Section 396. Employer not liable for payment of benefits

Neither the
  state, nor state university, nor any  electing  employer  or  its  local
  sponsor  shall  be a party to any contract purchased in whole or in part
  with  contributions  made  under   the   optional   retirement   program
  established  and  administered pursuant to this article.  No retirement,
  death, or other benefits shall be payable by  the  state,  or  by  state
  university,  or by any electing employer or its local sponsor under such
  optional retirement program.  Such benefits shall be  paid  to  electing
  employees  or  their beneficiaries by the designated insurer or insurers
  in accordance with the terms of their contracts.