TCA § 8-37-216 — Employer assumption of employee contributions

Each employer shall be permitted to pick up the employee contributions required by § 8-37-202 for all compensation earned after December 31, 1986; provided, that the state has received a favorable decision before that date from the internal revenue service or the federal courts that, under § 414(h) of the Internal Revenue Code (26 U.S.C. § 414(h)), these contributions shall not be included in the gross income of the employee until they are distributed or made available to the employee. If a favorable decision is received after December 31, 1986, then such plan shall go into effect for compensation earned after the next December 31. Employee contributions shall be paid by the employer in lieu of contributions by the employee. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the Internal Revenue Code. The state shall pick up contributions on behalf of state employees and teachers. Political subdivision employers may elect to pick up contributions on behalf of all of their employees upon adoption of a resolution by the chief governing body authorizing and accepting the liability for such contributions. The employee shall not have the option of choosing to receive the contributions in the form of cash or cash equivalents instead of having them paid by the employer into the retirement fund.