(40 ILCS 5/18-133.1) (from Ch. 108 1/2, par. 18-133.1)
Sec. 18-133.1.
Pickup of contributions.
(a) Each employer may pick up the participant contributions required
under Section 18-133 for all salary earned after December 31, 1981. If an
employer decides not to pick up the contributions, the employee contributions
shall continue to be deducted from salary. If contributions are picked up they
shall be treated as employer contributions in determining tax treatment under
the United States Internal Revenue Code. However, the employer shall continue
to withhold Federal and State income taxes based upon these contributions until
the Internal Revenue Service or the Federal courts rule that pursuant to
Section 414(h) of the United States Internal Revenue Code, these contributions
shall not be included as gross income of the participant until such time as
they are distributed or made available. The employer shall pay these
participant contributions from the same source of funds which is used in paying
earnings to the participant. The employer may pick up these contributions by a
reduction in the cash salary of the participant or by an offset against a
future salary increase or by a combination of a reduction in salary and offset
against a future salary increase. If participant contributions are picked up
they shall be treated for all purposes of this Article as participant
contributions were considered prior to the time they were picked up.
(b) Subject to the requirements of federal law, a participant may elect to
have the employer pick up optional contributions that the participant has
elected to pay to the System, and the contributions so picked up shall be
treated as employer contributions for the purposes of determining federal tax
treatment. The employer shall pick up the contributions by a reduction in the
cash salary of the participant and shall pay the contributions from the same
fund that is used to pay earnings to the participant. The election to have
optional contributions picked up is irrevocable and the
optional contributions may not thereafter be prepaid, by direct payment or
otherwise. If the provision authorizing the optional contribution requires
payment by a stated date (rather than the date of withdrawal or retirement),
that requirement shall be deemed to have been satisfied if (i) on or before the
stated date the participant executes a valid irrevocable election to have the
contributions picked up under this subsection, and (ii) the picked-up
contributions are in fact paid to the System as provided in the election.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)
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