Changes in the pension fund balance for the year ended June 30,1989, were as follows (amounts expressed
in thousands):

	Fund	Balance (a)
	Employee	Retirement
	Annuity	Accumulation
	Savings (b)	Fund (c)
Balance, July 1, 1988 ............................	$1,240,736	$6,878,984
Increases:
Member contributions ..........................	110,562
Employer contributions .........................		599,586
Investment and other income ....................		802,630
Decreases:
Benefit payments ..............................		(499,382)
Refunds ......................................	(31,593)
Administrative expenses .........................		(10,819)
Transfers to the Employee Annuity Savings Fund for
interest credited to members' accounts ............	68,706	(68,706)
Transfers to the Retirement Accumulation Fund for
contributions of retiring members ................	(67,855)	67,855
Balance, June 30, 1989 ...........................	$1,320,556	$7,770,148

(a) The consulting actuary annually determines the changes in fund balances resulting from transfers of
employees from the Employees' and Teachers' Retirement Systems to the Employees' and Teachers' Pension
Systems and allocations of investment income.

(b) Contributions made by members together with interest thereon are credited to the Employee Annuity
Savings Fund.

(c) Contributions made by the employer and investment income thereon are credited to the Retirement
Accumulation Fund.

17. Deferred Compensation Plan:

The State offers its employees a deferred compensation plan created in accordance with Internal Revenue
Code Section 457. The plan, available to all State employees, permits them to defer a portion of their salary
until future years. Participation in the plan is optional. The deferred compensation is not available to
employees until termination, retirement, death or unforeseeable emergency. All amounts of compensation
deferred under the plan, all property and rights purchased with those amounts, and all income attributable
to those amounts, property or rights are (until paid or made available to the employee or other beneficiary)
solely the property and rights of the State subject only to the claims of the government's general creditors.
Participants' rights under the plan are equal to those of general creditor of the State in an amount equal to
the fair market value of the deferred account for each participant.

It is the opinion of the government's legal counsel that the government has no liability for losses under
the plan but does have the duty of due care that would be required of an ordinary prudent investor. The
government believes that it is unlikely that it will use the assets to satisfy the claims of general creditors
in the future.

Investments are managed by the plan's trustee under one of several investment options, or a combination
thereof. The choice of the investment option(s) is made by the participants.

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