Opinion No. (2008)

EDMUND G. BROWN JR. Attorney General TAYLOR S. CAREY Deputy Attorney General THE HONORABLE BONNIE GARCIA, MEMBER OF THE STATE ASSEMBLY, has requested an opinion on the following questions: 1. May a school district or its employees promote or give preferred status to a particular provider of Internal Revenue Code section 403 (b) plans when offering such plans to the district's employees? 2. May a school district or its employees receive compensation for the promotion or sale of a particular 403(b) plan to public school employees? *Page 2 CONCLUSIONS 1. A school district and its employees may promote or give preferred status to a particular provider of 403(b) plans if the arrangement will aid the district in the administration of its benefit programs, does not unreasonably discriminate against any provider, and does not interfere with the rights of employees to purchase investment products from qualified providers of their own choice. 2. A school district and its employees may not receive compensation for the promotion or sale of a particular 403(b) plan to public school employees. However, a third-party administrator that is under contract to perform 403(b) plan administrative…