WILLIAM DONALD SCHAEFER, Governor Ch. 580

(3)  EVERY MEMBER SHALL BE DEEMED TO CONSENT TO THE
DEDUCTIONS MADE AND PROVIDED IN THIS SECTION AND SHALL RECEIPT
FOR THE MEMBER'S FULL COMPENSATION, AND PAYMENT OF COMPENSATION
LESS THE DEDUCTIONS SHALL BE A FULL AND COMPLETE DISCHARGE AND
ACQUITTANCE OF ALL CLAIMS AND DEMANDS WHATSOEVER FOR THE SERVICES
RENDERED BY THE PERSON DURING THE PERIOD COVERED BY THE PAYMENT.
ANY DEPARTMENT THAT FAILS TO PAY TO THIS PENSION SYSTEM THE
DEDUCTIONS FROM THE COMPENSATION OF ITS EMPLOYEES ON THE DATE THE
EMPLOYEES ARE PAID SHALL BE LIABLE FOR A PENALTY OF 10 PERCENT OF
THE AMOUNTS DUE. HOWEVER, THE SECRETARY OF THE BOARD MAY ALLOW A
GRACE PERIOD NOT TO EXCEED 10 ADDITIONAL CALENDAR DAYS. ALL
AMOUNTS DUE AND UNPAID ON THE DATE OF PAYMENT SHALL ALSO BEAR
INTEREST AT THE RATE OF 10 PERCENT A YEAR UNTIL THE DATE OF
PAYMENT. THE STATE COMPTROLLER, IF NOTIFIED BY THE SECRETARY
THAT A DELINQUENCY EXISTS, SHALL IMMEDIATELY EXERCISE THE RIGHT
OF SETOFF AGAINST ANY MONEY DUE OR TO BECOME DUE TO THE
DELINQUENT DEPARTMENT.

(4)  THE ACCUMULATED CONTRIBUTIONS OF A MEMBER THAT
ARE WITHDRAWN BY THE MEMBER OR PAID TO THE MEMBER'S PERSONAL
REPRESENTATIVE OR TO THE MEMBER'S DESIGNATED BENEFICIARY AT THE
MEMBER'S DEATH, SHALL BE PAID FROM THE ANNUITY SAVINGS FUND. ON
THE RETIREMENT OF A MEMBER, THE MEMBER'S ACCUMULATED
CONTRIBUTIONS SHALL BE TRANSFERRED FROM THE ANNUITY SAVINGS FUND
TO THE ACCUMULATION FUND.

(5)  (I) IN THIS PARAGRAPH, "APPROVED EMPLOYER" MEANS
AN EMPLOYER OF MEMBERS IN THIS PENSION SYSTEM, WHO HAS OBTAINED
THE APPROVAL OF THE INTERNAL REVENUE SERVICE TO HAVE AN EMPLOYER
PICKUP PROGRAM IN ACCORDANCE WITH § 414(H)(2) OF THE INTERNAL
REVENUE CODE.

(II)  AFTER JULY 1, 1989, THE STATE OR OTHER
APPROVED EMPLOYER OF THE MEMBER SHALL PICK UP THE MEMBER
CONTRIBUTIONS REQUIRED UNDER SUBSECTION (B) OF THIS SECTION FOR
SERVICE RENDERED BY THE MEMBER FROM JULY 1, 1989.

(III)  THE CONTRIBUTIONS PICKED UP UNDER ITEM
(II) OF THIS PARAGRAPH SHALL;

1.  BE TREATED AS EMPLOYER CONTRIBUTIONS
IN DETERMINING TAX TREATMENT UNDER § 414(H)(2) OF THE INTERNAL
REVENUE CODE, AS AMENDED;

2.  BE IMPLEMENTED BY A REDUCTION, EQUAL
TO THE AMOUNT OF THE PICKUP, OF THE COMPENSATION OF EACH MEMBER
REQUIRED TO MAKE CONTRIBUTIONS TO THE ANNUITY SAVINGS FUND UNDER
THIS SUBSECTION AND MAY NOT BE INCLUDED AS GROSS INCOME OF THE
MEMBER UNTIL THE PICKUP AMOUNTS ARE DISTRIBUTED OR MADE AVAILABLE
TO THE MEMBER;

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