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ARTICLE XIII <br />13.0 RETIREMENT <br />13.1 General. The terms of the existing contract between the City and California Public <br />Employees' Retirement System (CaIPERS) governing the City retirement benefits for <br />affected employees are incorporated by reference herein. The City shall continue to <br />make contributions to CaIPERS in accordance with its contract with CaIPERS for SAMA <br />employees covered by said contract as amended. <br />13.2 Deferred Retirement. The City will continue to make payment to CaIPERS on behalf of <br />each SAMA employee, in an amount necessary to pay one hundred percent (100%) of his <br />or her individual retirement contribution which is currently equal to eight percent (8%) of <br />base salary, effective January 1, 2009. Such payments shall be credited to the individual <br />employee's CaIPERS account. <br />Such payments are not increases in base salary and no salary rate range applicable to any <br />of the employees covered by this MOU shall be changed or deemed to have been <br />changed by reason thereof As a result, the City will not treat these payments as ordinary <br />income and, thus will not withhold Federal or State income tax from said payments. The <br />City has received an opinion or ruling from the Internal Revenue Service confimling that <br />these payments are deferred compensation, and not ordinary income. In the event that the <br />City receives a ruling from the Internal Revenue Service that such payments are ordinary <br />income of the employees instead of deferred compensation, the City's obligation to make <br />such payments shall discontinue and in place thereof the base salary of each said <br />employee shall forthwith be increased by eight percent (8%) after January 1, 2009. <br />For the purpose of reporting an employee's compensation to CaIPERS, the City shall <br />include these payments as if they were a part of the employee's base salary. <br />13.3 Credit for Unused Sick Leave. An employee covered by this MOU, can have unused <br />accumulated sick leave at the time of retirement converted to additional service credit at <br />the rate of 0.004 years of service credit for each clay of amused sick leave (i.e., 200 days <br />of sick leave equals .80 additional years of service credit). The City must report only <br />those days of unused sick leave that were accrued by the employee during the normal <br />course of employment. This section applies to members whose effective date of <br />retirement is within four (4) months of separation from employment. <br />ESI] <br />