(1) Except as provided in subsection (2) of this section, notwithstanding any other provision of law to the contrary, no governmental unit or government-financed entity shall pay postemployment compensation to any government-supported official or employee.

(2) (a) At the option of the appointing authority for any government-supported official or employee, such official or employee may be provided postemployment compensation that consists of the payment of up to a maximum of three months of salary for such official or employee and the provision of up to a maximum of three months of employee benefits for such official or employee. No postemployment compensation shall be provided other than cash payments and the provision of employee benefits. Postemployment compensation may be approved and provided only if the government-supported official or employee who is to receive such compensation was employed by the governmental unit or government-financed entity for less than five years; except that postemployment compensation may be approved and provided for an official or employee of a state institution of higher education or of the Auraria higher education center, regardless of the length of employment.

(b) Postemployment compensation may be provided to any government-supported official or employee only if the appointing authority for the official or employee takes positive action to approve such compensation. The provisions of this subsection (2) shall not beconstrued to authorize any employment contract term requiring the provision of postemployment compensation in violation of the provisions of section 24-19-104. Postemployment compensation payments shall be solely the option of the appointing authority for a government-supported official or employee and no official or employee shall be entitled to or have any right to receive any postemployment compensation.

(3) Any employment contract, employment contract extension, or other agreement between a governmental unit or government-financed entity and a government-supported official or employee that is not substantially in compliance with this section is null and void. Any payment made to any person by a governmental unit or government-financed entity in violation of this section is illegal and the recipient of such payment shall return the payment to the governmental unit or government-financed entity.