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individual retirement contribution, Such payments shall be credited to the individual employee's PERS account, Such payments are not increases in base salary and no salary rate range applicable to any of the employees covered by this Resolution, shall be changed or deemed to have been changed by reason thereof. As a result, the City will not treat these payments as ordinary income and, thus will not withhold federal or state income tax from said payments. The City previously received a ruling from the lnternal Revenue Service confirming that such payments are deferred compensation and not ordinary income. In the event that the City receives a new ruling from the Internal Revenue Service that such payments are ordinary income of the employees instead of deferred compensation, the City's obligation to make such payments shall discontinue and in place thereof the base salary of each said employee shall forthwith be increased by seven percent (7%), except for "safety-member" employees eligible for coverage under the 2% at Age 50 Benefits Formula where the base salary shall be increased by nine percent (9%). For the purpose of reporting an employee's compensation to PERS, the City shall include these payments as if they were a part of the employee's base salary. 6.2 Deferred Compensation. Each affected employee shall continue to receive as deferred compensation an amount equal to one percent (1.0%) of his or her monthly salary rate. The amounts contributed by the City under this provision shall be subject to the general terms and conditions of the City of Santa Aha Deferred Compensation Plan, and subject further to the conditions that the employee shall have no vested rights in the amounts contributed by the City until termination of employment with the City and that the City will pay the total amount of c~ntributions plus any earnings to the employee upon termination, resignation, retirement, dismissal or death. 6.3 Health and Dental Insurance. The City will continue to contribute the following amounts toward the payment of premiums for affected employees and their eligible dependents under the existing health and dental insurance programs (or new programs providing substantially similar coverage and benefits). A. With respect to employees who do not have dependents included under the programs, an amount equal to the highest amount of City contribution applicable to the "employee-only" health and dental coverages for employees as specified in any current operative Memorandum of Understanding between the City and a recognized employee organization. B. With respect to employees who have dependents included under the programs, an amount equal to the highest amount of City contribution applicable to the "family-plan" health and dental coverages for employees and their dependents as specified in any