SENATE BILL REPORT

SB 5369

BYSenators Garrett and Zimmerman; by request of Office of Financial Management

Renaming the deferred compensation revolving fund.

Senate Committee on Ways and Means

Senate Hearing Date(s):February 19, 1987

Majority Report:  Do pass.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bluechel, Cantu, Deccio, Kreidler, Lee, McDonald, Rasmussen, Rinehart, Saling, Talmadge, Williams, Wojahn.

Senate Staff:Charles Langen (786-7715)

                  February 19, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 18, 1987

BACKGROUND:

The funds deferred from employees' compensation are deposited in the Deferred Compensation Revolving Fund.  The deferred compensation funds are expended from the revolving fund for investment purposes as are the expenses of the Deferred Compensation Committee.  Recent changes, however, in generally accepted accounting principles (GAAP) and the Governmental Accounting Standards Board (GASB) require that deferred compensation funds be accounted for separately in an agency's accounting system.

SUMMARY:

There is created the Deferred Compensation Principal Account and the Deferred Compensation Administrative Account in the state treasury, satisfying GAAP and GASB standards.  The Principal Account contains the deferred compensation amounts and interest on the investment of these funds.  Funds from the Principal Account are transferred to the Administrative Account to cover operational costs of the Committee, and any earnings from the investment of balances in the Administrative Account will accrue to the Administrative Account.  Any excess of these investment earnings are expended to the Principal Account.  Any deficiency in the Administrative Account is covered by a transfer from the Principal Account.

Fiscal Note:      requested

Senate Committee - Testified: No one