§88-46  Deducting employee contributionsfrom salary and employer pick up of employee contributions.  (a)  The headof each state department and the finance director of each county shall deductfrom the compensation of each class A or class B member on each and everypayroll under their respective jurisdiction, the percentage of compensation ofeach member as provided under section 88-45.  The total amount of deductionsmade from the salaries of employees and a record of the amount deducted fromeach member's compensation shall be transmitted to the system monthly or atsuch other times as may be agreed upon by the board of trustees.  The amountsdeducted shall be paid into the annuity savings fund and shall be credited tothe individual account of the member from whose compensation the deductionswere made.  Regular interest shall also be credited to the individual accountof the member in the annuity savings fund.

(b)  The State and each county, pursuant tosection 414(h)(2) of the federal Internal Revenue Code of 1986, as amended,shall pick up and pay the contributions which would otherwise be payable byeach class A or class B member, including contributions designated by themember relating to the acquisition of membership service as provided under section88-59, from compensation paid after December 31, 1987.  The contributions sopicked up shall be treated as employer contributions for the purpose ofdetermining the amount of federal income tax to withhold from each class A orclass B member's compensation.

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

(d)  Member contributions picked up by theemployer shall be transmitted to the system in accordance with subsection (a). Such contributions shall be credited to a separate account within each member'sindividual account in the annuity savings fund, so that the amount contributedby the member before January 1, 1988, may be distinguished from the membercontributions picked up by the employer.  Regular interest shall also becredited to the individual account of the member in the annuity savings fund.[L 1925, c 55, pt of §8; am imp L 1927, c 251, §4; RL 1935, pt of §7927; RL 1945,pt of §712, subs 1; RL 1955, §6-83; am L 1957, c 143, §8; am L 1963, c 127,§16; am L 1964, c 62, §11; HRS §88-46; am L 1969, c 110, pt of §1; am L 1984, c108, §5; am L 1987, c 115, §1; am L 1988, c 41, §2; am L 1997, c 213, §1]

 

Attorney General Opinions

 

  Member must have made contributions in order to have payincluded as part of average final compensation.  Att. Gen. Op. 85-10.