SECTION 64C. Individual retirement accounts between governmental bodies and employees

The treasurer or, if there is no treasurer, the chief financial officer, by whatever name that person is called, of any political subdivision, body politic and corporate, or public instrumentality created by the commonwealth or by any county, city, or town or group thereof by whatever) name the body is called, including without limitation an agency, board, authority, corporation or district, including, also without limitation, any regional school, police, fire, refuse or sewage district, hereinafter referred to as a ''governmental body,'' which is not subject to a general or special law authorizing deferred compensation contracts with its employees, may contract with an employee of that governmental body to make contribution for and in the name of such employee, from amounts otherwise payable to the employee as current compensation, to an Individual Retirement Account (''IRA'') by such employee established under the U.S. Internal Revenue Code, (the ''Code''). The participating employee may invest that portion of the employee's income so contributed to an IRA in an annuity contract, mutual fund, bank investment trust or other investment authorized by the Code. Before making such deduction, the treasurer or chief financial officer shall be required to solicit bids from insurance companies authorized to conduct business within the commonwealth under chapter 175, mutual fund managers and banks, which bids shall be sealed and opened at a time and place designated by the treasurer or chief financial officer. Any bid submitted by an insurance company, mutual fund or bank investment trust seeking investment of the IRA contribution shall, where applicable, clearly indicate the interest rate which shall be paid on the invested funds, any commissions which will be paid to the salesmen, any load imposed for the purpose of administering the funds, expected payouts, tax implications for participating employees and such other information as the treasurer or chief financial officer may require. Upon the treasurer's or chief financial officer's determining which provider offers the product or products most beneficial to the employee in each category for which bids were solicited, the treasurer or chief financial officer may offer such employee the opportunity to establish an IRA with 1 or more such providers. The employee who wishes to invest the employee's IRA funds with such provider, or combination of providers, may authorize the treasurer or chief financial officer to deduct from amounts otherwise payable to the employee, at 1 time or on a periodic basis, amounts to be paid into the employee's IRA. If the employee so elects, the treasurer or chief financial officer shall pay to the providers the amount designated by the employee, in the name of the employee, to the employee's IRA. Amounts so paid to the providers for the employee's IRA account shall belong exclusively to the employee. Except as otherwise provided herein, the treasurer or chief financial officer may restrict an employee's right to contract to have contributions made to an IRA through deductions and payments by the treasurer or chief financial officer, to those providers selected as the result of the competitive bidding process outlined herein, but the authority conferred upon the treasurer or chief financial officer shall not be construed to restrict or limit the right of any employee to establish 1 or more IRAs with such banks, insurance companies, or similar authorized institutions as the employee may choose in any manner other than through an authorized deduction by the treasurer or chief financial officer of a portion of the employee's compensation as outlined herein. Any contract entered into between an employee and the governmental body under this section shall include all information in terms the employee can reasonably be expected to understand.

As used in this section the word ''employee'' shall have the same meaning as the word ''employee'' in section 1 of chapter 32 and shall also include consultants and independent contractors who are natural persons paid by the governmental body.

An employee may contribute a portion of the employee's compensation to an RA under the program outlined herein so long as such contribution, for an employee who is single, is the lesser of $2,000 or 100 per cent of the employee's compensation for a taxable year, and, for an employee who is married, the contribution is the lesser of $2,250 or 100 per cent of the employee's compensation for a taxable year, such dollar amount to be adjusted to reflect any applicable amendments to the code adopted from time to time. If an employee has any compensation deferred under a deferred compensation plan for employees of the governmental body, if one is established by the treasurer or chief financial officer under section 64B, then the aggregate amount of such deferred compensation deduction and amounts contributed to such employee's IRA shall not exceed the limits imposed upon such combined deduction and contribution by the Code.

Notwithstanding any provisions to the contrary, the treasurer or chief financial officer shall not be required to solicit bids to invest the contributed portion of an employee's income into the employee's IRA provided: (a) the treasurer or chief financial officer is authorized by the employee to pay that portion of the employee' compensation into the employee' IRA in the same investment products as are provided through a deferred compensation or RA plan for employees of the commonwealth administered by the state treasurer or a deferred compensation plan for employees of the governmental body administered by the treasurer or chief financial officer, provided such plan resulted from the solicitation of bids under bidding requirements comparable to those required under this section; or (b) the treasurer or chief financial officer is authorized by the employee to pay that portion of the employee's compensation into the employee's IRA in the investment products offered under a deferred compensation or IRA plan developed through a competitive selection process, provided that such plan resulted from the solicitation of bids by a group of any combination of 3 or more city, town, county or public authority treasurers or treasurers or chief financial officers of government bodies covered by this section acting as a ''Common Group'' for purposes of soliciting such proposals under bidding requirements comparable to those required under this section.

Such IRA plan shall be in addition to and not a part of any retirement program or pension system as provided under said chapter 32 and any other benefit program provided by law for such employee. Any compensation contributed by the employee to the employee's IRA under such a plan shall continue to be included as regular compensation, as defined in section 1 of said chapter 32, for the purpose of computing any retirement and pension benefits earned by any such employee, but any compensation so contributed shall not be included in the computation of federal taxes but shall be included in the computation of state taxes withheld on behalf of any such employee.