Chapter 36. Employee Deferred Compensation Program.

§ 47–3601. Authorized; treatment of benefits; employee eligibility; exclusion from certain review and collective bargaining provisions.

(a)(1) There shall be established an employee deferred compensation program which meets the requirements of this section and § 457 of the Internal Revenue Code of 1954 and the regulations and interpretations thereunder.

(1A)(A) All newly hired employees eligible to participate in the employee deferred compensation program, including employees eligible pursuant to subsection (c) of this section, shall be automatically enrolled in the deferred compensation program.

(B) All newly hired employees' contributions shall be no less than 5% of their annual base salary upon hire.

(C) An employee may increase, reduce, or cease his or her contributions to the deferred compensation program at any time.

(2) The employee deferred compensation program shall be in addition to any other retirement, pension, or benefit system established by law, and no deferral of income under the employee deferred compensation program shall effect a reduction of the amount of any other retirement, pension or other benefit provided by law. Any amount deferred under the employee deferred compensation program shall be included in the employee’s compensation for purposes of computing contributions to existing life insurance, retirement systems, F.I.C.A. or any other system keyed to the employee’s scheduled rate of pay, but shall not be included for the purposes of computing federal or District income tax withholdings on behalf of any such employee.

(3) Any amount of compensation deferred under the employee deferred compensation program and any income attributable to the amount so deferred, shall be includible in the employee’s District gross income pursuant to Chapter 18 of this title only for the taxable years in which such compensation or other income is paid or otherwise made available to the employee or other beneficiary, and shall be subject to District income tax withholding for such year pursuant to Chapter 18 of this title.

(b) Members of boards and commissions whose pay is set under § 1-611.08 shall not be eligible to participate in the employee deferred compensation program.

(b-1)(1) The Mayor shall select default investments for the accounts of employees automatically enrolled in the District government's deferred compensation program. The Mayor may delegate this responsibility to an employee's personnel authority.

(2) Upon an eligible employee's hire, the Mayor shall provide the employee notice of the automatic enrollment required pursuant to subsection (a) of this section; provided, that the Mayor may delegate this function to an employee's personnel authority or independent agency pursuant to an agreement executed pursuant to subsection (c) of this section. The notice shall explain:

(A) The employee's right under the plan to designate how contributions and earnings will be invested;

(B) How, in the absence of an investment election by the employee, such contributions and earnings will be invested;

(D) The employee's right to increase, reduce, or cease the employee's contributions to the program; and

(E) How an employee may elect investments and change or cease contribution amounts under the plan.

(c) The Mayor may enter into an agreement with any personnel authority or independent agency for the purpose of extending to the employees of such personnel authority or independent agency eligibility to participate in the employee deferred compensation program.

(d) The provisions of this section are not subject to review by the Office of Employee Appeals under subchapter VI of Chapter 6 of Title 1, nor are they subject to the provisions of subchapter XVII of Chapter 6 of Title 1, concerning collective bargaining.

(Sept. 26, 1984, D.C. Law 5-118, § 2, 31 DCR 4034; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; June 5, 2018, D.C. Law 22-102, § 2(a), 65 DCR 3774.)

Prior Codifications

1981 Ed., § 47-3601.

Section References

This section is referenced in § 47-1803.02.

Cross References

Income and franchise taxes, gross income inclusions and exclusions, deferred compensation, see § 47-1803.02.

Applicability

Section 7031 of D.C. Law 22-168 repealed section 3 of D.C. Law 22-102 amending the applicability restriction impacting this section. Therefore the amendments of this section by D.C. Law 22-102 have been implemented.

Applicability of D.C. Law 22-102: § 3 of D.C. Law 22-102 provided that the change made to this section by § 2(a) of D.C. Law 22-102 is subject to the inclusion of the law’s fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.

References in Text

Section 457 of the Internal Revenue Code of 1954, referred to in paragraph (1) of subsection (a) of this section, is classified to 26 U.S.C. § 457.

Delegation of Authority

Delegation of authority under D.C. Law 5-118, see Mayor’s Order 85-64, May 20, 1985.

§ 47–3602. Regulations.

The Mayor shall promulgate regulations which enable employees to participate in a voluntary tax-sheltered income deferment program which meets the requirements of § 457 of the Internal Revenue Code of 1954 , and the regulations and interpretations thereunder. The regulations shall include, but not be limited to:

(1) Provision for the receipt of the compensation deferred and for the use of such funds in accordance with any investment election permitted employees participating in the employee deferred compensation program;

(2) Provision for a contract agreement between the Mayor and any employee who desires to defer compensation under the employee deferred compensation program;

(3) Provision for and limitations on the types of instruments, securities, accounts or other items in which compensation deferred under the employee deferred compensation program may be invested; and

(4) Rules to implement the Deferred Compensation Program Enrollment Amendment Act of 2018 [(Law 22-102)] within 180 days of [June 5, 2018].

(Sept. 26, 1984, D.C. Law 5-118, § 3, 31 DCR 4034; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; June 5, 2018, D.C. Law 22-102, § 2(b), 65 DCR 3774.)

Prior Codifications

1981 Ed., § 47-3602.

Applicability

Applicability of D.C. Law 22-102: § 3 of D.C. Law 22-102 provided that the change made to this section by § 2(b) of D.C. Law 22-102 is subject to the inclusion of the law’s fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.

References in Text

Section 457 of the Internal Revenue Code of 1954, referred to in the first sentence of the introductory language of the section, is classified to 26 U.S.C. § 457.

Editor's Notes

District of Columbia Deferred Compensation Committee Established: See Mayor’s Order 85-135, August 2, 1985.

§ 47–3603. Contracts for services.

(a) The Mayor may select 1 or more contractors to provide such services as may be part of the employee deferred compensation program.

(b) The cost of any contract for provision of such services as may be part of the employee deferred compensation program shall be financed solely from employee contributions to the employee deferred compensation program or from a fund or funds established to administer the employee deferred compensation program.

§ 47–3604. Annual report.

The Mayor shall, before February 2nd each year, submit to the Council an annual report which details the activities, and operation of the employee deferred compensation program for the preceding fiscal year.