(a) The pension accumulation fund shall be the fund in which shall be held the reserves for all annuities in force and from which shall be paid all annuities and all benefits in lieu of annuities under this chapter. If a beneficiary is restored to membership, his annuity reserve shall be transferred from the pension accumulation fund to his individual account in the annuity savings fund. The pension accumulation fund shall also be the fund in which are accumulated all reserves for the payment of all pensions and other benefits payable from contributions made by employers and from which are paid all such pensions and other benefits, as follows:

(1) Employer contributions shall consist of a percentage of the earnable compensation of members, to be known as the "normal contribution," and an additional percentage of such earnable compensation, to be known as the "accrued liability contribution." These contributions shall be borne by appropriations from state and federal funds. The percentage rate of each portion of the employer contribution shall be fixed on the basis of the liabilities of the retirement system, as shown by actuarial valuation, as provided for in subsection (b) of Code Section 47-2-26;

(2) The normal contribution rate shall be determined after each actuarial valuation. Until all accrued liability contributions have been completed, the normal contribution rate shall be based on a uniform and constant percentage of the earnable compensation of the average new entrant member, which percentage, if contributed on the basis of his prospective earnable compensation throughout his entire period of active service, would be sufficient to pay any pension payable on his account. For purposes of computing the normal contribution rate any appropriate tables last adopted by the board of trustees shall be used, and interest shall be computed at the regular rate. After all accrued liability contributions have been completed, the normal contribution rate shall be the rate of the earnable compensation of all members, which rate shall be obtained by deducting from the total liabilities of the pension accumulation fund the amount of the funds in hand standing to the credit of the pension accumulation fund and dividing the difference by an amount equal to 1 percent of the present value of the prospective future earnable compensation of all members;

(3) Immediately following the first actuarial valuation, the accrued liability contribution rate shall be computed as the percentage rate of the total earnable compensation of all members, which rate is equivalent to 4 percent of the total liability of the pension accumulation fund in excess of the funds in hand standing to the credit of the pension accumulation fund, which excess liability would not be discharged by the normal contributions payable with respect to members during the remainder of their active service. The amount placed to the credit of each annual accrued liability contribution account shall be at least 3 percent greater than the amount placed to the credit of each such account in the previous year; and in no event shall all the accrued liability contributions in any year be less than the amount which, when combined with all the normal contributions and the amount of funds in hand standing to the credit of the pension accumulation fund, will provide all payments and transfers from the pension accumulation fund as required by this subsection during the year then current. The accrued liability contribution shall be discontinued as soon as the amount of the funds standing to the credit of the pension accumulation fund equals the present value, as actuarially computed and approved by the board of trustees, of the total liabilities of the pension accumulation fund less the present value of the normal contributions to be made at the normal contribution rate then in force with respect to all persons who are at that time members.

(b) All interest and dividends earned on the funds of the retirement system shall be credited to the pension accumulation fund. Once each year the board of trustees shall transfer from the pension accumulation fund to the annuity savings fund such amounts as are sufficient to allow regular interest on the balances of the individual accounts of members in the annuity savings fund.