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<br />216 <br /> <br />RESOLUTION NO. 91-066 <br />Page 8 of 17 <br /> <br />eligible affected management employees are incorporated by <br />reference herein. The City shall continue to make contributions <br />to PERS in accordance with its contract with the system for <br />affected employees covered by said contract. <br /> <br />B. Deferred Retirement. The City shall continue <br />to make payment to the PEaS on behalf of each eligible affected <br />employee in an amount required to pay one hundred percent <br />(100%) of the employee's individual retirement contribution. <br />Such payments shall be credited to the individual employee's <br />PEaS account. <br /> <br />Such payments are not increases in base salary <br />and no salary rate range applicable to any of the employees <br />covered by this Resolution shall be changed or deemed to have <br />been changed by reason thereof. As a result, the city will not <br />treat these payments as ordinary income and thus will not <br />withhold federal or state income tax from said payments. The <br />city previously received a ruling from the Internal Revenue <br />Service confirming that such payments are deferred compensation <br />and not ordinary income. In the event that the City receives a <br />new ruling from the Internal Revenue Service that such payments <br />are ordinary income of the employees instead of deferred <br />compensation, the city's obligation to make such payments shall <br />discontinue and in place thereof the base salary of each said <br />employee shall forthwith be increased by seven percent (7%), <br />except for "safety-member" employees eligible for coverage <br />under the 2% at Age 50 Benefits Formula where the base salary <br />shall be increased by nine percent (9%). <br /> <br />For the purpose of reporting an employee's <br />compensation to PERS, the City shall include these payments as <br />if they were a part of the employee's base salary. <br /> <br />6.2 Deferred Compensation. An amount equal to one <br />percent of the base semi-monthly pay rate being paid each <br />affected employee is deemed to be deferred compensation and <br />shall be contributed into the city's deferred compensation plan <br />by the City on behalf of each affected employee. The amount <br />contributed by the City under this provision shall be subject <br />to the general terms and conditions of the city of Santa Ana <br />Deferred Compensation Plan, and subject further to the <br />conditions that the employee shall have no vested rights in the <br />amounts contributed by the City until termination of employment <br />with the city and that the City will pay the total amount of <br />contributions plus any earnings to the employee upon <br />termination, resignation, retirement, dismissal or death. <br /> <br />6.3 Health Insurance. The City shall contribute the <br />following amounts toward the payment of premiums for affected <br />employees and their eligible dependents under the existing <br /> <br />II <br />