Purchase of Insurance for School District Employes

17 Pa. D. & C. 671

• Court: Pennsylvania Department of Justice
• Decided: April 5, 1932
• Status: Published

Opinion

Arnold, Deputy Attorney General,

— You have asked us whether the Act of June 22, 1931, P. L. 844, authorizes school districts to purchase, or contribute to the cost of, group life, health and accident insurance policies or annuity contracts for their employes.

The pertinent portion of the act is section one, which reads as follows:

“Be it enacted, etc., That the Commonwealth of Pennsylvania, or any department or division thereof, and any county, city, borough, incorporated town, township, school district or poor district, now or hereafter authorized by law to make appropriations or contributions for any such purpose, may make contracts of insurance with any insurance company authorized to transact business within the Commonwealth insuring its employes or any class or classes thereof under a policy or policies of group insurance covering life, health or accident insurance, and may contract with any such company granting annuities or pensions for the pensioning of such employes; and, for such purposes, may agree to pay part or all of the premiums or charges for carrying such contracts, and may appropriate out of its treasury any money necessary to pay such premiums or charges or portions thereof.”

Your question arises because the authority contained in the act is restricted to school districts and other municipal subdivisions “now or hereafter authorized by law to make appropriations or contributions for any such purpose.”

The act creates no new general purpose for which appropriations or contributions may be made. Therefore, we must look to the existing law for the answer to your question.

We find no authority given to school districts to appropriate or contribute money for life, health or accident insurance for their employes. Therefore, we advise you that the Act of 1931 does not permit school boards to purchase or contribute toward the cost of any such insurance policies.

Under sections 2401, 2402, 2403 and 2404 of the School Code of May 18, 1911, P. L. 309, as amended by the Act of April 21, 1915, P. L. 162, 24 PS §§ 2083-2086, school districts were authorized to establish and contribute to retirement funds for their teachers and employes. From these funds retired beneficiaries were entitled to receive annuities. However, we are informed that no such local retirement associations are now in existence. They have all been finally dissolved and have been superseded by the State School Employes’ Retirement Association under the Act of July 18, 1917, P. L. 1043, Sec. 3 (3), as amended by the Act of May 14,1929, P. L. 1738.

Therefore, we are of the opinion that school boards now have no authority to appropriate money for or to contribute toward annuity funds for the benefit of their employes, except, of course, the State Employes’ Retirement Fund. We do not regard contributions to this state fund as within the terms of the Act of 1931, because nothing contained in the act would authorize school districts to substitute annuity contracts for or otherwise to alter their method of contribution to that fund.

Therefore) we advise you that the Act of June 22, 1931, P. L, 844, does not authorize school districts to purchase or contribute to the purchase of life, health or accident insurance policies or annuity contracts for their employes.

From C. P. Addams, Harrisburg, Pa.