THEA~-~oRNI~Y GENERAL

OFTEXAS

November 24, 1959

Honorable Frank M. Jackson Executive Secretary Teacher Retirement System of Texas Austin, Texas Opinion No. WW-740

Re: Questionsas to amounts of the salariespaid to em-' ployees subject to the Teacher Retirement Law, which must be withheld and paid monthly to the RetireDear Mr. Jackson: ment System.

Your recent request for an opinion states that the Board of Trustees of the Teacher Retirement Systemhas ruled that the full sixper cent (6%) of the salariespaid to employees subject to the Teacher Retirement Law must be withheld and submittedmonthly to the Retirement Systemuntil the employee has received a salary of $8,400, of which the aggregate sum of $504 has been withheld and submittedto the Retirement System. You ask if this procedure by the Board is in accordancewith the Teacher RetirementAct.

Subsection 1 (b) of Section 10 of Article 2922-1, Vernon's Texas Civil Statutes,provides as follows:

"Eachemployer on each of its payrolls shall cause to be deducted from the salary of each member, fiveper cent (5%)of his earnable compensation for each payroll period prior to September L, 1957, and sixper cent (6%) of his earnable compensation for each payroll period thereafter;provided that the
sum of the deductionsmade during any one year shallnot exceed fiveper cent (5%) of the member's annual compensation,or One Hundred Eighty Dollars ($180.00),whichever is the lesser, for any year ending on or before August 31, 1957, nor more than sixper cent (6%)of his annual compensation,or Five Hundred Four- ..

Honorable Frank M. Jackson,page 2 (W-740)

Dollars ($504.00),whichever is the lesser, for any year ending after September 1, 1957. In determining the amount earnableby a member within a payroll period, the State Board of Trusteesmay consider the rate of annual compensationpayable to suchmember on the first day of the payroll period as continuing throughout suchperiod, and it may omit deduction from compensation for any period less than a fullpayroll period if the person was not a member on the first day of suchperiod, and to facilitate the making of deductions, it may modify the deduction required of any member by suchan amount as shallnot exceed one-tenth (l/10)of such one per centum (l$) of the annual compensationupon the basis ofwhich such deduction is to be made."

Subsections l(a) and (b) of Section 11,provide as follows:

"1

. The collectionof members' contributions shallbe as follows:
"(a) Each employer shall cause to be deducted on each and every psyroll of a member for each and every pay roll period subsequentto the date of establishmentof the Retirement System the contributionspayable by suchmember, as provided in this Act. Each employer shall certify to the treasurer of said employer on each and every pay roll a statementas vouchers for the amount so deducted.
"(b) The treasurer or proper disbursing officer of each employer on authority from the employer shallmake deductions from salariesof members as provided in this Act, and shall transmit monthly, or at such time as the State Board of Trustees shalldesignate, a certified copy of the pay roll, and the amount specifiedto be deducted shall be paid to the Executive Secretaryof the State Board of Trustees; and after making a record of all receipts, the said Board shallpay them to the Treasurer of the State of Texas, and by him be credited to Teacher Savings Fund, and such funds shallbe deemed as appropriated for use according to the provisions of this Act.

. , .'Honorable Frank M. Jackson,page 3 (w-740)

The above quotedprovisions of the Teacher Retirement Act clearly provide that on and after September 1, 1957, that there shall cause to be deducted from the salary of each member sixper cent (6%) of his earnable compensation for each payroll period; provided, however, that the sum of the deductionsmade during any one year shallnot exceed sixper cent (6%) of the member's annual compensationor $504.00,whichever is the lesser, for any year ending after September 1, 1957. Accordingly,members whose annual compensationsexceed $8,400.00 shouldhave deducted from their pay a full sixper cent (6%) of his earnable compensation for each payroll period until the sum of such deductions for any one year shall equal $504.00,after which the deductions for suchyear shall cease.

You are therefore advised that it is our opinion that the Board of Trustees of the Teacher Retirement Systemhas correctly construedand applied the law in this respect.

SUMMARY

The full sixper cent (6%)of the salaries for each payroll period paid to employees subject to the Teacher Retirement Act, should be withheld and remitted to the Teacher Retirement System;provided, however, that the
sum of deductions for any year ending after September 1, 1957, shallnot exceed sixper cent (6%)of the member's annual compensation
or $504.00,whichever is the lesser.

Yours very truly,

WILL WILSON Attorney General of Texas

LP:me:zt APPROVED: OPINION COMMITTEE W.V.Geppert, Chairman J.C.Davis, Jr. Houghton Brownlee, Jr. Paul Floyd Ray Loftin

REVIEWED FOR THE ATTORNEY GENERAL BY: Morgan Nesbitt - Leonard Passmore Assistant