THE ATTORNEY GENERAL OF TEXAS

Ausn~.TExan 78711
January 12, 1968

Honorable Frank M. Jackson Sxecutive Secretary OpinionNo. M-194

Teacher Retirement System of Texas Re: Whether a member of the 314West 11th Street Teacher Retirement System Third Floor, Lowich Building may purchase current servAustin, Texas ice credit for out-of-state service less than three years before the date of his retirement and related questions. under the facts Dear Mr. Jackson: stated.

Inyour request for an opinion from this officeyou state the following:

"Amember of the Teacher Retirement System failed to make application to purchase credit for out-of-stateservicewithinthree years and payment for such servicewithin fiveyears of the date of his membership in the Teacher Retirement System. He latermade application to purchase out-of-statecredit. Under these circumstances,we respectfully present the following questions foryour opinion.
“1. May a member of the Teacher Retirement System purchase current service credit for out-ofstate service less than threeyears before the date of his retirement?

"2, If the answer to Question No. 1 is in the affirmative,would the out-of-stateservice for which paymentwas made be included in computing the member's retirementbenefit at the time of his retirement?

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Hon. Frank M. Jackson, Page 2 (M-194)

"3o If the answer to Question No. 1 is affirmative and Question No. 2 is negative,would the member's retirementbe adjusted after retirement to include credit for the out-of-state servicewhen threeyears from the date of payment have expired?

"Theabove questions are based upon the premise that (a)the memberhas a minimum of ten years of creditable service in Texas and two years of creditable service in Texas for each year of out-of-stateservice purchased,and (b) the out-of-stateservice forwhich paymentwas made was in a public school system maintained inwhole or in partby another state or territory of the United States or by the United States for children of United States citizens.

"Thesequestions are pertinent to the specific situation outlinedbelow. Mr. Earle H. Fischer,
a member of the Teacher Retirement System from Amarillo, Texas, first inquired inApril of 1964 about purchasingcurrent service creditwith the Teacher Retirement System of Texas for service in
a public school of another state. He was then sent forms for applying to purchase this credit and was referred to the reverse side of the form for administrative interpretationsof the laws governing the purchase of credit for out-of-state service 1 He subsequentlymade the followingpayments:

"Date Number of Years Amount

March 3, 1965 1 $ 771.61 February 15, 1966 1 771.61 April 5, 1967 1 771.61 May 8, 1967 7 5,401.27

-925-Ronr Frank M. Jackson, Rage 3 (M-194~)'

"on' May 17, 1967, Mr. Fischer indicated that he would be forced to retire’from theAmarillo Public Schools May 31, 1969,because of a ruling by the Board of Trustees of the Amarillo Schools setting age sixty-five as the compulsory retirement age in that particular school district. Mr. Fischer was then informed that ifhe should retire before May 31, 1970, the eight years of out-ofstate service forwhich paymentwas made onApril 5, 1967. and May 8, 1967; could not be used in determininghis benefits and that deposits made far theseyears would'be refunded to him. The years forwhich payment was made on March 3, 1965, and February 15, 1966,were not questioned.

"Mr.Fischer contends that the administrative interpretation of the laws governing the Qurchase~ of credit for out-of-stateservice is in error. He has requested that he be allwed to retire on May 31. 1969,with his benefit computedwithout using the last eightyears of out-of-stateservioe forwhich payment was made, then have his benefit adjusted three years from the date of payment for the additional out-of-state service to include'suchservice.

"Mr. Fischerbecame a member of the Teacher Retirament System of Texas in September of 1940. He satisfies other conditions of the law pertaining to Texas service credit.

"Thebasic Teacher Retirement Law is codified
as Article 2922-1,Vernon's Texas Civil Statutes. Section 14 pertains to out-of-state service. This lawwas enacted as S.B. 290, 54th Texas Legislature, Regular Session, 1955. The provisions of this Section permittinga personwho was a member prior to 1955 to purchase credit for out-of-state service expired threeyears after the effective date of the Act.
"Section 2 of S.B. 99, 57th Texas Legislature,

-926-Hon. Frank M. Jackson, page 4 (M-194)

Regular Session, 1961, (Article6228a-4,Vernon's Texas Civil Statutes) again provided for the purchase of out-of-stateservice. This Bill contained
no provision for regulating the purchase or computing the payment for such service. It did repeal all laws in conflict to the extent of the conflict only,

"In administering S.B. 99, Section 2 thereof
was considered to have replaced all of Section 14, Subsection 1, of S.B. 290, Subsections 2, 3, 4, 5 and 6 of Section 14. S.B. 290,were considered to remain in forcewith the exception of the last portion of Subsection 2 reading as follows: '.

. , and failure to make the remaining deposits required, within the next two (2)consecutiveyears, shall forfeit the privilege of purchasingany credits for which depositshave not been made.' This portion seemed to conflictwith the new provisions of S.B. 99.
"Since the enactment of S.B. 99, the administrative construction of Section 2(b) has been that all service credit, unless purchasedunder the provisions of Section 2 (a),purchasedby a 'member' would be granted threeyears after the date of payment, but that all service credit must be validated by a three-yearwaiting periodwhile still a member of the Retirement System. Thiswould mean that paymentmust be made at least threeyears prior to the date of retirement. This seemed to be consistent with other provisions of the retirement law and especiallywith Section 5, S.B. 290, 54th Texas Legislature, 1955,which specifies~ the service requirements underwhich a 'member"may qualify for retirement. Section 2, S.B. 290, specifically provides that 'membership'terminatesupon retirement. No provisions (exceptfor specific Bills increasing benefits) could be found for adjustingbenefits after retirement except the authority to correct an error.

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RoPn,Frank M. Jackson, Rage 5 (M-194)

8, I,

. . . The controlling statutory provisions, are Subdivis~ions (a)and (b) of Section 2 of Article 6228a+4 ofVernon's Civil Statutes (Acts 1961, 57th Leg., R.S., Ch. 22, p. 35, S-B-.99) which read as follows:



### “(a) In the event application for such purchase is made within three (3)years and payment within five (5)years from date of membership in this System, ~currentservice creditwill be oranted, imrrediptelv

uoon oavment.
"(b) In the event application for such purchase is not made within three (3)years or pay-, ment not made within five (5)years from date'of membership in this System, mt service credit will be orantsd three (3)years after~the date of flvment." (Rmphasisadded.)
Section 3 of thisAct expressly repeals all laws parts of laws in conflict therewith. The Emergency Clause

"Sec. 4. BmergencyClause. The fact that laws permitting teachers to,receive credit for service and to purchase out-of-stateservicehave expired and no, legal prwisions nw exist per-, mitting such generally accepted righ,ts, creates
an emergency and an imperativepublic necessity that the ConstitutionalRule requiringbills to be read on three several days in each House be suspended, and said Rule ishereby suspended: and that thisAct shall take effect and be in force from and after its passage,and it is so enacted."

The controlling provisions in these Subdivisions (a) and (b)are thosewhich relate tot

(l)'thedate of payment: (2)the timewhen current service credit will be granted.

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Hon. Franlq M. Jackson, page 6 (M-194)

I Subdivision (b)rather than Subdivision (a) is applicable to the facts presented. Subdivision (b) is couched in plain and unambiguous language in specifying that "current service creditwill be qranted three (3)years after the date of payment." (Emphasisadded.) The Legislature did not add to said provisionwords to the effect, "in the event such member has not retiredbefore the end of such three-year period," We believe that paymentmay be made at any time prior to retirement and that the service credit may be granted three years after the date o'fsuch payment even though the member of the Retirement Systemhas fully retired afterhe made the payment and before expiration of the three years after the date of such payment, as the Legislaturedid not provide otherwise. Your second question is answered in the negative, and your third question is answered in the affirmative. For service in Texas, the date of retirementwill control as to the age of the member and the beneficiary. For out-of-stateservicewhich has been purchasedwithin less than threeyears prior to retirement. the age of the member and the beneficiary on the subsequentdate which is threeyears from the date of paymentwill control in computing the additionalbenefits.

Our view isbased primarilyupon the statutory language of Article 6228a-4, Section 2 (b). our position is f~urthersustainedby the fact thatArticle 6228a-4, enacted in 1961, appears to have for its primary purpose removal of the time limit provided in Article 2922-1, Section 14, enacted in 1955,which placed rather strict limitationsupon the time within which members of the Retirement Systemwere required to make application for purchase of equivalent current service credit.

Section 8.42 of the Rules and Regulations of the Board of Trustees for the Teacher Retirement System of Texas, relative to the purchase of credit for out-of-state service, provides that if applicationand payment are later than specified in Section 8.41,which is the present case, credit cannot be allowed
sooner than threeyears after payment: and Section 8.6 provides that if payment is made but the member does not serve long enough in Texas to receive retirement credit for out-of-state service, paymentwill be refundedwith interestat the rate of 2%% for each whole schoolyear. This rule would not apply to the fact

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non. Frank M. Jackeon. page 7 (M-194)

situation presented. The Board has no authority to add requirements not set out in the statutes

SUMMARY -

A member of the Teacher Retirement System may purchase current service credit for out-ofstate service less than threeyears before the date of his retirement, under the facts stated. For out-of-stare servicewhich has been purchased within less than three years prior to retirement. the age of the member and the beneficiary on the subsequent datewhich is three years from the date of paymentwill control in computing the additionalbenefits.

Preparedby ~BillAllen Assistant Attorney General

APPROVED: OPINION COMMITTEE

Hawthorne Phillips. Chairman Kerns Taylor, Co-Chairman W. V. Geppert W. 0. Shultz John Grace John Banks

A. J. CARUBBI, JR. Staff Legal Assistant

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