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(a) For purposes of any public pension plan, as defined in section 356.63, paragraph (b), each
employer shall pick up the employee contributions required pursuant to law or the pension plan
for all salary payable after December 31, 1982. If the United States Treasury Department rules
that under section 414(h) of the Internal Revenue Code of 1986, as amended through December
31, 1992, that these picked up contributions are not includable in the employee's adjusted gross
income until they are distributed or made available, then these picked up contributions must
be treated as employer contributions in determining tax treatment under the Internal Revenue
Code of 1986, as amended through December 31, 1992, and the employer shall discontinue
withholding federal income taxes on the amount of these contributions. The employer shall
pay these picked up contributions from the same source of funds as is used to pay the salary of
the employee. The employer shall pick up these employee contributions by a reduction in the
cash salary of the employee.
(b) Employee contributions that are picked up must be treated for all purposes of the public
pension plan in the same manner and to the same extent as employee contributions that were
made prior to the date on which the employee contributions pick up began. The amount of the
employee contributions that are picked up must be included in the salary upon which retirement
coverage is credited and retirement and survivor's benefits are determined. For purposes of this
section, "employee" means any person covered by a public pension plan. For purposes of this
section, "employee contributions" include any sums deducted from the employee's salary or
wages or otherwise paid in lieu thereof, regardless of whether they are denominated contributions
by the public pension plan.
(c) For any calendar year in which withholding has been reduced under this section, the
employing unit shall supply each employee and the commissioner of revenue with an information
return indicating the amount of the employer's picked-up contributions for the calendar year that
were not subject to withholding. This return must be provided to the employee not later than
January 31 of the succeeding calendar year. The commissioner of revenue shall prescribe the form
of the return and the provisions of section 289A.12 must apply to the extent not inconsistent
with the provisions of this section.
History: 3Sp1982 c 1 art 2 s 7; 1983 c 148 s 6; 1983 c 216 art 1 s 85; 1990 c 480 art
1 s 46; 1993 c 375 art 8 s 14; 2001 c 7 s 66; 2002 c 379 art 1 s 78; 2002 c 392 art 11 s 44;
2003 c 2 art 1 s 42

Official Publication of the State of Minnesota
Revisor of Statutes