Court Opinion

ID: 4141428
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:10:35.230123+00
Date Added: 2024-06-11T14:49:13.195295
License: Public Domain

THE     ,~TORNEY           GENERAL

                      OF     TEXAS

Mrs. B.B. Sapp; Director and Executive Secretary
Teacher Retirement System of ~Texas
Austin. Texas
Dear Mrs. Sapp:            Opinion Number O-4908
                           Re: Investment of moneys now In sus-
                                pense account.
       We have received your letter of February 16, 1943, which
we quote in part as follows:
       "The Teacher Retirement System respectfully
    requests an opinion from your Department on the
    following questions:
       "This year due to the emergency so many
    teachers are changing from school to school it
    makes It very difficult to clear reports. As
    a result we have,in Fund No. 63, known as a
    suspense account, approximately $400,000. This
    mqneg is Idle and as a result the Interest rate
    for teachers on their investments will be mater-
    ially affected; since within a few months these
    reports will be cleared and this money properly
    deposited, would we have the right to invest
    approximately three fourths of this money held
    In suspense account in order to receive interest
    and thereby give the members of the Teacher Re-
    tlrement System full benefit of their investment?
    Would It be within our rights to transfer from
    Fund No. 63 (Suspense Fund) a lump sum to Fund
    No. 103 and mark it Undistributed?
       "I am herewith outlining the method the
    Teacher Retirement System will use in exhaust-
    ing the amount transferred to Fund No. 103, Un-
    distributed. Each day reports will be completed
    to the extent that all credits can be applied to
    the individual accounts. Such reports will be
    listed daily by Register Numbers. If the reports
    Include membership fees, such fees will be trans-
    ferred direct from Funds No. 63 to Fund No. 108.
    All credits to individual accounts will be applied
    against the Fund No. 103 Undistributed Fund until
Mrs. B.B. Sapp, page 2          o -4908

   the Fund is completely exhausted. The Summary of
   Deposits to Funds submitted to the State Treasurer
   will not include the amount applied against Fund
   No. 103 Undistributed. This amount will be carried
   In a different column to be used in the office of
   the Teacher Retirement System only. The Teacher
   Retirement System will exhaust the complete 103
   Undistributed Fund before August 31, 1943.
       "We will appreciate your immediate attentionin
    this instance because this amount of money idle, as
    I have aforesaid, will seriously affect our interest
    credit to the individual teachers' accounts."
       Section'8 of the Teacher Retirement Act (Article 2922-1,
Vernon's Annotated Civil Statutes) sets up seven different
funds for teacher retirement moneys. You have informed us that
Fund No. 103, menti-onedIn your letter is the Teacher Saving
Fund. Subsection 1 of Section 8 provldes in part as follows:
       "1. The Teacher Saving Fund.
      "(a) The Teacher Saving Fund shall be a fund
   1n which shall be accumulated regular five (5) per
   centum contributions from the compensation of mem-
   bers, including current interest earnings. Contrl-
   butions to and payments from the Teachers Saving
   Fund shall be made as follows:
              l   l   *   *fl
       "lb)
       Subsection (l), Section 7 of the Retirement Act reads
as follows:
      "Sec. 7. (1) The State Board of Trustees
   shall be the trustees of the~~severalfunds as
   herein created by this Act, and shall have full
   power to invest and reInvest such funds subject
   to the following limitations and restrictions:
   All retirement funds, as are'received by the
   Treasury of the State of Texas from contribu-
   tions of teachers and employers as herein pro-
   vided, may be invested only in bonds of the
   United States, the State of Texas, or counties,
   or cities, or school districts have not default-
   ed in principal or interest on bonds within a
   period of ten (10) years, or in bonds issued by
   any agency of the United States Government, the
   payment of the principal and interest on which
   Is guaranteed by the United States; and in in-
Mrs. B,B. Sapp, page 3         o-4908

    terest-bearing notes or bonds of the University
    of,Texas Issued under and by virtue of Chapter
    40, Ac,tsof the Forty-third Legislature, Second
    Called Session; provided that a sufficient amount
    of said fund,sshall be kept on hand to meet the
    immediat,epayment'of'the amounts that may become
    due each year as provided in this Act. The State
    Board of Trustees shall have full power by proper
    resolution to hold, purchase, sell, assign, trans-
    fer, and dispose of any of the securities and ln-
    vestments in which any of the funds created herein
    shall have been invested, as well as the proceeds
    of sais Fnvestments and any moneys belonging to
    said funds, provided tha,tany money on hand shall
    be subject to the State Depository Laws of Texas."
        The suspense account is a fund set up by the State Board
 of Trustees of the Retirement System for retirement moneys
 received by the Retirement System which but for some error in
 the reports of the school district or other employer or in the
 amount of money sent would be placed In the Teacher Saving Fund
 and the Expense Fund. In most instances the error Is minor and
 will in a short time be corrected. Also, in the great majority
 of cases the error concerns only one or two teachers of the
 employer whereas the reports and contributions fully and ad-
 equately cover all the remaining teachers of such employer.
 In other words, because of an error which affects only one or
 two teachers of the employer, the report must necessarily be
 held up until the error is corrected. The contributions of
 all the teachers covered by the report of the employer In the
 past have been placed in the suspense account until the error
 is corrected. You now wish to know whether part of the moneys
,presently in the suspense account may be transferred to the
 Teacher Saving Fund in an undistributed lump sum, earmarked
 as such, and then itemized and properly-distributed as the
 reports are cleared up. In other words, you wish to transfer
 part of the suspense account, which part you feel offers very
 little doubt and feel certain will promptly be cleared, -and
 then moneys will thereafter be cleared In the Teacher Savlng
 Fund instead of first being cleared in the suspense account.
 and-then transferred to the Teacher Saving Fund. In this man-
 ner, such moneys may promptly be invested and start earning
 Interest.
       It seems to us that this is a matter properly lying
within the discretion of the State Board of Trustees. The con-
tributions of the members of the Retirement System under the
Act are to be placed in the Teacher Saving Fund (Subsection (1)'
of Section 8) D The Act is silent as to the means whereby-errors
in reports and in contributions are to be corrected, Of course,
Mrs. B.B. Sapp, page 4         0 -4908

it Is contemplated that such errors will be corrected, and we
think that the means of such correction are for the State Board
of Trustees to determine.
       Subsection (7) of Section 6 provides aa follows:
       "(7) Subject to the limitations of this Act;
    the State-Board of Trustees shall, from time to
    time, establish rules and regulations for ellgi-
    bility of membership and for the admlnistratlon
    of the funds created by this Act and for the trans-
    action of Its business."
       In answer to your question, it is our opinion that if
the State Board of Trustees in its discretion determines that~
the transfer of moneys from'the suspense account to the Teacher
Saving Fund, as outlined, is reasonable and proper, we know of
no legal inhibition to the same.
                                 Very truly yours
                             ATTORNEY GRNRRAL OF TRXAS
                                 By a/George W. Sparks
                                      George~~W.Sparks
                                      Assistant
GWS/s/wc

APPROVE) FRR 26, 1943
s/Grover Sellers
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chalrman