The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5429 January 25, 1979 OFFICES AND EMPLOYEES: Contribution to retirement system RETIREMENT AND PENSIONS: Contributions to the police officers and firemen retirement system POLICE: Contributions to police and firemen retirement system FIREMEN: Contributions to police and firemen retirement system WORDS AND PHRASES: 'Salary' The term 'salary' as employed in 1937 PA 345, Sec. 9(1), which provides for contributions by policemen and firemen to the police and firemen retirement system, includes base salary, longevity pay, shift differential pay, holiday pay and overtime pay. Honorable Thomas Guastello State Senator The Capitol Lansing, Michigan You have requested my opinion as to whether the term 'salary' as employed in 1937 PA 345, Sec. 9(1); MCLA 38.559; MSA 5.3375(9), includes base salary, longevity pay, shift differential pay, holiday pay and overtime pay. 1937 PA 345, MCLA 38.551 et seq; MSA 5.3375(1) et seq, provides for the establishment and maintenance of a retirement system for the police officers and firemen of municipalities with full-time police and fire departments. At the outset, it should be noted that the Act does not become effective in a municipality unless adopted by its electors in accordance with 1937 PA 345, supra, Sec. 11. The contributions by the members of the retirement system are governed by 1937 PA 345, Sec. 9, supra, as follows: '(1) The contributions of a member to the retirement system shall be 5 per cent of the salary paid to him by the city, village or municipality. The officer or officers responsible for making up the payroll shall cause the contributions provided for in this paragraph to be deducted from the salary of each member on each and every payroll for each and every payroll period so long as he remains an active member in the employ of the city, village or municipality and each of said amounts when deducted shall be paid into the funds of the retirement system. The members' contributions provided for herein shall be made notwithstanding that the minimum salary provided for by law shall be changed thereby. Every member shall be deemed to consent and to agree to the deductions made and provided for herein and shall receipt for his full salary and payment of his salary less said deduction which shall be a full and complete discharge and acquittance of all claims and demands for the services rendered by such member during the period covered by such payment, except as to benefits provided by this retirement system.' (emphasis added) In a similar vein, 1937 PA 345, supra, Sec. 2(3) states that the retirement board shall '[c]ause amounts as established by law to be deducted from the salaries of active members of the retirement system and be paid into the treasury of the retirement system.' Thus, since member contributions consist of 5% of salary, it is necessary to determine what payments to the members constitute 'salary' within the meaning of 1937 PA 345, Sec. 9, supra. In Beach v Kent, 142 Mich 347, 356; 105 NW 867, 870 (1905), the court stated that salary 'contemplates 'a fixed annual or periodic payment for services depending upon the time and not upon the amount of services rendered." Similarly, the court in People v Lay, 193 Mich 476, 488; 160 NW 467, 471 (1916), defined salary as 'a periodic allowance made as compensation to a person for his official or professional services or for his regular work.' Also, in Holmes v State Officers Compensation Commission, 57 Mich App 255; 226 NW2d 90 (1974), the court concluded that the term 'salary' does not include benefits such as official residences, life insurance and health insurance. 'Salary' thus consists of all payments which are part of an established, regular schedule of payment for services rendered. Under this definition, it is apparent that base salary pay, shift differential pay, holiday pay and overtime pay all constitute 'salary' because all are paid according to established, regular schedules. Longevity pay has also been held to constitute 'salary' based on the same rationale because it is a fixed annual or periodic payment for services depending upon the length of service of the recipients. See 2 OAG, 1955-1956, No 2616, p 317 (June 7, 1956). Therefore, it is my opinion that the term 'salary' as employed in 1937 PA 345, Sec. 9(1), supra, includes base salary, longevity pay, shift differential pay, holiday pay and overtime pay. Frank J. Kelley Attorney General