(a)  Except as designated in this section, any sum deferred under the deferred compensation program shall not be subject to taxation until distribution is actually made to the employee.

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(b)  Subsection (a) of this section shall not apply where the deferred compensation program includes a qualified Roth contribution program and the sums have been deferred as a designated Roth contribution. Where the employee has elected that sums be deferred as a designated Roth contribution, the sums shall be deferred post tax.

(c)  For the purposes of this section, the term “qualified Roth contribution program” means a program under which an employee may elect to make designated Roth contributions in lieu of all or a portion of elective deferrals the employee is otherwise eligible to make under the deferred compensation program. A program shall not be treated as a qualified Roth contribution program unless the deferred compensation program:

(1)  Establishes separate accounts for the designated Roth contributions of each employee and any earnings properly allocable to the contributions; and

(2)  Maintains separate recordkeeping with respect to each account.

(d)  For the purposes of this section, the term “designated Roth contribution” means any elective deferral that is excludable from gross income of an employee with regard to subsection (a) of this section and the employee designates as not being so excludable.