Section 40 ILCS 5/14-133.1 - Pickup of contributions(a) Each department shall pick up the employee contributions required by Section 14-133 for all compensation earned after December 31, 1981, and the contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code; however, each department shall continue to withhold federal and State income taxes based upon these contributions until the Internal Revenue Service or the federal courts rule that pursuant to Section 414(h) of the United States Internal Revenue Code, these contributions shall not be included as gross income of the employee until such time as they are distributed or made available. The department shall pay these employee contributions from the same fund which is used in paying earnings to the employee. The department may pick up these contributions by a reduction in the cash salary of the employee or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase. If employee contributions are picked up they shall be treated for all purposes of this Article 14 in the same manner and to the same extent as employee contributions made prior to the date picked up.
(b) Subject to the requirements of federal law, an employee of a department may elect to have the department pick up optional contributions that the employee has elected to pay to the System, and the contributions so picked up shall be treated as employer contributions for the purposes of determining federal tax treatment. The department shall pick up the contributions by a reduction in the cash salary of the employee and shall pay the contributions from the same fund that is used to pay earnings to the employee. The election to have optional contributions picked up is irrevocable and the optional contributions may not thereafter be prepaid, by direct payment or otherwise. If the provision authorizing the optional contribution requires payment by a stated date (rather than the date of withdrawal or retirement), that requirement shall be deemed to have been satisfied if (i) on or before the stated date the employee executes a valid irrevocable election to have the contributions picked up under this subsection, and (ii) the picked-up contributions are in fact paid to the System as provided in the election. P.A. 90-448, eff. 8/16/1997; 90-766, eff. 8/14/1998.