Source of Funds

PURPOSE: This rule sets forth the method and deadline for payments by employers as provided by section 169.620, RSMo. (1) Each employer reporting to The Public Education Employee Retirement System of Missouri shall report required data on employees and all contributions to the retirement system using the Online Automated System Integrated Solution (OASIS). (2) Employers shall use OASIS to report salary payments made to all employees, contributions withheld from employees included in the retirement system, and supporting information required by the board of trustees. Transmission of data must be sent to the board of trustees no later than ten (10) working days after the last day of each calendar month of the school year in which salaries are paid. (3) Employers of persons included in the retirement system shall withhold from each salary payment issued to such persons during the school year in which the services are rendered an amount which is the percent of salary rate required by the contribution rate then in effect, and employers shall transmit to the board of trustees, not later than ten (10) days after the last day of each calendar month of the school year, twice the amount withheld during the month. Salary shall be reported for the school year when the salary is earned, not when the salary is paid. (4) All deductions of contributions from salary payments made by employers for the retirement system are declared and shall be considered to be funds belonging to the retirement system, and no employer shall refund or repay any contributions or any part of any contributions so deducted to any employee for any cause but shall transmit all contributions deducted, together with an equal amount, to the board of trustees, which board shall settle all claims against funds so deducted. (5) All contributions withheld from salaries paid to members along with an equal contribution of the employer shall be transmitted to the board of trustees by check, bank draft, electronic funds transfer, or any negotiable instrument collectible at par through a bank in the state of Missouri, made payable to The Public Education Employee Retirement System of Missouri. (6) If remittance for the full amount of both employee’s and employer’s contributions which are due the retirement system is not received in accordance with these regulations, it shall be considered a failure or refusal by the employer to transmit such amount and suit for recovery of the amount may be instituted as provided for in section 169.620, RSMo. (7) Errors by employers in reporting of eligibility for membership, assigning of employees, and in remitting of contributions will be corrected retroactively, provided the employer certifies that an error was made, provides evidence adequate to support the correction, and remits any balance due from the employer and employee. If the employer has overremitted, the amount of the employer’s portion of the overpayments will be credited to the employer to be applied against future contributions. The amount withheld by the employer from the employee shall be refunded to the employee in a manner consistent with the Internal Revenue Code. (8) Any refund of contributions remitted in error for a member or an employee shall include the total interest, if any, which was credited to those contributions by the retirement system. Any credit provided to the employer for matching employer contributions required in such an instance shall be equal to the total amount paid to the member or employee, including interest. Any correcting remittance of contributions for a member shall include the total interest, if any, which would have been credited to those contributions by the retirement system had the contributions been remitted on a correct and timely basis. Any matching employer contribution remitted in such an instance shall be equal to the total amount remitted for the member, including interest. (9) For purposes of determining retirement contributions and benefits, salary rate includes medical insurance premiums (including dental and vision) paid by the employer on behalf of the member and payments made by the employer on behalf of the member to a self-funded medical benefits plan. The employer shall withhold from the member’s salary and remit to the system contributions on any such premiums and payments, along with matching employer contributions. The payment reported for each member covered by a self-funded medical benefits plan shall be determined by the employer. (A) Salary rate also includes payments made by the employer on behalf of the member to purchase an annuity, or fund a deferred compensation plan, in lieu of medical insurance or a self-funded medical benefits plan. (B) Premiums and payments for prescription drug, life, and other ancillary benefits determined separately from premiums and payments for general medical benefits are not part of salary rate. (C) Beginning July 1, 2017, premiums paid by the employer on behalf of the member and payments made by the employer on behalf of the member to a self-funded medical benefits plan for prescription drug coverage shall be included in salary rate as defined in section 169.600, RSMo, whether or not such premiums or payments for prescription drug coverage were determined separately from premiums and payments for general medical benefits. Contributions transmitted to the retirement system before July 1, 2017, based on salary rates which either included or excluded employer-paid premiums or payments to a selffunded medical benefits plan for prescription drug coverage for members shall be deemed to have been in compliance with this section. The retirement system shall not refund or adjust contributions or adjust benefit determinations with respect to any period before July 1, 2017, solely because of the treatment of employer-paid premiums or payments to a self-funded medical benefits plan for prescription drug coverage for members. (D) Beginning July 1, 2020, certain payments made by the employer on behalf of the member to a Health Savings Account (HSA) shall be included in salary rate as defined in section 169.600, RSMo, whether or not such payments were determined separately from premiums and payments for general medical benefits. Payments made by an employer to a member’s HSA shall be included in salary rate up to the amount that is offered to all employer’s employees and not to exceed the applicable annual HSA contribution limit set by Internal Revenue Code for single coverage. If a member elects family medical coverage premium for the member and for other members employed by the same employer, the other members covered under this premium waive his or her insurance coverage, and the employer pays HSA payments for the member only, the employer shall report and remit to the system contributions up to the amount of the HSA contribution offered to all employer’s employees to the member paying the family medical coverage and remaining amount for the other members covered under the family medical coverage premium. The annual contribution limit used will be the one in effect for the calendar year in which a plan year begins. Contributions transmitted to the retirement system before July 1, 2020, based on salary rates which either included or excluded employer payments to a member’s HSA shall be deemed to have been in compliance with this section. The retirement system shall not refund or adjust contributions or adjust benefit determinations with respect to any period before July 1, 2020, solely because of the treatment of employer-paid HSA contributions. (E) Salary, salary rate, or compensation as defined in section 169.600, RSMo, shall not be reduced due to premium rebates or refunds received by the employer as a result of the implementation of the “Patient Protection and Affordable Care Act,” Public Law 111-148. (F) If a member elects family medical coverage premium for the member and for other members employed by the same employer, the other members covered under this premium waive his or her insurance coverage, and the employer pays more than the individual medical premium rate when a mem ber elects the family medical coverage premium, the employer shall report and remit to the system contributions for the indi vidual employee medical coverage premium for the member paying the family medical coverage premium and remaining amount for the other members covered under the family med ical coverage premium. (10) Retirement contributions which are withheld from com pensation paid to members after June 30, 1989, shall be deemed to have been picked up by the employer within the meaning of Section 414(h)(2) of the Internal Revenue Code. The contribu tions shall be withheld and credited to member accounts in accordance with the provisions of sections 169.600–169.710, RSMo, but shall be considered to have been picked up by the employer solely for the purpose of sheltering the contributions from federal income tax until paid by the retirement system in the form of a refund or other benefits. The contributions shall be subject to refund or benefit claims by either the member or his/her surviving beneficiary in the same manner as any other contributions in the member’s account with the retirement sys tem. In reporting the contributions to the retirement system, every employer included within the retirement system shall certify that—1) the employee contributions were picked up by the employer in lieu of being paid directly to the employees, and 2) the employees had no option to receive the contribu tions directly. The salary reported to the retirement system for each employee shall include the contributions withheld, and the total contributions withheld and reported shall equal the percentage of that salary required under the then-prevailing contribution rate. In withholding and reporting federal income tax to taxing authorities, however, the employer shall exclude from taxable compensation the retirement contributions with held. Nothing in this rule shall be construed in any way as affecting eligibility for, the amount of, or the process of paying any refund or benefit payable to either the member or his/her surviving beneficiary. (11) The terms “salary,” “salary rate,” and “compensation” are synonymous when used in regulations promulgated by the board, unless the context plainly requires a different meaning. (A) For purposes of calculating contributions and benefits, those terms mean the regular remuneration earned by a member as an employee of any covered district during a school year, including (unless excluded by subsection (11)(B))— 1. Salary paid under the terms of the basic employment agreement; 2. Wages, except as excluded in paragraphs (11)(B)6. and 9.; 3. Payments for extra duties, whether or not related to the employee’s regular position. An activity is considered an extra duty if it is set and approved by a school district’s Board of Education except for any activity including but not limited to fringe benefits, as defined under 16 CSR 10-6.020(11)(B); 4. Overtime payments; 5. Career ladder payments made pursuant to sections 168.500 to 168.515, RSMo; 6. Supplemental salary paid in addition to workers’ compensation; 7. Medical benefits as specified in section (9) of this rule; 8. Payment for annual leave, sick leave, or similar paid leave actually used by the member; 9. Payment for leaves of absence if at least one hundred percent (100%) of previous contract rate; 10. Compensation on which taxation is deferred under Internal Revenue Code (IRC) section 401(k), 403(b), 457, 414(h) (2), or similar plans established by the employer under the IRC; 11. Salary reductions for purposes of a plan established by the employer under IRC section 125; and 12. Other similar payments that are earned by a member as an employee of any other covered district during a school year. (B) Salary, salary rate, and compensation do not include— 1. Payments for services as an independent contractor, or any other payment that must be reported on IRS form 1099MISC; 2. Payments made by an entity that is not a covered employer and reported to the IRS under that entity’s tax identification number; 3. Payments made for unused annual, sick, or similar leave time, except as provided by section 104.601, RSMo; 4. Payment for leaves of absence if less than one hundred percent (100%) of previous contract rate, except as provided in section 169.595, RSMo; 5. Extraordinary payments such as bonuses, awards, and retirement incentives; 6. Consideration for agreeing to terminate employment, including retirement incentives, retirement or separation notice incentives, or any other payment(s) received by an employee in exchange for agreeing to terminate employment, regardless of if the employee is required to also perform extra duties as a condition of receiving the payment(s); 7. Fringe benefits, except medical benefits as described in section (9) of this rule; 8. Any other payment that is not part of the regular remuneration earned by a member as an employee of a covered district during a school year; 9. Payments resulting from employment disputes including severance pay, back pay awards, payments in settlement of employment contract disputes, payments in consideration for agreeing to terminate employment, and payments in settlement of other employment disputes; and 10. Any salary, wages, payments, benefits, or compensation not included in subsection (11)(A). (C) While an individual is employed in a position covered by the system, compensation received from all employers participating in the system will be used to determine contributions and benefits. Compensation includes payments for services rendered during the regular school session, summer school, or interim periods. Individuals may not have compensation covered by both Public School Retirement System (PSRS) and Public Education Employee Retirement System (PEERS) for the same period, provided individuals who contributed to both systems on compensation for the same period during the 1996–97 school year may elect in writing to continue that status. The election is irrevocable and must be made before September 30, 1997. If an individual is employed in a position covered by PEERS and concurrently takes a position with a public community college under section 169.140, RSMo, both positions including any non-certificated work shall automatically be covered under PSRS unless the PEERS member elects to remain with PEERS. (D) In determining “final average salary” as defined in sec tion 169.600, RSMo, the system will disregard any increase in compensation in excess of twenty percent (20%) from one (1) year to the next in the final average salary period. This limit will not apply to increases due to bona fide changes in position or employer, increases required by state statute, or district-wide salary schedule adjustments for previously un recognized education related service. A bona fide change in position, for purposes of applying the final average salary cap occurs in the following situations: 1) the essential duties of the position held change, or 2) there is a permanent change in hours mandated by the employer. A mere title change without any of these factors does not constitute a bona fide change in position, nor does the addition of extra duties as set forth in subsection (11)(A). AUTHORITY: section 169.610, RSMo 2016.* Original rule filed Dec. 19, 1975, effective Jan. 1, 1976. Amended: Filed June 20, 1978, effective Oct. 15, 1978. Amended: Filed Feb. 16, 1988, effective July 1, 1988. Amended: Filed April 18, 1989, effective July 1, 1989. Amended: Filed March 14, 1990, effective June 28, 1990. Amended: Filed Dec. 29, 1994, effective June 30, 1995. Amended: Filed April 24, 1996, effective Nov. 30, 1996. Amended: Filed Feb. 13, 1997, effective July 1, 1997. Amended: Filed July 8, 1997, effective Jan. 30, 1998. Amended: Filed June 14, 1999, effective Dec. 30, 1999. Amended: Filed Nov. 18, 1999, effective May 30, 2000. Amended: Filed Sept. 1, 2005, effective Feb. 28, 2006. Amended: Filed Oct. 31, 2012, effective April 30, 2013. Amended: Filed June 24, 2013, effective Jan. 30, 2014. Amended: Filed Jan. 15, 2014, effective July 30, 2014. Amended: Filed Feb. 17, 2015, effective Aug. 30, 2015. Amended: Filed April 21, 2016, effective Nov. 30, 2016. Amended: Filed Jan. 29, 2020, effective July 30, 2020. Amended: Filed Oct. 2, 2024, effective April 30, 2025. Amended: Filed Feb. 2, 2026, effective Aug. 30, 2026. *Original authority: 169.610, RSMo 1965, amended 1977, 2005. Op. Atty. Gen. No. 224, Black (11-30-77). If an employer participates in The Missouri Non-Teacher School Employee Retirement System, employer may not withhold employer’s share of contribution for full-time employee whose salary is funded through the Comprehensive Employment and Training Act of 1973 until the employee’s retirement benefits vest. Also, the Retirement System is not authorized to refund to an employer the employer’s contributions attributable to any employee who terminates his/her employment prior to the vesting of his/her benefits.