Opinion letter to the Honorable Maurice Schechter

Febr uary 9 , 1972 Honorable Maurice Schechter Senator, District 13 Room 427, Capitol Building Jefferson City, Missouri 65101 Dear Senator Schechter: OPINION LETTER NO. 9 Answer by l etter-Jones This letter 1s to acknowledge receipt or your request for a formal opinion from this office which reads as follows: "In March 1970, you issued an opinion to Senator VanLandingham relating to additional compensa- tion to teachers based upon life, health and other insurance fUrnished by the school dis- trict to the teacher. Your ruling stated such insurance was additional compensation, charg- able (sic) to the teachers fund and subject to the state income withholding tax. "Senate Bill 270 of the 76th General Assembly, approved by the Governor eliminates the same being subject to state 1mcome (sic] tax, which also includes retirement plans. ''It' such fringe benefits are income to the teacher, should such amounts be included in the total compensation for teachers retirement which is presently paid 81 by the teacher and 8' by the school district? If your ruling is in the affirmative, is there a specific formula in de- termining the amount of such compensation as generally the rates of insurance vary, based upon the age and sex of the individual, but are usually prorated and a lump sum paid by the em- ployer, being the school district in this case. " Honorable Maurice Schechter The Public School Retirement System of Missouri is provided tor in Sections 169.010 through 169.130, RSMo 1969. The system includes all school districts in this state, except those 1n cities that had populations or tour hundred thousand or more according to the latest census. Subsection 3 or Section 169.030, RSMo 1969, provides tor member contributions to the Retirement System a.nd reads as follows: "The contributions or members or the retire- ment system shall be collected by their em- ployers through appropriate deductions from pay checks. The total amount deducted rrom the pay checks or members during any school year shall equal such a percent or their salai{ rates as may be required by the contribution ra e then in effect. " (Emphasis added) In addition, accumulated contributions or a member are defined in subsection 1 or Section 169.010, RSMo 1969, as follows: "(1) 'Accumulated contributions' shall mean the sum or the annual contributions a member has made to the retirement system through deduc- tions trom his salary, plus interest compounded annually on each year's contributions trom the end or the school year during which such con- tributions were made;'' (Emphasis added) Senate Bill No. 270 was passed by the 76th General Assembly and signed by the Governor. This was an act to repeal Section 143.100, RSMo 1969, relating to income tax and to enact in lieu thereof' one new section relating to the same subject. Specifically, subsection 7 or Section 143.110, RSMo 1969, now provides as follows: "7. The amount to be included in the groaa in- come or an employee attributable to contributions by or coat to hia employer tor group term lite insurance, accident and health plana and pen- sions or profit-sharing plana on hia behalf', or attributable to amounts received by an em- ployee under such accident and health plana, or attributable to any agreement with his em- ployer tor a salary adjustment in return tor a deterred compensation arrangement between the employer and the employee, shall be the same aa, and not in excess or, the amount properly includable 1n the gross income or the employee pursuant to the provisions or the Internal Revenue Code of the United States. " -2- Honorable Maurice Schechter It should be noted that this office has previously held in three former opinions that a school board has the discretionary authority to pay the premiums on liability insurance, life in- surance, and health and accident insurance to its employees as part or their compensation (Opinion No. 93, Cason, 9-9-69; Opin- ion No. 452, Branom, 10-23-69; Opinion No. 500, Vanlandingham, 11-18-69, copies enclosed). More specirically, in Opinion No. 93 in construing the applicable statutes dealing with the employment of teachers, it was held that the terms "wages," "salary," and "compensation" were synonymous. Therefore, it is our view that consistent with Opinion No. 93 and subsection 1 or Section 169. 010, ~. and subsection 3 or Section 169.030, ~~ra, a board or edu- catiOn, having decided to purchase liability aurance, health and accident insurance, or lite insurance tor teachers as part of their compensation, must consider the amount or the premiums as part of the teachers' total compensation; and thus a deduction tor payment or contribution to the Public School Retirement System must be made. In this connection, Senate Bill No9 270 refers to the amount to be included in gross income tor purposes of income tax an4 makes no reference to Chapter 169 or any other statute. We are not per- suaded that Senate Bill No. 270 has any errect on the determina- tion that the purchase of insurance by a school board as part of a teacher's compensation must be considered as part or the teacher's total compensation; and a deduction tor payment or contributions to the Public School Retirement System is required under Chapter 169, even though the premiums may be non-taxable tor income tax purposes. In this regard, there is authority tor the proposition that repeals by implication are not favored and in order tor a later statute to operate as a repeal by implication ot an earlier one, there must be such manifest and total repugnance that the two can- not stand, but where two acts are seemingly repugnant, they must, it possible, be so oonstrued that the latter may not operate as a repeal or the earlier one by implication. State v. LMdwif• 322 S. W.2d 841 (Mo. bane 1959). It is, therefore, our opinion hat a board or education purchasing insurance as part or a teacher's com- pensation must consider the amount ot the premiums as part or the teacher's total compensation; and a deduction tor payment or con- tributions to the Public School Retirement System or Missouri must continue to be made. In reference to your second question as to whether there is a specific formula in determining the amount of such compensation as generally the rates or insurance vary, baaed upon the age and sex or the individual, it is our opinion that this is a matt~r to be -3- Honorable Maurice Schechter decided by each board of education and its employees, after con- sultation with their insurance carrier. Enoloaures: Op. No. 500 Yours very truly, JOHN C • DANlPORTB Attorney General 11-18-69, Vanlandingham Op. No. ~52 10-23-69, Branom Op. No. 93 9-9-69, Cason -ll-