At June 30,1991, the unfunded pension benefit obligation (i.e., pension obligation less net assets available for
benefits) of the System was as follows (amounts expressed in thousands):

Pension benefit obligation:
Retirees and beneficiaries currently receiving benefits and terminated employees not yet
receiving benefits ..........................................................	$7,527,282
Current employees: Accumulated employee contributions including allocated investment income ..........	1,449,117
Employer— financed vested ..................................................	8,997,365
Employer— financed nonvested ...............................................	407,282
Total pension benefit obligation .............................................	18,381,046
Net assets available for benefits, at cost (market value is $12,504,678) ..................	11,325,358
Unfunded pension benefit obligation ...........................................	$7,055,688

There were no changes in actuarial assumptions or benefit provisions which significantly affected the
valuation of the pension benefit obligation during fiscal year 1991.

Contributions Required and Made:

The State's retirement contributions are appropriated annually, based upon actuarial valuations. In this
regard, the System has engaged an independent firm of consulting actuaries to prepare annual actuarial
valuations and perform various actuarial consulting services. Effective July 1,1980, in accordance with the law
governing the Systems, all benefits of the System are funded in advance. The entry age normal cost method is the
actuarial cost method used to determine the employers' normal and accrued liability contribution rates and the
unfunded actuarial accrued liability. Using this method the actuarial present value of the projected benefits of
each individual included in an actuarial valuation is allocated on a level basis over the earnings or service of the
individual between entry age and assumed exit age(s). The portion of this actuarial present value allocated to a
valuation year is called the normal cost. The portion of this actuarial present value not provided for at a valuation
date by the actuarial present value of future normal costs is called the actuarial accrued liability.

Employer contributions to the System totalling $633,995,000 (12.4% of covered payroll) for fiscal year 1991
were made in accordance with actuarially determined contribution requirements based on an actuarial valuation
performed as of June 30,1989. This amount consisted of $352,773,000 normal cost and $281,222,000 amortization
of the unfunded actuarial accrued liability. Employee contributions to the System for fiscal year 1991 were
$114,103,000 (2.2% of covered payroll).

The liquidation period for the unfunded actuarial accrued liabilities (as provided by law) is 29 years from June
30,1991. Significant actuarial assumptions used to compute contribution requirements are the same as those used
to compute the pension benefit obligation.

The computation of the pension contribution requirements for fiscal year 1991 was based on the same
actuarial assumptions, benefit provisions, actuarial funding method, and other significant factors used to
determine pension contribution requirements in the previous year.

Retirement expenditures applicable to governmental fund types for the year ended June 30,1991, aggregated
approximately $536,381,000. The excess of retirement expenditures over retirement costs of approximately
$40,544,000 is included in the general long-term debt account group.

Three-Year Historical Trend Information for the System (amounts expressed in thousands):

				(4)		(6) Unfunded Pension Benefit		(8) Employer
	(1)			Unfunded		Obligation as		Contributions
	Net Assets	(2)	(3)	Pension	(5)	a Percentage		as a Percentage
	Available for	Pension	Percentage	Benefit	Annual	of Covered	(7)	of Covered
Fiscal	Benefits	Benefit	Funded	Obligation	Covered	Payroll	Employer	Payrolls
Year	at Cost	Obligation	(D-K2)	(2)-(l)	Payroll	(4)+(5)	Contributions	(7)-(5)
1989 .......	. . . . $9,090,704	$15,400,391	59.0%	$6,309,687	$4,284,572	147.3%	$599,586	14.0%
1990 .......	10,251,637	16,672,354	61.5	6,420,717	4,682,550	137.1	593,004	12.7
1991 .......	11,325,358	18,381,046	61.6	7,055,688	5,093,708	138.5	633,995	12.4

Ten-year historical trend information is available in a separate financial report issued by the System. This
report presents information about progress made in accumulating sufficient assets to pay benefits when due.

For asset and investment management purposes, the State combined the assets of all State administered
retirement and pension systems into a pooled trust fund. Accordingly, the financial statements for the State
administered pension fund are presented on a combined basis in the fiduciary fund type financial statements.

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