RNES GENERAI, 

OF-XAS 

Mr. Frank M. Jackson 

Executive Secretary 

Teacher Retirement System 

of Texas 

314 West 11th Street 

Austin, Texas 78701 

Opinion No. M- 949 

Re: (a) Authority of Board 

of the Teacher Retirement 

System to grant merit 

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 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 to pay premiums on 

policies containing group life, health, accident, 

accidental death and dismemberment, disability income replacement and hospital, surgical and medical 

expense insurance for employees of the Teacher Retirement 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 involving 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 employments 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 Classification Plan hereinafter described are . . . and such 

other positions in the State government as have heretofore 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 Classifiebtf& 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 Appropriation 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 

supplied) 

(Emphasis 

-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, 

no opinion. 

a matter upon which we express 

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 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 in paying 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-