51.1-144 - Member contributions.
§ 51.1-144. Member contributions.
A. Each member shall contribute five percent of his creditablecompensation for each pay period for which he receives compensation.
The employer shall deduct the contribution payable by themember. Every employee accepting employment shall be deemed to consent andagree to any deductions from his compensation required by this chapter. Nodeduction shall be taken from the compensation of a member after his normalretirement date if the member elects not to contribute.
B. In determining the creditable compensation of a member in apayroll period, the Board may consider the rate of compensation payable to themember on the date of entry or removal of his name from the payroll as havingbeen received throughout the month if service for the month is creditable. Ifservice for the month is not creditable, the Board may consider anycompensation payable during the month as not being creditable compensation.
C. The minimum compensation provided by law for any membershall be reduced by the deduction required by this section. Except for anybenefits provided by this chapter, payment of compensation minus the deductionsshall be a full and complete discharge of all claims for services rendered bythe member during the period covered by the payment.
D. No deduction shall be made from any member's compensationif the employer's contribution is in default.
E. The Board may modify the method of collecting thecontributions of members so that the employer may retain the amounts deductedfrom members' salaries and have a corresponding amount deducted from statefunds otherwise payable to the employer.
F. 1. Except as provided in subdivision 2, any employer mayelect to pay an equivalent amount in lieu of all member contributions requiredof its employees. Such payments shall be credited to the members' contributionaccount. These contributions shall not be considered wages for purposes ofChapter 7 (§ 51.1-700 et seq.) of this title, nor shall they be considered tobe salary for purposes of this chapter.
2. A person who becomes a member on or after July 1, 2010,shall be required to pay member contributions on a salary reduction basis inaccordance with § 414(h) of the Internal Revenue Code in the amount of fivepercent of creditable compensation if the person is (i) a member covered by thedefined benefit plan established under this chapter, (ii) a member of the StatePolice Officers' Retirement System under Chapter 2 (§ 51.1-200 et seq.), (iii)a member of the Virginia Law Officers' Retirement System under Chapter 2.1 (§51.1-211 et seq.), (iv) a member of the Judicial Retirement System underChapter 3 (§ 51.1-300 et seq.), or (v) earning the benefits permitted by §51.1-138.
Each county, city, town, local public school board, or otherlocal employer may elect to pay an equivalent amount in lieu of the membercontributions required of its employees described in this subdivision. Thecounty, city, town, local public school board, or other local employer may pay,in whole percentages, up to five percent of the creditable compensationotherwise required of such employees, provided that the employer pays the same percentageof creditable compensation for all such employees, and is paying all membercontributions required under this section for all of its other member employeesnot described in this subdivision. Any portion of the five percent ofcreditable compensation required of a person who becomes a member on or afterJuly 1, 2010, that is not paid by the county, city, town, local public schoolboard, or other local employer, shall be paid by such person.
No employer other than a county, city, town, local public schoolboard, or other local employer shall be allowed to elect to pay any amount ofthe member contributions required of a person who becomes a member on or afterJuly 1, 2010.
3. Notwithstanding any other provision of this section orother law, only those employers who were paying member contributions as ofFebruary 1, 2010, may pay member contributions. The provisions of thissubdivision shall not apply to a county, city, town, local public school board,or other local employer.
G. Subject to the provisions of subsection F, any employerwhose employees are paying member contributions to the retirement system on asalary reduction basis in accordance with § 414(h) of the Internal Revenue Codemay phase-in the payment of the member contributions on behalf of its employeesupon notification to the Board of the employer's intent to make such payments.The Board shall approve the period of time by which the phase-in shall becompleted not to exceed six years from the commencement of the phased-inpayments.
H. Any employer that, by resolution of its governing body,elects to provide retirement coverage for its employees in accordance with §51.1-130 on or after September 1, 1998, shall allow its employees to pay membercontributions to the retirement system on a salary reduction basis inaccordance with § 414(h) of the Internal Revenue Code in lieu of paying themember contribution on behalf of its employees in accordance with theprovisions of subsection F.
I. The Board may develop procedures to effect the transfer ofmember contributions paid by employers on or after July 1, 1980, and accruedinterest on those contributions, to the member contribution account of themember, if such contributions have been previously deposited into theretirement allowance account of the employer.
(1952, c. 157, §§ 51-111.13, 51-111.46; 1956, c. 560; 1960, c.604; 1966, c. 174; 1972, c. 568; 1974, c. 353; 1976, c. 537; 1980, c. 722, §51-111.46:1; 1982, c. 467; 1984, c. 430; 1990, c. 832; 1998, c. 660; 2001, cc.693, 702; 2002, c. 307; 2010, cc. 737, 738.)