                             March 30,   1950

     Hon. Gordon H. Lloyd           Opinion No. V-1023.
     Executive   Seoretary
     Employees Retirement           Re: Aaceptenee of contri-
     System of Texas                    butlons to Retirement
     Austin, Texas                      System of a former
                                        member for the period
                                        spent in military ser-
                                        vice in 1948 and 1949,
                                        the party having re-
                                        turned to State employ-
     Dear Hr. Lloyd:                    ment.
                 Your request for an opinion reads as follows:
_-               "Please favor us with your opinion, based
            on the following facts and interpretingSection
            V, SubsectionIi of H.B. 168, passed by the Reg-
            ular Session of the 50th Legislature.
                 "Mr. A, an employee of one of the State De-
            partments, became a member of the Rmployees Re-
            tirement S stem on September 1, 1947. During
            August, 19t8, Kr. A left State employment and
            entered the Army. He received his discharge Deo-
            ember 31, 1949 and immediatelyreturned to State
            employment. Hr. A now desires to make contribu-
            tions to the Retirement System for the one year
            and four months while absent from State employ-
            ment during this period of Mli,tary Service and
            desires such contributionsto be deduoted from
            his monthly salary warrant and remitted to the
            Employees RetirementSystem as hkcontributions
            for such period of time.
                 n1. Is the Bmployees Retirement System of
            Texas authorizedto accept contributionafrom Hr.
            A for the one year and four months while in Wili-
            tary Service, based on fLve peraent of the month-
            ly salary he was receiving at the time he entered
            Military Service?
                 "2. If the answer to Question One is yes,
            can the State make Its matching contrlbutiona
Eon. Gordon R. Lloyd, page 2    (V-1023)


     to the Employees Retirement System for the
     one year and four months?

           "3. If the answer to Question Two is
     yes, then would the Funds from which the em-
     ployee was reoeivinghLs salary at the time
     of leaving to enter Military Service make
     the Stat8 oontributiona,or would the Fund
     from whiah the employee received his salary
     after returning to State employment make ths
     Stat8  contributions?
          “4.   Would Mr. A receive tenure servioe
     for retirement purposes for the one year and
     four months while   in Willtary Service?"
          Article 6228s, Section 5, SubseotlonH, Ver-
non's Civil Statutes, to which you refer, reads 8s fol-
lows:
          "Il. Credit for Military Service.
          "During the period of time the United
     States is in a state of war and for a period
     of twelve (12) months thereafter,time spent
     by a member of the Employees RetirementSys-
     tem (1) in the Armed Forces of the United
     States and their auxlliarlesor In the Armed
     Forces Reserve and their auxiliaries,or in
     the American Red Cross, or (2) in war work as
     a direct result of having been drafted or con-
     scripted Into said war work, shall count to:
     ward membership service. In addition, a member
     of the Employees RetirementSystem shall be
     permitted to contribute each year to the Re-
     tirement System a sum not to exceed the amount
     contributedby him to said Retirement System
     during the last year that he was employed as
     a member under the provisions of the Retire-
     ment Act. The funds so contributedshall be
     deposited to the credit of the member's indi-
     vidual account and shall be treated in the
     same manner as funds contributedby the mem-
     ber while he was employed by the State. Any
     employee of the State who entered military
     service prior to the establishmentof the Re-
     tirement System, either by induction or en-
     listment,will be entitled to prior serviae
     Hon. GordonR. Lloyd, page 3   (V-1023)



         oredit for the time prior to establishmentof
         the System and membership service for the time
         subsequentto the establishmentof the System.
         Any employee so absent shall have the r.ightto
         olontrlbuteto said System either during his
         aervLce with Armed Foroes or upon return an
         amount equal to the contrrbutionawhioh would
         have been made by him based on his compensa-
         tion earnable at eommenaementof his-abseuoe,
         provided such employee re-entersthe service
         of the State vithln sixty (60) days after the
         termination of his mllltary service and eleots
         to becom8 a member of the System within sixty
         (60) days after such re-employment.

               "In aomputing the average prior service
          compensationfor employees who served Ln the
          Amed Forces 01%leaves of absenae from the
          State and subsequentlybecame members of the
          System, that time spent in the Armed Forces
          shall be counted as part of the ten (10) years
,-
          Immediatelypreceding the enactment of the law
          and the basis for oompensationshall be the
          same that was earned at corrmenaementof his
          leave of absenae from the State."
              Se&ion 8 of Article 6228a       provides, in part:
                “A. The amount contributedby each mem-
          ber of the RetirementSystem shall be five per
          cent (5) of the regular annual oompensation
          paid to each member. The amount contributed
          by the State of Texas to the RetirementSys-
          tem shall not exceed during any one (1) year
          five per cent (5$) of salaries of ell~members,
          disregardingsalaries in amounts in exoess of
          Three Thousand, 91x Hundred Dollars ($3,6oO),
          providing the total amount contributedby the
          State during any one (1) year shall at least
          equal the total amount contributedduring the
          same year by all members of the ,Retirement
          System; provided further that all contribu-
          tions made by the State shall be from and
          charged to the respectivefunds appropriated,
          allocated, and provided to pay the salary or
          compensationof the employee for whose bene-
          fit the contribution 2s made. . . D
               “2.   State Membership AccumulationFund.
Eon. Gordon H. Lloyd, page 4   (V-1023)


          %!he State Membership AocumulationFund
     shall.be the fund in which shall be accumu-
     .latedall contributionsmade to the Employees
     Retir8m8ntSystem by,the Stat8 of Texas for
     the purpose of providing upon the r8tiPsment
     of eaah member an amount equal to swh mem-
     her'saccumulatedoontrlbutlon;and:from
     whioh shall b8 transferredto the Eemberahlp
     Annuity Reserve Fund at the retirement of a
     smmber an amount equal to the aooumu3.ated
     contributionsof the member, Contributions
     to and payments from this fund shall b8 mede
     as follows:
          "a. The Stat8 of Texas shall pay each
     year in equal monthly installmentsinto th8
     Stat8 I68mb8rShiLp
                      AccumulationFund an amount
     equal ~toa per oentum of the contributions
     of the membera during such year, which shall
     be calaulatedby the Aotuary and oertifled
     to the Comptrollerby the Stat8 Board 'of
     Trustees as b8ing the neoessary and requir8d
     per oentum to malntein a reserve in this fund
                                                      4




     equal to the present and prospectiveliablll-
     ties of the fund o q e
          "B. Collection of Contributions.
          v2. The collection of the State's con-
     tributions shall be made as follows:
          "a. From and after the date of th8 8s-
     tablishmentof the smmbershlp and full opera-
     tion of the RetirementSystem created by this,
     Aot takes effeat there is hereby ellooated and
     appropriatedto the Emplogees RetirementSys-
     tem of Texas, in ecoordanoewith this Act from
     the several funds from which the ~8mploy8es~.
     benefited by this Bat; receive their respec-
     tive salaries, a sum equal to five per cent
     (5$) of the total compensationpeid to the
     said ~esp8otiv8 employees who are membera of
     said RetirementSystem and whose colapsnsation
     IS paid from funds directly oontrolled by the
     State. The State Boerd of Trustees shall cer-
     tify to theStat Comptroller of Public Aa-
     counts and the Stat8 Treesurer at the end of
     8ech month the total amount of oomp8I3aatiOn         -
     paid sucrhmembers of th8 R8tiZWimOnt~SyStOm,
Hon. Gordon H. Lloyd,'page 5   (V-1023)


     and the State Comptroller shall thereupon
     transfer five per oent (5$) of this amount
     from the said respeotivefunds from which
     said employees are paid to the State Employ-
     ees RetirementFund; and which money'in said
     fund is hereby appropriatedfor the purposes
     provided by this Act for the balance of the
     fiscal year 1947 and the fiscal year 1948.
     Appropriationsfor the enaui biennium shall
     be made aocordlng to Section3 , SubsectionB,
     Part 2, Paragraph a, b, snd a of this Act.
           "b. Thereefter, on or before the first
     day of Wovember next preceding each Regular
     Session of the Legislature, the State Board
     of TrUIt88S shall certify to the Stat8 Board
     of Control for its review and adoption the
     amount neoessary to pay the aontrlbutionsof
     th8 State of T8XaS to the Rmployeea Retire-
     ment System for the,ensuing biennial. This
     amount shall equal five per cent (!!$)of the
     total oompensationpaid membera of the Retire-
     ment System and ahall be inaluded in the bud-
     get of the State whioh the Governor submits
     to the Legislature. The State Board of Trua-
     tees shall certify on or before August thirty-
     first of each year to the State Comptroller
     of Public Aocounts and the State Treasurer
     the estimated amount of oontributionsto be
     received from members during the ensuing year.
          "c. All moneys hereby alloaated and ap-
     propriatedby the State to the Bmployees Re-
     tirement System shall be paid to the Rmployees
     Retirement System in equal monthly install-
     ments based upon the annual estimate by the
     State Board of Trustees of the IEmployeesRe-
     tirement System of the contributionsto be
     received from the members of said System dur-
     ing said year, provided further in the event
     said estimate of the contributionsof the mem-
     bers of the System shall vary from the actual
     amount of the employees'oontributionaduring
     the year, then such adjustment shall be made
     at th8 olose of eaah fiscal year as may be re-
     quired. Each of said monthly installments
     shall be paid into the State Membership Aocu-
     mulstion Fund and the Prior Service Annuity
Hon. Gordon Ii.Lloyd, page 6   (V-1023)


     Reserve Fund in the proportionateamount cer-
     tified by the ,StateBoard of Truste8s.n
          The following provisionswere made in Senate
Bill 391, Acts 5Gth Leg., 1947, ch.kOG,,,p.
                                          91:
          "(29) All moneys oolleoted and reoelved
     by the,Employee'sRetirement System of Texas
     under the provisions of House Bill Ro. 168,
     Acts of the Regular Session of the.50th Leg-
     islature, 1947, during the biennium beginning
     September 1, 1947, together with the balances
     of swh funds on hand at the beginning of
     each fisoal year of the biennium, are hereby
     appropriatedto the Employee's Retirement Sys-
     tem of Texas for the purpose of oarrying out
     the provisions of said Act. The Employee's
     R8tiXWSOntSystem Is hereby authorized to em-
     ploy a suffioientnumber of employees to carry
     out the terms and provisions of said AOt, but
     in no event shall salaries be paid in exoesa
     of the amount paid for the same or similar
     poo;;;nt in any department of the State gov-
            l




          Appropriationsfor Stat8 Departments and Agen-
cies were made in House Bill 322, Aots 51st Leg., R.S.
1949, ch.615, p.1239. X8 quote the following provislons
from Howe Bill 322:
          "There is hereby allocated and appropriat-
     ed to the Employees RetirementSystem of Texas,
     In aooordancewith H.B. Eo.168, Acts of the 50th
     Legislature,1947, Regular 38saIon, from the
     several funds from whioh the employees receive
     their respectivesalaries and/or compensation,
     sufficient amounts to provide the State con-
     tributions neoessary to equal the five (s) per
     aent of the oompensatlonof the members, oon-
     tributed by them to the RetirementSystem, as
     provided in the RetilrtmentAot."
          It is our opinLon that the State la authoris-
ed to aocept contributionsfrom Mr. A for the tLm8 spent
by him in military serviae in 1948 and 199.   It is pro-
vided in SubsectionH, Scotion 5 of Article 6228a, that
a pa&y who was a member of the RetirementSystem at the
time of entering military serviae may contrfbute to the    -
Retirement System for the time spent In such service.He
,



-c-   Hon. Gordon H. Lloyd, page 7   (v-1023)


      may contribute eaoh'year an amount not to ,exoeedthe sum
      contributedby him to the Retir8ment System during the
      last year that he was,employed by the State and was a
      member of the Retirement System.
                In answer to your Question Ro. 2, it la our
      opinion that no provision has been made by the Leglsla-
      ture for the State to match the contributionsinques-
      tion and that, consequently,no matching contribution
      can be msde by the State. The appropriationmade to the
      Employees Retirement System for the purpose-ofmaking
      the State's matching contributionswas made "from the
      several funds from which the employees reoeive their
      respeotive salaries and/or compensation.* Mr. A vaa not
      receiving any salary or compensation-froma State Fund
      during the time that h8 was in military service. We are
      of the opinion that the faot that no provision has been
      made for the State's matahing contributionwill not pre-
      vent the Retirement System from accepting the contrlbu-
      tion of the person here involved. In view of our answer
      to Question Ro. 2, it is not necessary to answer Ques-
      tion No. 3.
                It is our opinion that Question Ro. 4 should
      be answered in the affirmative. Mr. A should be credit-
      ed with membership service for retirement purposes for
      the time spent by him in military service, provided he
      has made oontrlbutionsto the Retirement System acaord-
      ing to the provisions of the Retirement Act.
                            SUMbfARY
                A person who was in military service in
           1948 and 1949, and who was a member of'the
           Employees Retirement System of T8XaS at the
           time of entering military service, may oon-
           tribute to the Retirement System for eaoh of
           such years sn amount not to exoeed the sum
           aontributedby him to the ROtlr8mentSystem
           during the last year that he was employed by
           the State and was a member of the Retirement
           System. ,Suchperson should be credited with
           membership service for retirementpurposes
           for the time spent by him in military servioe.
           Ro provision was made by the Legislature for
           the State to make a matohing contribution in
,-
Hon. Gordon B. Lloyd, page 8   (V-1023)


     swh oases, but that fact vi11 not prevent
     the Retirement Systemfrom receiving the
     contributionof the employee.
                                   Yours very truly,
                                     PRICB DAKIKL
APPROVED:                          Attorney Ganeral
Red NoDaniel
State Affaira Division
Charles D. Mathews
~8ClUtiV8 Assistant
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