The Pension Trust Fund's (Fund) cash deposits (including cash equivalents) are also categorized to give an
indication of the level of risk assumed at year-end. Category 1 includes deposits that are insured or collateralized
with securities held by the Fund's custodian in the name of the Fund. Category 2 includes deposits which are
collateralized with securities held by the pledging financial institutions trust department or agent in the Fund's
name. Category 3 includes deposits that are uncollateralized. At year-.end, the Fund's bank deposits were
uninsured and uncollateralized, except for deposits covered by Federal depository insurance. As of June 30,1993,
the carrying amount of the Fund's deposits was $705,000 and the bank balance was $2,289,000. The Fund's
uninsured and uncollateralized deposits as of June 30,1993, were $1,787,000.

Investments of the enterprise funds are stated at cost, adjusted for amortization of premiums and accretion of
discounts. The investment policies for all enterprise funds, with the exception of the Community Development
Administration, are the same as those of the State Treasurer. The Community Development Administration, an
agency of the Department of Housing and Community Development, is authorized to invest in obligations of the
U.S. Treasury, U.S. Government agencies and corporations, political subdivisions of the U.S., banker's
acceptances, repurchase agreements, corporate debt securities and certificates of deposit with foreign or
domestic banks. The U. S. Treasury and agency obligations and collateral for the repurchase agreements are held
by the fund's agent in the fund's name.

The Pension Trust Fund (Fund), in accordance with Article 73 B, Section 160 of the Annotated Code of
Maryland, is permitted to make investments subject to the terms, conditions, limitations, and restrictions imposed
by the Board of Trustees of the Maryland State Retirement and Pension Systems. The law further provides that
not more than 15% of the assets that are invested in common stocks may be invested in non-dividend paying
common stocks. The pension trust fund's investments are commingled in three combined investment funds. Two
investment funds consist principally of bonds and other fixed income investments while the other investment fund
consists principally of common stocks. Certain amounts totalling $675,574,000 (market value of $675,574,000) are
not invested in the investment funds, but are reported as cash and cash equivalents. All of the Fund's investments
meet the criteria of category 1, except for cash equivalents with a carrying value totalling $182,485,000 as of June
30,1993, which meet the criteria of category 2. Investments of the pension trust fund are stated at cost, adjusted
for amortization of premiums and accretion of discounts.

The investments as of June 30, 1993 for the enterprise and pension trust funds are as follows (amounts
expressed in thousands):

		Category		Carrying	Market
	1	2	3	Value	Value
U.S. Treasury and agency obligations ...............	$ 320,639			$ 320,639	$ 365,323
Repurchase agreements ..........................	288,008			288,008	288,008
Bonds .........................................	8,104,582			8,104,582	8,802,879
Corporate equity securities ........................	4,494,342			4,494,342	6,197,096
Other ..........................................	56,286			56,286	57,563
	$13,263,857			13,263,857	15,710,869
Annuity contracts ...............................				355,291	355,291
Mutual funds ...................................				795,329	758,764
Total ........................................				$14,414,477	$16,824,924

C. Higher Education Fund:

The bank deposits of the Higher Education Fund (Fund) as of June 30, 1993, were $5,428,000. Of the bank
balances, $2,063,000 was covered by federal, private or foreign national government depository insurance,
$3,730,000 was collateralized by a pledge of U.S. Treasury obligations held by Federal Reserve banks in the name
of the banking institutions, and $1,026,000 was uninsured and uncollateralized. Mutual funds and money market
funds aggregating $85,464,000 at June 30,1993, are reported as cash and cash equivalents.

Investment funds established by higher education institutions relate principally to endowment and trust
accounts required by debt instruments. In general, endowment funds can be invested in debt and equity securities
and trust accounts can be invested only in debt securities. These investments include U.S. Treasury and agency
obligations, certificates of deposit, commercial paper, repurchase agreements, bankers' acceptances and money
market funds.

Investments of the higher education institutions are stated at cost, adjusted for amortization of premiums and
accretion of discounts.

45