Employees of board of education, agreement to reduce salary for purchase of annuity

18A:66-127. Any board of education may enter into an agreement with any of its employees whereby the employee agrees to take a reduction in salary with respect to amounts earned after the effective date of such agreement in return for the board's agreement to use a corresponding amount to purchase for the employee an annuity, as defined by N.J.S.17B:17-5, from any company authorized to sell such annuities under the provisions of Title 17B of the New Jersey Statutes, or to invest in a custodial account for the employee through a broker-dealer or agent registered pursuant to the provisions of sections 9 and 10 of the "Uniform Securities Law (1967)," P.L.1967, c.93 (C.49:3-56 and C.49:3-57). Any such annuity shall be purchased by means of an individual or group annuity contract which may provide for continuance of purchase payments during total disability, and under which the rights of such employee to such contract shall be nonforfeitable. Any such custodial account shall be established in accordance with and maintained to meet the requirements of section 403(b)(7) or section 457(b) of the Federal Internal Revenue Code of 1986, 26 U.S.C. ss.403(b) and 457(b), as amended. All moneys deferred for section 457 plans adopted after the effective date of this act, P.L.2003, c.155 and any other income shall be held in trust, in one or more annuity contracts or in custodial accounts for the exclusive benefit of the participating employees and their beneficiaries. Every such agreement shall specify the amount of such reduction, the effective date thereof, and shall be legally binding and irrevocable with respect to the amounts earned while the agreement is in effect. The total amount of the reductions in an employee's salary pursuant hereto, for any calendar year, shall not exceed the limitations set forth in sections 403(b), 457(b) and 415(c) of the Internal Revenue Code of 1986 as amended for such year. Any such agreement may be terminated upon notice in writing by either party. Amounts payable pursuant to this section by a board of education on behalf of an employee for a pay period shall be transmitted and credited not later than the fifth business day after the date on which the employee is paid for that pay period.