65.155 Pick up of employee contributions.
388 words·~2 min read·
/ky/chapter-65/65-155A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)Each local government or local government agency which has a pension plan which
is qualified under Section 401(a) of the Internal Revenue Code shall, solely for the
purpose of compliance with Section 414(h) of the United States Internal Revenue
Code, pick up the employee contributions made to the respective retirement system
pursuant to KRS 79.080, 90.400, 90.410, 95.290, 95.580, 95.627, 95.768, 95.769,
95.867, or 96.180 for all compensation earned after August 1, 1982, or after
qualification pursuant to Section 401(a) of the Internal Revenue Code, whichever is
later, and all contributions so picked up shall be treated as employer contributions in
determining tax treatment under the United States Internal Revenue Code and KRS
141.010. However, each local government or local government agency shall
continue to withhold federal and state income taxes based upon these contributions
and hold them in a separate account 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
employee until such time as the contributions are distributed or made available to
the employee. The picked-up employee contribution shall satisfy all obligations to
the retirement fund satisfied prior to August 1, 1982, or later date, as the case may
be, by the employee contribution, and the picked-up employee contribution shall be
in lieu of an employee contribution. The local governments or local government
agencies shall pay these picked-up employee contributions from the same source of
funds which is used to pay earnings to the employee. The employee shall have no
option to receive the contributed amounts directly instead of having them paid by
the local government or local government agency to the fund. Employee
contributions picked up after August 1, 1982, shall be treated for all purposes of
KRS 79.080, 90.400, 90.410, 95.290, 95.580, 95.627, 95.768, 95.769, 95.867, or
96.180 in the same manner and to the same extent as employee contributions made
prior to August 1, 1982, or later date of pick up, as the case may be.
(2)The pick up of employee contributions by the employer shall not be construed to
reduce the final salary or the average salary upon which the employee retirement
benefit may be based in any of the retirement systems covered by this section.