No. S-177 (1955).

Case Date:September 30, 1955
Texas Attorney General Opinions 1955. No. S-177 (1955). 1September 30, 1955Hon. Robert S. CalvertComptroller of Public AccountsAustin, TexasOpinion No. S-177Re: Imposition of inheritance tax where survivorship benefits accrue under pension plan.Dear Mr. Calvert: You have requested the opinion of this office on the above captioned matter and have submitted in connection therewith the following facts. At the decedent's death certain benefits accrued to his widow under a "Retirement Plan" established by his employer. The Plan is administered by three trustees, designated by the employer, who administer the Plan by receiving all the employer's contributions or payments and purchasing Retirement Income and Group Income Endowment insurance. This insurance together with money from a special fund within the trust provided the source of the benefits here in question. The employee paid no part of the cost of the premiums of the insurance, nor did he contribute to the special fund. The employer has no ownership rights in the payments it makes to the trustees or in the funds held by them or in the insurance policies purchased with said funds. Participant employees are not allowed to transfer, assign, withdraw or dispose of any part of the benefits or to take action with respect to any part of the contributions or policies. They may not borrow on any benefits nor can such benefits be reached by a creditor or lien holder. However the plan does provide for withdrawal benefits similar to the regular cash surrender value of insurance policies. If employment is terminated because of the employee's misconduct, benefits may be suspended, reduced or cancelled. The employer reserves the right to modify or terminate the Plan and to reduce or discontinue contributions. Any such action would not deprive the employee of his equity at that time. Monthly retirement income in excess of $20.00 a month is written on an individual policy basis, and a physical examination is necessary. Each $10.00 a month retirement income provides $1,000.002life insurance. For example, if current retirement funding is on the basis of a monthly retirement income of $40.00, the life insurance protection is $4,000.00. Should the applicant fail to pass the medical examination, under the Plan he would still have $2,000.00 face value life insurance plus a minimum benefit of the total premiums paid for individual retirement annuity policies in excess of...

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