Untitled Texas Attorney General Opinion

June 18, 1969
Honorable Graves Landrum Opinion No. M-420
Vice-Chancellor for Administration
The University of Texas System Re: Whether rights of an em-
Austin, Texas ployee, participating in
the Optional Retirement
Act, vest after one year's
participation in the
Optional. Retirement'Pro-
Dear Mr. Landrum: gram, and related questions.
You have requested that this office answer the following
questions:
"1. Do rlghts~ of the employee particl-
patlng in the Optional Retirement Act vest
after one year's participation in the Optional
EEtFement Program?
"2. If answer ,to question 1 is yes, then
do the rights of the employee vest on his first
day of employment after one year's participation
in the O.R.P.?
"3. Is it mandatory that the participation
requirements in the 0.R.P'. be completed at one
institution, or may the participation require-
ments be completed 'In more than one state-supported
institution of higher education, including junior
colleges, to insure vesting after dne year of
participation?
“4. Does the employee have a vested in-
terest after one year's participation even
though the participation might be with more
than one instiance company?
Article 2922-11, Vernon's Civil Statutes, provides for
the Optional Retirement Program for. teachers and administrative
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..
Ron. Craves Landrum, page 2 (~-420,
personnel employed by state-supported institutions of higher
education and reads, In part, as follows:
“Section 1. The Legislature finds that
higher education Is vitally important to the
welfare, If not the survival, of Texas and
the United States at this stage. In history
and that the quality of higher education Is
dependent upon the quality of college and
unlverelty faculties. The Legislature finds,
therefore, that moneys spent on recognized
means for producing an excellent system of
public higher education Is money spent to
serve a public purpose of great importance.
The Legislature finds further that a sound
faculty retirement program that provides
full and complete retirement benefits to
teachers and administrators who have given
faithful service to state -supported lnstltu-
tlons of higher education Is a well-recognized
means for Improving a state’s program of pub-
lic higher education. The Legislature’s pur-
pose in establlshlng the retirement program
provided for by this Act Is to improve further
the higher education available to the youth at
the state-suonorted ‘colleges and universities
and to estabiish this retirement program as
part of the plan of compensation for the faculty
of these colleges and universities.
“Sec. 2. As used in this Act, unless the
context otherwise requires:
,I
. . .
“(c) ‘Institution of higher education’
means an lnstltutlon of higher education as
defined under the provisions of Chapter 12, Acts,
Regular Session, 59th Legislature (1965), and
lncludlng James Connally Technical Institute,
except the Rodent and Predatory Animal Control
Service.
“(d) ‘Faculty member’ means a person em-
ployed by an institution of higher education
on a full time basls as a member of the faculty
or staff and whose duties Include teaching,
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Hon. Graves Landrum, page 3 (~.420~
research, administration, Including profes-
sional librarians, or the performance of pro-
fessional services but does not mean a person
employed in a position which Is In the lnstltu-
tlon’s classified personnel system or a person
employed In a similar type of position if the
Institution does not have a classified personnel
system.
“(e) ‘Governing Board ’ means the body
charged with policy direction of any institution
of higher education.
“(f) ‘Optional Retirement Program’ means
the optional retirement program created by this
Act to provide fixed or variable retirement an-
nuities, Including retirement unit annuity
certificates of participation for faculty
members.
“Sec. 3(a) There Is hereby established
an Optional Retirement Program. Participation
in the Optional Retirement Program Is In lieu
of active membership in the Retirement System,
The Qoverning Boards for all Institutions of
higher education shall make available to all
faculty members In their component Institution’s,
agencies and units the Optional Retirement Pro-
“(b) All faculty members are eligible to
participate in the Optional Retirement Program,
subject to such rules as may be prescribed by
the Qoverning Board of the institution of higher
education at which they are employed.
“Sec. 4. In administering the Optional Re-
tirement Program a Qovernlng Board may provide
for the purchase of annuity contracts from any
insurance or annuity company o.uallfled and admitted
to do business in this state. Any life Insurance or
annuity company qualified and admitted to do
business In this state shall be exempt from the
payment of al: franchise or premium taxes as to
all annuity or group Insurance contracts made
pursuant to a benefit program authorized by the
governing board of an Institution of higher ed-
ucation, or by any private non-profit educational
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Hon. Graves Landrum, page 4 (M-420)
Institution of higher learning, which benefit
program is paid for in whole or in part from
the funds of such institution. Where a Governing
Board has more than one component Institution,
agency or unit under Its jurisdiction, it may
provide a separate Optional Retirement Program
for each component Institution, agency or unit
or place two or mbre component institutions,
agencies or units under a single program.
n
* . . ” (Emphasis added. )
The answers to your first two questions are found In
the provisions set out In Section 3(a) of Article 2922-11, as
above quoted. The glaln and unambiguous language of this sec-
tion sets out that the Optional Retirement Program shall ro-
vlde for vesting of benefits after one year of parti&
We therefore hold that your first question Is answered 1 th e
affirmative. Accord, Attorney Genera’l’s Opinion No. ~-1G6
(1968).
Article 23, Vernon’s Civil Statutes, defines year to
mean a calendar year. It 1s well established both at common
law and by statute, that, unless otherwise expressed the word
“year” when used is a contract, judicial proceeding or statute,
or constitution, ordinarily 1s understood to mean a calendar
year, regardless of whether It be leap year or otherwlse.’
Douglas v. Acacia Mu 118 S.W.2d 643 (Tex.
Civ.App. 1938, error r v. National Life and
Accident Ins. Co., 63 ex.Clv.App. 1933 , error
ref.) th e Court set means “at the end of”
“as soon as” and In computation of time the word “after”
&erally understod In the sense of excluding the day or date
mentioned, Words In a statute must be given their enerally
accepted meaning. Calvert v. Audio Center Inc., 34% S.W.2d
420 (Tex.Clv.App. 1961 , error ref. n.r.e.). Applying the above
stated definitions to the words “vesting after one year of par-
tlclpatlon”, we hold that the rights of an employee vest on ~hls
first day of employment, after one year’s participation in the
Optional Retlrement Program, and your second question is answered
In the affirmative.
To arrive at the Intention of the Legislature In regard
to your third question we must look at the full Act. Having the
power to set up the Optional Retirement Frcgram, the Legislature
had the power to spell out Its requirezer,ts. This it has done
by delegating the duty to the governing board of each institution
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Hon. Graves LandNm, page 5 (M- 420)
of higher education to make an Optlonal Retirement Program
available for the faculty of its institution. Section 3
specifically gives the governing board of each lnstltutlon
of higher education the authority to make the rules governing
the program for that lnstltutlon, and to provide in those
rules that there be a vesting of benefits after one year of
participation. Section 4 provides that the governing board
may provide for the purchase of annuity contracts from any
Insurance or annuity company qualified and admitted to do
business in Texas. The act clearly sets out, In all of Its
provisions and requirements, the duty and responsibility for
the Optional Retirement Program to be with the governing board
of each institution of higher education.
We therefore hold that It is mandatory that the faculty
member must have participated in the Optional Retirement Program
at one Institution of higher education for at least one calendar
year to be eligible for vesting of benefit rights under the Op-
tional Retirement Program.
Where the governing board of a system composed of more
than one component institution, such as the University of Texas
system, has adopted a program placing all Institutions within
the system under one program, It Is our opinion that an employee
may meet the one year vestlng.requlrement by participating in
such program In any one or more Institutions within the system
within the same calendar year.
For purposes of anawerlng your fourth question we
have searched the statute for provisions providing for the
vesting of benefit rights by participating ln more than one
Insurance program. Section 4 provides that the governing board
may have a program with more than one Insurance company for its
faculty members. Therefore, It 1s our opinion that an employee
may have a vested Interest after one year's participation In
the program of that lnstltutlon even though It may be with more
.,than one Insurance company that was approved by the governing
board of that Institution.
SUUMARY
Article 2922-11, V.C.S., requires that
Optional Retirement Programs provide for
vesting of benefit rights after one year of
participation in the program by an emplcyee.
Said vesting Is to be effective on his first
day of employment after one year’s participation
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Hon. Graves Landrum, page 6 (~-420~
In the program prescribed by the governing board
of the inetitution. It Is mandatory that the
partlclpatlon requirements be completed at one
Institution. Where the governing board of a
system composed of more than one component
Institution, such as the University of Texas
system, has adopted a program placing all ln-
stltutlons within the system under one program,
It Is our opinion that an employee may meet
the one year vesting requirement by participating
In such program In any one or more lnst%tutlons
within the system within the same calendar year.
The participation may be with more than one ap-
proved Insurance company.
General of Texas
Prepared by William J. Craig
Assistant Attorney General
APPROVED:
OPINION'COMMITTEE
Kerns Taylor, Chairman
George Kelton, Vice-Chairman
Joseph Sharpleg
Sam McDaniel
Houghton Brownlee
Jlm Swearingen
W. V. Geppert
Staff Legal Assistant
Hawthorne Phillips
Executive Assistant
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