HERBERT R. O'CONOR, GOVERNOR. 597

bank or trust company shall not exceed twenty-five per
centum of the paid up capital and surplus of such bank or
trust company.

(5) Except as otherwise herein provided, no trustee and
no employee of the Board of Trustees shall have any direct
interest in the gains or profits of any investment made by the
Board of Trustees. No trustee or employee of the Board
shall, directly or indirectly, for himself or as an agent, in any
manner use the same except to make such current and neces-
sary payments as are authorized by the Board of Trustees;
nor shall any trustee or employee of the Board of Trustees
become an endorser or surety, or in any manner an obligor,
for moneys loaned to or borrowed from the Board of Trustees.

8. Method of Financing. All of the assets of the retire-
ment system shall be credited, according to the purpose for
which they are held, among five funds, namely, The Annuity
Savings Fund, the Annuity Reserve Fund, the Pension Accu-
mulation Fund, the Pension Reserve Fund, and the Expense
Fund.

(1) ANNUITY SAVINGS FUND.

(a) The Annuity Savings Fund shall be a fund in which
shall be accumulated contributions from the compensation of
members to provide for their annuities. Upon the basis of
such tables as the Board of Trustees shall adopt and regular
interest, the actuary of the retirement system shall determine
for each member the proportion of earnable compensation
which, when deducted from each payment of his prospective
compensation earnable prior to this attainment of the age of
65 and accumulated at regular interest until his attainment
of said age, shall be computed to provide at that time an
annuity equal to the pension to which he will be entitled at
that age on account of his service as a member. Such propor-
tion of compensation shall be computed to remain constant.

(b) The proportion so computed for a member of the age of
64 shall be applied to a member who attains a greater age
before he becomes a member of the retirement system. The
Board of Trustees shall certify to the head of each depart-
ment, and the head of each department shall cause to be
deducted from the salary of each member on each and every
payroll of such department for each and every payroll period,
the proportion of earnable compensation of each member so
computed. But the head of any department shall not have
any deduction made for annuity purposes from the compensa-
tion of a member who elects not to contribute if he has
attained the age of 65 and has completed thirty-five years of
service. In determining the amount earnable by a member in