§ 5-2. Mandatory contributions by non-hybrid members.

(a) Scope of section.

This section applies only to non-hybrid members of the Plan.

(b) In general.

Beginning with the first full payroll period that starts on or after the date on which a non-hybrid member commences participation in the Retirement Savings Plan and continuing through the last full payroll period ending on or before termination of employment with a participating employer:

(1) for each payroll period, the member must contribute to the Plan 5% of the member's earnable compensation for that payroll period;

(2) for each payroll period, the Department of Finance will cause the contribution to be deducted from the member's earnable compensation for that payroll period; and

(3) as soon as administratively practicable after the deduction is taken, the contribution will be credited to the member's Mandatory Employee Contribution Sub-Account.

(1)(i) The contributions described in this section are intended to be treated as being "picked up" by the participating employer within the meaning of IRC § 414(h)(2).

(ii) The amount of each mandatory employee contribution is paid by the employer in lieu of contributions by members, and members may not receive those amounts directly. Because the mandatory employee contributions are paid by the employer, they must be treated as employer contributions in determining their federal income tax treatment.

(2) The picked-up contributions may not be excluded in computing any other benefit paid in connection with the member's employment with a participating employer.

(3)(i) As soon as administratively practicable after enactment of this article, the City will request a private letter ruling from the Internal Revenue Service to the effect that the contributions so picked up by the employer on behalf of members will be treated as employer contributions under IRC § 414(h)(2) and will not be includible in the member's gross income for federal income tax purposes for the year in which they are contributed.

(ii) If the Internal Revenue Service rules that the pick up of contributions does not satisfy the requirements of IRC § 414(h)(2), or if IRC § 414(h)(2) is repealed, the contributions required under this section will remain in effect, but the contributions may no longer be treated as picked up and instead will be treated as paid directly by the member.