(a) A member may make voluntary contributions to the system and may, no more than once, withdraw such voluntary contributions from the system under rules of the board. Voluntary contributions shall be subject to the limitations imposed under Section 415(c) of the Internal Revenue Code for the applicable limitation year. Such contributions shall earn credited interest. Upon retirement such member shall elect to receive the accumulated contributions plus credited interest either in a lump sum or in the form of an actuarially equivalent annuity for life. Such lump sum or annuity shall be paid or commenced to be paid when the first payment of such member's other retirement benefit is made. If such member dies before the effective date of his or her retirement, the accumulated contributions plus credited interest shall be paid to such member's designated beneficiary.

(b) For purposes of applying the limitations of Section 415(c) of the Internal Revenue Code under subsection (a) of this section, compensation shall include (1) wages within the meaning of Section 3401(a) of the Internal Revenue Code, for purposes of income tax withholding at the source, (2) amounts that would be included in wages except for elections made under Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b) of the Internal Revenue Code, and (3) any other payments of compensation to a member by such member's employer for which the employer is required to furnish the member a written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Internal Revenue Code, but such compensation shall not exceed the maximum amount allowed under Section 401(a)(17) of the Internal Revenue Code for the applicable limitation year.

(P.A. 78-208, S. 8, 35; P.A. 79-428; P.A. 08-76, S. 5.)

History: P.A. 79-428 permitted one-time-only withdrawal of voluntary contributions; P.A. 08-76 designated existing provisions as Subsec. (a) and added provision therein re Internal Revenue Code limitations on voluntary contributions, and added Subsec. (b) re calculation of compensation for purposes of such limitations, effective May 27, 2008.