Illinois Statutes Chapter 40. Pensions § 5/15-157.1. Pickup of employee contributions

(a) Each employer shall pick up the employee contributions required under subsections (a), (b), and (c) of Section 15-157 for all earnings payments made on and after January 1, 1981, and the contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code.  1 These contributions shall not be included as gross income of the participant until such time as they are distributed or made available. The employer shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The employer may pick up these contributions by a reduction in the cash salary of the participants, or by an offset against a future salary increase, or by a combination of a reduction in salary and offset against a future salary increase.

(b) Subject to the requirements of federal law, a participating employee may elect to have the employer pick up optional contributions that the participant has elected to pay to the System under Section 15-157(g), and the contributions so picked up shall be treated as employer contributions for the purposes of determining federal tax treatment under the federal Internal Revenue Code of 1986. These contributions shall not be included as gross income of the participant until such time as they are distributed or made available. The employer shall pick up the contributions by a reduction in the cash salary of the participant and shall pay the contributions from the same source of funds that is used to pay earnings to the participant. The election to have optional contributions picked up is irrevocable.