March 30, 1950

_- Hon. Gordon H. Lloyd

Executive Seoretary EmployeesRetirement System of Texas Austin, Texas OpinionNo. V-1023.

Re: Aacepteneeof contributlons to Retirement System of a former member for the period spent in military service in 1948 and 1949, the party having reDear Hr. Lloyd: turned to State employment.

Your request for an opinion reads as follows:

"Pleasefavor us with your opinion,based
on the following facts and interpreting Section V, SubsectionIiof H.B. 168, passed by the Regular Session of the 50th Legislature.

"Mr. A, an employee of one of the State Departments,became a member of the RmployeesRetirement S stem on September 1, 1947. During August, 19 8, Kr. A left State employmentand

t entered the Army. He receivedhis dischargeDeoember 31, 1949 and immediatelyreturned to State employment. Hr. A now desires to make contributions to the RetirementSystem for the one year and four months while absent from State employment 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 BmployeesRetirementSystem of Texas authorizedto accept contributiona from Hr. A for the one year and four months while in Wilitary Service, based on fLve peraent of the monthly 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 contrlbutionaEon. Gordon R. Lloyd, page 2 (V-1023)

to the EmployeesRetirementSystem for the
one year and four months?

"3. If the answer to QuestionTwo is yes, then would the Funds from which the employee was reoeivinghLs salary at the time of leaving to enter Military Servicemake the Stat8 oontributiona, or would the Fund from whiah the employee receivedhis salary after returning to State employmentmake ths Stat8 contributions?

“4. Would Mr. A receive tenure 

### servioe for retirementpurposes for the one year and four months while in Willtary Service?"

Article 6228s, Section 5, SubseotlonH, Vernon's Civil Statutes, to which you refer, reads 8s follows:

"Il. Credit for Military Service.

"Duringthe 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 RetirementSystem (1) in the Armed Forces of the United States and their auxlliarlesor In the Armed Forces Reserve and their auxiliaries,or in the AmericanRed Cross, or (2) in war work as a direct result of having been drafted or conscripted Into said war work, shall count to: ward membershipservice. In addition,a member of the Employees RetirementSystem shall be permitted to contributeeach year to the RetirementSystem a sum not to exceed the amount contributedby him to said RetirementSystem during the last year that he was employed as a member under the provisionsof the Retirement Act. The funds so contributedshall be deposited to the credit of the member's individual account and shall be treated in the
same manner as funds contributed by the member while he was employedby the State. Any employee of the State who enteredmilitary serviceprior to the establishment of the RetirementSystem, either by inductionor enlistment,will be entitled to prior serviae,- Hon. GordonR. Lloyd, page 3 (V-1023)

oredit for the time prior to establishment of the System and membershipservice for the time subsequentto the establishmentof the System. Any employee so absent shall have the r.ight to olontrlbute

to said System either during his aervLcewith Armed Foroes or upon return an amount equal to the contrrbutiona whioh would have been made by him based on his compensation earnable at eommenaementof his- abseuoe, provided such employee re-entersthe service of the State vithln sixty (60) days after the terminationof his mllltary service and eleots to becom8 a member of the System within sixty (60) days after such re-employment.

"In aomputing the averageprior service compensationfor employeeswho served Ln the Amed Forces 01%

leaves of absenae from the State and subsequently became members of the System, that time spent in the Armed Forces shall be counted as part of the ten (10) years Immediately

preceding the enactment of the law and the basis for oompensationshall be the
same that was earned at corrmenaement of his leave of absenae from the State."

Se&ion 8 of Article 6228a provides, in part:

“A. The amount contributed by each member 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 RetirementSystem 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), providingthe total amount contributed by the State during any one (1) year shall at least equal the total amount contributed during the
same year by all members of the ,Retirement System; provided further that all contributions 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 benefit the contribution 2s made.

. . D

“2. State Membership Accumulation Fund.Eon. Gordon H. Lloyd, page 4 (V-1023)

%!he State MembershipAocumulation Fund shall.be the fund in which shall be accumu- .lated all contributions

made 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's accumulatedoontrlbutlon; and:from whioh shall b8 transferredto the Eemberahlp AnnuityReserve Fund at the retirementof a smmber an amount equal to the aooumu3.ated contributions

of 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

Accumulation

Fund an amount equal ~to

a 

### 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 equal to the present and prospectiveliablllties of the fund o q e

"B. Collectionof Contributions.

v2. The collectionof the State's contributionsshall be made as follows:

"a. From and after the date of th8 8stablishment

### of the smmbershlpand full operation of the RetirementSystem createdby this, Aot takes effeat there is hereby ellooatedand appropriated

to the EmplogeesRetirementSystem of Texas, in ecoordanoe with this Act from the several funds from which the ~8mploy8es ~. benefitedby this Bat; receive their respective salaries,a sum equal to five per cent (5$) of the total compensation peid to the said ~esp8otiv8employeeswho are membera of said RetirementSystem and whose colapsnsation IS paid from funds directlyoontrolledby the State. The State Boerd of Trustees shall certify to theStat Comptrollerof Public Aacounts and the Stat8 Treesurer at the end of 8ech month the total amount of oomp8I3aatiOn paid sucrh

members of th8 R8tiZWimOnt~SyStOm, 4

-Hon. Gordon H. Lloyd,'page5 (V-1023)

and the State Comptrollershall thereupon transfer five per oent (5$) of this amount from the said respeotivefunds from which said employees are paid to the State Employees RetirementFund; and which money'in said fund is hereby appropriatedfor the purposes providedby this Act for the balance of the fiscal year 1947 and the fiscalyear 1948. Appropriations

for the enaui

3 biennium shall be made aocordlngto Section
, SubsectionB, Part 2, Paragraph a, b, snd a of this Act.

"b. Thereefter,on 

### or before the first day of Wovember next precedingeach 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 neoessaryto pay the aontrlbutions of th8 State of T8XaS to the RmployeeaRetirement System for the, ensuing biennial. This amount shall equal five per cent (!!$) of the total oompensation paid membera of the Retirement System and ahall be inaluded in the budget of the State whioh the Governor submits to the Legislature. The State Board of Truatees shall certify on or before August thirtyfirst of each year to the State Comptroller of Public Aocountsand the State Treasurer the estimated amount of oontributions to be received from members during the ensuingyear.

"c

. All moneys hereby alloaatedand appropriatedby the State to the BmployeesRetirementSystem shall be paid to the Rmployees RetirementSystem in equal monthly installments based upon the annual estimateby the State Board of Trustees of the IEmployeesRetirement System of the contributions to be received from the members of said System during said year, provided further in the event said estimate of the contributions of the members of the System shall vary from the actual amount of the employees'oontributiona during the year, then such adjustmentshall be made at th8 olose of eaah fiscalyear as may be required. Each of said monthly installments shall be paid into the State MembershipAocumulstionFund and the Prior Service AnnuityHon. Gordon Ii. Lloyd, page 6 (V-1023)

Reserve Fund in the proportionate amount certified by the ,State Board of Truste8s.n

The followingprovisionswere made in Senate Bill 391, Acts 5Gth Leg., 1947, ch.kOG,,,p. 91:

"(29) All moneys oolleotedand reoelved by the,Employee's

RetirementSystem of Texas under the provisionsof House Bill Ro. 168, Acts of the Regular Session of the. 50th Legislature,1947, during the bienniumbeginning September 1, 1947, togetherwith the balances of swh funds on hand at the beginning of each fisoal year of the biennium, are hereby appropriated

to the Employee'sRetirementSystem of Texas for the purpose of oarrying out the provisionsof said Act. The Employee's R8tiXWSOntSystem Is hereby authorizedto employ a suffioient

number of employees to carry out the terms and provisionsof said AOt, but in no event shall salariesbe paid in exoesa of the amount paid for the same or similar poo;;;nt in any departmentof the State govl Appropriations

for Stat8 Departmentsand Agencies were made in House Bill 322, Aots 51st Leg., R.S. 1949, ch.615, p.1239. X8 quote the followingprovislons from Howe Bill 322:

"There is hereby allocatedand appropriated to the Employees RetirementSystem of Texas, In aooordance

with H.B. Eo.168, Acts of the 50th Legislature,1947, Regular 38saIon, from the several funds from whioh the employeesreceive their respectivesalaries and/or compensation, sufficientamounts to provide the State contributionsneoessaryto equal the five (s) per aent of the oompensatlonof the members, oontributedby them to the RetirementSystem, as provided in the Retilrtment Aot."

It is our opinLon that the State la authorised to aocept contributions from Mr. A for the tLm8 spent by him in military serviae in 1948 and 199. It is provided in SubsectionH, Scotion 5 of Article 6228a, that
a pa&y who was a member of the RetirementSystem at the time of enteringmilitary serviaemay contrfbuteto the RetirementSystem for the time spent In such service.He -,

-c- Hon. Gordon H. Lloyd, page 7 (v-1023)

may contributeeaoh'year an amount not to ,exoeedthe sum contributedby him to the Retir8mentSystem during the last year that he was, employedby the State and was a member of the RetirementSystem.

In answer to your QuestionRo. 2, it la our opinion that no provisionhas been made by the Leglslature for the State to match the contributionsinquestion and that, consequently, no matching contribution

can be msde by the State. The appropriation made to the Employees RetirementSystem for the purpose-ofmaking the State's matching contributions was made "from the several funds from which the employeesreoeive their respeotive salaries and/or compensation.* Mr. A vaa not receiving any salary or compensation-from a State Fund during the time that h8 was in military service. We are of the opinion that the faot that no provisionhas been made for the State's matahing contribution will not prevent the RetirementSystem from acceptingthe contrlbution of the person here involved. In view of our answer to QuestionRo. 2, it is not necessary to answer Question No. 3.

It is our opinion that Question Ro. 4 should be answered in the affirmative. Mr. A should be credited with membership service for retirementpurposes for the time spent by him in military service,providedhe has made oontrlbutions to the RetirementSystem acaording to the provisionsof the RetirementAct.

SUMbfARY

A person who was in military service in 1948 and 1949, and who was a member of' the EmployeesRetirementSystem of T8XaS at the time of enteringmilitary service,may oontribute to the RetirementSystem for eaoh of such years sn amount not to exoeed the sum aontributedby him to the ROtlr8mentSystem during the last year that he was employedby the State and was a member of the Retirement System. ,Suchperson should be creditedwith membership service for retirementpurposes for the time spent by him in military servioe. Ro provisionwas made by the Legislature for the State to make a matohing contributionin

,-Hon. Gordon B. Lloyd, page 8 (V-1023)

swh oases, but that fact vi11 not prevent the RetirementSystemfrom receiving the contributionof the employee.

Yours very truly,

APPROVED:

Red NoDaniel State Affaira Division

Charles D. Mathews ~8ClUtiV8 Assistant
CBK:rt:jmarmw PRICB DAKIKL AttorneyGaneral