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coverage . The Police Department will notify the Association of all <br /> employees on unpaid leave or who separate from City employment <br /> within three (3) working days . The City will continue the payment <br /> of contribution for insurance coverage until the end of the month <br /> in which the Association had received notice from the City of the <br /> employee' s separation from employment . <br /> ARTICLE XIII - RETIREMENT <br /> Section 1 - General . The City shall continue to make <br /> contributions to P.E .R.S. in accordance with its contract with <br /> P.E.R. S for employees covered by said contract as amended on <br /> January 1, 1990 . <br /> Section 2 - Deferred Retirement . The City shall continue to <br /> make payment to P.E.R. S . on behalf of each employee covered by this <br /> Agreement in accordance with the following schedule : <br /> A. With respect to "safety-member" employees, the City <br /> shall pay an amount equal to nine-ninths (9/9ths) of his or her <br /> individual employee retirement contribution. <br /> B. With respect to "miscellaneous-member" employees <br /> covered by this Agreement, the City shall pay an amount equal to <br /> 100% of his or her individual employee retirement contribution. <br /> Such payments shall be credited to the individual <br /> employee' s P.E.R. S . account . <br /> Such payments are not increases in base salary and no <br /> salary rate range applicable to any of the employees covered by <br /> this Agreement shall be changed or deemed to have been changed by <br /> reason thereof . As a result, the City will not treat these payments <br /> as ordinary income and thus, will not withhold federal or state <br /> income tax from said payments . The City has received an opinion or <br /> ruling from the Internal Revenue Service confirming that these <br /> payments are deferred compensation, not ordinary income. <br /> In the event that the City receives a subsequent ruling <br /> from the Internal Revenue Service that such payments are ordinary <br /> income of the employees instead of deferred compensation, the <br /> City' s obligation to make such payments shall discontinue and in <br /> place thereof the base salary of each affected employee shall <br /> forthwith be increased by eighteen (18) salary rate ranges (9 . 0%) <br /> for "safety-member" and fourteen (14) salary rate ranges (7 . 0%) for <br /> all "miscellaneous-member" employees covered by this Agreement . <br /> For the purpose of reporting an employee' s compensation <br /> to P.E.R. S . , the City shall include these payments as if they were <br /> a part of the employee' s base salary. <br /> 32 <br />