110

LAWS OF MARYLAND

Ch. 23

INDEMNIFICATION SHALL BE AGAINST THOSE EXPENSES, INCLUDING
REASONABLE ATTORNEY'S FEES, JUDGMENTS, FINES, AND ACCOUNTS
PAID IN SETTLEMENT THAT ACTUALLY AND REASONABLY WERE
INCURRED BY HIM IN CONNECTION WITH THE PROCEEDING.

(4)   THE TERMINATION OF ANY SUIT OR PROCEEDING, IN ANY
MANNER, OF ITSELF, DOES NOT CREATE A PRESUMPTION THAT THE
PERSON DID NOT ACT IN GOOD FAITH AND IN A MANNER HE
REASONABLY BELIEVED TO BE IN OR NOT OPPOSED TO THE BEST
INTEREST OF THIS PENSION SYSTEM, AND WITH RESPECT TO A
CRIMINAL ACTION OR PROCEEDING, HAD REASONABLE CAUSE TO
BELIEVE THAT HIS CONDUCT WAS UNLAWFUL.

(5)   INDEMNIFICATION MAY NOT BE MADE:

(I)   WITH RESPECT TO ANY SUIT, CLAIM, OR MATTER
AS TO WHICH THE PERSON IS ADJUDGED TO BE LIABLE FOR GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT IN THIS SYSTEM; OR

(II)  FOR AN INDEPENDENT CONTRACTOR WHO PROVIDES
SERVICES TO THIS PENSION SYSTEM.

(6)   THE STATE MAY PROVIDE INSURANCE FOR EVERY PERSON
ELIGIBLE FOR INDEMNIFICATION UNDER THIS SECTION AGAINST ANY
LIABILITY ASSERTED AGAINST HIM OR INCURRED BY HIM ARISING
OUT OF HIS STATUS AS A FIDUCIARY. THE STATE MAY PROVIDE
SELF INSURANCE FOR THIS PURPOSE, IN WHOLE OR IN PART, UNDER
TERMS AND CONDITIONS THAT ARE SATISFACTORY TO THE STATE
TREASURER. IF THE STATE FAILS TO PROVIDE ADEQUATE INSURANCE
COVERAGE OR IF THE STATE FAILS TO PROVIDE INDEMNIFICATION
UNDER THIS SECTION, A FIDUCIARY MAY NOT BE REQUIRED TO PAY
THE AMOUNTS ATTRIBUTABLE TO LIABILITY DESCRIBED IN THIS
SECTION BECAUSE THE STATE FAILED TO PROVIDE THE
INDEMNIFICATION.

122. METHOD OF FINANCING.

ALL OF THE ASSETS OF THIS PENSION SYSTEM SHALL BE
CREDITED, ACCORDING TO THE PURPOSE FOR WHICH THEY ARE HELD,
TO THE FOLLOWING FUNDS:

(I)   THE ANNUITY SAVINGS FUND;

(II)  THE ACCUMULATION FUND; AND

(III) THE EXPENSE FUND.

(1) (A) THE ANNUITY SAVINGS FUND SHALL BE THE FUND
IN WHICH THE CONTRIBUTIONS DEDUCTED FROM THE COMPENSATION OF
MEMBERS TOGETHER WITH ANY AMOUNTS TRANSFERRED THERETO FROM
THE ANNUITY SAVINGS FUND OF THE RETIREMENT SYSTEM SHALL BE
ACCUMULATED. THE AMOUNTS TRANSFERRED SHALL BE ALLOCATED
BETWEEN REGULAR AND ADDITIONAL CONTRIBUTIONS. ON HIS
RETIREMENT OR OTHER WITHDRAWAL FROM SERVICE ON THE BASIS OF
WHICH A RETIREMENT ALLOWANCE IS PAYABLE, THE MEMBER'S
ADDITIONAL CONTRIBUTIONS, WITH INTEREST, SHALL BE PAID AS AN
ADDITIONAL ALLOWANCE EQUAL TO AN ANNUITY THAT IS THE