Alabama Attorney General Opinion 1979-0144

I f," riti 0 E Ler L. MALE CIE•LITY ATTORNEY GENERAL WILLIAM M. BEMURS. JR . EflCUTIVE ASSISTANT IN^Lterr S. TURNER cm,er ASSISTANT ATTORNEY GENERAL JANIE NOBLES ACHRINiSTRATIVE ASSISTANT OIN.\\ !!!,A' I ).,A*1;„ 111-7 *irTtr ! 4/ CHARLES A. GRADDICK ATTORNEY GENERAL STATE OF ALABAMA APR 11 1913 Sat, 19 • o0144 AOMINISTRATIT C BUILDING •• NORTH UNION STREET MONTGOHERY, AL AAAAA 15130 AREA (.205I. 134-5110 Mr. James E. Wilson City Clerk-Treasurer Post Office Box 98 Florence, Alabama 35630 Municipalities-Florence- Employers and Employees City of Florence may legally adopt deferred compensation plan. Dear Mr. Wilson: The Office of the Attoraey General has received your opinion request. Your inquiry is whether the City of Florence may legally and properly adopt a deferred compensa- tion plan. You have submitted for our consideration a copy of City of Florence, Alabama Deferred Compensation Plan II. The plan contains the following explanation: What Is "Deferred Compensation" Under This Plan? - It is the deposit of a portion of your wages or salary in a savings account in the Florence Munici- pal Federal Credit Union, through pay- roll deduction. You will not have to pay income tax on the amount saved, or the earnings on it, as long as it re- mains so invested. Any employee of the City of Florence or independent con- tractor with the City of Florence is eligible to participate (;KNERAL mr. James E. Wilson Page Two in the plan. Neither the Credit Union nor the City plan to make any service charges in connection with the plan. Under Code of Alabama 1975, §11-43-7 the governing bodies of municipalities are authorized to provide for the compensation of municipal employees. Under the facts pre- sented by you, this office can find nothing which would pro- hibit the governing body froth providing the opportunity to receive a portion of this compensation as deferred compen- sation. It is, therefore, the opinion of this office that the City of Florence may legally and properly adopt a plan of the type referred to in your request so that its employees may receive deferred compensation. As is true with any undertaking of the City of Florence, this program should not be implemented where the possibility of any conflict of inLerest exists. I do hope that this sufficiently answers your question. If, however, this office may be of further assistance, please feel free to call on us. Very truly yours, CHARLES A. GRADDICK Attorney General By- CAROL JEAN SMITH Assistant Attorney General CJSIdwm