Item 25 - Memorandum of Understanding Establishing the Terms and Conditions of Employment for SAMA

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ARTICLE XIV 14.0 RETIREMENT 14.1 General. The terms of the existing contract between the City and California Public Employees' Retirement System (CalPERS) governing the City retirement benefits of employees are incorporated by reference herein. The City shall continue to make contributions to CalPERS in accordance with its contract with CalPERS for employees covered by said contract as amended. 14.2 Deferred Retirement. The City will continue to make payment to CalPERS on behalf of each affected employee, in an amount necessary to pay one hundred percent (100%) of their individual employee retirement contribution. Such payments shall be credited to the individual employee's CalPERS account. Such payments are not increases in base salary and no salary rate ranges applicable to any employees 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. For the purpose of reporting an employee's compensation to CalPERS, the City shall include these payments as if they were part of the employee's base salary. In the event that the City receives a 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 nine percent (9%) for "safety member" employees covered under the 3% at age 50 CalPERS formula and eight percent (8%) for all "miscellaneous member" employees covered under the 2.7% at age 55 CAPERS formula. 14.3 1959 Survivor's Benefit. The City shall provide CalPERS fourth level of 1959 Survivor's Benefits to all eligible employees. 14.4 Pre -Retirement Optional Settlement 2 Death Benefit. The City shall provide the Pre - Retirement Optional Settlement 2 Death Benefit to all employees. 14.5 2.7% at 55 Service Retirement Benefit for Classic Miscellaneous Members. The City agrees to continue to provide Classic Miscellaneous employees who are defined as Classic Members under the California Public Employees' Pension Reform Act (PEPRA) of 2013 with the 2.7% at 55 Service Retirement benefit. Payment of 2.7% at 55 Service Retirement Benefit. Classic Miscellaneous employees covered by this MOU shall pay eight percent (8%) of CalPERS reportable compensation 42