§ 45-21-41.1. Municipality payment of member contributions.
(a) Each municipality, pursuant to the provisions of 26 U.S.C. § 414(h)(2) of the United States Internal Revenue Code, may, pursuant to appropriate legal action
by the municipality, pick up and pay the contributions which would be payable by the
employees as members under § 45-21-41. The contributions so picked up shall be treated as employer contributions in determining
tax treatment under the United States Internal Revenue Code; however, each municipality
shall continue to withhold federal and state income taxes based upon these contributions
until the Internal Revenue Service rules that pursu
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§ 45-21-41.1. Municipality payment of member contributions.
(a) Each municipality, pursuant to the provisions of 26 U.S.C. § 414(h)(2) of the United States Internal Revenue Code, may, pursuant to appropriate legal action
by the municipality, pick up and pay the contributions which would be payable by the
employees as members under § 45-21-41. The contributions so picked up shall be treated as employer contributions in determining
tax treatment under the United States Internal Revenue Code; however, each municipality
shall continue to withhold federal and state income taxes based upon these contributions
until the Internal Revenue Service rules that pursuant to 26 U.S.C. § 414(h)(2) of the United States Internal Revenue Code, these contributions shall not be included
as gross income of the employee until the time they are distributed. Employee contributions
which are picked up pursuant to this section shall be treated and identified as member
contributions for all purposes of the retirement system except as specifically provided
to the contrary in this section.
(b) Member contributions picked up by a municipality shall be paid from the same source
of funds used for the payment of compensation to a member. A deduction shall be made
from a member's compensation equal to the amount of the employee's contributions picked
up by the employee's municipal employer. This deduction, however, shall not reduce
the employee's compensation for purposes of computing benefits under the retirement
system pursuant to this chapter. Picked up contributions shall be submitted to the
retirement system in accordance with the provisions of § 45-21-41 on the date contributions are withheld but no later than three (3) business days
following the pay period ending in which contributions were withheld.
(c) Every employer is required to deduct and withhold member contributions and to transmit
same to the retirement system and is hereby made liable for the contribution. In addition,
any amount of employee contributions actually deducted and withheld shall be deemed
to be a special fund in trust for the benefit of the member and shall be transmitted
to the retirement system as set forth herein.
(d) The liability of an employer who fails to segregate the trust funds, or refuses to
deduct and withhold member contributions from its employees, is enforceable by the
retirement board through an appropriate action in the superior court. The general
treasurer is also authorized to deduct the amount due from any money due the employer
from the state.