It is the intent of the Legislature to make available to participants a defined contribution plan as described in Section 401 of the Internal Revenue Code, so as to enable the participants to conveniently and economically receive the fullest benefits offered by federal tax law as it relates to qualified defined contribution savings plans for public employees covered by a mandatory defined benefit public employee savings plan and participating in voluntary supplemental deferred compensation or tax sheltered annuity plans under Internal Revenue Code Sections 457 and 403(b) respectively.

As used in this chapter, the following terms have the following meanings:

(1) BOARD. The Board of Control of the Public Employees Defined Contribution Savings Fund.

(2) ELIGIBLE EMPLOYER. An employer or other entity who compensates a participant for the public service.

(3) FUND. The Public Employees* Defined Contribution Savings Fund.

(4) PARTICIPANT. A person who elects to participate in the fund who makes voluntary employee contributions into a 457 deferred compensation or a 403(b) tax sheltered annuity plan, who is not a public school employee and who meets any of the following requirements:

a. Is a member of the Teachers* Retirement System.

b. Is a member of the Employees* Retirement System.

c. Is a member of the Judicial Retirement Fund.

d. Is an employee of an employer eligible to participate in the Employees* Retirement System pursuant to Section 36-27-6 which elects to participate.

e. Is a public official or public employee of the State of Alabama or any political subdivision thereof. As used in this chapter, @public official@ does not include a person holding an elected state or local office.

The Public Employees* Defined Contribution Savings Fund is created. The fund shall be administered by a board of control of seven individuals appointed by the Alabama State Employees* Association.

(a) At its first meeting, the board shall elect one of its members as chair.

(b) The board may adopt regulations necessary to implement this chapter. Regulations adopted are exempt from the Alabama Administrative Procedure Act.

(c) The board may contract with one or more entities for the daily operation and investment of funds under this chapter.

(d) The board may adopt one or more defined contribution plans as described in Section 401 of the Internal Revenue Code if the board determines that doing so will offer substantial tax benefits to any segment of the participants covered under this chapter.

To the extent not in conflict with the Internal Revenue Code, all investments shall be subject to any limitations established and adopted by the board.

(a) Participation in this fund shall be voluntary under regulations adopted by the board and in accordance with the Internal Revenue Code.

(b) Any person who becomes ineligible for participation in the fund due to the termination of his or her employment with an eligible employer, or due to other reasons, may leave his or her vested accumulations on account with the fund. In that event, no further contributions may be accepted on the account of the person unless the person is reemployed by an eligible employer or again becomes eligible.

(a)(1) By July 1 of each year, the board, based on the funds appropriated by the Legislature for employer contributions to defined contribution savings plans for the ensuing fiscal year and the number of participants, shall determine the maximum amount of employer match contribution available for each participant. Nothing in this chapter shall be deemed to require the Legislature to appropriate an employer match or any other monies to the Employee Savings Plan.

(2) The employer match contribution as established in subdivision (1) shall be available to each participant in the plan and funded into the 401 plan established by the board for the participant.

(3) The board shall make a similar determination for employees of any other agency electing to participate in a defined contribution savings plan under this chapter whose employees are not included within an appropriation for employer contributions by the Legislature.

(4) Such agencies referred to in subdivision (3) may participate in the plan, subject to regulations of the board.

(b) Each participant shall contribute elective deferrals deducted from the participant*s compensation to a 457 deferred compensation plan or a 403(b) tax sheltered annuity plan as the participant*s contribution to a plan under this chapter.

(c) Each participant shall receive employer contributions into the 401 plan as specified in subdivision (2) of subsection (a) of an amount equal to participant contributions into a 457 deferred compensation plan or a 403(b) tax sheltered annuity plan as specified in subsection (b). Such employer contribution shall not exceed the maximum employer match available for each participant as determined annually in subdivision (1) of subsection (a).

(d) The participant*s contribution, if any, and any employer*s match contribution shall be transmitted to the appropriate entity under subsection (c) of Section 36-27C-4. The employer shall transmit such contributions during each pay cycle as established by the employer.

(e) In addition to all other appropriations heretofore or hereafter made, there is appropriated from the Public Employees* Defined Contribution Savings Fund to the Board of Control of the Public Employees* Defined Contribution Savings Fund the sum of $1,000,000 for the fiscal year ending September 30, 2004. The appropriation made in this subsection shall be expended by the board for an employer match in accordance with this section.

The administrative cost for the operation of the fund shall be provided through investment earnings or contributions to the fund. No additional state funds may be used to administer this chapter.

Nothing in this chapter shall limit or otherwise lessen the State of Alabama*s, current or future, obligation to fund the Employees* Retirement System, the Teachers* Retirement System, or the Judicial Retirement Fund. The provisions of this chapter, in whole or in part, may not be used to allow a person otherwise covered under the Retirement Systems of Alabama to opt out or otherwise cease participation in the Employees* Retirement System, the Teachers* Retirement System, or the Judicial Retirement Fund. The State of Alabama or any political subdivision thereof may not substitute or cause to be substituted this Employee Savings Plan or any other defined contribution plan for the state retirement defined benefit plan that currently exists in the Employees* Retirement System, the Teachers* Retirement System, or the Judicial Retirement Fund.