California Code, Government Code - GOV § 16431

(a) Notwithstanding any other provisions of this code, funds held by the state, pursuant to a written agreement between the state and employees of the state to defer a portion of the compensation otherwise receivable by the state's employees and pursuant to a plan for that deferral as adopted by the state and approved by the Department of General Services, may be invested in the types of investments set forth in Sections 53601 and 53602and may additionally be invested in corporate stocks, bonds, and securities, mutual funds, savings and loan accounts, credit union accounts, annuities, mortgages, deeds of trust, or other security interests in real or personal property. Nothing in this section shall be construed to permit any type of investment prohibited by the California Constitution.

(b) Deferred compensation funds are public pension or retirement funds for the purposes of Section 17 of Article XVI of the California Constitution.