Harold E. Emmons and Anna Mae Emmons - Page 4

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          Benefits, are paid from the Expense Fund.  Md. Ann. Code, art.              
          73B, sec. 14(3) (1988 and Supp. 1991).                                      
               The Annuity Savings Fund holds a participant's "accumulated            
          contributions", which consist of the participant's total                    
          contributions plus "regular interest".  Md. Ann. Code, art. 73B,            
          secs. 1(13), (23), 14(1)(a), (2)(c) (1988 and Supp. 1990).                  
          Regular interest is credited to a participant's account annually.           
          Md. Ann. Code, art. 73B, sec. 14(2)(c) (1988).  The rate of                 
          regular interest is set by the Board of Trustees at a statutorily           
          prescribed rate of 4 percent.4  Md. Ann. Code, art. 73B, sec.               
          14(1)(a) (1988 and Supp. 1990).  If a participant withdraws his             
          or her accumulated contributions, or if such contributions are              
          paid to the estate or designated beneficiary of a participant,              
          such amount is paid from the Annuity Savings Fund.  Md. Ann.                
          Code, art. 73B, sec. 14(1)(f) (1988).                                       
               All interest and dividends earned on the funds of the                  
          Retirement System are credited to the Accumulation Fund.  Md.               
          Ann. Code, art. 73B, sec. 14(2)(c) (1988).  Upon a participant's            
          retirement, the participant's accumulated contributions are                 
          transferred from the Annuity Savings Fund to the Accumulation               
          Fund, and the participant's annuity is then paid from the                   
          Accumulation Fund.  Md. Ann. Code, art. 73B, sec. 14(1)(f) and              

          4 See also Md. Ann. Code, art. 73B, sec. 1(12) (1988).  Each                
          year, after a participant's account in the Annuity Savings Fund             
          is credited with "regular interest", such interest is transferred           
          from the Accumulation Fund to the Annuity Savings Fund.  Md. Ann.           
          Code, art. 73B, sec. 14(2)(c) (1988).                                       



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