              THE    ATTORNEY            GENERAL
                          OF    TEXAS
                      Ausn~.TExan       78711

                       January 12, 1968


Honorable Frank M. Jackson              Opinion No. M-194
Sxecutive Secretary
Teacher Retirement System of Texas      Re:   Whether a member of the
314 West 11th Street                          Teacher Retirement System
Third Floor, Lowich Building                  may purchase current serv-
Austin, 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.

          In your request for an opinion from this office you
state the following:

          "A member of the Teacher Retirement System
     failed to make application to purchase credit
     for out-of-state service withinthree years and
     payment for such service within five years of
     the date of his membership in the Teacher Re-
     tirement System. He later made application to
     purchase out-of-state credit. Under these cir-
     cumstances, we respectfully present the follow-
     ing questions for your opinion.

          “1.  May a member of the Teacher Retirement
     System purchase current service credit for out-of-
     state service less than three years before the
     date of his retirement?

          "2 , If the answer to Question No. 1 is in
     the affirmative, would the out-of-state service
     for which payment was made be included in com-
     puting the member's retirement benefit 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 af-
    firmative and Question No. 2 is negative, would
    the member's retirement be adjusted after retire-
    ment to include credit for the out-of-state
    service when three years from the date of pay-
    ment have expired?

           "The above questions are based upon the
    premise   that (a) the member has a minimum of ten
    years of creditable service in Texas and two
    years of creditable service in Texas for each
    year of out-of-state service purchased, and (b)
    the out-of-state service for which payment was
    made was in a public school system maintained
    in whole or in part by another state or territory
    of the United States or by the United States for
    children of United States citizens.

            "These questions are pertinent to the specific
    situation outlined below. Mr. Earle H. Fischer,
    a member of the Teacher Retirement System from
    Amarillo, Texas, first inquired in April of 1964
    about purchasing current service credit with 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 interpretations of the laws
    governing the purchase of credit for out-of-state
    service   1 He subsequently made the following pay-
    ments:

                           Number of
        "Date                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 the Amarillo
    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 retire-
    ment age in that particular school district. Mr.
    Fischer was then informed that if he should retire
    before May 31, 1970, the eight years of out-of-
    state service for which payment was made on April
    5, 1967. and May 8, 1967; could not be used in
    determining his benefits and that deposits made
    far these years would'be refunded to him. The
    years for which 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-state service is in error. He
    has requested that he be allwed to retire  on May 31.
    1969, with his benefit computed without using the last
    eight years of out-of-state servioe for which pay-
    ment was made, then have his benefit adjusted three
    years from the date of payment for the additional
    out-of-state service to include'such service.

         "Mr. Fischer became 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.

         "The basic Teacher Retirement Law is codified
    as Article 2922-1, Vernon's Texas Civil Statutes.
    Section 14 pertains to out-of-state service. This
    law was enacted as S.B. 290, 54th Texas Legislature,
    Regular Session, 1955. The provisions of this Sec-
    tion permitting a person who was a member prior to
    1955 to purchase credit for out-of-state service ex-
    pired three years after the effective date of the
    Act.

         "Section 2 of S.B. 99, 57th Texas Legislature,


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



    Regular Session, 1961, (Article 6228a-4, Vernon's
    Texas Civil Statutes) again provided for the pur-
    chase of out-of-state service. This Bill contained
    no provision for regulating the purchase or com-
    puting the payment for such service. It did re-
    peal 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 force with 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) consecutive years, shall
    forfeit the privilege of purchasing any credits
    for which deposits have not been made.' This por-
    tion seemed to conflict with the new provisions of
    S.B. 99.

         "Since the enactment of S.B. 99, the adminis-
    trative construction of Section 2(b) has been that
    all service credit, unless purchased under the pro-
    visions of Section 2 (a), purchased by a 'member'
    would be granted three years after the date of pay-
    ment, but that all service credit must be validated
    by a three-year waiting period while still a member
    of the Retirement System. This would mean that
    payment must be made at least three years prior to
    the date of retirement. This seemed to be consistent
    with other provisions of the retirement law and
    especially with Section 5, S.B. 290, 54th Texas
    Legislature, 1955, which specifies~the service re-
    quirements under which a 'member" may qualify for
    retirement. Section 2, S.B. 290, specifically pro-
    vides that 'membership' terminates upon retirement.
    No provisions (except for specific Bills increasing
    benefits) could be found for adjusting benefits af-
    ter retirement except the authority to correct an
    error.


                            -927-
 .    .




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 of Vernon'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 pur-
     chase is made within three (3) years and payment
     within five (5) years from date of membership in
     this System, ~current service credit will be oranted,
     imrrediptelvuoon oavment.

          "(b) In the event application for such pur-
     chase 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." (Rmphasis added.)

          Section 3 of this Act expressly repeals all laws
parts of laws in conflict therewith. The Emergency Clause

           "Sec. 4. Bmergency Clause. The fact that
     laws permitting teachers to,receive credit for
     service and to purchase out-of-state service have
     expired and no, legal prwisions nw exist per-,
     mitting such generally accepted righ,ts,creates
     an emergency and an imperative public necessity
     that the Constitutional Rule requiring bills to
     be read on three several days in each House be
     suspended, and said Rule is hereby suspended: and
     that this Act 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 those which relate tot

          (l)'the date of payment:
          (2) the time when current service credit will
     be granted.


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                                                         .    .




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



              Subdivision (b) rather than Subdivision (a) is appli-
I
    cable to the facts presented. Subdivision (b) is couched in
    plain and unambiguous language in specifying that "current
    service credit will be qranted three (3) years after the date
    of payment." (Emphasis added.) The Legislature did not add
    to said provision words to the effect, "in the event such mem-
    ber has not retired before the end of such three-year period,"
    We believe that payment may be made at any time prior to re-
    tirement and that the service credit may be granted three
    years after the date o'fsuch payment even though the member of
    the Retirement System has fully retired after he made the pay-
    ment and before expiration of the three years after the date of
    such payment, as the Legislature did 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 retirement will control as to the age of the member
    and the beneficiary. For out-of-state service which has been
    purchased within less than three years prior to retirement. the
    age of the member and the beneficiary on the subsequent date
    which is three years from the date of payment will control in
    computing the additional benefits.

              Our view is based primarily upon the statutory language
    of Article 6228a-4, Section 2 (b). our position is f~urthersus-
    tained by the fact that Article 6228a-4, enacted in 1961, appears
    to have for its primary purpose removal of the time limit pro-
    vided in Article 2922-1, Section 14, enacted in 1955, which placed
    rather strict limitations upon the time within which members of
    the Retirement System were required to make application for pur-
    chase 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 application and payment are later than specified in
    Section 8.41, which is the present case, credit cannot be allowed
    sooner than three years 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,
    payment will be refunded with interest at the rate of 2%% for
    each whole school year. This rule would not apply to the fact


                                     -929-
.    .




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



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

                         -SUMMARY
          A member of the Teacher Retirement System
     may purchase current service credit for out-of-
     state service less than three years before the
     date of his retirement, under the facts stated.
     For out-of-stare service which has been pur-
     chased within less than three years prior to re-
     tirement. the age of the member and the bene-
     ficiary on the subsequent date which is three
     years from the date of payment will control in
     computing the additional benefits.




Prepared by ~Bill Allen
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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