Indiana Administrative Code › Title 35 - BOARD OF TRUSTEES OF THE INDIANA PUBLIC RETIREMENT SYSTEM › Article 11 - PUBLIC EMPLOYEES' RETIREMENT FUND ADDITIONAL CONTRIBUTIONS › Rule 1 - Elective Payroll Deductions for Additional Contributions › Section 1-1 - Payroll deduction for additional contributions

Current through July 10, 2024
Authority: IC 5-10.5-4-2
Affected: IC 5-10.2-3-2
Sec. 1.
(a) The
				purpose of this rule is to provide a pickup of member contributions by
				participating employers under Section 414(h)(2) of the Internal Revenue Code of
				1986 for additional employee contributions made to the member's annuity savings
				account under IC 5-10.2-3-2(c) and IC 5-10.2-3-2(d). Employers may elect to
				participate in the pickup of additional employee contributions by a resolution
				adopting the provisions of this rule.
(b) A member in active covered employment
				(with an electing employer) who elects to make contributions to the member's
				annuity savings account in addition to the contributions required under IC
				5-10.2-3-2(b) may do so through a binding, irrevocable payroll deduction
				authorization.
(c) A member in
				active covered employment, having executed a binding, irrevocable payroll
				deduction authorization with respect to any such additional contributions, is
				not entitled to any option of choosing to receive the contributed amounts
				directly instead of having them paid by the employer to the board of trustees
				of the public employees' retirement fund. Such contributions shall be remitted
				to the public employees' retirement fund in the same manner as all other
				contributions and shall be credited to the member's annuity savings account.
				The salary the employer will use to calculate such contributions will be the
				same as the salary the employer reports to the board of trustees for purposes
				of determining a member's mandatory contribution and benefit calculation. Such
				contributions, although designated as employee contributions, will be paid by
				the employer in lieu of contributions by the employee. The contributions so
				assumed shall be treated as tax-deferred employer pickup contributions pursuant
				to Section 414(h)(2) of the Internal Revenue Code, subject to a favorable
				letter ruling by the Internal Revenue Service.
(d) A member in active covered employment may
				elect to pay all or part of any additional contribution through payroll
				deduction. This election is available for two (2) years, beginning on September
				1 following the plan year in which the employee completes five (5) years of
				creditable service and ending on August 31 of the second calendar year
				following the opening of the election period. The amounts to be deducted and
				the duration of the deduction shall be specified on the authorization form
				prescribed by the board, and the amounts and duration shall be irrevocable and
				binding once made. Prepayment of amounts covered by the authorization is not
				permitted. However, nothing in this rule shall prevent a member from paying any
				amounts not covered by the authorization with after-tax dollars, up to the
				statutory maximum. The investment of the additional contributions shall be made
				in the same manner and percentage as the investment of the member's mandatory
				contributions.
(e) If a member
				terminates and then returns to covered employment with a different employer,
				when the member has five (5) or more years of creditable service credited or
				recredited under Indiana statutes, the member shall be entitled to execute a
				new binding irrevocable payroll deduction authorization within a two (2) year
				election period, beginning on September 1 following the plan year in which the
				employee completes or is recredited with five (5) years of creditable service
				and ending on August 31 of the second calendar year following the opening of
				the election period. If a member terminates and then returns to covered
				employment with the same employer, the member's binding irrevocable payroll
				deduction authorization, if any, shall be immediately effective upon
				rehire.
(f) No payroll deduction
				shall begin unless and until the active member executes the payroll deduction
				authorization on a form prescribed by the board, which must be received within
				the election period defined in subsection (d). The board will send the form to
				the treasurer or other disbursing officer of the employer. After receiving the
				binding, irrevocable payroll deduction authorization, the treasurer or other
				disbursing officer of each employer shall add such contributions to the
				contributions deducted from the member's regular compensation each pay day. The
				employer shall treat these deductions as picked up contributions.
(g) All such payroll deductions, including
				the amounts and the duration specified, shall be binding and irrevocable upon
				the member's execution of the prescribed form. A member may execute and submit
				the payroll deduction authorization with the election period defined in
				subsection (d), effective as of the next possible payroll date within the
				election period. However, such deductions will cease only upon any of the
				following events:
(1) The member's
				death.
(2) The termination of the
				member's employment.
Distribution of the additional contributions shall be made in
				  the same manner as distributions from the member's annuity savings account. In
				  no event shall the member receive a return of the payroll deductions made under
				  this rule except pursuant to the normal disbursement procedures of IC
				  5-10.2.