WILLIAM DONALD SCHAEFER, Governor                   Ch. 430

(1) (a) The Annuity Savings Fund shall be a fund [in
which shall be] CONSISTING OF accumulated contributions [from the
compensation] CREDITED TO INDIVIDUAL ACCOUNTS of members to
provide for their annuities. Upon the basis of such tables as
the board of trustees shall adopt and an interest rate of four
per centum per annum compounded annually, the actuary of the
retirement system shall determine for each member who shall have
become a member prior to July 1, 1973, the proportion of earnable
compensation which, when deducted from each payment of his
prospective compensation earnable prior to his attainment of the
age of 60 and accumulated at interest of four per centum per
annum compounded annually until his attainment of said age, shall
be computed to provide at that time an annuity equal to one
one-hundred-and-fortieth of his average final compensation for
each year of service as a member. Such proportion of
compensation shall be computed to remain constant.

However, commencing as of July 1, 1973, the proportion of
compensation payable by any member as of June 30, 1973 shall be
the lesser of (i) the proportion so determined or (ii) 5 percent
of his earnable compensation, and the proportion of compensation
payable by any person who becomes a. member after June 30, 1973
shall be 5 percent of his earnable compensation. Any member who
elects under § 9(2)(d) of this article for a full service credit
for regular part-time service in the computation of the
retirement allowance or benefit shall contribute 5 percent of the
compensation the member would have earned had the member been a
full-time employee during the period of disability.

(H) (I) IN THIS PARAGRAPH, "APPROVED EMPLOYER"
MEANS AN EMPLOYER OF MEMBERS IN THE RETIREMENT SYSTEM, WHO HAS
OBTAINED THE APPROVAL OF THE INTERNAL REVENUE SERVICE TO HAVE AN
EMPLOYER PICKUP PROGRAM IN ACCORDANCE WITH § 414(H)(2) OF THE
INTERNAL REVENUE CODE.

(II)  AFTER JANUARY 1, 1989, THE STATE OR
OTHER APPROVED EMPLOYER OF THE MEMBER SHALL PICK UP THE MEMBER
CONTRIBUTIONS REQUIRED UNDER PARAGRAPH (A) OF THIS SUBSECTION FOR
SERVICE RENDERED BY THE MEMBER FROM JANUARY 1, 1989.

(III)  THE CONTRIBUTIONS PICKED UP UNDER
ITEM (II) OF THIS PARAGRAPH SHALL:

1.  BE TREATED AS EMPLOYER CONTRIBUTIONS
IN DETERMINING TAX TREATMENT UNDER SECTION 414(H)(2) OF THE
INTERNAL REVENUE CODE, AS AMENDED;

2.  BE IMPLEMENTED BY A REDUCTION, EQUAL
TO THE AMOUNT OF THE PICKUP, OF THE COMPENSATION OF EACH MEMBER
REQUIRED TO MAKE CONTRIBUTIONS TO THE ANNUITY SAVINGS FUND UNDER
THIS SUBSECTION AND MAY NOT BE INCLUDED AS GROSS INCOME OF THE
MEMBER UNTIL THE PICKUP AMOUNTS ARE DISTRIBUTED OR MADE AVAILABLE
TO THE MEMBER;

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