The fiscal year 1993 pension benefit obligation was determined as a part of an actuarial valuation as of June
30, 1993. 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.

As of June 30,1993, the unfunded pension benefit obligation (i.e., pension obligation less net assets available
for benefits) for covered employees, excluding paticipating municipalities, was as follows (amounts expressed in
thousands):

Pension benefit obligation:
Retirees and beneficiaries currently receiving benefits and terminated employees not yet
receiving benefits ..........................................................	$ 8,508,435
Current employees:
Accumulated employee contributions including allocated investment income ..........	1,445,189
Employer-financed vested ...................................................	8,390,242
Employer-financed nonvested ................................................	331,335
Total pension benefit obligation .............................................	18,675,201
Net assets available for benefits, at cost (market value is $15,396,553) ..................	13,197,548
Unfunded pension benefit obligation ...........................................	$ 5,477,653

There were no changes in actuarial assumptions or benefit provisions which significantly affected the
valuation of the pension benefit obligation during fiscal year 1993.

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 for covered State employees to the System totalling $617,782,000 (13.6% of covered
payroll) for fiscal year 1993 were made in accordance with actuarially determined contribution requirements
based on an actuarial valuation performed as of June 30,1991. This amount consisted of $340,769,000 normal cost
and $277,013,000 amortization of the unfunded actuarial accrued liability (7.5% and 6.1%, respectively, of covered
payroll). Employee contributions to the System for fiscal year 1993 were $91,635,000 (2.0% of covered payroll).

The liquidation period for the unfunded actuarial accrued liabilities (as provided by law) is 27 years from
June 30,1993. 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 1993 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.

Two-Year Historical Trend Information for the System, excluding participating municipalities (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 Annual
Fiscal	Benefits	Benefit	Funded	Obligation	Covered	Payroll	Employer	Covered Payroll
Year	at Cost	Obligation	(l)-(2)	(2)-d)	Payroll	(4)-(5)	Contributions	(7)-(5)
1992 ..........	$11,884,463	$17,625,026	67.4%	$5,740,563	$4,487,636	127.9%	$588,785	13.1%
1993 ..........	13,197,548	18,675,201	70.7	5,477,653	4,542,599	120.6	617,782	13.6
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