Hon. William G. Button 

Chairman, Board of Regents 

East Texas State University 

Commerce, Texas 75428 

Dear Sir: 

Opinion No. W-595 

Re: Whether the employees' 

contributions under the 

Optional Retirement Program (Article 2922-li, 

V. C. S.) may also be used 

to purchase life insurance 

benefits. 

You have reauested the opinion of this office concerning 

the above question. In connection with your request you have 

furnished us with the following information. 

"This request has come after a recognition 

on the part of the University Insurance Committee 

that most of the faculty who have exercised 

their option to go with the Optional Retirement 

Program (ORP) have not taken insurance to cover 

the death benefits they are surrendering when 

they leave the Teacher Retirement System of Texas. 

The Committee believes that part of this reluctance 

lies in the fact that currently a faculty member 

would have to pay for such coverage, in addition to 

the regular six percent contribution he makes to the 

ORP. The University believes that the law actually 

permits the various carriers to offer such life 

insurance death benefits within the program. HOWever, it is felt that the Attorney General's opinion 

is needed to make this clear. 

-2835- 
. 

Ron. William G. Button, page 2 (M-595) 

"Our belief that this inclusion of life 

insurance death benefits within the ORP is based 

upon the following factors: 

" 1 . The title of the Act, as contained in the 

Session Laws 60th Legislature Laws 1967, 

page 1955 reads: 

'An Act concerning an optional retirement 

program for teachers and administrative 

personnel employed by state-supported 

institutions of higher education and annuity 

and insurance contracts issued for these and 

related purposes: and declaring an emergency.’ 

"2 . Section 1 of the Act uses the broad language 

'Retirement Program' as opposed to the more 

restrictive 'Annuity,' and speaks of an 

intention to provide 'full and complete 

retirement benefits.' 

“3. The defined term, 'Optional Retirement Program' 

speaks only of 'annuities.' But, Section 4. 

which authorizes the purchase of 'annuity 

contracts,‘ ignores the defined term and refers 

to 'annuity and group insurance contracts made 

pursuant to a benefit proqram authorized by the 

Governing Board,' as if to recognize a distinction 

between a strict annuity and an annuity contract 

containing special features adding up to a 

'benefit program' as opposed to the defined 

'Optional Retirement Program."' 

We quote the following pertinent provisions from Article 

2922-li, Vernon's Civil Statutes, the Optional Retirement 

Program: 

"Sec. 2. As used in this Act, unless the 

context otherwise reguires: 

. " .a.. 

II . . . . 

-2836- 
. ’ 

Hon. William G. Button, page 3 (M-595) 

"(f) 'Optional Retirement Program' means the 

optional retirement program created by this Act 9 

provide fixed or variable retirement annuities. 

including retirement unit annuity certificates 

of participation for faculty members. 

II 

. . . . 

"Sec. 4. In administering the Optional 

Retirement Program a Governing Board may provide 

for the purchase of annuity contracts from any 

insurance or annuity company qualified and admitted 

to do business in this state. Any life insurance or 

annuity company aualified and admitted to do business 

in this State shall be exempt from the payment of all 

franchise or premium taxes as to all annuity or croup 

insurance contracts made pursuant to a benefit proqram 

authorized by the qoverninq board of an institution 

of higher education, or by any private non-profit 

educational institution of higher learning, which 

benefit program is paid for in whole or in part from 

the funds of such institution." (Emphasis added.) 

We first note that the definition of "Optional Retirement 

Program" contained in Section 2(f), supra, does not encompass 

a life insurance feature. If the Act contains any authorization for the inclusion of life insurance as a part of the 

Optional Retirement Program, such can be found only in 

Section 4. A close analysis of the terms of Section 4 reveals 

only an authorization for annuity contracts, since the sentence 

that contains the phrase "group insurance contracts" relates 

only to the exemption of insurance companies from certain 

franchise or premium taxes. 

We are unable to infer an intent to alter the expressed 

definition of the term "Optional Retirement Program", so as to 

include the authority to purchase life insurance on any basis. 

-2a37- 
1 . 

Hon. William G. Button, page 4(*595) 

As further discussion of this problem, we note from your 

letter of request that it was contemplated that the life 

insurance protection would be written as an integral part of 

the annuity contract purchased by each individual faculty 

member. Even assuming the most liberal construction possible, 

Section 4, supra, could only be construed as authorizing group 

life insurance, and not individual policies. Going even 

further, we observe that State colleges and universities are 

specifically authorized to enter into group life insurance 

contracts on behalf of all their employees, by virtue of 

Article 3.50, Texas Insurance code. See Attorney General's 

Opinion M-502 (1970). Life insurance protection is thus 

available without the necessity of involving the Optional 

Retirement Program. 

You are accordingly advised that it is the opinion of 

this office that the Optional Retirement Program authorized 

by Article 2922-li, Vernon's Civil Statutes, is limited to 

fixed or variable retirement annuities, and the statutory 

program does not contemplate the life insurance feature. 

SUMMARY 

The Optional Retirement Program authorized by Article 29227li, V.C.S., is limited: 

to fixed or variable retirement annuities, and 

the statutory program does not contemplate the 

life insurance feature. 

General of Texas 

Prepared by Malcolm L. Quick 

Assistant Attorney General 

-2838- 
Hon. William G. Button, page 5 (M-595) 

APPROVED: 

OPINION COMMITTEE 

Kerns Taylor, Chairman 

Bill Allen, Acting Co-Chairman 

Jack Sparks 

Fielding Early 

Alan Minter 

John Richards 

MEADE F. GRIFFIN 

Staff Legal Assistant 

ALFRED WALKER 

Executive Assistant 

NOLA WHITE 

First Assistant 

-2a39-