KRS 78.610: Employee's contribution -- Rate -- Deduction -- Picked-up employee

contributions.

(1) Each employee shall contribute, for each pay period for which he or she

receives compensation:

(a) 1. Five percent (5%) of his or her creditable compensation if the

employee is participating in a nonhazardous position; or

2. Eight percent (8%) of his or her creditable compensation if the

employee is participating in a hazardous position; and

(b) The amount specified by KRS 78.5536(3)(b) for employees who begin

participating on or after September 1, 2008.

(2) The agency reporting official of a participating county shall cause to be

deducted from the "creditable compensation" of each employee for each and

every payroll period subsequent to the date the county participated in the

system the contribution payable by the member as provided in KRS 78.510 to

78.852. The agency reporting official shall promptly pay the deducted

employee contributions to the system in accordance with KRS 78.625.

(3) The deductions provided for in subsection (2) of this section shall be made

notwithstanding that the minimum compensation provided by law for any

employee shall be reduced thereby. Every employee shall be deemed to

consent and agree to the deductions made as provided in subsection (2) of this

section; and payment of salary or compensation less the deductions shall be a

full and complete discharge of all claims for services rendered by the person

during the period covered by the payment, except as to any benefits provided

by KRS 78.510 to 78.852.

(4) Each employer shall, solely for the purpose of compliance with Section 414(h)

of the United States Internal Revenue Code, pick up the employee

contributions required by this section for all compensation earned after August

1, 1982, and the contributions picked up shall be treated as employer

contributions in determining tax treatment under the United States Internal

Revenue Code and KRS 141.010. These contributions shall not be included as

gross income of the employee until the contributions are distributed or made

available to the employee. The picked-up employee contribution shall satisfy all

obligations to the retirement system satisfied prior to August 1, 1982, by the

employee contribution, and the picked-up employee contribution shall be in lieu

of an employee contribution. Each employer shall pay these picked-up

employee contributions from the same source of funds which is used to pay

earnings to the employee. The employee shall have no option to receive the

contributed amounts directly instead of having them paid by the employer to

the system. Employee contributions picked up after August 1, 1982, shall be

treated for all purposes of KRS 78.510 to 78.852 in the same manner and to

the same extent as employee contributions made prior to August 1, 1982.

(5) The provisions of this section shall not apply to individuals who are not eligible

for membership as provided by KRS 78.535.