Untitled Texas Attorney General Opinion ( 1970 )

Hon. William G. Button Opinion No. W-595
Chairman, Board of Regents
East Texas State University Re: Whether the employees'
Commerce, Texas 75428 contributions under the
Optional Retirement Pro-
gram (Article 2922-li,
V. C. S.) may also be used
to purchase life insurance
benefits.
Dear Sir:
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. HOW-
ever, it is felt that the Attorney General's opinion
is needed to make this clear.
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.
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. ...
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. ’
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 authori-
zation 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.
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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 authori-
zed 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
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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
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