Contract for purchase of annuity or investment in custodial account

(a) The department of education and the University of Hawaii, on behalf of any employee of the respective institutions, may enter into a written agreement with any employee to purchase for the employee: (1) An annuity contract under section 403(b) of the Internal Revenue Code of 1986, as amended, from an insurer who holds a certificate of authority under section 431:3-201 or certificate of registration of dealer in securities under chapter 485A, or both, and who complies with the requirements established by the respective institution and agrees to abide by the terms, conditions, rules, or regulations of the respective institution; or (2) An annuity contract qualified under section 401(k) of the Internal Revenue Code of 1986, as amended, which provides a nationwide retirement trust for a group of college or university football coaches who, due to the nature of their jobs, change employers frequently. (b) The University of Hawaii and after December 31, 2003, the department of education may pay amounts to a custodial account established on behalf of the employee pursuant to section 403(b)(7) of the Internal Revenue Code of 1986, as amended.