Section 18A. As used in this section, the words “includible compensation” and “custodial account” shall have the same meaning as in section 403(b) of the Internal Revenue Code of 1986, as amended; and the word “premiums” shall include contributions to a custodial account.
The state board of education on behalf of any employee of the department of education, the board of higher education on behalf of any employee of said board on behalf of any employee of said council, the state universities or the community colleges, the board of trustees of the University of Massachusetts on behalf of any employee of said university, the boards of trustees of the Bristol county agricultural school, the Essex agricultural and technical institute and the Norfolk county agricultural school, on behalf of any employee at their respective schools, and the board or other body or officer of any other public educational institution maintained and operated by the commonwealth or by any county, on behalf of any employee thereof, may enter into a written agreement with any such employee to purchase an individual or group annuity contract or any other investment approved by the internal revenue service guidelines relative to section 403(b) of the Internal Revenue Code of 1986, as amended, for such employee; provided, however, that in no event shall the total of the premiums paid for the purchase of such annuity or other investment and such employee’s includible compensation for any year exceed the total annual salary or compensation under the existing salary schedule for the job group applicable to such employee in such year. Such employee’s rights in such annuity contract or other investment shall be nonforfeitable.
Any such annuity contract shall be purchased only from an insurer authorized to issue life insurance or annuity contracts in the commonwealth; provided, however, that such board or other body or officer may agree with any employee or prospective employee who has an annuity contract in force for at least ninety days prior to the effective date of such agreement to continue to make premium payments under such contract subsequent to the effective date of such agreement, without regard to whether or not such contract has been issued by an insurer authorized to issue such contracts in the commonwealth, but in such case any subsequent contract shall be purchased only from an insurer authorized to issue life insurance or annuity contracts in the commonwealth.
Upon execution of such an agreement, such board or other body or officer, shall forthwith give written notice thereof to the treasurer of the commonwealth or the county or to the appropriate payroll officer of such educational institution, as the case may be, and shall certify the amount and dates of premiums payable under the terms of such annuity contract or of the custodial agreement setting up the custodial account to hold such other investment; the name of the issuer of such annuity contract or the custodian of such custodial account; and the office to which such premium payments shall be made. Said treasurer or other payroll officer shall thereafter make such premium payments while said contract or custodial agreement is in force and such employee is actively employed by such board, and upon written notice duly given by such board or other body or officer, shall make any changes in the manner or amount of premium payments required under the terms of any subsequent agreement entered into by such employee and such board or other body or officer, and shall stop such premium payments when so notified by such board or other body or officer.