HERBERT R. O'CONOR, GOVERNOR. 601

tions of the State, shall be paid from the Pension Accumula-
tion Fund. Pensions payable under Section 9 to employees
retired before the establishment of this retirement system shall
be paid from the Pension Accumulation Fund.

(h) Upon the retirement of a member not entitled to credit
for prior service, an amount equal to his pension reserve shall
be transferred from the Pension Accumulation Fund to the
Pension Reserve Fund.

(i) The Board of Trustees may in its discretion transfer to
and from the Pension Accumulation Fund the amount of any
surplus or deficit which may develop in the reserve held in the
Annuity Reserve Fund or the Pension Reserve Fund.

(4) PENSION RESERVE FUND.

The Pension Reserve Fund shall be the fund in which shall
be held the reserves on all pensions granted to members not
entitled to credit for prior service and from which such pen-
sions and benefits in lieu thereof shall be paid. Should a
beneficiary not entitled to credit for prior service and retired
on account of disability be restored to membership, his pen-
sion reserve shall be transferred from the Pension Reserve
Fund to the Pension Accumulation Fund. Should the pension
of a disability beneficiary not entitled to credit for prior
service be reduced as a result of an increase in his earning
capacity, the amount of the annual reduction in his pension
shall be paid annually into the Pension Accumulation Fund
during the period of such reduction.

(5) EXPENSE FUND.

The Expense Fund shall be the fund to which shall be
credited all money provided by the State to pay the adminis-
tration expenses of the retirement system and from which shall
be paid all the expenses necessary in connection with the ad-
ministration and operation of the system. Biennially the
Board of Trustees shall estimate the amount of money, not in
excess of three-tenths of one per centum of the payroll of mem-
bers, which shall be deemed necessary to be paid into the Ex-
pense Fund during the ensuing years to provide for the ex-
pense of operation of the retirement system, and such amount
shall be paid to the Expense Fund for this purpose.

(6) STATE CONTRIBUTIONS.

(a) On or before the first day of November next preceding
each regular meeting of the General Assembly of Maryland,
the Board of Trustees shall certify to the Governor the
amounts which will become due and payable during the bien-
nium next following to each of the funds of the retirement