§88-46  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 A or class B member on each and every
payroll under their respective jurisdiction, the percentage of compensation of
each member as provided under section 88-45.  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 monthly or at
such other times as may be agreed upon by the board of trustees.  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 federal Internal Revenue Code of 1986, as amended,
shall pick up and pay the contributions which would otherwise be payable by
each class A or class B member, including contributions designated by the
member relating to the acquisition of membership service as provided under section
88-59, 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 A or
class B member's compensation.



(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 A or class
B member's compensation equal to the amount of the member's contributions
picked up by the employer, provided that such 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 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, c
108, §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 pay
included as part of average final compensation.  Att. Gen. Op. 85-10.