Belefski Estate

Dissenting Opinion by

Mr. Justice Cohen :

Section 18 of the Public School Employes’ Retirement Act states as follows: “The right of a person to an employe’s annuity, a State annuity, or retirement allowance, to the return of contributions, any benefit or right accrued or accruing to any person under the provisions of this act, and the moneys in the fund created under this act, are hereby exempt from any State or municipal tax, and exempt from levy and sale, garnishment, attachment, or any other process whatsoever, and shall be unassignable, except as in /his act specifically otherwise provided. . . .” (Emphasis supplied.)

The majority of this Court apparently read “The right of a person” as being limited by six succeeding categories, i.e., “The right of a person to” (a) an employe’s annuity, (b) a State annuity, (c) a retire*377ment allowance, (d) a return of contributions, (e) any benefit, etc., (f) the monies in the Fund “are exempt.”

I disagree. The provision quoted is hardly a model of proper sentence structure; but I conclude that, correctly read, it means that three categories are exempt from tax, levy, sale, etc.: (1) the right of a person.t.0 an employe’s annuity, a State annuity, .a retirement allowance or a return of contribution; (2) .any benefit or right accrued or accruing.to any person under the provisions of the Retirement Act; (3) the moneys in the Fund created under the Retirement Act.

My conclusion on this point of construction is supported by several factors. First, the verb in the above-quoted exemption provision is the plural “are” (i.e., “. . . are hereby exempt from.....”); read as the majority would have it, the provision must contain the singular verb “is”. Second, my conclusion is consonant with traditional exemption clauses; that is, the property itself is exempt from tax, not necessarily its transfer, etc. (subject here, however, to. the apparent intent of the second category of exemption to free from inheritance tax the direct receipt of benefits by a specifically designated beneficiary). See Tack’s Estate, 325 Pa. 545, 191 Atl. 155 (1937). Third, under the Inheritance and Estate Tax Act of 1961, §316, retirement benefits paid to the decedent’s estate are subject to inheritance tax when ultimately received by the heir or legatee; and the comments to this section indicate that the provision conforms to existing law (both decedents in the present appeal died prior to the time the Act of 1961 took effect and would be subject to the inheritance tax provisions of the Act of 1919 — the “existing law”). Fourth, the reasoning of the majority leads to some absurd results. For example, suppose a school employee retires and receives a retirement allowance under the Act of 1917. Suppose, further, he carefully places each and every periodic payment in a *378savings account and inserts a provision in his will making a specific bequest of the “retirement moneys in the savings account.” Can it be doubted that such a bequest is subject to inheritance tax? I think not, but the majority would raise such a doubt. For example, also, suppose an employee dies while in service and actually has designated his estate as beneficiary. The retirement moneys credited to him are paid by the Fund to his estate. Are such moneys still exempt from claims of the decedent’s creditors? I cannot believe so, but the majority apparently would so hold.

In short, I believe §18 was intended only to exempt from tax rights and moneys while held by the Fund itself for someone. Once the moneys are paid from the Fund, they enjoy no special privilege. Receipt from the Fund itself is explicitly freed from inheritance tax, whether received by specific persons or by the estate; but receipt thereafter from the estate is taxable. In this light all of the Commonwealth’s argument here about the true nature of the inheritance tax is beside the point. At this late date it seems quite clear that it is a tax, a tax on the privilege of inheritance; and as such it is included within the breadth of §18 of the Retirement Act as well as any other tax. Therefore, the benefit or right accruing to a person (be he individual or the estate) to receive retirement funds, in cases like the present ones, from the Fund itself upon the death of an employee is exempt from inheritance tax. The right or privilege of a person to inherit or take from the. estate itself moneys which were formerly in the Fund is not exempt. Hence, I would hold the assets involved in the estates here subject to appraisement for inheritance tax purposes and must dissent.