Kirkwood

— The State Controller appeals from an “Order Sustaining Objections to Report of Inheritance Tax Appraiser and Fixing Inheritance Tax,” which order had exempted certain death benefits paid to respondent by the San Francisco and State of California Retirement Systems. Government Code, section 31452, exempts such payments from property taxation but not from the state inheritance tax. (Estate of Simpson, 43 Cal.2d 594 [ 275 P.2d 467 ].) The question now presented is whether such payments, as respondent claims, constitute proceeds from an “insurance policy” (Rev. & Tax. Code, § 13721 1 ) and are therefore exempt from the inheritance tax (Rev. & Tax. Code, §§ 13723-13724 2 ). Appellant challenges the propriety of the order exempting such payments and, in our opinion, his position must be sustained.

The appeal is presented on an agreed statement. The deceased, a teacher, died during her term of active service. Respondent, her sister and designated beneficiary, thereupon was paid $8,048.55 by the San Francisco Teachers’ Retirement Fund and $846.50 by the State Retirement Fund. The $8,048.55 consisted of the amount earnable by the decedent during the six months immediately preceding her…