858 LAWS OF MARYLAND. [CH. 349

(g) All pensions and benefits in lieu thereof, with the
exception of those payable on account of members who re-
ceive no prior service credit, and all lump sum death benefits
on account of death in active service payable from contribu-
tions of the State, shall be paid from the Pension Accumu-
lation 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 admin-
istration expenses of the retirement system and from which
shall be paid all the expenses necessary in connection with
the administration and operation of the system. Annually the
Board of Trustees shall estimate the amount of money, not
in excess of one and four-tenths per centum of the payroll of
members, which shall be deemed necessary to be paid in to
the Expense Fund during the ensuing year to provide for the
expense 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,