RNES GENERAI,
OF-XAS
Mr. Frank M. Jackson Opinion No. M- 949
Executive Secretary
Teacher Retirement System Re: (a) Authority of Board
of Texas of the Teacher Retirement
314 West 11th Street System to grant merit
Austin, Texas 78701 increase to salaried
employees.
(b) Authority of the
Board to pay certain
insurance premiums for
Dear Mr. Jackson: employees.
In your recent letter you requested the opinion of
this office on the following questions:
"1. Does the Board of Trustees of the Teacher
Retirement System have authority to grant merit in-
creases within a salary group to employees of the
Teacher Retirement System?
"2 . Does the Board of Trustees of the Teacher
Retirement System have authority to pay premiums on
policies containing group life, health, accident,
accidental death and dismemberment, disability in-
come replacement and hospital, surgical and medical
expense insurance for employees of the Teacher Re-
tirement System in excess of $12.50 per month per
full-time employee?"
Except as the merit increase may be subject to President
Nixon's recent "freeze order" (see Attorney General's Opinion No.
M-942, 1971), we are of the opinion that the Board has authority
to grant a merit increase provided the higher salary does not
exceed the highest salary paid by the State for a position in-
volving similar services.
The State Position Classification Plan does not govern
salaries of employees of the Teacher Retirement System for
reasons here discussed.
-4644-
Mr. Frank M. Jackson, page 2 (M-949)
Section 2 of Article 6252-11, Vernon's Civil Statutes,
Position Classification Act of 1961, provides in part as follows:
"Sec. 2. All regular, full-time salaried employ-
ments within the departments and agencies of the State
specified in Article III, and the Central Education
Agency, Deaf and Blind Schools in Article IV, . . .
of the biennial Appropriations Act, shall conform with
the Position Classification Plan hereinafter described
. . . with the exception and deferments hereafter
provided in this Section.
"Effective January 1, 1962, all regular, full-time
salaried employments in executive or administrative
agencies of the State, regardless of whether their funds
are kept inside or outside the State Treasury, shall
also conform with the Position Classification Plan
hereinafter described and with the salary rates and
provisions of the General Appropriation Act with the
exceptions hereinafter provided in this Section.
II . . .
"Specifically excepted from the Position Classifi-
cation Plan hereinafter described are . . . and such
other positions in the State government as have hereto-
fore been or as may hereafter be excluded from such
Position Classification Plan by executive order of the
Governor or by direction of the Legislature." (Emphasis
supplied)
We are of the opinion that employees of the Teacher
Retirement System have been excluded from the Position Classifi-
ebtf& Plan by direction of the Legislature.
The Teacher Retirement System is presently governed by
Chapter 3 of the Texas Education Code as amended and codified by
Chapter 405 (Bouse Bill No. 279), Acts of the 62nd Legislature,
Regular Session, 1971.
Section 3.56 of the Texas Education Code provides, in
summary, that all expenses of the system shall be paid from an
expense account created by the statute. Membership fees are
credited to that account, and a transfer is made to the expense
account from the interest account if needed.
-4645-
Mr . Frank M. Jackson, page 3 (M-949)
There is no provision in the latest General Appropria-
tion Act for administrative expenses for the Teacher Retirement
System. There is provision in the Appropriation Act for the
State's contribution to match members' contributions, but this
is credited to a special State Contribution Account.
Further indication of Legislative intent that the
Teacher Retirement System is not to be governed by the Position
Classification Plan is found in Section 3.59(j) of the 'Texas
Education Code, which reads in part as follows:
II . . . The rate of compensation of all persons
employed by the State Board of Trustees, as well as
the amounts necessary for other operations of the
retirement system, shall be approved by the State
Board of Trustees, provided they shall be no greater
than those for similar services performed for the
State of Texas."
We are of the opinion that the Position Classification
Plan has no application to the Teacher Retirement System. In
reaching this conclusion we have followed the rationale employed
in Attorney General's Opinion No. WW-1095 (1961), WW-1222 (1961),
and WW-1262 (1962). Those opinions held, respectively, that the
Position Classification Plan does not apply to the Finance
Commission, Banking and Savings and Loan Departments, to the
Texas State Board of Plumbing Examiners, or to the Liquidation
Division of the State Board of Insurance.
Your second question is undoubtedly related to the
provisions of Article V, Section 10, of the General Appropriations
Act passed by the 62nd Legislature. A part of that Section reads
as follows:
"Payment by the state from the designated funds on
any policy or policies shall be limited to twelve dollars
and fifty cents ($12.50) per month per full-time employee."
That provision does not apply to the Teacher Retirement
System for the reason that the paragraph in which it is included
provides in part that
"State departments and agencies covered by this
Act (Articles I through VI) . . . shall utilize funds
. . . to pay employee-premiums . . .'I (Emphasis
supplied)
-4646-
Mr. Frank M. Jackson, page 4 (M-949)
The only appropriation made in the General Appropriation
Act to the Teacher Retirement System is for State contributions
to match members' contributions. We think this does not bring
the System within the purview of the paragraph in Article V,
Section 10 of the Act relating to employee insurance.
We think that in paying insurance premiums for its
employees the System will be governed by the provisions of
Articles 3.50 and 3.51 of the Texas Insurance Code and may be
subject to the Presidential Freeze Order or the ruling of the
President's Cost of Living Council, a matter upon which we express
no opinion.
SUMMARY
The Teacher Retirement System of Texas is not
governed by the Position Classification Plan in
granting a merit increase in salary.
Except as the merit increase may be subject to
President Nixon's recent "freeze order" (Attorney
General's Opinion No. M-942, 1971), the Teacher
Retirement System is restricted as to salaries
paid by a provision of the Texas Education Code
that the System may not pay more than is paid for
similar services performed for the State of Texas.
The provisions of Article V, Section 10, of the
General Appropriations Act passed by the 62nd Legisla-
ture, Regular Session, 1971, relating to State contri-
bution to insurance premiums, do not apply to the Teacher
Retirement System.
The Teacher Retirement System is governed in pay-
ing insurance premiums for its employees by Articles
3.50 and 3.51 of the Texas Insurance Code and may be
subject to the Presidential Freeze Order or the ruling
of the Cost of Living Council, a matter upon which no
opinion is expressed. 4
Yqi& very fruly,
-4647-
,
Mr. Frank M. Jackson, page 5 (M-949)
Prepared by James S. Swearingen
Assistant Attorney General
APPROVED:
I)PINION COMMITTEE
Bill Craig
Marietta Payne
Roland Allen
Houghton Brownlee
SAM MCDAiiIEL
Acting Staff Legal Assistant
ALF%D WALKUR
tixecutive Assistant
NOLA IUITE
First Assistant
-4648-