40 ILCS 5/7-173.2
2021 Illinois Compiled Statutes|Chapter 40 - PENSIONS|40 ILCS 5/ - Illinois Pension Code.|Article 7 - Illinois Municipal Retirement Fund

 (from Ch. 108 1/2, par. 7-173.2)Sec. 7-173.2.     Pickup of employee contributions.(a) Until July 1, 1984, each participating municipality and each  participating instrumentality may elect, for all of its employees, to pick up  the employee contributions required by subparagraphs 1 and 3 of subsection (a)  of Section 7-173 and, in the case of sheriff's law enforcement employees,  required by Section 7-173.1.  The pick up may be for employee contributions on  earnings received by employees after December 31, 1981 and shall be applicable  to the contributions on total earnings paid in any month.  The decision to pick  up contributions shall be made by the governing body.Beginning July 1, 1984, the pick up of employee contributions shall cease to  be optional.  Each participating municipality and participating instrumentality  shall pick up the employee contributions required by subparagraphs 1 and 3 of  subsection (a) of Section 7-173 and, in the case of sheriff's law enforcement  employees, contributions required by Section 7-173.1, for all compensation  earned after such date.(b) Contributions that are picked up shall be treated as employer  contributions in determining tax treatment under the United States Internal  Revenue Code.  The employee contribution shall be paid from the same source  of funds as is used in payment of earnings to the employee and may not be  paid from funds raised by the tax levy authorized by Section 7-171.  The  contributions shall be picked up by a reduction in earnings payment to  employees.  Employee contributions that are picked up shall be considered as  earnings under Section 7-114.   If a participating municipality or  participating instrumentality fails to report participating employee earnings  which should have been reported to the fund and pays the employee the full  amount of earnings including employee contributions which should have been  picked up and forwarded to the fund, then the employee shall make payment of  the employee contributions to the fund on behalf of employer and such  contributions shall be considered as picked up contributions  if paid in the year the earnings were received, or by January 31st of the  following year, and are reflected as picked up on reports to the Internal  Revenue Service.  If they cannot be so reflected, or if received after that  date, they shall not be treated as picked up contributions.  Picked up employee  contributions shall be considered as employee contributions in computing  benefits paid under this Article 7.(c) Subject to the requirements of federal law, an employee may elect to  have the employer pick up optional contributions that the employee has elected  to pay to the Fund, 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 employee and shall pay the contributions from the same source of funds  that is used to pay earnings to the employee.  The employee's election to have  the optional contributions picked up is irrevocable and the optional  contributions may not thereafter be prepaid, by direct payment or otherwise.    (Source: P.A. 90-766, eff. 8-14-98.)