. . . J
October 2, 1957
Honorable Cordon H. Lloyd Opinion No. ww-268
Executive Secretary
Employees Retirement System Re: Construction of House
of Texas Bill No. 441, Acts 55th
Austin, Texas Legislature, Regular
Session, Chapter 116,
page 240, and related
Dear Mr. Lloyd: questions.
Your letter of September 19, 1957, requests an Opinion
by this office regarding the status of either State employees,
or teachers or auxiliary employees, who have previously waived
membership or withdrawn deposits with the Employees Retirement
System. In connection therewith you have submitted for our con-
sideration the following questions:
"1. A person who waived membership with the
Employees Retirement System within 90 days from
the establishment of the System September 1,
1947, and who now desires to become a member of
the Employees Retirement System and deposit with
this System the amounts which would have been
paid by him if he had not waived.
"westion: Is the Employees Retirement
System permitted to accept such amounts
from this person and grant all prior ser-
vice and membership service to which this
person would have been entitled had he
never signed a waiver?
"2. A person who had signed a waiver electing not
to become a member of the Employees Retirement Sys-
tem, but who thereafter became a member of the
Teacher Retirement System and now desires to de-
posit with the Employees Retirement System the
amount that would have been paid by him to the
l%ployees Retirement System had he not signed a
waiver.
: . .
Honorable Cordon H. Lloyd, page 2 (WW-268)
"Question: Is the Employees Retirement Sys-
tem permitted to accept the deposits of the
teacher or auxiliary employee, now a member
of the Teacher Retirement System, for the
amount that would have been paid by him as a
State employee, had he not signed a waiver
with the Employees Retirement System, and
grant him such service to which he would have
been entitled had he not signed the waiver?
"3. A person who had become a member of the RVQ3lOYees
Retirement System, resigned his positiOn and with-
drew his contributions from the Employees Retire-
ment System, but who thereafter became a member of
the Teacher Retirement System and now desires to re-
place the amount withdrawn from the Employees Re-
tirement System and re-establish his service for
retirement purposes.
"Question: Is the Employees Retirement Sys-
tZ&i'pe$mxttedto accept deposits from this
person who had withdrawn, but subsequently
became a member of the Teacher Retirement
System, and grant him, after replacement of
the amount withdrawn, the membership and
prior service to which he would have been
entitled had he not withdrawn his contribu-
tions?"
The answer to the questions submitted depends upon
the legal construction of House Bill No. 441. The provisions
of House Bill 441, pertinent to our inquiry, are as follows:
"5. Reinstatement of Former Service Credits.
"(a) Any teacher or auxiliary employee who
has heretofore executed a waiver of membership in
the Retirement System shall have the privilege of
eleCti.ng to receive full forer semrice credit,
provided such teacher or auxiliary employee after
becoming a member of the Retirement System shall
deposit before August 31, 1959, all back deposits,
assessments and dues which he would have paid or
deposited had he been a member of the System during
each of the years that he actually taught or was
employed as an auxiliary employee in the public
schools following the date on which he first be-
came eligible for membership in the System, together
Honorable Cordon H. Lloyd, page 3 (w-268)
with interest from the date each amount was
payable at the rate of two and one-half per-
cent (23$) per annum.
"(b) Any person who heretofore became a
member of the Retirement System and who there-
after terminated such membership and withdrew
his accumulated deposits, but who has since
returned to service as a teacher or auxiliary
employee or who returns to service as a teacher
or auxiliary employee prior to September 1,
1959, and who, following such resumption of
membership, renders service for five (5) con-
secutive years, shall have the privilege of de-
positing the total amount withdrawn nlus all
back assessments and dues, together with simole
interest thereon at two and one-half per cent
er annum from date of withdrawal of stime
@%tg of redeposit and thereupon such member
shall be entitled to'credit for all prior service
and membership former service to which he was en-
titled prior to such termination and withdrawal.
The amounts to be deposited shall be determined
in each case by the Board of Trustees and in no
event shall any such person be granted retire-
ment upon such former service credits until the
amount so determined shall have been paid in full.
"Provided further, that membership in either
the Teacher Retirement System or the State Em-
ployees Retirement System would qualify an individ-
ual to deposit funds in either of the two systems
under the provisions of this Act." (Emphasis added)
Pursuant to the provisions of Section 63 of Article
XVI of the Constitution of Texas, reciprocal joint retirement
is authorized and provided for under the Teachers and Employ-
ees Retirement Systems of Texas. Th~isconstitutional provi-
sion reads as follows:
"Sec. 63. Qualified members of the Teacher
Retirement System, in addition to the benefits
allowed them under the Teacher Retirement System
shall be entitled to credit in the Teacher Retire-
ment System for all services, including prior ser-
vice and membership service, earned or rendered
by them as an appointive officer or employee of
the State. Likewise, qualified members of the
Employees Retirement System of Texas, in addition
Honorable Cordon H. Lloyd, page 4 (ww-268)
to the benefits allowed them under the Pnployees
Retirement System of Texas shall be entitled to
credit in the Employees Retirement System of Texas
for all services, including prior service and mem-
bership service, earned or rendered by them as a
teacher or person employed in the public schools,
colleges, and universities supported wholly or
partly by the State. Added Nov. 2, 1954."
The foregoing constitutional provision permits free
and easy passage of career employees of the State between
teaching and State department service. It enables administra-
tive officials to employ personnel from positions covered under
one system to positions covered under the other system, with-
out disturbing the accumulated credits for retirement purposes.
Subsequent to the adoption of this constitutional
amendment in November, 1954, the Legislature enacted Senate
Bill No. 212, Acts 54th Legislature, Regular Session, Chapter
75, page 356, codified as Article 6228a-2 of Vernon's Civil
Statutes. Section 2 (A) and (B) of said Act provides in sub-
stance that members of either the Teachers or the State &ploy-
ees Retirement Systems who have terminated or waived membership
in either of said Systems may claim and receive credit for prior
service in either System by complying with the provisions there-
of. It is noted, however, that there is a limitation with
respect to the time in which a member may comply with such
rovisions. Consequently, before the enactment of House Bill
E.
41, many members of both systems, for various reasons, were
unable to purchase credit for prior service.
It is apparent that if House Bill 441 be construed
to permit the purchase of credits for prior service in the
Employees Retirement System in each or either of the three
categories presented by your letter, it must be by reason of
the final paragraph of said Bill which we have underscored for
emphasis. The meaning of this paragraph is not free from doubt.
We think, however, that that portion thereof which authorizes
a member of either system to deposit knds in either the Teach-
er Retirement System or the Employees Retirementtern is
very significant in arriving at the intention of the Iegisla-
ture. To say that an employee is granted the right to de-
posit funds in either system but is denied the right to re-
ceive credit for prior service in the Employees Retirement
System would be to grant such employees a right, but to deny
him the benefits logically accruing therefrom. We conclude,
therefore, that House Bill 441 authorizes state employees or
teachers, as the case may be, in each of the three categories
set forth in your letter, to receive credit for prior service
_ ._-
Honorable Gordon H. Lloyd, page 5 (wi-268)
as a State employee by complying with the provisions of said
Bill. The effect of our interpretation is to make the pro-
visions of House Bill 441 applicable to the purchase of prior
service credits in the Teachers Retirement System, equally
applicable to the purchase of such credits for prior service
In the mployees Retirement System.
Each of your three questions is accordingly answered
in the affirmative.
SUMMARY
The provisions of House Bill No. 441, Acts
55th Legislature, Regular Session, Chapter
116, page 240, pertaining to the purchase
of credits for prior service in the Teachers
Retirement System by members of either the
Teachers or Rnployees Retirement Systems
are equally applicable to the purchase of
credits for prior service in the Employees
Retirement System by members of either
system.
Yours very truly,
WILL WILSON
Attorney General of Texas
BY
nard Passmore
LP:jl:zt Assistant
APPROVED:
OPINION COMMITTEE
Gee. P. Blackburn, Chairman
Wayland C. Rivers, Jr.
John H. Minton, Jr.
W. V. Geppert
J. C. Davis, Jr.
YIEWED FOR THE ATTORNEY GENERAL
: James N. Ludlum