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any other retirement system right, benefit or privilege of such member; the amount of the member contributions picked up pursuant to this section shall be deemed to be a part of the employee salary of such member and such member's gross salary (as it would be in the absence of a pick up program applicable to him or her hereunder) shall not be deemed to be changed by such member's participation in such program.

(2) Nothing contained in paragraph one of this subdivision c shall be construed as superseding the provisions of section four hundred thirty

of the retirement and social security law or any similar provision of law which limits the salary base for computing retirement benefits payable by a public retirement system.

d. (1) For the purpose of determining the retirement system rights, benefits and privileges of any Tier I member or Tier II member whose Tier I or Tier II member contributions eligible for pick up by the employer are picked up, pursuant to this section (including the procurement of loans by any such member), such picked up member contributions, subject to the provisions of subparagraph four of this paragraph, shall be deemed to be and treated (i) as member contributions made by such member pursuant to law

a part of such member's accumulated deductions,

(2) Interest on contributions picked up for any Tier I or Tier II member pursuant to this section shall accrue in favor of the member and be payable to the retirement system at the same rate, for the same time periods, in the same manner and under the same circumstances as interest would be required to accrue in favor of the member and be payable to the retirement system on such contributions if they were made by such member in the absence of a pick up program applicable to such member under the provisions of this section.

(3) Where member contributions of any Tier I member or Tier II member are picked up, and paid into the annuity sayings fund pursuant to this section, such picked up contributions shaly be credited to a separate account within the individual account of such member in such fund, that a separate record of the amount of such picked up contributions is maintained. (4) For the

purposes of determining the retirement system rights, benefits and privileges of any Tier I member or Tier II member who is a* participant in a variable annuity program of the retirement system, his or her picked up member contributions shall, to the extent and in the proportions appropriate pursuant to his or her election to participate in such program, be deemed to be and treated as a part of his her accumulated deductions and/or credits in his or her account in the variable annuity savings fund. A separate record shall be kept showing any such variable annuity savings fund account credits attributable to any such picked up contributions.

(5) Nothing contained in this subdivision d shall be construed as granting member contributions picked up under this section any status, under federal

other than as employer contributions, pursuant to subsection h of section four hundred fourteen of the United States internal revenue code, for the federal purposes for which such subsection h so classifies such picked up contributions.

No contributor whose member contributions are required to be picked up pursuant to this section shall have any right to elect that such pick up, with accompanying deduction from the compensation of such contributor as prescribed by subdivision b of this section, shall not be effectuated.

§ 6. Section 2575 of the education law is amended by adding a new subdivision 19 to read as follows: 19. Pick

up

of Tier I and Tier II member contributions by the employer: (a) For the purposes of this subdivision: (1) The terms "board of education, "rules

and regulations" and "retirement system" shall have the meanings set forth in subparagraphs one, three and four, respectively, of paragraph (a) of subdivision sixteen of this section; and

(2) the terms "member," "Tier I member" and "Tier II member" shall have the meanings set forth in subparagraphs one, four and five, respectively, of subparagraph (b) of subdivision seventeen of this section.

(b) the following terms, as used in this subdivision, shall have the following meanings, unless a different meaning is plainly

required by the context:

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(1) "Basic rate of contribution as a Tier I or Tier II member." (i) Subject to the provisions of clauses (ii) and (iii) of this subparagraph one,

the term "basic rate of contribution as a Tier I or Tier II member" shall mean the proportion of the earnable compensation of a Tier I ber or Tier II member required by the provisions of subparagraph (i) of paragraph f of subdivision one of section eight of the rules and regulations and any other, applicable provisions of the rules and regulations or law to be deducted from the personal compensation of such member his or her member contributions, exclusive of any increase in such contributions resulting from an election by such member pursuant to law to effect such an increase, or any decrease in such contributions on account of any program for increased-take-home-pay or pursuant to subdivision

of section one hundred thirty-eight -b of the retirement and social security, law (relating to election to decrease member contributions by contributions due on account of social security coverage).

(ii). In any case where it is provided in the rules and regulations that the deduction from a member's compensation on account of member contributions required to be made by a Tier I member or Tier II member shall not be in excess of fifteen per

centum unless the member elects, and such member makes such election, any per centum of such deduction in excess of fifteen per centum with respect to such member shall not be included in such member's basic rate of contribution as a Tier I or Tier II member.

(iii) In any case where a Tier I member or Tier II member who is a fifty-five-year-increase-service-fraction member (as defined in subdivision thirty-one of section two of the rules and regulations) has elected or elects, pursuant to paragraph & of subdivision one of section eight of the rules and regulations,' to contribute to the retirement system at a rate one per centum less than such member's normal rate of contribution, such member's basic rate of contribution as a Tier I or Tier II member, during any period wherein şuch election is in effect, shall be

per centum less than such member's normal rate of contribution as a fifty-five-year-increased-service-fraction member. In any case where any such member elects pursuant to such paragraph ę to discontinue such reduction, such election to discontinue shall not be deemed, for the purposes of subparagraph four of this paragraph (b) to be an election to increase member' contributions above the level prescribed by the member's basic rate of contribution as a Tier I or Tier II member, and upon such discontinuance, such member's basic rate of contribution as a Tier I

or Tier II member shall be his or her normal rate of contribution as a fifty-five-year-increased-service-fraction member.

(2) "Contributing Tier I or Tier II member." With respect to any payroll period as to which the status of a Tier I member or t'ier II mem

to required member contributions is to be determined, the term "contributing Tier I or Tier II member" shall mean any Tier I member Tier II member other than any Tier I member or Tier í'í member who is not required to contribute during such payroll period because of his or her then, currently effective election, pursuant to subparagraph f of paragraph one of section eight

of the

rules

and regulations, not to contribute.

(3) "Employer responsible for pick up." The public employer by which a Tier I member or Tier II member is employed.

(4) "Tier I Tier II member contributions eligible for pick up by the employer." (i) With respect to any, payroll period, for a contributing Tier I or Tier II member (as defined in subparagraph two of this para graph (b)), the amount of member contributions which, in the absence of a pick up program applicable to such member pursuant to this subdivision, would be required by law to be deducted, account of such member's basic rate of contribution as a Tier I or Tier II member (as defined in subparagraph one of this paragraph), from the personal compensation of such member for such payroll period, after (A) giving effect to any reduction in such contributions required under any program for increased-take-home-pay pursuant to subdivision one of section one hundred thirty-eight-b of the retirement and social security, law and (B) excluding any deductions from such compensation, (or redeposits, restorations or payments) on account of (1) loans or withdrawal of

contributions or (2) any election by any such member, pursuant to any applicable provision of the rules and regulations, to increase his or her member contributions above the level prescribed by his or her EXPLANATION-Matter in italics is new; matter in brackets [] is old law

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basic rate of contribution as a Tier I or Tier II member (3) other cause not attributable to the member's basis rate of contribution as a Tier I or Tier II member after reduction in such rate, if any, described in item (A) of this clause (i).

(ii) If deductions on account of any such member's basic rate of contribution as a Tier I or Tier II member are required by the rules and regulations to be made from the personal compensation of such member for any payroll period, such member shall not have, for such payroll period, any

Tier I or Tier II member contributions eligible for pick up by the employer. The amount of Tier I or Tier II member contributions eligible for pick up by the employer of any Tier I member or Tier II member for any payroll period shall be determined solely on the basis of personal compensation paid to such member for such payroll period by his or her public employer. A Tier I member or Tier Il member shall not have any Tier I or Tier II member contributions eligible for pick up by the employer with respect to any payroll period for which he or she is not paid personal compensation by his or her public employer. (5) "Starting date

for pickup . The first day of the first whole payroll period commencing after the date which is sixty days after

the internal revenue service shall have issued a ruling that member contributions picked up pursuant to this subdivision are not includible gross income for federal income tax purposes until distributed or made available.

(c) Notwithstanding any other provision of the law to the contrary, on and after the starting date for pick up, the employer responsible for pick up shall pick up and pay into the annuity savings fund (subject to the provisions of subparagraph four of paragraph (f) of this subdivision) the Tier I or Tier II member contributions eligible for pick up by the employer which each Tier I member and Tier II member would otherwise be required to make on and after such starting date.

(d) An amount equal to the amount of such picked up contributions shall be deducted by the employer responsible for pick up from the personal compensation of such member (as such compensation would be in the absence of a pick up, program applicable to him her hereunder)

and shall not be paid to such member. Such deduction shall be effected by means of subtraction from such member's current personal

compensation (as defined), or offset against future pay increases, or a combination of such methods.

(e) (1) The member contributions picked up pursuant to this subdivision for any Tier 1 member or Tier II member shall be paid by the ployer responsible for pick up in lieu of an equal amount of the member contributions otherwise required to be paid by such member under the provisions of

the rules and regulations and shall be deemed to be and treated as employer contributions pursuant to subsection h of section four hundred fourteen of the United States internal revenue code, as amended, for the purposes, under federal law, for which such subsection h so classifies such picked up contributions. Subject to the provisions of paragraph (d) of this subdivision, for all other purposes, including but not limited to:

(i) the obligation of such member to pay New York state and New York city income and/or wages or earnings taxes and the withholding of such taxes; and

(ii) the determination of the amount of such member's Tier I or Tier
II member contributions eligible for pick up by the employer; and
(iii) the

the determination of the amount of any retirement allowance or other retirement system benefit payable to or on account of such member

any other retirement system right, benefit or privilege of such member; the amount of the member contributions picked up pursuant to this subdivision shall be deemed to be a part of the employee personal compensa: tion of such member and such member's gross personal compensation as it would be in the absence of a pick up program applicable to him

her hereunder) shall not be deemed to be changed by such member's participation in such program.

(2) Nothing contained in subparagraph one of this paragraph (e) shall be construed as sy perseding the provisions of section four hundred thirty-one of the retirement and social security law or any similar provision of law which limits the salary base for computing retirement benefits payable by a public retirement system.

(f) (1) For the purpose of determining the retirement system rights, benefits and privileges of any Tier I member or Tier II member whose Tier I

or T'ier II member contributions eligible for pick up by the em

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ployer are picked up pursuant to this subdivision (including

procurement of loans by any such member), such picked up member contributions, subject to the provisions of subparagraph four of this paragraph (f), shall be deemed to be and treated (i) as member contributions made by such member pursuant to law and (ii) as a part of such member's accumulated deductions.

(2) Interest on contributions picked up for any Tier I member or Tier II member pursuant to this subdivision shall accrue in favor of the member and be payable to the retirement system at the same rate, for the same time periods, in the same manner and under the

circumstances interest would be required to accrue in favor of the member and be payable to the retirement system on such contributions if they were made by such member in the absence of a pick up program applicable to such neinber under the provisions of this section.

(3) Where member contributions of any Tier I member or Tier II member are picked up and paid into the annuity savings fund pursuant to this section, such picked up, contributions shall be credited to a separate account within the individual account of such member in such fund, that å separate record of the amount of such picked up contributions is maintained.

(4) For the purpose of determining the retirement system rights, benefits and privileges of any Tier I member or Tier II member who is a participant in a variable annuity, program of the retirement system, his or her picked up member contributions shall, to the extent and in the proportions appropriate pursuant to his or her election to participate in such program, be deemed to be and treated as a part of his or her accumulated deductions and/or credits in his or her account in the variable annuity savings fund.' A separate record shall be kept showing any such variable annuity savings fund account credits attributable to any such picked up contributions.

(5) Nothing contained in this paragraph (f) shall be construed as granting member contributions picked up under this subdivision any status, under federal law, other than as employer contributions, pursuant to subsection hof section four hundred fourteen of the United States internal revenue code, for the federal purposes for which such subsection h so classifies such picked up contributions.

(8) No member whose member contributions are required to be picked up pursuant to this subdivision shall have any right to elect that such pick up, with accompanying deduction from the personal compensation of such member as prescribed by paragraph (d) of this

this subdivision, shall not be effectuated.

§ ,7. Paragraph 26 of subsection (b) of section 612 of the tax law,
amended by chapter 114 of the laws of 1989, is amended

to read
follows:
(26) The

amount of member or employee contributions to a retirement system or pension fund picked up or paid by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law section 13-225. 1, 13-327.1 [or], 13-125.1, 13-125.2 or 13-521.1 of the administrative code of the city of New York or subdivision nineteen of section twenty-five hundred seventy-five of the education law.

$ 8. Paragraph 26 of subdivision (b) of section 11-1712 of the administrative code of the city of New York, as amended by chapter 114 of the laws of 1989, is amended to read as follows:

(26) The amount of member or employee contributions to a retirement system or pension fund picked up or paid by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law section 13-225.1, 13-327. 1. [or), 13-125.1, 13-125.2 or 13-521.1 of title thirteen of the code or subdivision nineteen of section twenty-five hundred seventy-five of the education law.

§ 9. Subdivision (e) of section 11-1901 of the administrative code of
the city of New York, as amended by chapter 421 of the laws of 1991, is
amended to read as follows:
(e) "Wages" means wages

defined in subsection (a) of section thirty-four hundred one of the internal revenue code, except that (1) wages shall not include payments for active service as a member of the armed forces of the United States and shall not include, in the case of a nonresident individual or partner of a partnership doing an insurance EXPLANATION-Matter in italics is new; matter in brackets [ ] is old law

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business as a member of the New York insurance exchange described in section six thousand two hundred one of the insurance law, any item of income, gain, loss

deduction of such business which is such individual's distributive or pro rata share for federal income tax purposes or

which such individual is required take into account separately for federal income tax purposes, and (2) wages shall include (i) the amount of member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law or section 13-225. 1, 13-327.1 [or], 13-125. 1, 13-125.2 or 13-521.1 of title thirteen of the code or subdivision nineteen of section twenty-five hundred seventy-five of the education law, and (ii) the amount deducted or deferred from an employee's salary under à flexible benefits program established pursuant to section twenty-three of the general municipal law or section one thousand two hundred ten-a of the public authorities law,

5 10. Subdivision (d), of subsection 1 of section 25-m of the general city law, as amended by chapter 421 of the laws of 1991, is amended to read as follows:

(d) "Wages" shall mean wages as defined in subsection (a) of section thirty-four hundred one of the internal revenue code, except that (1) wages shall not include payments for active service as a member of the armed forces of the United States and shall not include, in the case of a nonresident individual or partner of a partnership doing an insurance business as a member of the New York insurance exchange described in section six thousand two hundred one of the insurance law, any item of income, gain,

loss or deduction of such business which is individual's distributive or pro rata share for federal income tax purposes or which such individual is required to take into account separately for federal income tax purposes and (2) wages shall include (i) the amount of member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law or section 13-225. 1, 13-327. 1 [or], 13-125.1, 13-125.2 or 13-521.1 of title thirteen of the administrative code of the city of New York or subdivision nineteen of section twenty-five hundred seventy-five of the education law, and (ii) the amount deducted or deferred from an employee's salary under a flexible benefits program established pursuant to section twenty-three of the

general municipal law or section one thousand two hundred ten-a of the public authorities law.

$ 11. Subparagraph (B) of paragraph 2 of subsection (b) of section 671 of the tax law, as amended by chapter 746 of the laws of 1990, is amended to read as follows:

(B) Any member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen şubdivision d of section six hundred thirteen of the retirement and social security law or section 13-225.1, 13-327.1 [or], 13-125. 1, 13-125.2 or 13-521.1 of the administrative code of the city of New York or subdivision nineteen of section twenty-five hundred seventy-five of the education law.

§ 12. Subsection (ç) of section 1 contained in subsection (c) of section 1340 of the tax law, as amended by chapter 421 of the laws of 1991, is amended to read as follows:

(c) Wages. Wages shall mean wages as defined in subsection (a) of sec. tion' thirty-four hundred one of the internal revenue code,

except that (1) wages shall not include payments for active service as

a member of thé armed forces of the United States and shall not include, in the case of a nonresident individual or partner of a partnership doing an insurance business as a member of the New York

insurance exchange described in section six thousand two hundred one of the insurance law, any item of income, gain,, loss or deduction of such business

which is such individual's distributive or pro rata share for federal income tax purposes or which such individual

is required to take into account separately for federal income tax purposes and (2) wages shall include (i) the amount of member or employee contributions to a retirement system or pension fund picked up by the employer pursuant to subdivision f of section five hundred seventeen or subdivision d of section six hundred thirteen of the retirement and social security law or section 13-225.1, 13-327. 1 [or), 13-125.1, 13-125.2 or 13-521.1 of the administrative code of the city of New York or subdivision nineteen of section twenty-five hundred seventy-five of the education law, and (ii) the

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