Statutory authority for the Governing Committee for Deferred Compensation Plans (Committee) is found at A.R.S. §§38-871 through 38-874. The Committee was renamed in 2018.
The Committee is authorized to approve deferred compensation plans that provide state employees income tax benefits as outlined by the Internal Revenue Code. State employee participation in a plan is voluntary. The Committee is authorized to enter into agreements with companies who have demonstrated expertise in areas related to deferred compensation plans. The Committee is required to arrange for billing and administrative services that operate at no cost, or only incidental costs, to the state. An annual financial audit is required. Statute also requires a performance review of the plans, or participation in benchmarking surveys or studies, at least every five years.
The Committee is made up of seven members, including the Director of the Arizona Department of Administration, the Superintendent of Financial Institutions, the Director of the Department of Insurance, the Director of the Arizona State Retirement System and three members appointed by the Governor. Agency directors may appoint a designee to serve on the Committee. The Committee is required to meet at least quarterly and may meet more often as the Committee deems necessary.
Laws 1972, Chapter 133 authorized cities, towns, counties and the state to establish tax deferred annuity and deferred compensation plans for public officers and employees in order to provide state income tax benefits. Participation by employees was voluntary. Participating employees were required to authorize reductions in their wages according to a written compensation agreement. The measure created a seven-member Governing Committee and outlined its responsibilities. The Committee was authorized to enter into agreements with life insurance companies, bank trustees or custodians, and investment counseling firms registered with the Securities Exchange Commission in order to develop programs to provide tax deferred benefits to employees.
Laws 1985, Chapter 48 modified membership of the Committee, deleting the Attorney General and an employee of the Department of Administration, and adding the directors of the Department of Insurance and the Arizona State Retirement System. The measure also required: the Committee to meet monthly; an annual audit; and a performance audit of programs at least once every three years.
Laws 2018, Chapter 90 changed the name of the Committee from “Tax Deferred Annuity and Deferred Compensation Programs” to “Deferred Compensation Plans.” The measure modified qualifications for appointment to the Board, allowing the Governor to appoint three members who are either: individuals who have an account balance in a deferred compensation plan overseen by the Committee (as a contributing or non-contributing member, and either retired or nonretired); or public members who do not participate in a deferred compensation plan and have at least ten years of relevant experience in finance, investment management, pension or retirement plans. The measure also specified that Committee members are subject to state conflict of interest laws; allowed the Committee to meet quarterly, rather than monthly; revised Committee authority to enter into agreements with certain companies; and modified reporting requirements. Additionally, the measure removed the option for state employees to participate in tax deferred annuities and deleted related references.
- Arizona Revised Statutes §§38-871 through 38-874
- Arizona Administrative Code §§R2-9-101 et seq.
- Session Laws
- Laws 1972, Chapter 133
- Laws 1985, Chapter 48
- Laws 2018, Chapter 90