June 18, 1969

Honorable Graves Landrum Opinion No. M-420 Vice-Chancellor for Administration TheUniversity of Texas System Re: Whether rights of anemAustin, Texas ployee, participating in the Optional Retirement Act, vest after one year's participation in the Optional. Retirement'ProDear Mr. Landrum: gram, andrelated questions.

You have requested that this office answer the following questions: "1. Dorlghts~ of the employee particlpatlng in the Optional Retirement Act vest after one year's participation in the Optional EEtFement Program? "2. If answer ,to question 1is yes, then do the rights of the employee vest on his first day of employment after one year's participation in the O.R.P.? "3. Is it mandatory that the participation requirements in the 0.R.P'. be completed at one institution, or maythe participation requirements be completed 'Inmore than one state-supported institution of higher education, including junior colleges, to insure vesting after dneyear of participation?

“4. Does the employee have a vested interest after one year's participation even though the participation might be with more than one instiance company? Article 2922-11, Vernon's Civil Statutes, provides for the Optional Retirement Programfor. teachers andadministrative -2099-

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personnel employed by state-supported institutions of higher education andreads, In part, as follows:

“Section 1. The Legislature finds that higher education Is vitally important to the welfare, If not the survival, of Texas and the United States at this stage. In history and that the quality of higher education Is dependent upon the quality of college and unlverelty faculties. The Legislature finds, therefore, that moneys spent on recognized meansfor producing an excellent system of public higher education Is money spent to serve a public purpose of great importance. The Legislature finds further that a sound faculty retirement program that provides full andcomplete retirement benefits to teachers andadministrators whohave given faithful service to state -supported lnstltutlons of higher education Is a well-recognized means for Improving a state’s program of public higher education. The Legislature’s purpose in establlshlng the retirement program provided for by this Act Is to improve further the higher education available to the youth at the state-suonorted ‘colleges and universities and to estabiish this retirement programas part of the plan of compensation for the faculty of these colleges and universities.

“Sec. 2. As used in this Act, unless the context otherwise requires: ,I

. . .

“(c) ‘Institution of higher education’ meansan lnstltutlon of higher education as defined under the provisions of Chapter 12, Acts, Regular Session, 59th Legislature 

## (1965), and lncludlng James Connally Technical Institute, except the Rodent and Predatory Animal Control Service.

“(d) ‘Faculty member’ meansa person employed by an institution of higher education ona full time basls as a memberof the faculty or staff andwhose duties Include teaching, -.2100-Hon. Graves Landrum, page 3 (~.420~

research, administration, Including professional librarians, or the performance of professional services but does not meanaperson employed in a position which Is In the lnstltutlon’s classified personnel system or aperson employed In a similar type of position if the Institution does not have a classified personnel system.

“(e) ‘Governing Board’ meansthe body charged with policy direction of any institution of higher education.

“(f) ‘Optional Retirement Program’ means the optional retirement program created by this Act to provide fixed or variable retirement annuities, Including retirement unit annuity certificates of participation for faculty members.

“Sec. 3(a) There Is hereby established anOptional Retirement Program. Participation in the Optional Retirement ProgramIs In lieu of active membership in the Retirement System, TheQoverning Boards for all Institutions of higher education shall makeavailable to all faculty membersIn their component Institution’s, agencies andunits the Optional Retirement Pro-

“(b) All faculty membersare eligible to participate in the Optional Retirement Program, subject to such rules as maybe prescribed by the Qoverning Board of the institution of higher education at which they are employed.

“Sec. 4. In administering the Optional Retirement Programa Qovernlng Board mayprovide for the purchase of annuity contracts from any insurance or annuity company o.uallfled andadmitted to dobusiness in this state. Anylife Insurance or annuity companyqualified and admitted to do business In this state shall be exemptfrom the payment of al: franchise or premiumtaxes as to all annuity or group Insurance contracts made pursuant to a benefit program authorized by the governing board of an Institution of higher education, or by any private non-profit educational

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Institution of higher learning, which benefit program is paid for in whole or in part from the funds of such institution. Wherea Governing Board has morethan one component Institution, agency or unit under Its jurisdiction, it may provide a separate Optional Retirement Program for each component Institution, agency or unit or place twoor mbrecomponent institutions, agencies or units under a single program. n*

. .” (Emphasis added. ) Theanswers to your first two questions are found In the provisions set out In Section 3(a) of Article 2922-11, as above quoted. Theglaln andunambiguous language of this section sets out that the Optional Retirement Programshall rovlde for vesting of benefits after one year of parti& Wetherefore hold that your first question Is answered 1

Accord, Attorney Genera’l’s Opinion No. ~-1G6the affirmative. (1968). Article 23, Vernon’s Civil Statutes, defines year to meana calendar year. It 1s well established both at common law and by statute, that, unless otherwise expressed the word

“year” whenused is a contract, judicial proceeding or statute, or constitution, ordinarily 1s understood to meana calendar year, regardless of whether It be leap year or otherwlse.’ Douglas v. Acacia Mu Civ.App. 1938, error 118 S.W.2d 643 (Tex. r v. National Life and Accident Ins. Co., 63 ex.Clv.App. 1933, error ref.) the Court set means “at the end of ”

“as soon as” and In computation of time theword “after” &erally understod In the sense of excluding the day or date mentioned, WordsIn a statute must be given their enerally accepted meaning. Calvert v. Audio Center Inc., 34%S.W.2d 420 (Tex.Clv.App. 1961, error ref. n.r.e.). Applying the above stated definitions to the words tlclpatlon”, “vesting after one year of parwehold that the rights of an employee vest on~hls first day of employment, after one year’s participation in the Optional Retlrement Program, and your second question is answered In the affirmative.

Toarrive at the Intention of the Legislature In regard to your third question wemust look at the full Act. Having the power to set upthe Optional Retirement Frcgram, the Legislature had the power to spell out Its requirezer,ts. This it has done by delegating the duty to the governing board of each institution
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of higher education to makeanOptlonal Retirement Program available for the faculty of its institution. Section 3 specifically gives the governing board of each lnstltutlon of higher education the authority to makethe rules governing the program for that lnstltutlon, and to provide in those rules that there be a vesting of benefits after one year of participation. Section 4 provides that the governing board mayprovide for the purchase of annuity contracts from any Insurance or annuity company qualified and admitted to do business in Texas. The act clearly sets out, In all of Its provisions andrequirements, the duty and responsibility for the Optional Retirement Program to be with the governing board of each institution of higher education.

Wetherefore hold that It is mandatory that the faculty membermust have participated in the Optional Retirement Program at one Institution of higher education for at least one calendar year to be eligible for vesting of benefit rights under the Optional Retirement Program.

Wherethe governing board of a system composed of more than one component institution, such as the University of Texas system, has adopted a program placing all Institutions within the system under one program, It Is our opinion that an employee maymeet the oneyear vestlng.requlrement by participating in such program In any one or more Institutions within the system within the samecalendar year.

For purposes of anawerlng your fourth question we have searched the statute for provisions providing for the vesting of benefit rights by participating ln more than one Insurance program. Section 4provides that the governing board mayhave a programwith more than one Insurance companyfor its faculty members. Therefore, It 1s our opinion that an employee mayhave a vested Interest after one year's participation In the program of that lnstltutlon even though It may be with more .,than one Insurance companythat was approved by the governing board of that Institution. SUUMARY Article 2922-11, V.C.S., requires that Optional Retirement Programs provide for vesting of benefit rights after one year of participation in the program by an emplcyee. Said vesting Is to be effective on his first day of employment after one year’s participation

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In the program prescribed by the governing board of the inetitution. It Is mandatory that the partlclpatlon requirements be completed at one Institution. Wherethe governing board of a system composed of more than one component Institution, such as the University of Texas system, has adopted a program placing all lnstltutlons within the system under one program, It Is our opinion that an employee maymeet the one year vesting requirement by participating In such program In any one or more lnst%tutlons within the system within the samecalendar year. The participation maybe with more than one approved Insurance company.

Prepared byWilliam J. Craig Assistant Attorney General General of Texas

APPROVED: OPINION'

COMMITTEE Kerns Taylor, Chairman George Kelton, Vice-Chairman Joseph Sharpleg SamMcDaniel Houghton Brownlee JlmSwearingen W.V. Geppert Staff Legal Assistant Hawthorne Phillips Executive Assistant

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