March 30, 1950
Hon. Gordon H. Lloyd Opinion No. V-1023.
Executive Seoretary
Employees Retirement Re: Aaceptenee of contri-
System of Texas butlons to Retirement
Austin, Texas System of a former
member for the period
spent in military ser-
vice in 1948 and 1949,
the party having re-
turned to State employ-
Dear Hr. Lloyd: ment.
Your request for an opinion reads as follows:
_- "Please favor us with your opinion, based
on the following facts and interpretingSection
V, SubsectionIi of H.B. 168, passed by the Reg-
ular Session of the 50th Legislature.
"Mr. A, an employee of one of the State De-
partments, became a member of the Rmployees Re-
tirement S stem on September 1, 1947. During
August, 19t8, Kr. A left State employment and
entered the Army. He received his discharge Deo-
ember 31, 1949 and immediatelyreturned to State
employment. Hr. A now desires to make contribu-
tions to the Retirement System for the one year
and four months while absent from State employ-
ment during this period of Mli,tary Service and
desires such contributionsto be deduoted from
his monthly salary warrant and remitted to the
Employees RetirementSystem as hkcontributions
for such period of time.
n1. Is the Bmployees Retirement System of
Texas authorizedto accept contributionafrom Hr.
A for the one year and four months while in Wili-
tary Service, based on fLve peraent of the month-
ly salary he was receiving at the time he entered
Military Service?
"2. If the answer to Question One is yes,
can the State make Its matching contrlbutiona
Eon. Gordon R. Lloyd, page 2 (V-1023)
to the Employees Retirement System for the
one year and four months?
"3. If the answer to Question Two is
yes, then would the Funds from which the em-
ployee was reoeivinghLs salary at the time
of leaving to enter Military Service make
the Stat8 oontributiona,or would the Fund
from whiah the employee received his salary
after returning to State employment make ths
Stat8 contributions?
“4. Would Mr. A receive tenure servioe
for retirement purposes for the one year and
four months while in Willtary Service?"
Article 6228s, Section 5, SubseotlonH, Ver-
non's Civil Statutes, to which you refer, reads 8s fol-
lows:
"Il. Credit for Military Service.
"During the period of time the United
States is in a state of war and for a period
of twelve (12) months thereafter,time spent
by a member of the Employees RetirementSys-
tem (1) in the Armed Forces of the United
States and their auxlliarlesor In the Armed
Forces Reserve and their auxiliaries,or in
the American Red Cross, or (2) in war work as
a direct result of having been drafted or con-
scripted Into said war work, shall count to:
ward membership service. In addition, a member
of the Employees RetirementSystem shall be
permitted to contribute each year to the Re-
tirement System a sum not to exceed the amount
contributedby him to said Retirement System
during the last year that he was employed as
a member under the provisions of the Retire-
ment Act. The funds so contributedshall be
deposited to the credit of the member's indi-
vidual account and shall be treated in the
same manner as funds contributedby the mem-
ber while he was employed by the State. Any
employee of the State who entered military
service prior to the establishmentof the Re-
tirement System, either by induction or en-
listment,will be entitled to prior serviae
Hon. GordonR. Lloyd, page 3 (V-1023)
oredit for the time prior to establishmentof
the System and membership service for the time
subsequentto the establishmentof the System.
Any employee so absent shall have the r.ightto
olontrlbuteto said System either during his
aervLce with Armed Foroes or upon return an
amount equal to the contrrbutionawhioh would
have been made by him based on his compensa-
tion earnable at eommenaementof his-abseuoe,
provided such employee re-entersthe service
of the State vithln sixty (60) days after the
termination of his mllltary service and eleots
to becom8 a member of the System within sixty
(60) days after such re-employment.
"In aomputing the average prior service
compensationfor employees who served Ln the
Amed Forces 01%leaves of absenae from the
State and subsequentlybecame members of the
System, that time spent in the Armed Forces
shall be counted as part of the ten (10) years
,-
Immediatelypreceding the enactment of the law
and the basis for oompensationshall be the
same that was earned at corrmenaementof his
leave of absenae from the State."
Se&ion 8 of Article 6228a provides, in part:
“A. The amount contributedby each mem-
ber of the RetirementSystem shall be five per
cent (5) of the regular annual oompensation
paid to each member. The amount contributed
by the State of Texas to the RetirementSys-
tem shall not exceed during any one (1) year
five per cent (5$) of salaries of ell~members,
disregardingsalaries in amounts in exoess of
Three Thousand, 91x Hundred Dollars ($3,6oO),
providing the total amount contributedby the
State during any one (1) year shall at least
equal the total amount contributedduring the
same year by all members of the ,Retirement
System; provided further that all contribu-
tions made by the State shall be from and
charged to the respectivefunds appropriated,
allocated, and provided to pay the salary or
compensationof the employee for whose bene-
fit the contribution 2s made. . . D
“2. State Membership AccumulationFund.
Eon. Gordon H. Lloyd, page 4 (V-1023)
%!he State Membership AocumulationFund
shall.be the fund in which shall be accumu-
.latedall contributionsmade to the Employees
Retir8m8ntSystem by,the Stat8 of Texas for
the purpose of providing upon the r8tiPsment
of eaah member an amount equal to swh mem-
her'saccumulatedoontrlbutlon;and:from
whioh shall b8 transferredto the Eemberahlp
Annuity Reserve Fund at the retirement of a
smmber an amount equal to the aooumu3.ated
contributionsof the member, Contributions
to and payments from this fund shall b8 mede
as follows:
"a. The Stat8 of Texas shall pay each
year in equal monthly installmentsinto th8
Stat8 I68mb8rShiLp
AccumulationFund an amount
equal ~toa per oentum of the contributions
of the membera during such year, which shall
be calaulatedby the Aotuary and oertifled
to the Comptrollerby the Stat8 Board 'of
Trustees as b8ing the neoessary and requir8d
per oentum to malntein a reserve in this fund
4
equal to the present and prospectiveliablll-
ties of the fund o q e
"B. Collection of Contributions.
v2. The collection of the State's con-
tributions shall be made as follows:
"a. From and after the date of th8 8s-
tablishmentof the smmbershlp and full opera-
tion of the RetirementSystem created by this,
Aot takes effeat there is hereby ellooated and
appropriatedto the Emplogees RetirementSys-
tem of Texas, in ecoordanoewith this Act from
the several funds from which the ~8mploy8es~.
benefited by this Bat; receive their respec-
tive salaries, a sum equal to five per cent
(5$) of the total compensationpeid to the
said ~esp8otiv8 employees who are membera of
said RetirementSystem and whose colapsnsation
IS paid from funds directly oontrolled by the
State. The State Boerd of Trustees shall cer-
tify to theStat Comptroller of Public Aa-
counts and the Stat8 Treesurer at the end of
8ech month the total amount of oomp8I3aatiOn -
paid sucrhmembers of th8 R8tiZWimOnt~SyStOm,
Hon. Gordon H. Lloyd,'page 5 (V-1023)
and the State Comptroller shall thereupon
transfer five per oent (5$) of this amount
from the said respeotivefunds from which
said employees are paid to the State Employ-
ees RetirementFund; and which money'in said
fund is hereby appropriatedfor the purposes
provided by this Act for the balance of the
fiscal year 1947 and the fiscal year 1948.
Appropriationsfor the enaui biennium shall
be made aocordlng to Section3 , SubsectionB,
Part 2, Paragraph a, b, snd a of this Act.
"b. Thereefter, on or before the first
day of Wovember next preceding each Regular
Session of the Legislature, the State Board
of TrUIt88S shall certify to the Stat8 Board
of Control for its review and adoption the
amount neoessary to pay the aontrlbutionsof
th8 State of T8XaS to the Rmployeea Retire-
ment System for the,ensuing biennial. This
amount shall equal five per cent (!!$)of the
total oompensationpaid membera of the Retire-
ment System and ahall be inaluded in the bud-
get of the State whioh the Governor submits
to the Legislature. The State Board of Trua-
tees shall certify on or before August thirty-
first of each year to the State Comptroller
of Public Aocounts and the State Treasurer
the estimated amount of oontributionsto be
received from members during the ensuing year.
"c. All moneys hereby alloaated and ap-
propriatedby the State to the Bmployees Re-
tirement System shall be paid to the Rmployees
Retirement System in equal monthly install-
ments based upon the annual estimate by the
State Board of Trustees of the IEmployeesRe-
tirement System of the contributionsto be
received from the members of said System dur-
ing said year, provided further in the event
said estimate of the contributionsof the mem-
bers of the System shall vary from the actual
amount of the employees'oontributionaduring
the year, then such adjustment shall be made
at th8 olose of eaah fiscal year as may be re-
quired. Each of said monthly installments
shall be paid into the State Membership Aocu-
mulstion Fund and the Prior Service Annuity
Hon. Gordon Ii.Lloyd, page 6 (V-1023)
Reserve Fund in the proportionateamount cer-
tified by the ,StateBoard of Truste8s.n
The following provisionswere made in Senate
Bill 391, Acts 5Gth Leg., 1947, ch.kOG,,,p.
91:
"(29) All moneys oolleoted and reoelved
by the,Employee'sRetirement System of Texas
under the provisions of House Bill Ro. 168,
Acts of the Regular Session of the.50th Leg-
islature, 1947, during the biennium beginning
September 1, 1947, together with the balances
of swh funds on hand at the beginning of
each fisoal year of the biennium, are hereby
appropriatedto the Employee's Retirement Sys-
tem of Texas for the purpose of oarrying out
the provisions of said Act. The Employee's
R8tiXWSOntSystem Is hereby authorized to em-
ploy a suffioientnumber of employees to carry
out the terms and provisions of said AOt, but
in no event shall salaries be paid in exoesa
of the amount paid for the same or similar
poo;;;nt in any department of the State gov-
l
Appropriationsfor Stat8 Departments and Agen-
cies were made in House Bill 322, Aots 51st Leg., R.S.
1949, ch.615, p.1239. X8 quote the following provislons
from Howe Bill 322:
"There is hereby allocated and appropriat-
ed to the Employees RetirementSystem of Texas,
In aooordancewith H.B. Eo.168, Acts of the 50th
Legislature,1947, Regular 38saIon, from the
several funds from whioh the employees receive
their respectivesalaries and/or compensation,
sufficient amounts to provide the State con-
tributions neoessary to equal the five (s) per
aent of the oompensatlonof the members, oon-
tributed by them to the RetirementSystem, as
provided in the RetilrtmentAot."
It is our opinLon that the State la authoris-
ed to aocept contributionsfrom Mr. A for the tLm8 spent
by him in military serviae in 1948 and 199. It is pro-
vided in SubsectionH, Scotion 5 of Article 6228a, that
a pa&y who was a member of the RetirementSystem at the
time of entering military serviae may contrfbute to the -
Retirement System for the time spent In such service.He
,
-c- Hon. Gordon H. Lloyd, page 7 (v-1023)
may contribute eaoh'year an amount not to ,exoeedthe sum
contributedby him to the Retir8ment System during the
last year that he was,employed by the State and was a
member of the Retirement System.
In answer to your Question Ro. 2, it la our
opinion that no provision has been made by the Leglsla-
ture for the State to match the contributionsinques-
tion and that, consequently,no matching contribution
can be msde by the State. The appropriationmade to the
Employees Retirement System for the purpose-ofmaking
the State's matching contributionswas made "from the
several funds from which the employees reoeive their
respeotive salaries and/or compensation.* Mr. A vaa not
receiving any salary or compensation-froma State Fund
during the time that h8 was in military service. We are
of the opinion that the faot that no provision has been
made for the State's matahing contributionwill not pre-
vent the Retirement System from accepting the contrlbu-
tion of the person here involved. In view of our answer
to Question Ro. 2, it is not necessary to answer Ques-
tion No. 3.
It is our opinion that Question Ro. 4 should
be answered in the affirmative. Mr. A should be credit-
ed with membership service for retirement purposes for
the time spent by him in military service, provided he
has made oontrlbutionsto the Retirement System acaord-
ing to the provisions of the Retirement Act.
SUMbfARY
A person who was in military service in
1948 and 1949, and who was a member of'the
Employees Retirement System of T8XaS at the
time of entering military service, may oon-
tribute to the Retirement System for eaoh of
such years sn amount not to exoeed the sum
aontributedby him to the ROtlr8mentSystem
during the last year that he was employed by
the State and was a member of the Retirement
System. ,Suchperson should be credited with
membership service for retirementpurposes
for the time spent by him in military servioe.
Ro provision was made by the Legislature for
the State to make a matohing contribution in
,-
Hon. Gordon B. Lloyd, page 8 (V-1023)
swh oases, but that fact vi11 not prevent
the Retirement Systemfrom receiving the
contributionof the employee.
Yours very truly,
PRICB DAKIKL
APPROVED: Attorney Ganeral
Red NoDaniel
State Affaira Division
Charles D. Mathews
~8ClUtiV8 Assistant
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