§ 16-16-22.1 - City or town payment of teacher member contributions. - Rhode Island Statutes

SECTION 16-16-22.1

   § 16-16-22.1  City or town payment ofteacher member contributions. – (a) Each city or town, pursuant to the provisions of § 414(h)(2) of theUnited States Internal Revenue Code, 26 U.S.C. § 414(h)(2), may, pursuantto appropriate local action by the city or town, pick up and pay thecontributions which would be payable by the employees as teacher members under§ 16-16-22. The contributions so picked up shall be treated as employercontributions in determining tax treatment under the United States InternalRevenue Code; however, each city or town shall continue to withhold federal andstate income taxes based upon these contributions until the internal revenueservice rules that pursuant to 26 U.S.C. § 414(h)(2) these contributionsshall not be included as gross income of the employee until the time they aredistributed. Employee contributions picked up pursuant to this section shall betreated and identified as teacher member contributions for all purposes of theretirement system except as specifically provided to the contrary in thissection.

   (b) Teacher member contributions picked up by a city or townshall be paid from the same source of funds used for the payment ofcompensation to a teacher member. A deduction shall be made from a teachermember's compensation equal to the amount of his or her contributions picked upby his or her city or town employer. This deduction, however, shall not reducehis or her compensation for purposes of computing benefits under the retirementsystem pursuant to this chapter or chapter 10 of title 36. Picked upcontributions shall be transmitted to the retirement system in accordance withthe provisions of § 16-16-22 and § 36-10-1.