The trustees, subject to such conditions as they may establish, may purchase annuity contracts for any of their employees, 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:
(a)
The annuity contract is under an annuity plan which meets the requirements of Section 403(b) of the Internal Revenue Code of 1954 of the United States as amended by the Employment Retirement Income Security Act of 1974 (P.L. 93-406).
(b)
The employee makes application to the trustees for such purchase and reduction of salary.
(c)
All provisions of the Insurance Code applicable to the purchase of such annuities are satisfied.
If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1 of the Government Code, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.