Summary of Significant Accounting Policies:

As a part of the Pension Trust Fund, the accounts of the Plan, including benefits and refunds, are maintained
using the accrual basis of accounting. Fair value of the investments by the Plan is determined by the State Retirement
and Pension System of Maryland based on published securities data.

Funding Policy:

The Administration's required contributions are based on actuarial valuations. Effective January 1, 1990, in
accordance with the law governing the Plan, all benefits of the Plan are funded in advance. The entry age normal
cost method is the actuarial cost method used to determine the employer's contribution rates and the actuarial
accrued liability. All administrative costs of the Plan are paid by the Plan.

Employer contributions to the Plan totaling $13,103,000 (12.5% of covered payroll) for fiscal year 1999 were
made in accordance with actuarially determined contribution requirements based on an actuarial valuation performed
as of June 30,1999. This amount consisted of $2,393,000 normal cost and $10,710,000 amortization of the actuarial
accrued liability (2.3% and 10.2%, respectively, of covered payroll).

The liquidation period for the actuarial accrued liabilities (as provided by law) is 21 years from June 30,1999.
Significant actuarial assumptions used to compute contribution requirements are the same as those used to compute
the annual pension cost and net pension obligations.

The computation of the annual required contribution for fiscal year 1999 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.

Annual Pension Cost and Net Pension Obligation:

The Administration's annual pension cost for the fiscal years ended June 30, 1999, 1998 and 1997 were
$13,103,000, $13,902,000, and $11,502,000, respectively.

The Administration contributed 100% of the annual pension cost for each of the fiscal years ended June 30,
1999,1998 and 1997 for the Plan.

The Administration's net pension obligation was zero as of June 30, 1999, 1998 and 1997 for the Plan.

The fiscal year 1999 annual pension cost and net pension obligations were determined as a part of an actuarial
valuation as of June 30, 1999. The significant actuarial assumptions listed below were used for the Plan.

Valuation method .......................................................................................... Entry Age Normal Method

Cost method of valuing assets ...................................................................... Fair Value

Rate of return on investments...................................................................... 8% Compounded per Annum

Projected inflation rate................................................................................ 5.0%

Rate of salary increase.................................................................................. 3.0%, Compounded per Annum

Post retirement benefit increase .................................................................. N/A

Amortization method .................................................................................... Level dollar annual installments

Remaining amortization period.................................................................... 20 years from July 1, 1999

Status of period (Open or Closed)................................................................ Closed ___ ___

During fiscal year 1999, there were no changes in actuarial assumptions or benefit provisions from 1998 which
significantly affected the valuation of the annual pension cost and net pension obligation. No significant changes
in these assumptions are planned in the near term.

Post Retirement Benefits:

The State also provides, in accordance with State Merit System Laws, post employment health care benefits to
retired employees and their dependents (generally employees who retired before July 1,1984, employees who retired
on or after July 1,1984, with at least 5 years of creditable service and employees who receive disability retirement
allowances or special death benefits). The State subsidizes approximately 50% to 90% of covered medical and
hospitalization costs, depending on the type of insurance plan. The State assesses a surcharge for post employment
health care benefits which is based on health care insurance charges for current employees. During fiscal year
999, these benefits paid amounted to $79,885,000. There are 22,100 participants currently eligible to receive benefits.

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