19-20-415. (Effective on later of occurrence of contingency or July 1, 1999) Procedure for purchase of service credit and pick up. (1) A member who wishes to redeposit pursuant to 19-20-602(2) amounts previously withdrawn or who is eligible to purchase service credit pursuant to this part shall make the following series of elections to accomplish the redeposit or purchase:
     (a) The member may elect a lump-sum payment, a series of installment payments, or a combination of lump-sum payments and installment payments.
     (b) If a series of installment payments are elected by the member, the member may elect to pay the installments directly to the board or to have the installments paid by payroll deduction or the member may select a combination of both.
     (c) With respect to installments payable by payroll deduction, if the member's employer has adopted the resolution described in subsection (2), the member shall elect the irrevocable payroll deduction authorization provided in subsection (4). If the member's employer has not adopted the resolution, the member may elect only a revocable payroll deduction authorization.
     (2) An employer may adopt a resolution to pick up and pay the member's elective contributions made pursuant to a binding, irrevocable payroll deduction authorization. The contributions picked up by the employer must be payable from the same source as is used to pay compensation to the member. The resolution must contain the following statements:
     (a) that the member contributions, even though designated as member contributions for state law purposes, are being paid by the employer in lieu of the contributions by the member; and
     (b) that the member may not choose to receive the contributed amounts directly instead of having them paid by the employer to the system.
     (3) (a) With respect to any member's elective contributions, the effective date of the employer pick up is the later of:
     (i) the adoption of the employer's resolution; or
     (ii) the execution of the irrevocable payroll deduction authorization form.
     (b) The pick up does not apply to a contribution made before the effective date of the employer's resolution. An irrevocable payroll deduction authorization in effect on the effective date of the employer's resolution is void and the provisions of subsection (1) apply.
     (4) If the irrevocable payroll deduction authorization is elected by the member, it must be executed by the member and the member's employer. Subject to any maximum amounts or duration established by state or federal law, the irrevocable payroll deduction authorization must specify:
     (a) the amount of the deduction;
     (b) the number of installments;
     (c) the number of years and type of service that the member is purchasing; and
     (d) that the contributions being picked up, although designated as member contributions, are being paid by the employer directly to the board in lieu of contributions by the member.
     (5) The minimum duration of the irrevocable payroll deduction authorization is 3 months, and the maximum duration is 5 years. The minimum number of years specified to be purchased may not be less than 1 year or the total number of years that the member is eligible to purchase. The maximum may not exceed the total number of years that the member is eligible to purchase.
     (6) The irrevocable payroll deduction authorization may not give the member the option of receiving the deduction amounts directly instead of having them paid by the employer to the system. A member may make more than one binding, irrevocable payroll deduction authorization so long as a subsequent deduction authorization does not amend a previous binding, irrevocable payroll deduction authorization. A member may not prepay any amounts under a binding, irrevocable payroll deduction authorization.
     (7) If a member terminates or dies prior to completion of the installment payments, the binding, irrevocable payroll deduction authorization expires and the board shall prorate the service credit purchased based upon the amount paid as of the date of termination or death. In the case of a termination, the member may make a lump-sum contribution for the balance of the service subject to the limitations of section 415 of the Internal Revenue Code. In the case of the member's death, the payment to purchase service may be made from the member's estate subject to the limitations of section 415 of the Internal Revenue Code.

     History: En. Sec. 9, Ch. 111, L. 1999.