Members of the Employees' and Teachers' Retirement Systems are required to contribute to the System a
fixed percentage of their regular salaries and wages (e.g. 7%). Members of the Pension Systems are required to
contribute to the System 5% of their regular salaries and wages which exceed the social security wage base. State
Police members are required to contribute 8% of their regular salaries and wages to the System. All contributions
are deducted from each member's salary and wage payments and are remitted to the System on a regular, periodic
basis.

The State, the University of Maryland Medical System, the Maryland Automobile Insurance Fund, the Injured
Workers' Insurance Fund and the participating municipal corporations make all employer contributions to the
System. In addition, the State of Maryland, which is a non-employer contributor to the Teachers' Retirement and
Pension Systems, makes virtually all of the non-employee contributions to the Teachers' Systems. All
contributions to the System are made in amounts required by State statutes.

No investment of the System in any one organization represented 5% or more of the net assets available for
pension benefits. There were no investments in, loans to, or leases with parties related to the System.

Funding Status and Progress:

The amount shown as ''pension benefit obligation" is a standardized disclosure measure of the present value
of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a
result of employee service to date. The measure is the actuarial present value of credited projected benefits and is
intended to help users assess the Systems' funding status on a going-concern basis, assess progress made in
accumulating sufficient assets to pay benefits when due, and make comparisons among public employee
retirement systems. The measure is independent of the actuarial funding method used to determine contributions
to the System as described below.

The fiscal year 1992 pension benefit obligation was determined as a part of an actuarial valuation at June 30,
1992. Significant actuarial assumptions used include (a) a rate of return on the investment of present and future
assets of 7.5% per year compounded annually, (b) projected salary increases from 5% to 6% per year compounded
annually, attributable to inflation, (c) additional projected salary increases ranging from .94% to 6.82% per year,
attributable to seniority/merit, and (d) postretirement benefit increases ranging from 3% to 6% per year
depending on the system.

At June 30,1992, the unfunded pension benefit obligation (i.e., pension obligation less net assets available for
benefits) for covered employees (excluding participating municipalities) was as follows (amounts expressed in
thousands):

Pension benefit obligation:
Retirees and beneficiaries currently receiving benefits and terminated employees not yet
receiving benefits ..........................................................	$ 7,619,764
Current employees:
Accumulated employee contributions including allocated investment income ..........	1,443,180
Employer-financed vested ..................................................	8,206,981
Employer-financed nonvested ...............................................	355,101
Total pension benefit obligation .............................................	17,625,026
Net assets available for benefits, at cost (market value is $13,425,943) ..................	11,884,463
Unfunded pension benefit obligation ...........................................	$ 5,740,563

There were no changes in actuarial assumptions or benefit provisions which significantly affected the
valuation of the pension benefit obligation during fiscal year 1992.

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.

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