(a) The head of each state department and the finance director of each county shall deduct from the compensation of each class H member on each and every payroll under their respective jurisdictions, the percentage of compensation of each member as provided under § 88-325.
The total amount of deductions made from the salaries of employees and a record of the amount deducted from each member’s compensation shall be transmitted to the system semi-monthly or at other times as may be agreed upon by the board. The amounts deducted shall be paid into the annuity savings fund and shall be credited to the individual account of the member from whose compensation the deductions were made.
Regular interest shall also be credited to the individual account of the member in the annuity savings fund.
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Terms Used In Hawaii Revised Statutes 88-326
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- county: includes the city and county of Honolulu. See Hawaii Revised Statutes 1-22
(b) The State and each county, pursuant to section 414(h)(2) of the Internal Revenue Code of 1986, as amended, shall pick up and pay the contributions that would otherwise be payable by each class H member, including contributions designated by the member relating to the conversion or acquisition of membership service as provided under sections [ 88-322(d) ] and 88-324, from compensation paid after December 31, 1987. The contributions so picked up shall be treated as employer contributions for the purpose of determining the amount of federal income tax to withhold from each class H member’s compensation. The member shall complete a payroll authorization form before the period in which the contributions are earned and service is acquired, converted, or credited. With respect to service to be acquired or converted, the form shall be a binding irrevocable payroll deduction authorization in which the member acknowledges that the system will not accept direct payment from the member while the form is in effect.
(c) Member contributions picked up by the employer shall be paid from the same source of funds used for the payment of compensation to a member. A deduction shall be made from each class H member’s compensation equal to the amount of the member’s contributions picked up by the employer; provided that the deduction shall not reduce the member’s compensation for the purpose of computing benefits under this chapter.
(d) Member contributions picked up by the employer shall be transmitted to the system in accordance with subsection (a). Such contributions shall be credited to a separate account within each member’s individual account in the annuity savings fund so that the amount contributed by the member before January 1, 1988, may be distinguished from the member contributions picked up by the employer. Regular interest shall also be credited to the individual account of the member in the annuity savings fund.