PURPOSE: This rule sets forth the procedures for withholding of contributions by employers, transmittal, reporting and determination of the contribution rate as provided by section 169.030, RSMo.

Editor’s Note: The secretary of state has determined that the publication of this rule in its entirety would be unduly cumbersome or expensive. The entire text of the material referenced has been filed with the secretary of state. This material may be found at the Office of the Secretary of State or at the headquarters of the agency and is available to any interested person at a cost established by state law.

1. (1) All school districts and other employers of persons included in the retirement system shall withhold from each salary check or warrant issued to these 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 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, except that funds transmitted for the month of June shall be transmitted not later than the thirtieth day of June.
2. (2) All deductions of contributions from paychecks or warrants 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.
3. (3) 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 or any negotiable instrument collectible at par through a bank in Missouri, made payable to The Public School Retirement System of Missouri, and shall be accompanied with a transmittal form to be supplied by the board of trustees, showing in the proper order the information called for (see 16 CSR 10- 6.020(1) for the nonteacher system).
4. (4) Each employer shall file with the board of trustees, not later than the thirtieth day of June, a report showing the contributions withheld from salary payments to each employee and transmitted to the board of trustees in the fiscal year and the total amount of all contributions transmitted to the board of trustees in the fiscal year.
5. (5) An employer shall be considered delinquent in the remittance of contributions if s/he fails to transmit contributions to the board of trustees in accordance with these regulations. If remittance of the full amount of both employee’s and employer’s contributions which are due the retirement system is not received on or before June 30, suit for recovery of the amount shall be instituted as provided for in section 169.030, RSMo (see 16 CSR 10-6.020(2) for the nonteacher system).
6. (6) All employers of persons included in the retirement system shall forward to the board of trustees as early in the school year as possible, and not later than fifteen (15) days after the school term begins, on a form provided by the board of trustees or on a form approved by the board of trustees, a list of the names and annual salary rates of members of the system employed to serve during the school year; and employers shall indicate on transmittal forms the names and salary rates of members who assume employment at any later date in the school year.
7. (7) The board of trustees, on or before the first day of June of each year, shall determine the rate of contribution which shall be in effect for the next fiscal year.
8. (8) 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. 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. 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. Premiums and payments for prescription drug, life and other ancillary benefits deter- 16 CSR 10-3

mined separately from premiums and payments for general medical benefits are not part of salary rate. The payment reported for each member covered by a self-funded medical benefits plan shall be determined by the employer.

1. (9) Retirement contributions which are withheld from compensation 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 contributions shall be withheld and credited to member accounts in accordance with the provisions of sections 169.010–169.140, 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 system. 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 contributions 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 withheld. 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.

2. (10) 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.

   1. (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 (10)(B)):

      1. 1. Salary paid under the terms of the

basic employment agreement;

1. 2. Wages;
2. 3. Payments for extra duties, whether or

not related to the employee’s regular position;

1. 4. Overtime payments;
2. 5. Career ladder payments made pur-

suant to sections 168.500 to 168.515, RSMo;

1. 6. Supplemental salary paid in addition

to workers compensation;

1. 7. Medical benefits as specified in sec-

tion (8) of this rule;

1. 8. Payment for annual leave, sick leave

or similar paid leave actually used by the member;

1. 9. Payment for leaves of absence if at

least one hundred percent (100%) of previous contract rate;

1. 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;

1. 11. Salary reductions for purposes of a

plan established by the employer under IRC section 125; and

1. 12. Other similar payments that are

earned by a member as an employee of any covered district during a school year.

1. (B) Salary, salary rate and compensation do not include:

   1. 1. Payments for services as an indepen-

dent contractor, or any other payment that must be reported on IRS form 1099-MISC;

1. 2. Payments made by an entity that is not

a covered employer, and reported to the IRS under that entity’s tax identification number;

1. 3. Payments made for unused annual,

sick or similar leave time, except as provided by section 104.601, RSMo;

1. 4. Payment for leaves of absence if less

than one hundred percent (100%) of previous contract rate, except as provided in section 169.055 or 169.595, RSMo;

1. 5. Extraordinary payments such as

bonuses, awards and retirement incentives;

1. 6. Fringe benefits, except medical bene-

fits as described in section (8) of this rule; and

1. 7. 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.

1. (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 Nonteacher School Employee Retirement System (NTRS) 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.
2. (D) The following payments resulting from employment disputes will be included in salary if the award or settlement document designates those payments as salary as defined in this section: back pay awards; payments in settlement of employment contract disputes; and payments in settlement of other employment disputes. The award or settlement may be the result of a court order, an order of an administrative tribunal or a negotiated written settlement. The payments must be allocated to the appropriate school years and corrected contributions made, including interest charges.
3. (E) In determining “final average salary” as defined in section 169.010, RSMo, the system will disregard any increase in compensation in excess of twenty percent (20%) from one 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 or increases required by state statute. AUTHORITY: section 169.020, RSMo (Cum. Supp. 1996).* Original rule filed Dec. 19, 1975, effective Jan. 1, 1976. Amended: Filed Feb. 16, 1988, effective July 1, 1988. Amended: Filed April 18, 1989, effective July 1, 1989. 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. *Original authority 1945, amended 1951, 1953, 1967, 1973, 1983, 1990, 1995, 1996.