[§88-326]  Deducting employee contributions
from salary and employer pick up of employee contributions.  (a)  The head
of each state department and the finance director of each county shall deduct
from the compensation of each class H member on each and every payroll under
their respective jurisdictions, the percentage of compensation of each member
as provided under section 88-325.



The total amount of deductions made from the
salaries of employees and a record of the amount deducted from each member's compensation
shall be transmitted to the system semi-monthly or at other times as may be
agreed upon by the board.  The amounts deducted shall be paid into the annuity
savings fund and shall be credited to the individual account of the member from
whose compensation the deductions were made.



Regular interest shall also be credited to the
individual account of the member in the annuity savings fund.



(b)  The State and each county, pursuant to
section 414(h)(2) of the Internal Revenue Code of 1986, as amended, shall pick
up and pay the contributions that would otherwise be payable by each class H
member, including contributions designated by the member relating to the
conversion or acquisition of membership service as provided under sections [88-322(d)]
and 88-324, from compensation paid after December 31, 1987.  The contributions
so picked up shall be treated as employer contributions for the purpose of
determining the amount of federal income tax to withhold from each class H
member's compensation.  The member shall complete a payroll authorization form
before the period in which the contributions are earned and service is
acquired, converted, or credited.  With respect to service to be acquired or
converted, the form shall be a binding irrevocable payroll deduction
authorization in which the member acknowledges that the system will not accept
direct payment from the member while the form is in effect.



(c)  Member contributions picked up by the
employer shall be paid from the same source of funds used for the payment of
compensation to a member.  A deduction shall be made from each class H member's
compensation equal to the amount of the member's contributions picked up by the
employer; provided that the deduction shall not reduce the member's
compensation for the purpose of computing benefits under this chapter.



(d)  Member contributions picked up by the
employer shall be transmitted to the system in accordance with subsection (a).
Such contributions shall be credited to a separate account within each member's
individual account in the annuity savings fund so that the amount contributed
by the member before January 1, 1988, may be distinguished from the member
contributions picked up by the employer.  Regular interest shall also be
credited to the individual account of the member in the annuity savings fund.
[L 2004, c 179, pt of §1]