The Director of Education, subject to such conditions as the State Board of Education may establish, may purchase annuity contracts for the employees of the California School for the Deaf provided for in Chapter 1 (commencing with Section 59000) of Part 32 of Division 4 of this title, the California School for the Blind provided for in Chapter 2 (commencing with Section 59100) of Part 32 of Division 4 of this title, and the diagnostic schools for neurologically handicapped children provided for in Chapter 3 (commencing with Section 59200) of Part 32 of Division 4 of this title, and shall reduce the salary of any such employee for whom such contract is purchased in the amount of the cost thereof; provided that each of the following conditions are met: