AN ACT TO AMEND SECTION 25-14-5, MISSISSIPPI CODE OF 1972, TO ALLOW THE MISSISSIPPI DEFERRED COMPENSATION PLAN AND TRUST TO OFFER ROTH ACCOUNTS AND OTHER AFTER-TAX CONTRIBUTION VEHICLES; TO PROVIDE THAT A PARTICIPANT'S ROTH OR OTHER ALLOWABLE AFTER-TAX CONTRIBUTION INTO A DEFERRED COMPENSATION ACCOUNT SHALL BE TREATED BY THE EMPLOYER AS INCLUDABLE IN THE PARTICIPANT'S INCOME AT THE TIME THE PARTICIPANT WOULD HAVE RECEIVED THAT AMOUNT IN COMPENSATION IF THE PARTICIPANT HAD NOT MADE A DEFERRED ELECTION; TO AMEND SECTION 25-14-15, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR RELATED PURPOSES.
Summary
SB 2912 amends Mississippi’s deferred compensation law to expressly allow the Mississippi Deferred Compensation Plan and Trust to offer Roth accounts and other after-tax contribution options, so long as the plan document permits them. The bill also specifies how those contributions are to be treated for tax purposes: a participant’s Roth or other after-tax deferral is included in the participant’s income at the time the compensation would otherwise have been paid, rather than when it is later distributed.
The measure also makes a conforming change to the statute governing tax withholding for deferred compensation, clarifying that the general rule excluding deferred sums from withholding calculations does not apply to the new after-tax contribution category. The act takes effect July 1, 2026, and applies to state and local deferred compensation arrangements covered by Chapter 14 of Title 25.
Impact
The bill updates Sections 25-14-5 and 25-14-15 of the Mississippi Code to align state deferred compensation law with federal tax treatment for Roth-style and other after-tax retirement contributions. It expands the menu of investment and contribution options available through the state deferred compensation plan, while preserving the existing tax exemption for traditional pre-tax deferrals until distribution. The practical effect is to give public employees and participating governmental employers a new retirement savings option with different tax timing, and to require employers and plan administrators to treat those contributions as taxable wages when earned rather than when deferred.
Sentiment
The available voting history suggests broad support and little controversy: the Senate passed the bill unanimously, 52-0. No committee transcript is available, but the bill’s purpose is narrow and administrative, focused on modernizing the deferred compensation plan rather than changing benefit levels or imposing new mandates. The overall sentiment appears favorable, with the measure presented as a technical update to permit a commonly used retirement savings feature.
Contention
There is no recorded floor or committee debate in the provided materials, and the unanimous Senate vote indicates no visible opposition. Any potential points of contention would likely center on payroll administration and tax withholding mechanics for employers, as well as whether plan documents should permit Roth or other after-tax vehicles, but those issues are not reflected in the available discussion. The bill does not appear to raise substantive policy disputes about eligibility, funding, or benefit reductions.