESTMENT |
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PRODUCT. (a) This section applies only to an employee of a state |
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agency participating in a 401(k) plan. |
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(b) An employee participates in a 401(k) plan unless the |
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employee affirmatively elects not to participate in the plan. |
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Notwithstanding Sections 609.007(b) and (c), an employee is not |
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required to affirmatively contract for and consent to participation |
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in a plan under this section. |
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(c) An employee participating in a 401(k) plan under this |
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section makes a contribution of one percent of the compensation |
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earned by the employee to a default investment product selected by |
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the board of trustees based on the criteria established under |
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Section 609.505(d) and the rules adopted under Subsection (f). The |
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contribution is made by automatic payroll deduction. |
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(d) At any time, an employee participating in a 401(k) plan |
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under this section may, in accordance with rules adopted by the |
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board of trustees, elect to end participation in the 401(k) plan, to |
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contribute to a different investment product, or to contribute a |
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different amount to the plan. |
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(e) The board of trustees shall ensure that, at the time of |
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employment, each employee is informed of: |
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(1) the elections the employee may make under this |
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section; and |
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(2) the responsibilities of the employee under Section |
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609.010. |
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(f) The board of trustees shall adopt rules to implement the |
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requirements of this section. The rules must ensure that the |
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operation of the 401(k) plan under this section conforms to the |
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applicable requirements of any federal rule that provides fiduciary |
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relief for investments in qualified default investment |
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alternatives or otherwise governs default investment alternatives |
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under participant-directed individual account plans. |
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(g) The amount deducted under this section from an |
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employee's compensation is not deducted for payment of a debt and |
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the automatic payroll deduction is not garnishment or assignment of |
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wages. |
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SECTION 2. Section 609.007(c), Government Code, is amended |
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to read as follows: |
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(c) Except as provided by Section 609.5025, to [To] |
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participate in a deferred compensation plan, an employee must |
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consent in the contract to automatic payroll deductions in an |
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amount equal to the deferred amount. |
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SECTION 3. Section 659.102(a), Government Code, is amended |
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to read as follows: |
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(a) An employee of a state agency may authorize in writing a |
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deduction each pay period from the employee's salary or wage |
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payment for coverage of the employee under an eligible supplemental |
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optional benefits program. A deduction may be made each pay period |
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from the employee's salary or wage payment without authorization in |
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writing from the employee for participation in a 401(k) plan as |
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provided by Section 609.5025. |
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SECTION 4. Section 609.5025, Government Code, as added by |
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this Act, applies only to an officer or employee of a state agency |
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who initially takes office or begins employment on or after January |
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1, 2008. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |