An individual retirement account can be counted when calculating how much money an inmate owes the state for some of its costs of holding the inmate, a state appeals court ruled Tuesday.
Cole County Circuit Judge Dan Green ruled last year federal law prevented the state from using inmate Mark Bailey's IRA worth more than $277,877.
However, the appeals court said the federal law applied to company-created pension plans, not IRAs.
Bailey was serving a seven-year sentence for second-degree assault when the attorney general's office sued him in August 2013. Bailey caused an injury accident while driving intoxicated.
Missouri's Incarceration Reimbursement Act allows the state to seek repayment for some inmates' expenses.
Evidence in Attorney General Chris Koster's case against Bailey included the IRA, a more than $30,000 share following the sale of his house as part of a divorce settlement and an $11,152 account at UMB Bank that Bailey shared with his sister.
Green ruled Bailey owed the state more than $16,575, and the federal Employee Retirement Income Security Act made the IRA a "pension plan" federal law holds cannot be "assigned or alienated."
The appeals court agreed with the state that Green was wrong in "concluding the IRA was protected by the anti-alienation provision and that the resulting conflict between Missouri law and federal law required pre-emption."
"ERISA's anti-alienation provision," the three-judge panel ruled, "applies exclusively to pension plans," defined as established or maintained by an employer or an employee organization.
"An IRA is not established or maintained by an employer or employee organization. It is self-funded by an individual for the exclusive benefit of that individual or that individual's beneficiaries," the ruling held.
While Green based his decision on a 1997 U.S. Supreme Court case, the appeals court said, the facts of that case are different from Bailey's and can't be applied as Green used them.
The appeals court also rejected Bailey's complaint Green should not have directed any part of his assets to the state, because the state presented no evidence during the trial about its costs for Bailey's care in prison.
The court noted the day after the trial, the state filed a document detailing Bailey's incarceration costs to date of $78,453.67.
"The inmate's total cost of care is calculated based on the per capita cost for care at the facility where the inmate is being held," Welch noted. "Given that Bailey admitted that 'the inmate costs per capita at [the facility where he was being held] were $21,490.00' for the fiscal year 2012, there is no basis on which he can now complain that he was prejudiced by the State's failure to present evidence at trial as to its costs for his care."
The appeals court sent the case back to Green so he can adjust the amount Bailey owes the state.