## RNES GENERAI, OF-XAS

Mr. Frank M. Jackson Executive Secretary Teacher Retirement System of Texas 314West 11th Street Austin, Texas 78701 Opinion No. M- 949 Re: (a) Authority of Board of theTeacher Retirement System to grant merit increase to salaried employees. (b) Authority of the Board topay certain insurance premiums for DearMr. Jackson: employees.

Inyour 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 increases within a salary group to employees of the Teacher Retirement System?
"2. Does the Board of Trustees of the Teacher Retirement System have authority topay premiums on policies containing group life, health, accident, accidental death and dismemberment, disability income replacement andhospital, surgical andmedical expense insurance for employees of theTeacher Retirement System in excess of $12.50 per month per full-time employee?" Except as themerit increase may be subject to President Nixon's recent "freeze order" (seeAttorney General's Opinion No. M-942, 1971), we are of the opinion that the Board has authority to grant amerit increase provided thehigher salary does not exceed thehighest salary paid by the State for aposition involving similar services.

The State Position Classification Plan does not govern salaries of employees of the Teacher Retirement System for reasons here discussed.
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Section 2ofArticle 6252-11, Vernon's Civil Statutes, Position Classification Act of 1961, provides inpart as follows:

"Sec. 2. All regular, full-time salaried employments within thedepartments and agencies of the State specified inArticle III, and the Central Education Agency, Deaf and Blind Schools inArticle IV, . . . of thebiennial Appropriations Act, shall conform with the Position Classification Planhereinafter 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 ofwhether their funds are kept inside or outside the State Treasury, shall also conform with the Position Classification Plan hereinafter described andwith the salary rates and provisions of theGeneral Appropriation Act with the exceptions hereinafter provided in this Section. II

. . . "Specifically excepted from the Position Classification Plan hereinafter described are . . .and such other positions in the State government ashave heretoforebeen or asmay hereafter be excluded from such Position Classification Planby executive order of the Governor orby direction of theLegislature." (Emphasis supplied) We are of the opinion that employees of theTeacher Retirement System have been excluded from the Position Classifiebtf& Plan by direction of theLegislature.

The Teacher Retirement System ispresently governed by Chapter 3of the Texas Education Code as amended and codified by Chapter 405 (BouseBill No. 279),Acts of the 62nd Legislature, Regular Session, 1971.

Section 3.56of theTexas Education Code provides, in summary, that all expenses of the system shall bepaid from an expense account created by the statute. Membership fees are credited to that account, and a transfer ismade to the expense account from the interest account ifneeded.

-4645-Mr. Frank M. Jackson, page 3 (M-949)

There isnoprovision in the latest General AppropriationAct for administrative expenses for the Teacher Retirement System. There isprovision in theAppropriation Act for the State's contribution tomatch members' contributions, but this is credited to a special State Contribution Account.

Further indication of Legislative intent that the Teacher Retirement System is not tobe governed by thePosition Classification Plan is found in Section 3.59(j) of the 'Texas Education Code, which reads inpart as follows:

II

. . .The rate of compensation of allpersons employed by the State Board of Trustees, aswell 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 inAttorney General's Opinion No. WW-1095 (1961),WW-1222 (1961), andWW-1262 (1962). Those opinions held, respectively, that the Position Classification Plan does not apply to the Finance Commission, Banking and Savings andLoan 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 ofArticle V, Section 10, of the General Appropriations Act passed by the 62nd Legislature. Apart 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 theparagraph inwhich it is included provides inpart that

"Statedepartments and agencies covered by this Act (Articles I through VI)
. . .shall utilize funds

. . . topay employee-premiums
. . .'I supplied) (Emphasis

-4646-Mr. Frank M. Jackson, page 4 (M-949)

The only appropriation made in theGeneral Appropriation Act to the Teacher Retirement System is for State contributions tomatch members' contributions. We think this does not bring the System within thepurview of theparagraph inArticle V, Section 10of theAct relating toemployee insurance.

We think that inpaying insurance premiums for its employees the System will be governed by theprovisions of Articles 3.50 and 3.51 of the Texas Insurance Code andmay be subject to the Presidential Freeze Order or the ruling of the President's Cost of Living Council, no opinion. amatter uponwhich we express
SUMMARY The Teacher Retirement System of Texas isnot governed by the Position Classification Plan in granting amerit increase in salary. Except as themerit 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 aprovision of theTexas Education Code that the System may not pay more than ispaid for similar services performed for the State of Texas. The provisions ofArticle V, Section 10, of the General Appropriations Act passed by the 62nd Legislature, Regular Session, 1971, relating to State contribution to insurance premiums, Retirement System. do not apply to the Teacher
The Teacher Retirement System is governed inpaying insurance premiums for its employees byArticles 3.50 and 3.51of theTexas Insurance Code andmay be subject to the Presidential Freeze Order or the ruling of the Cost of Living Council, amatter uponwhich no opinion is expressed. 4 Yqi& very fruly,

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Mr. Frank M. Jackson, page 5 (M-949)

Prepared by James S. Swearingen Assistant Attorney General APPROVED: I)PINIONCOMMITTEE Bill Craig Marietta Payne Roland Allen Houghton Brownlee SAM MCDAiiIEL Acting Staff Legal Assistant ALF%D WALKUR tixecutiveAssistant NOLA IUITE FirstAssistant

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