Deferred compensation plan for municipal employees. Administration. Option of participating in deferred compensation program for state employees.

(b) The officer designated by the chief executive officer of any city, town or other political subdivision is authorized to enter into such contractual agreements with employees of the city, town or other political subdivision, as the case may be, on behalf of the city, town or political subdivision to defer any portion of that employee's compensation. (c) The administration of the deferred compensation program shall be under the direction of the officer designated by the particular city, town or other political subdivision. Payroll deductions shall be made, in each instance, by the appropriate payroll officer. The administrator of the deferred compensation program may contract with a private corporation or institution for providing consolidated billing and other administrative services with respect thereto. (d) For the purposes of this section: “Employee” means any person, whether appointed, elected or under contract, providing services for the city, town or other political subdivision, for which compensation is paid; and “investment savings account” means a savings account in a state bank and trust company, national banking association, mutual savings bank, savings and loan association or federal savings and loan association or a share account in a credit union or federal credit union established to receive the deferred compensation of a municipal employee under the deferred compensation plan established by the officer designated by a city, town or other political subdivision pursuant to this section. (e) Notwithstanding any other provision of law to the contrary, those persons designated to administer the deferred compensation program are hereby authorized to make (1) deposits or payments to such investment savings accounts, (2) payment of premiums for the purchase of fixed or variable life insurance or annuity contracts, or (3) payments for interests in investment trusts established by an organization of public employers and managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations under the deferred compensation program. Such payments shall not be construed to be a prohibited use of the general assets of the city, town or other political subdivision. (f) Any city, town or other political subdivision of the state may, by contract, elect to participate in the deferred compensation program for state employees as authorized under subsection (g) of section 5-264a . The deferred compensation funds associated with the participation by such city, town or political subdivision in the deferred compensation program for state employees may be invested in any of the funding vehicles authorized for such program under section 5-264a .