A. Each participating employer shall pick up under the provisions of Section 414(h)(2) of the Internal Revenue Code of 1986, as amended, and pay the contribution which the participating employee is required by law to make to the System for all compensation earned after the date as of which an employee begins to participate in the defined contribution system. Although the contributions so picked up are designated as participating employee contributions, such contributions shall be treated as contributions being paid by the employer in lieu of contributions by the participating employee in determining tax treatment under the Internal Revenue Code of 1986, as amended, and such picked-up contributions shall not be includable in the gross income of the participating employee until such amounts are distributed or made available to the participating employee or the beneficiary of the participating employee. The participating employee, by the terms of this System, shall not have any option to choose to receive the contributions so picked up directly and the picked-up contributions must be paid by the employer to the System.

B. Contributions by the participating employee into a 457(b) plan may not be picked up by the employer but shall be a voluntary deferral of the employee's compensation. Participating employers within OPERS that are not eligible to participate in the Deferred Compensation Plan administered by OPERS under subsection B of Section 1701 of Title 74 of the Oklahoma Statutes, and the Oklahoma State Employees Deferred Savings Incentive Plan under Section 1707 of Title 74 of the Oklahoma Statutes, and have established 457(b) plans for their employees, will have the obligation to ensure that their employees do not exceed the maximum annual contributions to a 457(b) plan under the Internal Revenue Code.