May 23, 1963 Mr. John S. Hovenga Opinion No.~C- 83 Executive Director Board of Regents Re: Whether the term "annuities" State Teachers Colleges as used in Article 6228a-5,, Box K, Capitol Stations Vernon's Civil Statutes,, Austin 11, Texas embraces group annuities as well ,as individual an- nuity'contracts. Should the board of regents of the institutions of higher learning hold the master contract in the name of the board of regents of the respective Institutions or should contracts be ls- sued in the name of the annuitant only, even if the contract is classified Dear Mr. Hovenga: as a group annuity. The questions submitted in your opinion request are as follows: "(1) Does the term Iannuities as used in the statute referred to in the caption (Article 6228a-5,~ Vernon's Civil Statutes) embrace group annuities as well as 'individual annuity contracts? "(2) Shall the board of regents of the in- stitutions of higher learning hold the master contract in the name of the board of regents of the respective institutions of higher learning, or shall contracts be issued in the name of the annultant only, even if the contract is classified as a group annuity?" Article 6228a-5, Vernon's Civil Statutes, reads as follows: -404.,- Mr. John S. Hovenga, page 2 (C- 83 ) "Local Boards of Education of the Public Schools of this state and the Governing Boards of the state-supported institutions of higher education are hereby authorized to enter into agreements with their employees for the purchase of annuities for their employees as authorized in Section &03(b) of the Internal Revenue Code of 1954, as amended,." In regard to your first question, Article 6228a-5 Vernon's Civil Statutes, does not limit the term "annuitiesL to either group or individual annuities. However, Article 6228a-5 refers to Section 403(b) of the Internal Revenue Code. In Sec- tion &03(b) and the Internal Revenue Regulations for that Sectio'n and related Sections, no distinction has been drawn between group annuities and individual annuity contracts. Since the general term "annuities" has not been limited in either of these statutes, the Legislature must have intended the term to embrace both group and Individual annuities. In the absence of evidence to the con- trary, common terms used in an enactmentshould be given their common meaning. 2 Sutherland Statutory Construction (3rd Ed. 1943) 429. As to your second question, Article 6228a-5 states that 'theboard may enter into agreements with their employees for the purchase of annuities for their employees as "authorized in Sectionk03(bl,of the Internal Revenue Code of 1954, as amen& ed." (Emphasis added). This evidences the intent that these il annuities would be set up in a manner in which they would be "tax- sheltered" annuities under the Internal Revenue Code and Reguia- tions. The question which you have posed to us +s one of mechanic: in the setting up of such a plan. In setting up your plan, you should dtscuss the details with representatives of the Internal Revenue Service and submit proposed plans to them for approval. SUMMARY The term "annui.ties"as used in Article 6228a-5, Vernonls Civil Statutes, embraces group annuities as well as individual annuity contracts. Whether the an- nuity contract should be held in the name of the Board of Regents of the school or in the name of the individual employees is a matter that you should discuss with the representatives of the Internal Revenue Service and sub- mit plans to them for approval. . ..4..;1: Mr. John S. Hovenga, Pa& 3 (C- 83 ) Sincerely, WAGGONER CARR Attorney General Assistant JGN:mkh APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman James M. Strock Wayne Rogers Pat Bailey Ben Harrison APPROVED FOR THE ATTORNEY GENERAL BY: Stanton Stone -406