A. Any county, county hospital, city or town, conservation district, circuit engineering district or any public or private trust in which a county, city or town participates and is the primary beneficiary, which is a participating employer and any eligible employee shall contribute to the System. The total employer and employee contributions shall be based on the allowable annual compensation as defined in paragraph (9) of Section 902 of this title. Except as provided for in this section, the employer shall not pay for the employee any of the employee contribution to the System.

B. For the fiscal year ending June 30, 2005, the total employer and employee contributions shall equal thirteen and one-half percent (13 1/2%) of the allowable monthly compensation of each member; provided, however, each participating employer listed in this section may set the amount of the employer and employee contribution to equal thirteen and one-half percent (13 1/2%) of the allowable monthly compensation of each member for compensation as provided in paragraph (9) of Section 902 of this title; provided, the employer contribution shall not exceed ten percent (10%) and the employee contribution shall not exceed eight and one-half percent (8 1/2%).

C. The total employer and employee contributions for fiscal years following the fiscal year ending June 30, 2005, shall be as follows:

July 1, 2005 – June 30, 200615%

July 1, 2006 – June 30, 200716%

July 1, 2007 – June 30, 200817%

July 1, 2008 – June 30, 200918%

July 1, 2009 – June 30, 201019%

July 1, 2010 – June 30, 2011

and each fiscal year thereafter20%

Such employee and employer contributions shall be based upon the allowable monthly compensation of each member for compensation as provided in paragraph (9) of Section 902 of this title. The maximum employer contribution of ten percent (10%) in subsection B of this section shall increase by one and one-half percent (1.5%) beginning in the fiscal year ending June 30, 2006, and one percent (1%) for each fiscal year thereafter until it reaches sixteen and one-half percent (16.5%). For such years, the employee contribution shall not exceed eight and one-half percent (8 1/2%).

D. For members who make the election pursuant to paragraph (2) of subsection A of Section 915 of this title, the employee contribution shall increase by two and ninety-one one-hundredths percent (2.91%). Such employee contribution increase shall be paid by the employee.

E. Each participating employer pursuant to the provisions of this section may pick up under the provisions of Section 414(h)(2) of the Internal Revenue Code of 1986 and pay the contribution which the member is required by law to make to the System for all compensation earned after December 31, 1989. Although the contributions so picked up are designated as member contributions, such contributions shall be treated as contributions being paid by the participating employer in lieu of contributions by the member in determining tax treatment under the Internal Revenue Code of 1986 and such picked up contributions shall not be includable in the gross income of the member until such amounts are distributed or made available to the member or the beneficiary of the member. The member, by the terms of this System, shall not have any option to choose to receive the contributions so picked up directly and the picked up contributions must be paid by the participating employer to the System.

F. Member contributions which are picked up shall be treated in the same manner and to the same extent as member contributions made prior to the date on which member contributions were picked up by the participating employer. Member contributions so picked up shall be included in gross salary for purposes of determining benefits and contributions under the System.

G. The participating employer shall pay the member contributions from the same source of funds used in paying salary to the member, by effecting an equal cash reduction in gross salary of the member.

Added by Laws 1975, c. 267, § 9, emerg. eff. June 5, 1975. Amended by Laws 1979, c. 285, § 13, eff. July 1, 1979; Laws 1980, c. 317, § 9, eff. July 1, 1980; Laws 1981, c. 316, § 3, eff. July 1, 1981; Laws 1984, c. 267, § 4, operative July 1, 1984; Laws 1987, c. 206, § 94, operative July 1, 1987 (vetoed); Laws 1987, c. 236, § 190, emerg. eff. July 20, 1987; Laws 1988, c. 267, § 35, operative July 1, 1988; Laws 1988, c. 284, § 9, operative July 1, 1988; Laws 1989, c. 84, § 2, operative July 1, 1989; Laws 1990, c. 340, § 42, eff. July 1, 1990; Laws 1991, c. 239, § 5, eff. July 1, 1991; Laws 1994, c. 383, § 13, eff. July 1, 1994; Laws 1995, c. 302, § 7, eff. July 1, 1995; Laws 1998, c. 317, § 14, eff. July 1, 1998; Laws 1999, c. 378, § 4, eff. July 1, 1999; Laws 2003, c. 486, § 10, eff. Jan. 1, 2004; Laws 2004, c. 536, § 27, eff. July 1, 2004; Laws 2005, c. 1, § 140, emerg. eff. March 15, 2005.

NOTE: Laws 2004, c. 325, § 3 repealed by Laws 2005, c. 1, § 141, emerg. eff. March 15, 2005.