July 8-9, 1999
ITEM 104-102-R0799 Resolution Authorizing Employer Pick-Up of Certain Employee Contributions to the Montana Teacher's Retirement System under Section 414(h)(2) of the Internal Revenue Code of 1986.
Whereas, The Montana University System is an employer whose employees participate in the Montana Teachers' Retirement System ("TRS") pursuant to 19-20-101 (hereinafter referred to as the "Employer"),
Whereas, the Montana Board of Regents of Higher Education (hereinafter referred to as the "Board") has determined that it would be in the best interest of its employees to provide a pick-up of employee contributions under Section 414(h)(2) of the Internal Revenue Code of 1986 for contributions that are made for the purpose of purchasing service credit under 19-20-401 et seq. and/or redepositing amounts withdrawn under 19-20-602(2), MCA;
Whereas, under 19-20-415 MCA, in order to effectuate this pick-up, the Board must adopt a resolution to pick up the member's contributions made pursuant to a binding, irrevocable payroll deduction authorization; and
Whereas, the contributions picked up by the Employer must be payable from the same source as is used to pay compensation to the employee;
Now, therefore, be it resolved by the Board as follows:
Section 1. The employee contributions made (pursuant to a binding irrevocable payroll deduction authorization to have such contributions picked up) for the purpose of purchasing service under 19-20-401 et seq. and/or redepositing amounts withdrawn under 19-20-602(2), MCA, even though designated as employee contributions for state law purposes, are being paid by the Employer to TRS in lieu of the contributions by the employee.
Section 2. That, if the employee desiring to have contributions picked up executes an irrevocable, binding payroll deduction with respect to these contributions, the employee shall not be entitled to any option of choosing to receive the contributed amounts directly instead of having them paid by the Employer to TRS.
Section 3. That, with respect to any employee's contributions, the effective date of the pick-up by the Employer is the later of:
a. Three months following the adoption of this resolution, or
b. the execution of the payroll deduction authorization form.
This pick up does not apply to any contributions made before the effective date or to any contribution that relates to compensation earned for services before the effective date.
Section 4. That any payroll deduction authorizations in effect as of the effective date of this resolution are void and that an employee who wishes to have payroll deductions made for the purpose of purchasing service or redepositing withdrawn amounts must follow the procedures specified in Section 5 of this resolution.
Section 5. That an employee who wishes to redeposit amounts withdrawn under 19-20-602(2) MCA or to purchase service credit under 19-20-401 MCA et seq. shall make the following series of elections with regard to these actions:
(a) The employee may elect a lump sum payment, a series of installments, or a combination of lump sum payments and installments.
(b) If a series of installment payments is elected by the employee, he/she may elect to pay the installments directly to TRS or to have the installments payable by payroll deduction; or the employee may select a combination of both.
a. With respect to installments payable by payroll deduction, the employee must elect to execute a binding irrevocable payroll deduction authorization to have these installment contributions picked up by the participating employer.
Section 6. That contributions made pursuant to Section 5(c) of this resolution are designated as being picked up by the employer and paid from the same source as the payment of salary to these employees.
Section 7. That this resolution takes effect October 1, 1999.
Adopted this 8th day of July, 1999 by the Montana Board of Regents of Higher Education.
Signature of Authorized Representative or Employer
Name and Title of Authorized Representative