Indiana Administrative Code › Title 35 - BOARD OF TRUSTEES OF THE INDIANA PUBLIC RETIREMENT SYSTEM › Article 19 - INDIANA STATE TEACHERS' RETIREMENT FUND ADDITIONAL CONTRIBUTIONS › Rule 1 - Elective Payroll Deductions for Additional Contributions › Section 1-1 - Miscellaneous

Current through July 10, 2024
Authority: IC 5-10.5-4-2
Affected: IC 5-10.2-3-2; IC 5-10.5
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,
				shall not be 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 Indiana state teachers' retirement fund (board). Such
				contributions shall be remitted to the 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 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 of 1986, 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 the
				September 1 following the plan year in which the employee completes five (5)
				years of creditable service and ending on the 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 herein 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 the September 1 following the plan year in which
				the employee completes or is recredited with five (5) years of creditable
				service and ending on the 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 such 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. Notwithstanding the above, such deductions will cease only
				after the authorization has expired by its terms or 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
				  hereunder except pursuant to the normal disbursement procedures of IC 5-10.2 et
				  seq.