H-3303              _______________________________________________

                                                   HOUSE BILL NO. 1640

                        _______________________________________________

State of Washington                              49th Legislature                              1986 Regular Session

By Representatives Unsoeld, Ebersole, Winsley, Belcher, Nutley and P. King

Read first time 1/21/86 and referred to Committee on Ways & Means.

AN ACT Relating to educational employees' tax deferred annuities; and amending RCW 28A.58.560.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 28A.58.560, chapter 223, Laws of 1969 ex. sess. as last amended by section 1, chapter 228, Laws of 1984 and RCW 28A.58.560 are each amended to read as follows:

(1) The board of directors of any school district, the Washington state teachers' retirement system, the superintendent of public instruction, and  educational service district superintendents are authorized to provide and pay for tax deferred annuities for their respective employees in lieu of a portion of salary or wages as authorized under the provisions of 26 U.S.C., section 403(b), as amended by Public Law  87-370, 75 Stat. 796, as now or hereafter amended.  The superintendent of public instruction and  educational service district superintendents, if eligible, may also be provided with such annuities.  For the purposes of this section, "tax deferred annuities" includes all investments authorized under the provisions of 26 U.S.C. section 403(b).

(2) At the request of at least five employees, the employees' employer shall arrange for the purchase of tax deferred annuity contracts which meet the requirements of 26 U.S.C., section 403(b), as now or hereafter amended, for the employees from any company the employees may choose that is authorized to do business in this state through a Washington-licensed insurance agent or securities salesman that the employees may select.  Payroll deductions shall be made in accordance with the arrangements for the purpose of paying the entire premium due and to become due under the contracts.  Employees' rights under the annuity contract are nonforfeitable except for the failure to pay premiums.

          The board of directors of any school district, the Washington state teachers' retirement system, the superintendent of public instruction, and educational service district superintendents shall not restrict, except as provided in this section, employees' right to select the tax deferred annuity of their choice or the agent, broker, or company licensed by the state of Washington through which the tax deferred annuity is placed or purchased, and shall not place limitations on the time or place that the employees make the selection.

          The board of directors of any school district, the Washington state teachers' retirement system, the superintendent of public instruction, and educational service district superintendents may each adopt rules regulating the sale of tax deferred annuities which:  (1) Prohibit solicitation of employees for the purposes of selling tax deferred annuities on school premises during normal school hours; (2) only permit the solicitation of tax deferred annuities by agents, brokers, and companies licensed by the state of Washington; and (3) require participating companies to execute reasonable agreements protecting the respective employers from any liability attendant to procuring tax deferred annuities.