(4) Any member who reaches the age of sixty years and has been in the continuous service of the Commonwealth for a period of fifteen years immediately preceding may retire or be retired by the board of retirement upon recommendation of the head of the department in which he is employed, and any member who reaches the age of seventy must so retire.

(5) Any member who has completed a period of thirty-five years of continuous service may retire, or may be retired at any age by the board of retirement upon recommendation of the head of the department in which he is employed, if such action be deemed advisable for the good of the service.

THE BOARD OF RETIREMENT.

SECTION 4. (1) The management of the retirement system is hereby vested in the board of retirement, consisting of three members, one of whom shall be the state treasurer; the second member shall be a member of the association elected by the latter within sixty days after the date on which the retirement system is established, in a manner to be determined by the state insurance commissioner; the third member shall be chosen by the other two members. In case of the failure of the latter to choose the third member within thirty days after the election of the second member, the governor shall appoint the third member. The first person so chosen or appointed as third member shall serve for two years; otherwise and thereafter the term of office of the two elected members shall be three years. On a vacancy occurring in the board for any cause or on the expiration of the term of office of any member, a successor of the person whose place has become vacant or whose term has expired shall be chosen in the same manner as his predecessor. (2) The members of the board of retirement shall serve without compensation; but they shall be reimbursed out of the contingent fund for any expense or loss of salary or wages which they may incur through service on the board. All claims for reimbursement on this account shall be subject to the approval of the governor and council.

(3) The state treasurer shall have charge and control of the funds of the system, subject to the approval of the board of retirement, and shall invest and reinvest the same, and may from time to time sell any securities held by him and invest and reinvest the proceeds, and any and all unappropriated income of said funds: provided, however, that all funds received by him, and not required for current disbursements, shall be invested in accordance with the provisions of the laws of this Commonwealth relating to the investment of the funds of savings banks. He shall in the investment of the funds give preference to the securities of the Commonwealth. He may, whenever he sells such securities, deliver the securities so sold upon receiving the proceeds thereof, and may execute any and all documents necessary to transfer the title thereto.

(4) The board of retirement shall have power to make by-laws and regulations not inconsistent with the provisions of this act, and to employ such clerical or other assistance as may be necessary for the fulfillment of its purposes, subject to the approval of the governor and council.

(5) The board shall determine the percentage of wages or salary that employees shall contribute to the pension fund, subject to the minimum and maximum percentages, and shall, furthermore, have the power to classify employees for the purposes of the retirement system and to establish different rates of contribution for different classes within the prescribed limits.

(6) The state treasurer shall, in January of each year, unless for cause the insurance commissioner shall have granted an extension of time, file in the office of the insurance commissioner a sworn statement, which shall exhibit the financial

condition of the retirement system on the thirty-first day of the preceding December, and its financial transactions for the year ending with said day. The said statement shall be in a form approved by the insurance commissioner, and shall show, among other things, the liability of the retirement system on account of the following items:

A. Deposit Reserves.

The total of the deposits of the members actually received by the treasurer or due from the Commonwealth under section five, (2) A, and held subject to withdrawal by such members.

B. Interest Reserve.

Regular interest on such deposits.

C. Annuity Reserve.

The net value of the annuities entered upon under section six, (2) B, on the basis of the mortality tables and interest rates provided for in this act.

D. Expense and Contingent Fund.

(a) The unexpended portion of the amounts received under section five, (1). (b) The contingent fund.

E. Gifts and Bequests.

The amounts received as gifts or bequests and held under the terms of such gifts or bequests.

All other liabilities.

F. Other Liabilities.

G. Surplus.

(a) Annuity Surplus. The undistributed surplus arising from annuity deposits.

(b) Other Surplus. All unassigned funds.

CREATION OF THE RETIREMENT FUND.

SECTION 5. The funds of the retirement system shall be raised as follows:

(1) Expense and Contingent Fund.

The general court shall appropriate annually such an amount as may be necessary to defray the whole expense of administration, according to estimates prepared by the treasurer.

(2) Annuity and Pension Fund.

A. Deposits by Members. Each member shall deposit in this fund from his salary or wages, as often as the same are payable, not less than one per cent and not more than five per cent of the amount of his wages or salary, as determined by the board of retirement under the provisions of section four (5): provided, however, that employees who receive more than thirty dollars weekly in salary or wages shall not be assessed for contribution to this fund on the excess above that amount.

B. Contributions of the Commonwealth. (a) Each month the Commonwealth shall contribute such amount as the board of retirement may determine to be necessary to pay current pensions for subsequent service, under section six (2) C (a). (b) Each year, in January, the Commonwealth shall contribute an amount equal to the surplus arising from annuity deposits. In case there should be a deficiency

arising from such annuity deposits, instead of a surplus, then the Commonwealth shall make good the deficiency.

(c) Each month the Commonwealth shall contribute such amount as the board of retirement may determine to be necessary to pay current pensions for prior service under section six (2) C (b).

(d) Each month the Commonwealth shall contribute such amount as the board of retirement may determine to be necessary to ensure the minimum payments provided for in section six, E.

(3) Provision for Payments.

All amounts payable by members of the association under paragraph (2) A of this section shall be deducted by the Commonwealth from the amounts payable to them as salary or wages, as often as the same are payable, and shall immediately be credited to the retirement fund by the state treasurer.

DISTRIBUTION OF FUNDS.

SECTION 6. The state treasurer shall administer the funds of the pension system in accordance with the following plan:

(1) Expense and Contingent Fund.

The fund provided for by section five, (1), shall be used, so far as may be necessary, for the payment of the expenses of administration. The portions not so used, if any, shall be repaid into the treasury of the Commonwealth. In case the amount appropriated for the expense of a contingent fund in any year should prove insufficient, the Commonwealth shall appropriate in the following year such additional sum as may be required to cover the deficit.

(2) Annuity and Pension Funds.

A. Refunds. (a) Should a member of the association cease to be an employee of the Commonwealth for any cause other than death before becoming entitled to a pension, there shall be refunded to him all the money paid in by him under section five, (2) A, with regular interest.

(b) Should a member of the association die before becoming entitled to a pension, there shall be paid to his legal representatives all the money paid in by him under section five, (2) A, with such interest as shall have been earned on such deposits.

B. Annuities from Employees' Deposits. — Any member who reaches the age of sixty years and has been in the continuous service of the Commonwealth for fifteen years immediately preceding, and then or thereafter retires or is retired, any member who retires or is retired at the age of seventy years, and any member who is retired for the good of the service under the provisions of section three, (5), shall receive an annuity to which the sum of his deposits under section five, (2), with regular interest, shall entitle him, according to the tables adopted by the board of retirement, in one of the following forms:

(a) A life annuity, payable monthly.

(b) A life annuity, payable monthly, with the provision that in the event of the death of the annuitant before receiving payments equal to the sum, at the date of his retirement, of his deposits under section five, (2) A, with regular interest, the difference shall be paid to his legal representatives.

C. Pensions derived from Contributions by the Commonwealth. (a) Pensions based upon subsequent service. Any member entitled to an annuity under paragraph (2) B of this section shall receive in addition thereto a pension for life

payable monthly equivalent to that annuity, to be paid out of the fund contributed by the Commonwealth under the provisions of section five, (2) B (a).

(b) Pensions based upon prior service. Any member of the association who reaches the age of sixty years, having been in the continuous service of the Commonwealth for fifteen years or more immediately preceding, and then or thereafter retires or is retired, shall receive in addition to the annuity and pension provided for by paragraphs (2) B and C (a) of this section, an extra pension for life as large as the amount of the annuity to which he might have acquired a claim if the retirement system had been in operation at the time when he entered the service of the Commonwealth, and if accordingly he had paid regular contributions from that date to the date of the establishment of the retirement association at the same rate as that first adopted by the board of retirement, and if such deductions had been accumulated with regular interest.

Any employee who had already reached the age of fifty-five years on the date when the retirement system was established, and also became a member of the association may be retired under the provisions of the preceding paragraph without having completed the otherwise required service period of fifteen years. For the purpose of computing any pension payable for prior service, the board of retirement may estimate on the basis determined by them the wages received at any period for which they may deem it impracticable to consult the original records.

Any employee not a member of the association who had already reached the age of fifty-five years on the date when the retirement system was established may be retired at any time and shall be paid a pension equivalent to the minimum payment hereinafter provided for.

D. Application of Surplus. The board of retirement shall have power to determine the application of any surplus, as defined under section four (6) G, subject to the approval of the insurance commissioner.

E. Minimum and Maximum Payments. In no case shall the total monthly payment to a member be at a rate less than two hundred dollars per year, or at a rate more than one half the amount of the average salary or wages received by the member during the ten years prior to his retirement.

F. Association Membership and Pension Certificate. — Membership in the association shall be evidenced by a certificate to be issued to each member by the board of retirement, and the right to an annuity or a pension shall be evidenced by a policy to be issued to each member who retires or is retired by the board of retirement.

TAXATION, ATTACHMENTS AND ASSIGNMENTS.

SECTION 7. The funds of the retirement system, so far as they are invested in personal property, shall be exempt from taxation.

That portion of the wages of a member deducted or to be deducted under this act, the right of a member to an annuity or pension, and all his rights in the funds of the retirement system shall be exempt from taxation, and from the operation of any law relating to bankruptcy or insolvency, and shall not be attached or taken upon execution or other process of any court. No assignment of any right in or to said funds shall be valid.

SUPERVISION BY INSURANCE COMMISSIONER.

SECTION 8. The insurance commissioner shall prescribe for the retirement system of the Commonwealth one or more mortality tables, and shall determine what rates of interest shall be established in connection with such tables, and may later modify such tables or prescribe other tables to represent more accurately the expense of the retirement system, or may change said rates of interest and may

determine the application of the changes so made. He shall also prescribe and supervise the methods of bookkeeping of the retirement association formed under the provisions of this act.

The insurance commissioner shall at least once in each year, either personally or by deputy or assistant, thoroughly inspect and examine the affairs of the retirement association to ascertain its financial condition, its ability to fulfil its obligations, whether all parties in interest have complied with the provisions of law applicable to the retirement association, and whether the transactions of the board of retirement have been in accordance with the rights and equities of those in interest. The retirement system shall be credited, in the account of its financial condition, with the amounts due from the Commonwealth, under the provisions of section five, (2) B (a), its investments having fixed maturities upon which the interest is not in default at amortized values, and its other investments at a reasonable valuation.

For the purposes aforesaid, the insurance commissioner or other persons making examination shall have access to all the securities, books and papers of the retirement system, and may summon and administer oaths and examine as witnesses the members of the board of retirement or any other person relative to the financial affairs, transactions and condition of the retirement system. The insurance commissioner shall preserve in a permanent form a full record of the proceedings at such examination, and the results thereof. Upon the completion of such examination, verification and valuation, the insurance commissioner shall make a report in writing of his findings to the board of retirement, and shall send a copy thereof to the governor and the executive council of the Commonwealth.

SECTION 9. If, in the judgment of the insurance commissioner, the Commonwealth or the board of retirement has violated or neglected to comply with any of the provisions of this act, or of the rules and regulations established by the board of retirement hereunder, he shall give notice thereof to the governor of the Commonwealth and to the board of retirement, and thereafter if such violation or neglect continues shall forthwith present the facts to the attorney-general for his action.

SECTION 10. The superior court shall have jurisdiction in equity upon petition of the insurance commissioner or of any interested party to compel the observance and restrain the violation of this act, and of the rules and regulations established by the board of retirement hereunder.

SECTION 11. This act shall take effect upon its passage. [Approved June 7,

1911.

CHAPTER 539.

AN ACT RELATIVE TO THE EMPLOYMENT OF LOCOMOTIVE ENGINEERS AND CONDUCTORS BY RAILROAD CORPORATIONS.

SECTION 1. No person shall act as a locomotive engineer unless he shall have been employed two years as a locomotive fireman or as an engineer's helper, or, prior to the passage of this act, shall have been employed as a locomotive engineer.

SECTION 2. No person shall act as a conductor on a railroad train unless he shall have been employed as a brakeman for two years, or, prior to the passage of this act, shall have been employed as a conductor on a railroad train.

SECTION 3. No person shall knowingly engage, promote, require, persuade, prevail upon, or cause any person to act in violation of either of the preceding sections.

SECTION 4. Nothing in this act shall be construed as applying to the operating of locomotive engines by engine hostlers in or around engine houses. In the event